On August 15, 2025, Justice Bannon of the New York County Commercial Division issued a decision in 435 Cent. Condo Dev. Holdings LLC v. Midtown Oaks JV Holdings LLC, 2025 NY Slip Op. 33103(U), denying a motion to discontinue without prejudice for failure to justify the lack of prejudice, explaining:
CPLR 3217(b) provides that, upon an order of the court, an action may be voluntarily discontinued upon terms and conditions, as the court deems proper. The authority to grant or deny a motion pursuant to CPLR 3217(b) is within the sound discretion of the trial court. A party cannot ordinarily be compelled to litigate, and absent a showing of special circumstances, discontinuance should generally be granted. However, discontinuance should not be granted if the discontinuance would prejudice a substantial right of another party, circumvent an order of the court, avoid the consequences of a potentially adverse determination, or produce other improper results. Factors militating against discontinuance include prejudice to an opposing party as well as the imposition of one or more counterclaims.
The plaintiffs provide no valid basis for seeking to discontinue this action beyond needing further internal investigations. This allegation falls flat as it is unspecific and the plaintiffs have had ample time to conduct any investigation. Their inaction indicates that no investigation is actually necessary. The plaintiffs have failed to comply with discovery demands and court orders for the past year and thereby essentially failed to prosecute the matter. Indeed, the desire to discontinue without prejudice appears to be an attempt to circumvent the court’s discovery orders and avoid the consequences of their own recalcitrance.
In a compliance conference order dated January 16, 2025, the court noted that the plaintiffs failed to provide discovery without any reasonable excuse. A status conference order dated May 8, 2025, repeats the same and cautions the plaintiffs that failure to comply by May 30, 2025, will result in preclusion or the striking of the complaint pursuant to CPLR 3126. The Note of Issue deadline was set as August 15, 2025. This motion was filed on May 7, 2025. At a status conference conducted August 14, 2025, counsel represented that the plaintiffs belatedly provided a discovery dump which was not in an easily accessible format. To protect the defendants, the court gave the plaintiffs additional brief and final period in which to comply and provide all outstanding discovery to the defendants or be sanctioned pursuant to CPLR 3126.
Under these circumstances, a discontinuance without prejudice would definitively result in prejudice to the defendants. Contrary to the plaintiffs’ argument, it would not allow defendant Jeffrey Simpson to avoid the consequences of his failure to appear. Rather, he will avoid such consequences in this case as it may be dismissed as against him since the plaintiffs did not move for a default judgment within one year as required by CPLR 3215(c). If the action is permitted to be discontinued without prejudice, the plaintiffs may be able to proceed against him anew. Nor would the defendants save on counsel fees, as suggested by the plaintiffs. The defendants have defended the instant action more than a year – they answered the complaint, asserted two cross-claims against Simpson, made discovery demands and prepared for and attended several discovery conferences with the court. Should a second action be commenced, the defendants would have to repeat that process, incurring additional, significant, costs.
Therefore, the plaintiffs’ motion to discontinue the action without prejudice is denied. Of course, the plaintiffs remain free to discontinue the action with prejudice if so advised.
(Internal quotations and citations omitted).