18 N.Y.3d 33 (2011)
An appeal from a final judgment brings up for review a prior non-final order dismissing a cause of action or counterclaim if the dismissal necessarily removed that legal issue from the case.
Summary
This case addresses the “necessarily affects” requirement under CPLR 5501(a)(1), determining whether an appeal from a final judgment allows review of a prior non-final order dismissing counterclaims. Strauss sued Windsor, Twinkle, and others, seeking a declaration as the lawful tenant of a property. The Rodriguezes (Windsor/Twinkle) counterclaimed, alleging fraud, conversion, and tortious interference, but not breach of contract. The Supreme Court dismissed these counterclaims. After a trial on possession, the court declared Strauss the lawful tenant. The Appellate Division held that the appeal from the judgment did not bring up for review the prior order dismissing the counterclaims. The Court of Appeals reversed, holding that the dismissal of the counterclaims necessarily affected the final judgment and should be reviewed.
Facts
Strauss and Windsor/Twinkle negotiated a merger, with Strauss to occupy Windsor’s leased premises. The parties began performing without a fully executed contract. A dispute arose, and Strauss removed the Rodriguezes from payroll and changed the locks. Strauss sued for a declaration as the lawful tenant.
Procedural History
Strauss sued in Supreme Court. The Rodriguezes counterclaimed. The Supreme Court dismissed the counterclaims. The Rodriguezes moved to amend their answer to assert breach of contract, but the motion was denied. After a bench trial, the Supreme Court declared Strauss the lawful tenant. The Rodriguezes appealed to the Appellate Division, seeking review of the order dismissing the counterclaims, but the Appellate Division affirmed, holding the order did not necessarily affect the final judgment. The Court of Appeals granted leave to appeal.
Issue(s)
Whether an appeal from a final judgment brings up for review a prior non-final order dismissing the defendant’s counterclaims.
Holding
Yes, because the dismissal of the counterclaims by the Supreme Court necessarily removed the legal issues raised in those counterclaims from the case, thus the order dismissing the counterclaims necessarily affected the final judgment.
Court’s Reasoning
The Court of Appeals addressed the scope of CPLR 5501(a)(1), which permits review of non-final orders that “necessarily affect” the final judgment. The Court cited Karger’s definition: a non-final order “necessarily affects” a final judgment if reversing the order would require reversing or modifying the judgment, and there was no further opportunity to raise the decided questions. The Court rejected the Appellate Division’s reliance on Siegel’s test (whether reversal of the non-final order would overturn the judgment), finding it too narrow. The Court emphasized that its prior jurisprudence (citing Draper, Lasidi, Karlin, Scarangella, and Bartoo) did not require the reinstatement of a counterclaim to completely overturn the judgment. The Court reasoned that the Supreme Court’s dismissal under CPLR 3211(a)(7) removed the legal issue from the case. “Put another way, because Supreme Court’s dismissal of the counterclaims and third-party claim necessarily removed that legal issue from the case (i.e., there was no further opportunity during the litigation to raise the question decided by the prior non-final order), that order necessarily affected the final judgment.” Consequently, the Court remitted the case to the Appellate Division for review of the Supreme Court’s order dismissing the counterclaims, along with the final judgment.