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decided: April 18, 1968.


Headley v. Noto, Chief Judge Fuld and Judges Burke, Scileppi and Keating concur with Judge Jasen; Judge Breitel dissents and votes to affirm in a separate opinion in which Judge Bergan concurs.

Author: Jasen

 This appeal, here by our leave, requires us to determine the consequences of a trial court's prior dismissal of a complaint "on the merits" predicated upon a plaintiff's failure to appear at the trial.

Prior to the institution of this action by the plaintiffs, Noto had himself commenced an action pursuant to former article 15 of the Real Property Law (now Real Property Actions and Proceedings Law, art. 15). When that action was reached for trial, Noto (as plaintiff in that action) did not appear and the action was dismissed. Thereafter, on June 12, 1964, he moved to open his default. This motion was granted and the case was again set down for trial on June 18, 1964. On that date Noto again failed to appear, whereupon the trial court, after taking testimony with respect to his neglect to prosecute, dismissed the action "on the merits".

On November 20, 1964, the instant action was commenced. Noto joined issue by serving an answer in which, inter alia, he interposed an affirmative defense and counterclaim alleging substantially the same facts as he had asserted in the complaint which had been dismissed "on the merits".

Plaintiffs moved for summary judgment and the Judge in Special Term, finding that the dismissal of the earlier action was "on the merits", involved the same parties and sought the same relief, dismissed Noto's counterclaim on the grounds of res judicata, and granted summary judgment in favor of plaintiffs.

Noto contends that despite the fact the judgment dismissing his earlier action for the same relief specified that it was "on the merits", this language was a nullity. In support of this seemingly illogical position, he relies upon Mink v. Keim (291 N. Y. 300); Greenberg v. De Hart (4 N.Y.2d 511), and Weisinger v. Berfond (9 N.Y.2d 742), which held there could be no judgment entered against the plaintiff "on the merits" since such a judgment can only come at the close of the plaintiff's evidence. The result, these cases held, was nothing more than a non-suit.

Special Term took the position that the draftsmen of the CPLR sought to cure this anomalous situation and nullify the effect of the Mink holding with the enactment of CPLR 3216 (see 4 Weinstein-Korn-Miller, N. Y. Civ. Prac., par. 3216.15).

The pertinent part of CPLR 3216 which is derived from former section 181 and in part from former section 482 of the Civil Practice Act reads as follows: "Where a party unreasonably neglects to proceed * * * against any party who may be liable to a separate judgment, * * * the court, on its own initiative or upon motion, may dismiss the party's pleading on terms. Unless the order specifies otherwise, the dismissal is not on the merits."

The threshold question here is whether the new statute had the effect of changing the Mink rule.

The Advisory Committee's notes (First Report, N. Y. Legis. Doc., 1957, No. 6[b]) clearly indicate that the language in CPLR 3216 was not intended to be read in a manner that virtually eliminated the lower court's authority to "specify otherwise" when dismissing for want of prosecution. In discussing the new language in the first sentence of CPLR 3216 that the court may dismiss "on terms", the advisory notes state that "[The] terms contemplated may include payment of the costs and reasonable attorney's fees of the moving party, as well as any terms that may be imposed when a claim is voluntarily dismissed * * * This would prevent litigants from circumventing the voluntary dismissal provisions by simply abandoning a claim." (Id., p. 102.) From this language, we conclude that the new statute changes the rule in Mink v. Keim (supra).

It certainly should be within the power of a trial court to dispose of a case "on the merits and with prejudice" where it has been adequately demonstrated that a plaintiff unreasonably neglected to prosecute an action. It is well recognized that the power to control its calendar is a vital consideration in the administration of the courts. (Cf. Thomas v. Melbert Foods, 19 N.Y.2d 216.) Indeed, a litigant should be prevented from repeatedly bringing his claim into court, thereby harassing the other parties involved and clogging the court's calendar.

However, in the instant case, plaintiffs are asserting legal title to real property in dispute, and the defendant lays claim to an equitable title. The merits of defendant's contentions were never adjudicated in any prior action.

While as a general rule a plaintiff whose action has been dismissed "on the merits" for such want of prosecution as appears here should be barred from again bringing an action or asserting a counterclaim on the same claim, he is not precluded from asserting the same facts defensively in an action brought against him involving the same subject matter or arising out of the same transaction. This is consonant with the philosophy underlying CPLR 203 (subd. [c]) which provides that a defense or counterclaim ordinarily barred by the Statute of Limitations can be asserted as a setoff if it arose out of the transaction upon which the affirmative claim is asserted.

However, the case before us presents a situation which we deem sui generis. If the court were to strike defendant's counterclaim but permit his allegations to remain merely as a defense, the title to the property involved might well be kept in a most unsatisfactory and unsettled state: the result might be that legal title would rest in the hands of one party and equitable title in the hands of the other. Accordingly, and, we repeat, under the peculiar circumstances of the case before us, we conclude that defendant's counterclaim may stand and that, if he establishes his claim, he is entitled to relief on the counterclaim, even though he would not have been entitled to obtain such relief by way of a separate action instituted by him.

The judgment appealed should be reversed and the matter remanded to the Supreme Court for further proceedings in accordance with this opinion.


Judgment reversed, without costs, and matter remitted to Supreme Court, Kings County, for further proceedings in accordance with the opinion herein.

Breitel, J. (dissenting). As the court holds, CPLR 3216 was intended to undo the rule in Mink v. Keim (291 N. Y. 300) by empowering the court to dispose finally of a neglected cause of action through dismissal "on the merits". Yet, by permitting defendant, whose cause of action had been dismissed in a prior action brought by him, to assert the same claim as a defense and counterclaim in this action, the court undercuts the statutory purpose of preventing harassment and promoting security for persons faced with reluctantly prosecuted claims. The court's approach denies the dismissing court the power finally and effectively to dispose of a plaintiff's action. Indeed, on the facts of this case, it renders a dismissal on the merits all but the absolute equivalent of a dismissal not on the merits. Moreover, this result is contrary to the policies and doctrine of res judicata, which the statute sought to invoke when it provided that dismissals for non-prosecution may be "on the merits".

The earlier dismissed action had been brought by defendant Noto "pursuant to the provisions of Article 15 of the Real Property Law" for a judgment declaring that plaintiff Headley had no interest in certain developed real property in Brooklyn. Defendant Noto asserted a claim to equitable title and to specific performance of a contract of sale made with one Michael de Pino (plaintiff Headley's predecessor) and also alleged that he was then in possession of the said premises. After numerous, extended delays, and a refusal to proceed when the case was reached for trial, defendant Noto's complaint was dismissed" on the merits".

The present ejectment was brought by plaintiff Headley to recover possession of the land in question and for damages representing the value of use and occupation of the premises. Defendant Noto asserted, as an affirmative defense, that he had acquired title by purchase from Michael de Pino. In addition, his answer set forth a counterclaim "pursuant to Article 15 of the Real Property Actions & Proceedings Law" for a judgment barring plaintiff Headley from all claims in the property.

If the dismissal on the merits of Noto's complaint for a judgment barring Headley's claims means anything it is that, as between these two parties, a foundation fact for that dismissal is that Noto does not have a superior claim of title. The logical corollary of this proposition is that Noto may not resist Headley's claim for ejectment by reassertion of a claim of title in contradiction of the prior judgment. It is repugnant to any realistic application of res judicata that inconsistent results be reached in the present ejectment action and the prior, dismissed, action for declaratory relief. Whether by operation of the rules of direct or collateral estoppel, Headley should not be required again to disprove Noto's claim of title.

It is old law that if the two causes of action are so intimately related that a contrary judgment in the second action would destroy or impair "the substance of the rights or interests established in the first action", the bar is applied (Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N. Y. 304, 308; cf. Reich v. Cochran, 151 N. Y. 122, 126; Von Moschzisker, Res Judicata, 38 Yale L. J. 299, 312-314). Alternatively, the lack of any valid claim of title in Noto may be viewed as a "fact" conclusively established by the prior dismissal on the merits and assertible by way of collateral estoppel in this action. This is analogous to the rule that a default judgment conclusively establishes those facts properly pleaded in the complaint (see, e.g., Ann.: Default Judgment-Res Judicata, 77 ALR 2d 1410, 1424, 1427; 2 Black, Judgments [2d ed.], § 697). The court holds that the dismissal would bar another action by Noto, but concludes nevertheless that the claim of title is assertible as a counterclaim in Headley's ejectment action. This distinction is unsound in principle and has no foundation in authority. Traditionally, the preclusive effect of a judgment has been deemed to extend in like degree to subsequent actions and counterclaims (see, e.g., Restatement, Judgments, § 48, Comment b). Moreover, the proffered analogy to the rule permitting claims barred by the Statute of Limitations to be set off against other affirmative claims is inapposite. In the first place, the Statute of Limitations generally bars only the remedy and rarely affects the underlying claim. Second, the relief sought in the instant counterclaim is hardly in the nature of a setoff, but rather requests a declaration of title -- a form of affirmative relief. Third, the policies underlying the Statute of Limitations -- for instance, protection against stale claims -- are not affected if the defendant himself chooses to bring the matter to court.

If res judicata bars Noto's counterclaim in this action it should also be held to preclude his affirmative defense based in this same claim of title. Otherwise, a decision in favor of Noto on this action would leave the property in limbo, with neither party in a position to claim title. Avoiding such an anomaly is a factor to be considered in determining res judicata effect, for the doctrines of res judicata are based on pragmatic considerations. Nor is it correct that the title to the property will be in limbo if the issue cannot be retried in this case. The judgment in this case in favor of plaintiffs would settle title and the right to possession as between these parties, and that indeed is so because the first action, on this analysis, accomplished as much.

For these reasons plaintiffs' motion for summary judgment was properly granted and defendant's answer and counterclaim properly stricken. Accordingly, I dissent and vote to affirm the order of the Appellate Division.


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