| Webber v Scarano-Osika |
| 2012 NY Slip Op 02920 [94 AD3d 1304] |
| April 19, 2012 |
| Appellate Division, Third Department |
| Marci Webber, Appellant, v Gina Scarano-Osika et al.,Respondents. |
—[*1] Wilson, Elser, Moskowitz, Edelman & Dicker, L.L.P., Albany (Joseph T. Perkins ofcounsel), for respondents.
Mercure, J.P. Appeal from an order of the Supreme Court (Nolan Jr., J.), entered October 22,2010 in Warren County, which, among other things, upon renewal, granted defendants' motionfor summary judgment dismissing the complaint.
In February 2005, plaintiff commenced this action alleging breach of contract, breach ofconfidentiality and negligence stemming from a professional relationship between her anddefendant Gina Scarano-Osika, a licensed psychologist and principal of defendant Osika andScarano Psychological Services, P.C. These claims are based upon actions allegedly taken byScarano-Osika through March 2002. Following joinder of issue, defendants moved in November2009 for summary judgment dismissing the complaint. In May 2010, Supreme Court granted themotion to the extent of dismissing the breach of contract claim, but otherwise denied it.
Shortly thereafter, defendants learned that plaintiff had filed a petition for chapter 7bankruptcy in the Northern District of New York in November 2004, more than two years afteraccrual of the claims at issue here. Although plaintiff had consulted with an attorney about theviability of the claims prior to filing her bankruptcy petition, the claims were not listed as apotential asset in the bankruptcy proceeding. She was granted a discharge by the bankruptcycourt in February 2005, approximately two weeks after she commenced the instant action.
A few days after making this discovery, defendants moved for leave to amend their secondamended answer to add additional affirmative defenses, including lack of capacity, based [*2]upon the bankruptcy proceeding. Defendants simultaneously movedboth to renew their earlier motion for summary judgment, and to reargue the denial of thatportion of their motion seeking to dismiss plaintiff's punitive damages claim. Supreme Courtgranted both the motion to amend and the motion to renew, and dismissed the complaint. Thecourt concluded that plaintiff's failure to schedule the instant claims in her bankruptcy proceedingdeprived her of legal capacity to pursue this action. The motion to reargue was denied as moot.Plaintiff appeals and we now modify by denying defendants' motion to renew.
Turning first to defendants' motion for leave to amend, it is well settled that, where aproposed amendment is meritorious, leave should be freely granted absent prejudice or surpriseto the other party (see CPLR 3025 [b]; Edenwald Contr. Co. v City of New York,60 NY2d 957, 959 [1983]; Ciarelli vLynch, 46 AD3d 1039, 1039-1040 [2007]). Furthermore, "[m]ere lateness is not abarrier to the amendment" (Edenwald Contr. Co. v City of New York, 60 NY2d at 959[internal quotation marks and citation omitted]). As relevant to the proposed affirmative defenseof lack of capacity, we note that a debtor in a bankruptcy proceeding is required to include causesof action that accrued prior to commencement of the proceeding in the schedule of assets filedwith the bankruptcy court; such disclosure enables the trustee to determine whether the claimsshould be administered by the bankruptcy court for the benefit of the creditors, or abandoned sothat the debtor may pursue the claims on his or her own behalf (see Dynamics Corp. of Am. vMarine Midland Bank-N.Y., 69 NY2d 191, 195-196 [1987]; Mehlenbacher vSwartout, 289 AD2d 651, 651-652 [2001]; DeLarco v DeWitt, 136 AD2d 406, 408[1988]). If a cause of action is not listed as an asset, it remains the property of the bankruptcyestate and the debtor is precluded from pursuing it (see Dynamics Corp. of Am. v MarineMidland Bank-N.Y., 69 NY2d at 195-196; Hansen v Madani, 263 AD2d 881, 882[1999]).
Here, the uncontroverted evidence establishes both that plaintiff's claims accrued prior tocommencement of the bankruptcy proceeding and that they were not listed with the bankruptcycourt. Thus, defendants' affirmative defense of lack of capacity has merit (see Whelan v Longo, 7 NY3d 821,822 [2006]). Because plaintiff failed to demonstrate prejudice or surprise, Supreme Courtproperly exercised its discretion in granting defendants leave to amend their answer.
We reach a different conclusion with respect to the motion to renew. To prevail upon amotion to renew, a party must proffer both "new facts not offered on the prior motion that wouldchange the prior determination . . . and . . . reasonable justification forthe failure to present such facts on the prior motion" (CPLR 2221 [e] [2], [3]; see JPMorgan Chase Bank, N.A. vMalarkey, 65 AD3d 718, 719-720 [2009]; Johnson v Title N., Inc., 31 AD3d 1071, 1071-1072 [2006]; Stocklas v Auto Solutions of Glenville,Inc., 9 AD3d 622, 625 [2004], lv dismissed and denied 4 NY3d 738 [2004]). Asnoted above, defendants have satisfied the first requirement; however, they failed to offer areasonable justification for not presenting such facts on their prior motion.[FN*]Although defendants were apparently unaware of plaintiff's bankruptcy proceeding at the timethey filed their motion for summary judgment, the existence of the proceeding was easilydiscovered by a private investigator, and the bankruptcy documents were obtained via a website[*3]that provides public access to case and docket informationfrom federal courts. Inasmuch as this information could have been produced earlier with duediligence, defendants have failed to demonstrate a reasonable justification for the delay (seeJPMorgan Chase Bank, N.A. v Malarkey, 65 AD3d at 720; Johnson v Title N., Inc.,31 AD3d at 1072), and we are not at liberty to disregard this statutory requirement in the interestof justice (see Stocklas v Auto Solutions of Glenville, Inc., 9 AD3d at 625). Accordingly,we must reverse Supreme Court's order insofar as it granted defendants' motion for leave torenew their summary judgment motion and, upon renewal, granted summary judgment. Theaction having been reinstated, defendants' motion to reargue is no longer moot.
Lahtinen, Spain, Stein and McCarthy, JJ., concur. Ordered that the order is modified, on thelaw, without costs, by reversing so much thereof as granted defendants' motion for leave torenew, granted summary judgment and dismissed the complaint and as denied defendants' motionto reargue as moot; motion to renew denied; and, as so modified, affirmed.
Footnote *: While "courts did, at one time,ignore this requirement and, in the exercise of discretion, grant motions to renew in the interestof justice, reasonable justification is now required by statute" (Stocklas v Auto Solutions ofGlenville, Inc., 9 AD3d at 625 [citation omitted]).