The New York Post reports that Caroline Meanwell filed documents in court Tuesday to drop the lawsuit.
The suit had alleged that Cashman conspired with her daughter's former therapist and his legal team to trick Meanwell into calling 911 to discredit her daughter, who had claimed to have a nine-month affair with Cashman.
The suit claimed Meanwell was coerced into telling authorities her daughter, Louise Neathway, was going to kill herself so Neathway would be institutionalized.
Prosecutors say Neathway stalked Cashman and got him to pay her $6,000 by threatening to damage his reputation.
Neathway has pleaded not guilty.