I'm Lucy, and I'd be happy to answer your questions today. I'm very sorry to hear that this is happening.
Once you have already filed an appearance in a case, it is unfortunately too late to move to dismiss on the basis of improper service. That defense must be stated in the first response to the Complaint. N.Y. Civ. Practice Laws and Rules, Section 3211. In addition, when a case is dismissed due to improper service, it is dismissed without prejudice. That means it can be immediately refiled, the defendant can be served properly, and the case will proceed. That's because there's a preference in the law for deciding cases on their merits and not on technicalities. That may be why your lawyer did not seek dismissal - it could have delayed things a bit, but it wouldn't make the case go away forever.
The law unfortunately does not allow a case to be dismissed based on the grounds that the allegations listed in the Complaint are untrue. This is because due process guarantees that everyone will receive their day in court. The judge isn't allowed to take your word for it that the grandparents are lying any more than the grandparents could ask him to automatically assume their allegations are correct and give them custody. Any time there is a dispute regarding the facts of the case, it has to go to trial. That's what a trial is for. A party cannot have a case with disputed facts dismissed just because the facts are groundless. You may be thinking of a motion to dismiss for failure to state a claim, but what that means is a judge would have to read a Complaint, assume ALL the facts in it were true, and still find that it doesn't allege any violation of the law. That's very different than the scenario you're in.
With that said, if you have evidence that the grandparents are intentionally filing baseless claims in order to take your children from you, knowing the claims have no legal merit, you may be able to file a civil cause of action against them for abuse of process. Damages can include the cost of paying an attorney to represent you to defend the case, so that's something to keep in mind when deciding whether to proceed pro se. You're also able to seek reimbursement for any out-of-pocket expenses, mileage traveling to and from court to defend the original allegations, and punitive damages. The custody case must be resolved in your favor before you can file a civil lawsuit against the grandparents for damages.
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