Court Should Have Ordered Necessary Parties to be Added to Case Rather Than Dismissing it

On February 3, 2021, the Second Department issued a decision in Ji Juan Lin v. Bo Jin Zhu, 2021 NY Slip Op. 00550, holding that a court should have ordered necessary parties to be added to a lawsuit rather than dismissing it, explaining:

Necessary parties are those who ought to be parties if complete relief is to be accorded between the persons who are parties to the action or who might be inequitably affected by a judgment in the action. Here, the Supreme Court correctly determined that the Limited Partnership and the third limited partner, Ai Ying Zheng, are necessary parties to this action. Given the claims asserted by the plaintiffs as limited partners of the Limited Partnership, the plaintiffs are estopped from relying on the invalid formation of the Limited Partnership as a basis for failing to join the Limited Partnership as a party.

However, as the Limited Partnership and Ai Ying Zheng are subject to the jurisdiction of the Supreme Court, the court should have ordered them summoned, rather than granting the motion to dismiss the complaint for failure to join necessary parties.

. . .

Accordingly, we remit the matter to the Supreme Court, Queens County, for the joinder of the Limited Partnership and Ai Ying Zheng and for further proceedings consistent herewith.

(Internal quotations and citations omitted).

As this decision shows, there are rules regarding whether a lawsuit can go forward without all persons affected by the lawsuit (necessary parties) being included in it. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client face a situation where all parties affected by a lawsuit have not been joined in it.