Action Dismissed for Failure to File Note of Issue

On July 2, 2020, Justice Sherwood of the New York County Commercial Division issued a decision in Solomon Capital, LLC v. Lion Biotechnologies, Inc., 2020 NY Slip Op. 32154(U), dismissing an action for failure to file a Note of Issue, explaining:

Defendant brings this motion as they allege plaintiffs have failed to prosecute this action following defendant's November 4. 2019 demand to resume prosecution and file a note of issue within 90 days. While plaintiffs eventually filed a note of issue on March 12, they failed to meet defendant's 90-day demand and this motion was filed on February 6, 2020.

. . .

CPLR 3216 states that where a party unreasonably fails to serve and file a note of issue, the court, on its own initiative or upon motion may dismiss the party's pleadings on terms. A motion to dismiss for lack of prosecution cannot be made unless: (i) the issue has been joined in the action. (ii) one year has passed since joinder or issue or six months have passed since the preliminary conference order. whichever is later, and (iii) the party seeking relief has served a written demand requiring the party opponent to resume prosecution of the action and to serve and file a note of issue within ninety days of the demand. Here, defendant has successfully shown that the issue has been joined. the requisite amount of time has passed. and a demand for a note of issue has been made and was not answered within 90 days. As such. it is plaintiffs' burden pursuant to CPLR 3216(e) to show that a justifiable excuse for the delay exists and the case has merit.

Plaintiffs' March 12, 2020 note of issue filing does not defeat this motion as plaintiffs who fail to meet the 90-day demand deadline remain subject to CPLR 3216 dismissal. Instead. as the court in Scott notes, failure to file within the allotted 90-day period obligates the court to examine the merits of an action. While plaintiffs correctly note that law office failure or failures of prior counsel can be reasonable excuses under CPLR 3216(e). such excuses are insufficient without a demonstration of a meritorious cause of action via affidavit from someone with personal knowledge. Plaintiffs fail to provide any such document, instead submitting an attorney affidavit which does not explain plaintiffs' failure to comply and cannot serve as an affidavit of merit. Consequently, defendant's motion to dismiss for lack of prosecution is GRANTED and plaintiffs' complaint is dismissed.

(Internal quotations and citations omitted).

New York procedural law (including the special rules applying to litigation in the Commercial Division of the New York courts) is not particularly complex. Still, there are procedural rules and as this decision illustrates, if a litigant ignores them, it can pay a high price. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding New York practice, and particularly regarding the rules governing practice in the Commercial Division.