Nationstar Mortgage, LLC v. Rampersad
Attorneys and Parties
Brief Summary
Mortgage foreclosure; voluntary discontinuance under New York CPLR 3217(b) [rule permitting voluntary discontinuance of an action by court order upon terms and conditions] and whether a defendant’s counterclaims survive the plaintiff’s discontinuance.
The Supreme Court, Queens County, granted the plaintiff’s motion, in effect under CPLR 3217(b), to discontinue both the foreclosure action and Windward Bora, LLC’s counterclaims.
The portion of the order allowing discontinuance of Windward Bora, LLC’s counterclaims was reversed; those counterclaims were severed and permitted to continue.
While courts generally grant CPLR 3217(b) motions absent prejudice or other improper results, the existence of counterclaims is a factor militating against discontinuance. The plaintiff could discontinue its own claims, but could not extinguish the defendant’s counterclaims; the proper course was to sever and continue them.
Background
Nationstar Mortgage, LLC commenced a foreclosure action in October 2019. Windward Bora, LLC answered in July 2020 with affirmative defenses and counterclaims. In December 2023, the plaintiff moved, in effect pursuant to CPLR 3217(b), to discontinue both the action and Windward’s counterclaims. Windward opposed, arguing its counterclaims could not be discontinued. The Supreme Court (Tracy A. Catapano-Fox, J.) granted the motion on March 22, 2024, and Windward appealed.
Lower Court Decision
Granted the plaintiff’s motion to voluntarily discontinue the foreclosure action and the counterclaims asserted by Windward Bora, LLC under CPLR 3217(b).
Appellate Division Reversal
Modified the order by denying the branch of the motion seeking to discontinue Windward Bora, LLC’s counterclaims and directed that those counterclaims be severed and continued; otherwise affirmed the discontinuance of the main foreclosure action; no costs or disbursements.
Legal Significance
Reaffirms that while voluntary discontinuance under CPLR 3217(b) is typically permitted, a plaintiff cannot use it to terminate a defendant’s counterclaims. The presence of counterclaims and potential prejudice to the opposing party are key factors; counterclaims should be severed and allowed to proceed independently when a plaintiff discontinues its own claims.
A foreclosure plaintiff may discontinue its action under CPLR 3217(b), but existing counterclaims survive and should be severed and continued; discontinuance cannot be used to extinguish a defendant’s counterclaims.