Voluntary Discontinuance and Settlement

• Pages: 337-372
• Author: Carl T. Grasso,Edward L. Birnbaum,Ariel E. Belen

DISCONTINUANCE,

SETTLEMENT,OFFERS

TO COMPROMISE

10-1

CHAPTER 10

VOLUNTARY DISCONTINUANCE,

SETTLEMENT, AND OFFERS

TO COMPROMISE

I. GENERAL POINTS

§10:01 Authority

§10:02 Only by Party Asserting Claim

§10:03 Methods

II. PURPOSE AND EFFECT

§10:10 Reasons to Discontinue

§10:11 Discontinuance Is Without Prejudice Unless Otherwise Stated

§10:12 Statute of Limitations and “Do Over” Toll

III. DISCONTINUANCE WITHOUT COURT ORDER

§10:20 By Notice

§10:21 By Stipulation of All Parties

§10:22 Stipulations of Settlement: In General

§10:22a Stipulations of Settlement in Open Court

§10:22b Stipulations of Settlement in Writing

§10:22c Stipulations of Settlement: Counsel Apparent Authority

§10:22d Stipulations of Settlement at Mediation

§10:22e Stipulations of Settlement: Emails

§10:22f Stipulations of Settlement: Non-Disclosure Agreements

§10:22g Stipulations of Settlement Requiring Court Approval

§10:23 Payment of Settlement

§10:24 Setting Aside Stipulations of Settlement

§10:25 Client’s Right to Settle

IV. DISCONTINUANCE BY COURT ORDER

A. Before Submission to Court or Jury

§10:30 Rule

§10:31 Procedure

§10:32 Timing

§10:33 Discontinuance Is Within Court’s Discretion

§10:34 Prejudice to Defendant

§10:35 No Discontinuance to Avoid Court Order

§10:36 No Discontinuance to Avoid Imminent Loss

DISCONTINUANCE,

SETTLEMENT,OFFERS

TO COMPROMISE

New York Trial Notebook 10-2

§10:37 Terms and Conditions

§10:38 In Practice: Whether to Oppose

§10:39 High-Low Agreements

§10:40 Discontinuance Where There Are Multiple Defendants

§10:41 Discontinuance Against Third Party Defendants

§10:42 After Discontinuance, Supreme Court Loses Jurisdiction Over Matter

B. After Submission

§10:50 Stipulation and Court Order Required

§10:51 Rationale

V. OFFERS TO COMPROMISE

§10:60 In General

§10:61 Tender

§10:62 Offer to Liquidate Damages Conditionally

§10:63 Offer to Compromise

FORMS

Form 10:10 Notice for Voluntary Discontinuance

Form 10:20 Stipulation to Discontinue Action

DISCONTINUANCE,

SETTLEMENT,OFFERS

TO COMPROMISE

10-3 Voluntary Discontinuance, Settlement, and Offers to Compromise §10:02

I. GENERAL POINTS

§10:01 Authority

CPLR 3217 governs voluntary discontinuances of a claim or action. “Voluntary dismissal” or “nonsuit” are

terms that are employed on occasion, usually in older cases, and mean the same thing. [See Weisinger v. Berfond,

21 Misc2d 788, 792, 198 NYS2d 799, 804 (Sup Ct Kings County 1960) (no distinction between a voluntary

discontinuance and a voluntary nonsuit); Schintzuis v. Lackawanna Steel Co., 224 NY 226, 120 NE 137 (1918);

Roland v. Hubbard, 36 AD2d 599, 599, 318 NYS2d 644, 645 (1st Dept 1971) (although plainti failed to present

a prima facie case, the dismissal should have been without prejudice, as “under the circumstances, plainti should

have been aorded the opportunity by means of a simple nonsuit” to procure additional evidence if available).]

NOTE:

CPLR 3217 does indeed govern discontinuances. In Bank of America, N.A. v. Ali, 202 AD3d 726, ___

NYS3d ___ (2d Dept 2022), a mortgage foreclosure action, plaintiff commenced an action in 2009, and in

2013, at a status conference Supreme Court issued a conditional order of dismissal for want of prosecution

pursuant to CPLR 3216 unless plaintiff proceeded within 90 days. Plaintiff took no action and the action was

administratively dismissed. Plaintiff commenced a new action in 2015 to foreclose the same mortgage, in which

plaintiff recited that “a prior action was commenced but has been discontinued.” Id., at 726. Supreme Court

dismissed this second action as time barred, and denied plaintiff’s motion to vacate the order dismissing the

rst action. In reversing, a majorit y of the Second Department rst held that Supreme Cour t had improperly

dismissed the rst action, as there had not been compliance with all the requirements of CPLR 3216. Then,

the Second Department observed that CPLR 3217 provides the procedural mechanism by which plaintiff may

voluntarily discontinue an action, and plaintiff did not take any of those actions. The majority rejected the dis-

sent’s position that “the plaintiff’s service of a summons and complaint in the second action was the equivalent

of a notice of discontinuance” in the rst action, id. at 728, and there was no support for the proposition that

plaintiff’s statement in one action can serve as a notice of discontinuance in another action. They also rejected

the argument that plaintiff ef fectively abandoned the rst action by commencing the second action. A two-

judge dissent differed, arguing that commencement of the second action was a de facto discontinuance of

the rst action, and it is possible the Court of Appeals may eventually weigh in.

§10:02 Only by Party Asserting Claim

Only the party asserting the claim may voluntarily discontinue it. [Shamley v. ITT Corp., 67 NY2d 910,

501 NYS2d 810 (1986).] This includes a plainti or a defendant bringing a counterclaim, cross-claim, or third

party claim.

NOTE:

While only a party asserting a claim may discontinue an action, a non-party may move the court to

conrm that a case has been discontinued. In GMAC Mortgage, LLC v. Galvin, 184 AD3d 750, 124 NYS3d

254 (2d Dept 2020), plaintiff GMAC had brought an action to foreclose a mortgage with the defendant

listed as Mary Galvin. A “Statement to Discontinue Action” (the Stipulation) dated October 17, 2013 was

led March 20, 2014, along with an afrmation of plaintiff ’s counsel (also dated October 17, 2013 and

led March 20, 2014) that the notice of pendency should be cancelled, saying “there now exists as a matter

of law no basis for this Cause of Action.” By order to show cause dated June 26, 2018, non-party Regina

Galvin moved Supreme Court to conrm the discontinuance based on the Stipulation and afrmation of

counsel. Supreme Court denied the motion, determining that the Stipulation was invalid because it was

signed by counsel for plaintif f who had been discharged and replaced before the Stipulation was led. In

reversing and conrming that the action had been discontinued, the Second Department observed that the

counsel who had signed the Stipulation on behalf of plaintiff was still counsel of record because the consent

to change attorney had not been executed in accordance with CPLR 321, so under those circumstances, the

Stipulation to discontinue was not defective. (The opinion does not state what, if any, relationship there was

between Mary Galvin and Regina Galvin.)