Legal Question in Civil Litigation in Colorado

You don't provide enough facts and your statement is not entirely clear. A suit can't be dropped by the defendant as the plaintiff is the one who files the suit. Counterclaims certainly can continue because they are separate claims. Often a suit can have literally dozens of claims and counterclaims. If one party voluntarily withdraws a claim that does not prevent the other claims from going forward.

You should contact an attorney and provide them enough facts to be able to advise you.