CPLR 3211(a)(4) Deference to Sister‑State Wrongful‑Injunction Proceedings: Dissolution of the Injunction Does Not Defeat Dismissal for Another Action Pending

Case: 417 N. Comanche Street, LLC v. EMRES II Texas, LLC, et al., 2025 NY Slip Op 06245 (1st Dept Nov. 13, 2025)

Court: Appellate Division of the Supreme Court, First Department (Manzanet-Daniels, J.P., Moulton, Scarpulla, González, JJ.)

Disposition: Order granting dismissal under CPLR 3211(a)(4) (another action pending) affirmed, without costs.

Introduction

This decision clarifies how New York courts apply CPLR 3211(a)(4) when a sister-state proceeding already encompasses the same core controversy and damages, even if a key injunction in that sister-state case has been dissolved. The First Department held that New York courts should dismiss a parallel New York action in favor of an ongoing Texas proceeding involving a wrongful-injunction counterclaim arising from the same operative facts, where:

There is sufficient identity between the parties;
The claims arise from the same series of alleged wrongs and seek substantially overlapping relief; and
Judicial economy, comity, and the risk of inconsistent judgments outweigh any differences in damages theories or the presence of additional affiliated defendants in New York.

The parties are a lender (417 N. Comanche Street, LLC, the plaintiff-appellant) and a prospective purchaser of a Texas property (EMRES II Texas, LLC, the lead defendant-respondent), along with EMRES’s affiliates. The litigation stems from a 2016 loan to develop a student housing complex in Texas, ensuing defaults, a dispute over the lender’s right to charge default interest, and injunctions that blocked nonjudicial foreclosure.

Summary of the Opinion

The First Department affirmed dismissal of 417 N. Comanche’s New York tortious interference action against EMRES and related entities under CPLR 3211(a)(4), concluding that a pending Texas action—where 417 N. Comanche is already pursuing a counterclaim for wrongful injunction (suit on bond)—covers the same operative dispute and sought relief. The court emphasized:

The New York and Texas litigations involve sufficiently identical parties: 417 N. Comanche and EMRES are direct adversaries in both. The presence of additional affiliated defendants in New York does not preclude dismissal.
The New York tortious interference claim and the Texas wrongful-injunction counterclaim arise from the same series of alleged wrongs—principally the procurement and continuation of an injunction that prevented foreclosure.
The relief overlaps because both suits principally seek compensation for damages caused by the lender’s inability to foreclose due to the injunction, even if 417 N. Comanche asserts potentially greater damages in New York.
Comity, judicial economy, and avoiding inconsistent rulings justify dismissal, especially because the Texas court must still decide whether the injunction was improperly issued or perpetuated under Texas law, an issue that would be duplicated in New York.

The court rejected the argument that dissolution of the Texas injunction rendered the New York action appropriate. The Texas counterclaim remains pending, and Texas law requires proof that the injunction was improperly issued or perpetuated—an unresolved determination. The First Department did not reach the other dismissal grounds (statute of limitations; failure to state a claim).

Background

2016: Nonparty Point San Marcos Partners, L.P. (PSMP) obtains a loan for a Texas student housing project.
2017–2020: PSMP defaults. The loan is accelerated in June 2020.
Oct–Nov 2020: PSMP attempts to sell the property to EMET Municipal Real Estate Strategy (EMET), allegedly violating assignment restrictions. 417 N. Comanche purchases the loan (November 6, 2020) and posts the property for a nonjudicial foreclosure sale.
Dec 2020: EMET assigns rights in the purchase agreement to EMRES II Texas, LLC (EMRES), a single-purpose entity formed to close. After failed payoff attempts, 417 N. Comanche reposts the property for foreclosure.
2021: Texas litigation begins.

PSMP obtains a preliminary injunction blocking foreclosure, contesting default interest.
EMRES files a second Texas action alleging tortious interference, again securing a preliminary injunction. A $500,000 bond is posted.
A third Texas action addresses whether the lender may charge default interest; an intermediate appellate court ultimately rules for 417 N. Comanche. The Texas Supreme Court later denies review (September 2025).

Feb–Apr 2024: 417 N. Comanche files a “suit on bond/wrongful injunction” counterclaim in the EMRES action in Texas, asserting the injunction was wrongful from inception because default interest was properly chargeable. The Texas court denies dissolution of the injunction but increases the bond to $3 million.
Mar 2024: 417 N. Comanche sues in New York for tortious interference against EMRES and several affiliates, alleging the Texas injunction blocked its foreclosure rights. It also points to EMET’s alleged inducement of PSMP to breach the loan’s consent provisions, but identifies the injunction as the center of the case and damages.
Oct 2024: While the New York motion to dismiss is pending, the Texas court grants 417 N. Comanche summary judgment dismissing EMRES’s tortious interference claim and lifts the injunction (October 15, 2024). The New York Supreme Court had dismissed the New York action eight days earlier under CPLR 3211(a)(4).

Detailed Analysis

Precedents Cited and Their Influence

Syncora Guar. Inc. v. J.P. Morgan Sec. LLC, 110 AD3d 87 (1st Dept 2013). The court distilled three key CPLR 3211(a)(4) considerations: identity of parties, commonality of transactions/facts, and whether the same recovery is sought. It also underscored judicial economy, comity, and avoiding inconsistent judgments, and reiterated the general first-in-time rule. Here, Syncora’s framework anchored the First Department’s factor-by-factor analysis.
White Light Prods. v. On The Scene Prods., 231 AD2d 90 (1st Dept 1997). Cited for balancing comity and judicial economy and for the principle that even where some differences exist, dismissal is appropriate if the relief is not antagonistic and would not serve different purposes. The court used White Light to emphasize that a discrepancy in damages sought does not defeat dismissal where the relief overlaps.
L-3 Communications Corp. v. SafeNet, Inc., 45 AD3d 1 (1st Dept 2007). Cited to caution that the first-in-time rule is not mechanically dispositive. The First Department acknowledged this nuance but concluded the balance still favored dismissal here.
GMF 157 LP v. Inspirit Dev. & Constr., LLC, 235 AD3d 493 (1st Dept 2025). Invoked to support the conclusion that claims arise from the same series of alleged wrongs even when framed under different theories, reinforcing the overlap between the New York tortious interference claim and the Texas wrongful-injunction counterclaim.
DeSantis v. Wackenhut Corp., 793 SW2d 670, 685–686 (Tex 1990), cert denied, 498 US 1048 (1991). A Texas Supreme Court authority, cited for the proposition that a wrongful-injunction claim requires showing the injunction was improperly issued or perpetuated, not merely that it was later dissolved. This underscored that live issues critical to damages remained for the Texas court to resolve—further justifying deference by New York.

Legal Reasoning

The First Department’s reasoning proceeds along the Syncora factors, tempered by White Light, L-3 Communications, and the comity/inconsistent-judgments concerns that animate CPLR 3211(a)(4):

Identity of parties. The court found “sufficient identity” because 417 N. Comanche and EMRES directly oppose each other in both litigations. The addition of other defendants in New York—who were affiliated with EMRES—did not undermine dismissal. New York courts do not require perfect overlap; where affiliates are added but the core dispute is the same, dismissal still lies.
Same transaction/series of wrongs. Both the Texas counterclaim and the New York complaint turn on the propriety and effects of the Texas injunction that blocked foreclosure, including whether it was wrongfully obtained or maintained. Even though 417 N. Comanche cited EMET’s alleged inducement of PSMP to breach loan assignment limits, it acknowledged the injunction sits at the “center” of its case. The court held the factual allegations are sufficiently similar and derive from the same series of alleged wrongs.
Same or overlapping recovery. The court viewed both suits as seeking to compensate the lender for harm caused by the inability to foreclose during the injunction’s lifespan. Although 417 N. Comanche claimed New York allowed greater damages than Texas (where recovery on a wrongful-injunction claim is often linked to the bond), the court noted that 417 N. Comanche did not explain why it could not assert other counterclaims in Texas to seek amounts beyond the $3 million bond. The relief is not antagonistic or serving different purposes; it is fundamentally duplicative.
Comity, judicial economy, and risk of inconsistent judgments. These considerations were decisive. Even after the Texas injunction was lifted, the wrongful-injunction counterclaim remained pending, and under Texas law requires an adjudication of whether the injunction was improperly issued or perpetuated. If New York proceeded on tortious interference predicated on the same injunction, it would risk inconsistent findings on precisely the same issues the Texas court is poised to decide. Dismissal thus avoids duplicative litigation and conflicting results.
First-in-time rule, non-mechanical. The court recognized that priority is not mechanically determined by filing date, but here, the Texas actions commenced years earlier and now encompass the counterclaim that mirrors the relief sought in New York. On balance, comity and efficiency favored deferring to Texas.

Finally, the court rejected the notion that dissolving the injunction mooted the comity analysis. Dissolution is an element of recovery under Texas wrongful-injunction law, but not the only element; the Texas court must still decide whether the injunction was improper in the first place or wrongfully continued. Until Texas resolves that, New York’s adjudication would intrude and potentially conflict.

Impact and Implications

On Multi-Forum Litigation and CPLR 3211(a)(4)

Sister-state injunctions and bond claims are centripetal. Where a sister-state court issued an injunction and holds the bond, New York will defer if a wrongful-injunction claim (or analogous counterclaim) remains pending there. Parties cannot repackage the same injunction-centered damages as New York torts to secure a broader forum or potentially larger damages.
Additional defendants and agency/affiliate theories will not defeat dismissal. Adding affiliated individuals or entities in New York will not overcome dismissal when the core adversaries are already litigating the same controversy elsewhere.
Damages differentials are secondary to comity and consistency. Even if a plaintiff alleges larger New York damages, dismissal may still be warranted if the relief in both fora is aligned and the foreign court can entertain additional counterclaims. Courts will prioritize avoiding inconsistent adjudications over the plaintiff’s forum-based damages strategy.
Timing and dissolution do not moot comity. The lifting of an injunction does not retroactively authorize duplicative New York litigation when the foreign court still must decide whether the injunction was improperly issued or maintained—a predicate for wrongful-injunction recovery.

For Secured Lenders and Real Estate Litigators

Consolidate injunction-related damages in the enjoining forum. If an injunction in State A halted foreclosure, damages flowing from that injunction should primarily be pursued in State A, especially via a wrongful-injunction claim against the bond and any additional counterclaims available there.
Expect scrutiny of forum-splitting on injunction harms. Where the gravamen of damages is the existence and duration of a sister-state injunction, New York will strongly favor dismissal under CPLR 3211(a)(4).
Consider bond strategy early. Here, the Texas court increased the bond to $3 million. Bond adequacy can be case-defining if recovery on a wrongful injunction is tied to that bond; parties should move to calibrate the bond to anticipated harm.

Doctrinal Clarifications

Identity of parties is practical, not perfect. That New York action included additional defendants did not preclude dismissal; where those parties are affiliated with an existing adversary, and the controversy is the same, CPLR 3211(a)(4) still applies.
Cross-border comity is robust. New York will avoid treading on a sister-state court’s prerogative to adjudicate the propriety of its own injunction and to manage the bond-based remedy.

Complex Concepts Simplified

CPLR 3211(a)(4) (Another Action Pending): A New York court may dismiss or stay a case if there is another action already pending between the same parties for the same cause of action in a court of any jurisdiction. Courts consider party overlap, factual overlap, and overlap in the relief sought, as well as comity, efficiency, and risk of inconsistent judgments.
Comity: A principle whereby courts respect the jurisdiction and proceedings of other courts (including those in other states), to promote orderly, non-duplicative litigation and avoid conflicting decisions.
First-in-Time Rule: As a general matter, the court that first takes jurisdiction over a dispute should decide it. New York applies this sensibly, not mechanically; courts still weigh fairness, convenience, and overlapping issues.
Wrongful Injunction (Suit on Bond): When a court issues a preliminary injunction, the applicant typically must post a bond to secure the enjoined party against wrongful restraint. A wrongful-injunction claim seeks damages caused by an injunction that was improperly granted or maintained. Under Texas law (per DeSantis), dissolution alone is insufficient; the party must show the injunction was improperly issued or perpetuated.
Default Interest and Acceleration: Loan agreements often provide for a higher interest rate after default (default interest) and allow the lender to accelerate the entire debt. Disputes over the contractual right to default interest can determine payoff amounts and therefore the propriety of injunctive relief blocking foreclosure.
Nonjudicial Foreclosure: A foreclosure process that occurs without court supervision, typically under a deed of trust. Many states (including Texas) permit nonjudicial foreclosure subject to statutory and contractual requirements.
Tortious Interference with Contract: A tort where a third party intentionally and improperly induces a contracting party to breach a contract, causing damages. Here, the claimed interference centered on the injunction that prevented foreclosure and, secondarily, on alleged inducement to breach loan assignment restrictions.

Unresolved and Not Reached

Statute of Limitations and Failure to State a Claim: The First Department affirmed on CPLR 3211(a)(4) grounds; it did not reach these alternative bases for dismissal.
Scope of Texas Remedies: The court noted 417 N. Comanche argued Texas recovery is limited to the bond, but observed that 417 did not explain why other counterclaims could not be brought in Texas to seek amounts beyond the bond. The First Department did not decide the scope of Texas recovery; it held only that the overlap in relief and the pending Texas issues warranted dismissal.

Key Takeaways

New York will dismiss a parallel action under CPLR 3211(a)(4) when a sister-state case already features a wrongful-injunction claim covering the same injunction-based damages, even if the injunction has since been dissolved.
Adding affiliated defendants or alleging higher damages in New York does not avoid dismissal where the core parties, facts, and remedial aims overlap.
Comity and the risk of inconsistent judgments are paramount, particularly where the sister-state court must still decide whether its own injunction was improperly issued or perpetuated.

Conclusion

417 N. Comanche St., LLC v. EMRES II Tex., LLC reinforces a disciplined approach to CPLR 3211(a)(4) in the multi-jurisdictional injunction context. The First Department underscores that where the essence of the dispute is an out-of-state injunction and its consequences, New York will defer to the forum that issued and supervised the injunction—especially when a wrongful-injunction claim remains unresolved there. Differences in defendants and alleged damages will not outweigh the goals of comity, judicial economy, and avoiding inconsistent decisions. For practitioners, the opinion is a clear signal: consolidate injunction-related damages in the enjoining forum, calibrate the bond to potential harm, and resist duplicative filings that risk dismissal in New York.