When is a counterclaim considered compulsory in New York?

A counterclaim is deemed compulsory in New York when it arises from the same transaction or occurrence as the original claim. This requirement is rooted in New York Civil Practice Law and Rules (CPLR), which encourages judicial efficiency by requiring parties to resolve all claims that stem from the same incident in a single action. This not only helps to avoid multiple lawsuits and inconsistent judgments but also serves to streamline the litigation process.

When a counterclaim meets this criteria, the defendant must assert it in their response or risk waiving the right to bring that claim later. The rationale is that both the original claim and the counterclaim are linked through their common origin in the same set of facts, thereby making it necessary to tackle them together to achieve a comprehensive resolution.

In contrast, a counterclaim that is unrelated to the original claim, involves a different party, or is submitted after the original claim has already been filed does not meet the compulsory requirement. Such counterclaims may still be permissible as permissive counterclaims but are not mandated to be presented in the same action as the original claim. This distinction ensures that the primary issues can be addressed efficiently without sidetracking the core dispute with unrelated claims.