| N.Y. App. Div. | May 24, 1994
—Order, Supreme Court, New York County (Walter M. Schackman, J.), entered on or about March 3, 1993, which granted defendant Oxford Resources Corp.’s motion to dismiss the complaint on the grounds of res judicata pursuant to CPLR 3211 (a) (5), and denied plaintiff’s cross motion for summary judgment, unanimously reversed, on the law, defendant’s motion denied, and remanded for further disposition, with costs.
The doctrine of res judicata did not bar plaintiff’s right to sue for return of its $11,349 payment in the instant case, where it had failed to include a counterclaim for money damages in a prior lawsuit involving the same transaction, an exchange of two automobiles. New York’s permissive counterclaim rule allows counterclaims to be raised through separate litigation even if interposed as a defense in prior litigation, as long as a party defendant does not remain silent in one action, then bring a second suit on the basis of a pre-existing claim for relief that would impair the rights or interests established in the first action (Batavia Kill Watershed Dist. v Charles O. Desch, Inc., 83 AD2d 97, 100, affd 57 NY2d 796; Modell & Co. v Minister of Refm. Prot. Dutch Church, 68 NY2d 456, 461). It does not appear that allowing plaintiff’s claim for a money judgment to proceed to disposition on the merits will upset