Permissive Counterclaim

Permissive Counterclaim

A claim by a defendant opposing the claim of the plaintiff and seeking some relief from the plaintiff for the defendant.

Once a plaintiff sues a defendant in a civil action, the defendant has the right to assert a legal claim of her own against the plaintiff. This is known as a counterclaim. A counterclaim makes assertions that the defendant could have made in a lawsuit if the plaintiff had not already begun an action. A counterclaim is distinct from a mere defense, which seeks only to defeat the plaintiff's lawsuit, in that it seeks a form of relief. There are two types of counterclaims: compulsory counterclaims and permissive counterclaims. Both are governed in federal court by rule 13 of the Federal Rules of Civil Procedure. The rules in state courts are similar.

The compulsory counterclaim arises from the same transaction or occurrence that forms the basis of the plaintiff's suit. For example, a car accident between two drivers leads to a personal injury lawsuit, but the defendant asserts in a compulsory counterclaim that the plaintiff actually owes him damages for injuries. A compulsory counterclaim generally must be part of the initial answer to the plaintiff's action and cannot be made later in the suit or in a separate lawsuit.

By contrast, the permissive counterclaim arises from an event unrelated to the matter on which the plaintiff's suit is based. For example, John Smith breaks his leg while visiting the home of Jane Doe. Smith sues Doe, alleging that she negligently left her child's roller skate on her front porch. In a permissive counterclaim, Doe asserts that Smith owes her money. The court will rule separately on plaintiff Smith's and defendant Doe's respective claims; if both claims are permitted to proceed, Smith v. Doe will involve the two parties' respective allegations of Negligence and a bad debt.

Counterclaims are usually valid only if it is possible to make the same claim by starting a lawsuit. Thus, in the example of Smith and Doe, Doe can only make her permissive counterclaim if the Statute of Limitations on collection of the debt has not expired. Permissive counterclaims need not be made in the initial Pleading; they can be made at a later time or even in another lawsuit. This flexibility may help the defendant's legal strategy: she can wait and sue in a different court, in order to have another judge hear the case or to avoid arguing the merits of separate claims before the same jury.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.
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Leisinger, (31) which held that a permissive counterclaim did not relate back to the complaint and therefore did not toll the statute of limitations.
(96) A permissive counterclaim is defined by S.D.C.L.
(112) Despite the lack of a summons, (113) South Dakota has interpreted a permissive counterclaim to be commenced and subject to the applicable statute of limitations when filed within the answer.
(217) The court's explicit preclusion of relating back a counterclaim in Jacobson was specific to a permissive counterclaim. (218) South Dakota statutorily distinguishes between compulsory and permissive counterclaims; (219) such demarcations are drawn in Jacobson.
[section] 15-6-13(b) (2004) (stating the elements of a permissive counterclaim).
Verizon New England, Inc., the First Circuit addressed the issue of whether a federal court can properly exercise supplemental jurisdiction over a permissive counterclaim based on its relation to another counterclaim asserted by the defendant.
1984) (exercising jurisdiction over permissive counterclaim based on ancillary jurisdiction, not defensive "set-off exception); McCaffrey v.
In order for a United States federal district court to exercise jurisdiction over claims brought by a plaintiff, the claims must either be of sufficient federal substance, or be based on diversity between the parties with an amount in controversy exceeding $75,000 (1) When the parties are in federal court based on a federal question, the court's supplemental jurisdiction extends to other non-federal compulsory counterclaims that a defendant is required to bring, and the court may exercise jurisdiction over so called "permissive counterclaims" so long as they form part of the same Article III case or controversy as the original claim.
(13) Count two asserted that GNAP had commingled funds, and count three claimed "alter ego liability and disregard of the corporate form." (14) Count three required joining additional parties to the lawsuit: Global NAPs New Hampshire, Global NAPs Networks, Global NAPs Realty, Ferrous, a holding company, and Frank Gangi "[the] founder and sole shareholder of Ferrous." (15) After an unsuccessful attempt by GNAP to have counts two and three dismissed as permissive counterclaims, the court entered a default judgment for Verizon based on GNAP's discovery violations and held all of the defendants jointly and severally liable for the full amount of the judgment.
[section] 1367, district courts addressed compulsory and permissive counterclaims through what was deemed pendent and ancillary jurisdiction.
Kroger filed an unrelated permissive counterclaim for her husband's wrongful death based on diversity, there would be no supplemental jurisdiction over her claim against additional party Owen Equipment); see also id.
preclusion should not apply to such permissive counterclaims. (69) As