Although they sound an awful lot alike, the difference between an Order dismissing a case and an Order granting summary judgment is quite significant under New York law. An October 19 decision from Justice Carolyn Demarest of Brooklyn in a breach of contract and tortious interference case provides an excellent illustration of this principle. In Terra CRG, LLC v. Marke, the plaintiffs sued to recover monies that were purportedly owed them under the terms of an exclusive real estate brokerage agreement. But this wasn't the first time they sued to recover on this agreement; they previously sued - and lost - in New York County, when a different judge dismissed the case, finding that their complaint failed to set forth a valid legal claim (in legalese, this is referred to as "failure to state a claim upon which relief may be granted"). While there is a doctrine called "res judicata," which means that the same claim can't be brought twice (this is not to be confused with "double jeopardy," which is in the criminal law context), that is only true when the dismissal of the case is on the merits - as would be the case when a claim is dismissed after having been litigated, and therefore dismissed on summary judgment - as opposed to at the very beginning of a lawsuit, before an answer to the complaint is served or filed. Justice Demarest summarized this concept as follows: "[R]es judicata bars future litigation between the same parties, or those in privity with the parties, of a cause of action arising out of the same transaction or series of transactions as a cause of action that was either raised or could have been raised in a prior proceeding. The prior action must have been brought to a final conclusion on the merits. There is only "limited preclusive effect" if the prior action is dismissed for failure to state a cause of action. A dismissal based upon "insufficient plead[ing]" is not on the merits and does not bar the claims from being asserted in a new action (Viafax Corp. v Citicorp Leasing, Inc., 54 AD3d 846, 849 [2d Dept 2008])." Applying the decision to this particular case, Justice Demarest further held as follows: "The instant action is not barred by the doctrine of res judicata or the doctrine of collateral estoppel because ... his decision did not, contrary to the defendants' claims, make a formal finding as to whether a breach of the Brokerage Agreement actually occurred. Rather, Justice Gammerman made a limited finding that, in the complaint before him, plaintiffs did not make the allegations necessary to adequately state a claim for breach of contract."
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