Lohmann v Miller
2011 NY Slip Op 32646(U)
July 22, 2011
Supreme Court, Nassau County
Docket Number: 11624/09
Judge: F. Dana Winslow
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[* 1]
SHORT FORM ORDER
SUPREME COURT - STATE OF NEW YORK
Present:
HON. F. DANA WINSLOW,
Justice
TRIALIIAS, PART 4
KEVIN LOHMANN,
NASSAU COUNTY
Plaintiff,
-against-
MOTION DATE: 5- 17MOTION SEQ. NO. : 001
INDEX NO. : 11624/09
DINA MILLER,
Defendant.
The following papers read on this motion (numbered 1- 4):
Notice of Motion... ...
..1:..
Notice of Cross- Motion and Affirmation in Opposition.................
Reply and Affirmation in Opposition............................................
Reply Affirmation in Support of Cross-Motion............................
3025(b) for leave to file a second amended
complaint adding four new causes of action and deleting four others. Defendant opposes
the motion and , in the alternative , cross-moves pursuant to
3025(b) for costs and
a continuance to permit discovery on the new causes of action.
Plaintiff moves pursuant to CPLR
CPLR
BACKGROUN
This action arises out of the personal and financial relationship between plaintiff
and defendant, which commenced in or about 1994. The undisputed facts are as follows.
Some time in 1994 , a home was purchased in the state of Florida in defendant' s name (the
Florida Propert" ). Plaintiff and defendant set up housekeeping in the Florida Propert
and had two children together. The Florida Propert was sold on or about March 5
, 2004.
In or about March of 2004 , a residence located at 23 Arrandale Avenue , Great Neck , NY
(the " 23 Arandale Avenue Property" ), was purchased in defendant' s name. The parties
resided together in the 23 Arrandale Avenue Propert until June of 2008, when the
parties ' personal relationship terminated and plaintiff moved out. In or about July of
2007 , real propert located at 21 Arrandale Avenue , Great Neck, NY (the " 21 Arrandale
Avenue Propert" ) was purchased in defendant' s name. Defendant continues to reside at
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the 23 Arrandale Avenue Propert.
rental propert.
The 21 Arrandale
Avenue Propert is maintained as a
The dispute between the paries centers on the financial arrangements relating to
the purchase , improvement and sale of the subject properties; paricularly the parties
respective contributions to the costs and expenses thereof, and their respective rights with
respect to the value , income or proceeds of sale. Essentially, plaintiff seeks to recover a
money judgment from defendant , ostensibly representing his uncompensated contribution
, or his share of, the value derived from the subject properties. Plaintiffhas changed
counsel twice since the commencement of the action , however , and each incoming
counsel has sought to amend the complaint to change , in part, the theories of recovery.
Plaintiff commenced this action on June 16 2009 , with the fiing of a Summons
and Verified Complaint by the Law Finn of Elias C. Schwartz , Esq. (the " Verified
Complaint" ) (Mot. Exh. A). The Verified Complaint contained five causes of action:
three sounding in unjust enrichment and quantum meruit with respect to each of the three
subject properties , respectively, and two seeking to impose a constructive trst on the 23
Arrandale Avenue Propert and the 21 Arrandale Avenue Propert, respectively.
On or about October 16 2009, without leave of the Court, plaintiff fied an
Amended Complaint (the " Amended Complaint" ) through incoming attorneys , the Law
Office of Ellot S. Schlissel. The Amended Complaint continued the original causes of
action and added four matrimonial causes of action , including three causes of action
demanding recognition of a common law marriage between the parties pursuant to the
laws of three different States , and the fourth demanding a divorce and related relief
pursuant to the Domestic Relations Law.
In the instant motion , plaintiff, now represented by attorneys Tilem & Campbell
P.
, seeks leave to amend the complaint a second time , to delete the four matrimonial
causes of action , and to add four new causes of action; namely, for breach of partnership
agreement , breach of contract , fraud and accounting. The original causes of action for
unjust enrichment and constructive trust are continued. The proposed Second Amended
Verified Complaint is attached to the Motion as Exhibit E.
Defendant opposes the motion on grounds that (i) the proposed amendments lack
merit, (ii) the application for leave to amend is late , and (ii) the amendment wil result
prejudice to the defendant.
[* 3]
DISCUSSION
Merits of the Amendment
On a motion to amend a pleading pursuant to CPLR ~3025 , the merits of the
proposed pleading are not evaluated in the same manner and by the same standard as on a
motion to dismiss pursuant to CPLR ~3211(a)(7). The part seeking to amend the
pleading is not required to establish the legal sufficiency or merit of a proposed pleading
in the first instance. Lucido v. Mancuso, 49 AD3d 220 227. The merits of the proposed
pleading are only examined when the insufficiency or lack of merit is clear and free from
doubt. Id. Leave to amend a pleading should be freely granted unless the proposed
amendment is palpably insufficient or patently devoid of merit. MBIA Ins. Corp. v.
Greystone & Co., Inc. , 74 A. D.3d 499 , 500; G. K. Alan Assoc., Inc. v. Lazzari , 44
AD3d 95 99; Trataros Const., Inc. v. New York City Housing Authority, 34 AD3d
451 452- 453. The standard is particularly liberal where , as here , the plaintiff seeks to
add a new theory of recovery, without alleging new or different transactions. Sample v.
Levada , 8 AD3d 465 , 468.
In the case at bar , the allegations of the proposed Second Amended Verified
Complaint mirror those set forth in the original Verified Complaint. Both the Second
Amended Verified Complaint and the original Verified Complaint are predicated upon
the existence of an " oral agreement andjoint venture " between the paries "to share their
lives and financial affairs. " Both allege that the parties entered into an oral joint venture
agreement to purchase , manage and improve real propert for investment purposes with
the intent to share in the profits and/or losses. The Second Amended Verified Complaint
and the original Verified Complaint allege the same essential transactions and occurrences relating to the Florida Propert, the 23 Arrandale Avenue Propert and the 21
Arrandale Avenue Propert. The only real difference between the Second Amended
Verified Complaint and the original Verified Complaint, is the addition of new theories of
recovery, and the manner in which the allegations are framed to support those theories of
recovery .
The Court does not fmd that the breach of parnership cause of action is wholly
lacking in merit. The absence of a written agreement is not conclusive. " When there is
no written partnership agreement between the paries , the court must determine whether a
partnership in fact existed from the conduct , intention , and relationship between the
parties. " Czernicki v. Lawniczak, 74 A. D.3d 1121. " Factors to be considered in
determining the existence of a partnership include (I) sharing of profits , (2) sharing of
losses , (3) ownership of partnership assets , (4) joint management and control , (5) joint
liabilty to creditors , (6) intention of the parties , (7) compensation , (8) contribution of
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capital , and (9) loans to the organization. " Id. Although disputed by the defendant, the
allegations contained in the Verified Complaint and the proposed Second Amended
Verified Complaint regarding the oral joint venture agreement to purchase , improve and
sell real estate and to share in the profits or losses , are not palpably insufficient to support
the breach of partership theory of recovery.
Similarly, such allegations are not palpably insufficient to support a cause of action
sounding in breach of contract. Defendant asserts that there was no "meeting of the
minds " and thus neither the breach of partnership nor breach of contract cause of action
can be sustained. The existence of an agreement between the parties is a question of fact
which cannot be detennined on a motion to amend the pleading, particularly where , as
here , the proposed allegations are not facially incredible and there are no established facts
in the record which clearly negate the truth of the proposed allegations.
The proposed fraud cause of action is based upon allegations (i) that defendant
fraudulently induced plaintiff to enter into the joint business venture , (ii) that , in reliance
upon defendant' s promise to share in the financial gain , plaintiff invested his money, time
and labor to purchase and improve the properties; and (iii) that defendant had no intention
of sharing in the profits of the venture. Plaintiff claims , among other things , that
defendant " continuously assured" plaintiff that she would add his name to the deeds of
the 23 Arrandale Avenue Propert and the 21 Arrandale A venue Propert, and that she
repeatedly " held Plaintiff out in public as an owner of the properties " in order to induce
his continued investment. Proposed Second Amended Verified Complaint,-,- 29 , 30.
The transactions and occurences underlying the proposed fraud cause of action
are substantially the same as those underlying the original Verified Complaint. The
claims are not inherently incredible , nor patently insufficient with respect to the elements
Perrotti v. Becker, Glynn,
Melamed & Muffy LLP , 82 A. D.3d 495.
of a cause of action for fraudulent inducement.
See
The Court notes that plaintiff cannot sustain a fraud cause of action if the only
Clark- Fitzpatrick, Inc. v. Long Island
Railroad Co., 70 NY2d 382; Page v. Muze, Inc. , 270 AD2d401. To maintain a fraud
fraud alleged relates to a breach of contract.
See
action in a contractual setting, the plaintiff must allege: " (1) a legal duty separate and
apart from the contractual duty to perfonn; (2) a fraudulent representation collateral or
(3) special damages proximately caused by the fraudulent
representation that are not recoverable under the contract measure of damages. " Bell
Sports, Inc. v. System Software Associates, Inc., 45 F . Supp. 2d 220 (emphasis
rev on other grounds.
extraneous to the contract;
supplied),
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In the case at bar , plaintiff alleges a " contract" to share in the profits or losses
derived from the investment in real propert. Insofar as the terms of such agreement are
not clear on the record of this motion, certain statements or conduct attributed to
defendant (the assurance that plaintiff's name would be added to the deeds , or the
holding out" of plaintiff as a co-owner of the subject properties), might ultimately be
deemed collateral to the contract. In any event , the fraudulent inducement claim may be
Bell Sports , Inc. v. System Software Associates , 71
Supp.2d 121. Thus , even though the fraud claim appears to arise in a contractual
setting, the Court does not, at this time , find that it is patently and unequivocally devoid
of merit so as to preclude an amendment to the pleadings. Such considerations may be
addressed , upon an evidentiary record , in the context of a summary judgment motion.
plead in the alternative.
See
The proposed cause of action for an accounting piggybacks onto the other causes
of action. To the extent that plaintiff is entitled to a share of the value derived from the
investment in the subject properties , on any theory of recovery, an accounting is necessary
to determine the amount.
Lateness and Prejudice
Defendant asserts that this application was late insofar as it was made two weeks
prior to the scheduled certification conference when all discovery (based upon the
existing pleadings) was complete. Defendant asserts that she wil be prejudiced by the
late fiing because she 'did 110t have the opportunity to " explore " these new theories of
recovery in discovery or at the deposition of plaintiff. (Affirmation in Support of CrossMotion
20)
Plaintiff claims that the delay was reasonable inasmuch as the factual basis for the
amendment was discovered at the paries ' depositions , and plaintiff moved to amend
shortly thereafter. Further , plaintiff argues that there is no prejudice or surprise to the
defendant , because the elements of the first four causes of action were present in the
original complaint , and the fraud cause of action is based upon evidence adduced at the
depositions. According to plaintiff, the purpose of the amendment was to conform to the
evidence. (Reply and Affinnation in Opposition
The motion to amend the pleadings is addressed to the discretion of the Court.
Lateness, in itself, is not a barrier. Rather , it is " lateness coupled with significant
prejudice to the other side " that warrants a denial of the application. Rutz v Kellum 144
D . 2d 1017 , 1018. " Prejudice in this context means that the
par opposing the
amendment has been hindered in the preparation of its case or has been prevented from
taking some measure in support of its position. " Garrison v. Clark Mun. Equip., 239
[* 6]
AD2d 742 (internal quotation omitted). The fact that a proposed amendment would
require the parties to conduct additional discovery does not , in itself, constitute sufficient
grounds to deny the motion, Id. at 743. The cases cited by defendant are inapposite
insofar as they concern applications made close to or at the time of trial.
Contilo, 55
See
Samson v.
AD3d 592; Cohen v. Ho, 38 AD3d 705.
In the case at bar , the proposed amendment is based upon substantially the same
transactions and occurrences as alleged in the original complaint. Although new legal
theories are asserted , the proof supporting the new causes of action is intertined with the
Garrison , 239 AD2d at 743. The
Court fmds that the proposed amendment poses no significant prejudice to defendant that
could not be averted by additional discovery, if necessary.
proof supporting the existing causes of action.
See
Defendant' s Cross-Motion
Although CPLR ~3025(b) authorizes the Court to grant costs and continuances to
the part opposing the amendment , the Court finds that defendant's argument for same on
the basis of a need for further discovery is both vague and conc1usory. In the absence of
deposition transcripts , the Court is unable to determine the extent to which defendant has
been able or unable to " explore " the facts underlying the new theories of the case. The
Cour requires a specific showing regarding the proposed subject matter of any furter
discovery sought , which shall be limited to subject matter that was not, or could not have
been, elicited in prior demands or proceedings.
The Court notes that , according to the Unified Cour System s Case Management
database , a Note of Issue was fied in this action on July 29 2011 , while the instant
motion was pending. In the interest of justice , the Court wil consider an application to
vacate the Note of Issue , upon notice and upon proof that further discovery is warranted
in accordance with the foregoing. The Cour wil consider awarding costs upon
determination of the subsequent a.pplication , if any: (i) to defendant , in the event that she
shows that further discovery was necessitated by the amendment of the complaint, or (ii)
to plaintiff, in the event that the subsequent application to vacate the Note of Issue is
deemed frivolous.
CONCLUSION
The Court has considered the remaining contentions of the parties and finds them
to be without merit. Based upon the foregoing, it is
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ORDERED , that plaintiffs motion to
CPLR
Plaintiff is shall fie and serve an amended complaint in the form of
the proposed Second Amended Verified Complaint, together with a copy of this Order
within 20 business days of entry of this Order in the records of the Nassau County Clerk;
and it is further
amend the complaint pursuant to
~3025(b) is
granted.
ORDERED , that defendant's cross-motion for costs and a continuance pursuant to
without prejudice to renewal upon proper proof or to the
filing of a motion to vacate the Note of Issue in accordance with the foregoing, within 20
business days of entry of this Order in the records of the Nassau County Clerk.
CPLR
~3025(b) is
denied,
ENTERED
OCT
06
2011
NASSAU COUNTY
COUNTY CLERK' S OFftCE
