Court May Dismiss Based on a Prior Pending Action Even When the Legal Theories are not Identical

On November 30, 2022, Justice Chan of the New York County Commercial Division issued a decision in Charles Condominiums, LLC v. Victor RPM First, LLC, 2022 NY Slip Op. 34067(U), holding that a court may dismiss claims based on a prior pending action even when the legal theories are not identical, explaining:

In determining whether dismissal is warranted based on the earlier commenced Victor Action, the court notes that it has broad discretion in determining whether an action should be dismissed based on another action pending between the same parties arising out of the same subject matter or series of alleged wrongs and it is inconsequential that different legal theories or claims were set forth in the two actions. In this regard, where a party seeks to litigate a claim involving the same wrong that has been
raised in a related action, dismissal is appropriate under CPLR 3211(a)(4).

Here, the Amended Counterclaims against Charles must be dismissed on the grounds of another action pending since the Amended Counterclaims for breach of contract and for an accounting involve the same parties and arise out of the same wrongs as the identical claims in the Victor Action. Regarding the remaining counterclaim against Charles seeking the imposition of a constructive trust over the $4,288,570.80 allegedly owed to Victor under the Development Agreement, Justice Sherwood’s dismissal of essentially duplicate claims for unjust enrichment and money had and received in the Victor Action warrants the dismissal of this claim under CPLR 3211(a)(4). In any event, the counterclaim for a constructive trust must be dismissed since the subject matter of the claim is governed by the Development Agreement.

Moreover, the addition of the New Counterclaim Defendants does not warrant a different result since this action and the Victor Action seek the same relief for the same alleged injuries and there is still a substantial identity of the parties which is sufficient.

(Internal quotations and citations omitted).

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