| Pansini Stone Setting, Inc. v Crow & Sutton Assoc., Inc. |
| 2007 NY Slip Op 10125 [46 AD3d 784] |
| December 18, 2007 |
| Appellate Division, Second Department |
| Pansini Stone Setting, Inc., Appellant, v Crow and SuttonAssociates, Inc., et al., Respondents. |
—[*1] Dreyer Boyajian LLP, Albany, N.Y. (James R. Peluso of counsel), for respondent Crow andSutton Associates, Inc. Becker & Becker, Albany, N.Y. (Lawrence E. Becker of counsel), for respondents RelianceInsurance Company, Reliance Surety Company, I.B.M. Corporation, The Whiting-TurnerContracting Company, and Reliance National Indemnity Company.
In an action, inter alia, to recover on a lien discharge bond, the plaintiff appeals from an orderof the Supreme Court, Westchester County (Donovan, J.), entered May 12, 2006, which deniedits motion for leave to serve a second amended verified complaint adding a cause of action basedupon a labor and materials payment bond and adding as defendants St. Paul TravelersCompanies, Inc., and Travelers Casualty & Surety Company of America.
Ordered that the order is reversed, on the law and in the exercise of discretion, with one billof costs payable by the respondents appearing separately and filing separate briefs, the motion isgranted, and the proposed second amended verified complaint which was annexed to theplaintiff's motion papers is deemed served.
In 1996, the defendant general contractor Crow and Sutton Associates, Inc. (hereinafter Crow& Sutton) hired the plaintiff Pansini Stone Setting, Inc., to construct fieldstone walls at theheadquarters of the defendant I.B.M. Corporation (hereinafter IBM) in Armonk, New York. Priorto the commencement of work, Crow & Sutton obtained a labor and materials payment [*2]bond (hereinafter the performance bond) in the amount of$1,557,502 from the defendant Reliance Insurance Company (hereinafter Reliance) for thebenefit of the defendants the Whiting-Turner Contracting Company (hereinafterWhiting-Turner), the construction manager, and IBM.
After the work had begun, a dispute arose between Crow & Sutton and the plaintiff regardingthe contract price of "mortar materials." Unable to resolve the issue, the plaintiff abandoned thejob. The plaintiff filed a mechanic's lien against IBM's property in the sum of $167,375, whichallegedly remained outstanding. Crow & Sutton obtained a bond in the amount of $182,500 fromReliance, which it filed to discharge the mechanic's lien (hereinafter the lien discharge bond).The plaintiff commenced this action on the lien discharge bond on or about August 20, 1997.
The parties stipulated to submit the dispute to arbitration. On September 18, 2003 themajority of a three-person arbitration panel issued an award in the plaintiff's favor in the principalsum of $234,321.85. The plaintiff moved to confirm the award; Crow & Sutton, IBM, andWhiting-Turner cross-moved to vacate it. Travelers Casualty & Surety Company of America(hereinafter Travelers), which had assumed the obligations of Reliance under both theperformance bond and the lien discharge bond, cross-moved to intervene in the action. Theplaintiff opposed Travelers' cross motion. The Supreme Court confirmed the award, but onlyagainst Crow & Sutton, and denied Travelers' motion to intervene. We affirmed the confirmationof the award (see Matter of PansiniStone Setting Inc. v Crow & Sutton Assoc. Inc., 20 AD3d 481 [2005]).
On or about February 2, 2006 the plaintiff moved for leave to serve a second amendedverified complaint adding a cause of action based upon the performance bond and addingTravelers and its parent, St. Paul Travelers Companies, Inc. (hereinafter St. Paul), as defendants.The Supreme Court denied the motion. We reverse.
"In the absence of prejudice or surprise to the opposing party, leave to amend a pleadingshould be freely granted unless the proposed amendment is palpably insufficient or patentlydevoid of merit" (G.K. Alan Assoc., Inc.v Lazzari, 44 AD3d 95, 99 [2007]; see CPLR 3025; Trataros Constr., Inc. v New York CityHous. Auth., 34 AD3d 451 [2006]; Surgical Design Corp. v Correa, 31 AD3d 744 [2006]; Melendez v Bernstein, 29 AD3d872 [2006]). Applying this rule, the plaintiff's motion should have been granted.
The performance bond and the lien discharge bond were issued by the same insurer, withregard to the same project, and insured payment for the same labor and material. The onlyprejudice that the defendants assert is that they will be exposed to additional potential liability asa result of the amendment. Prejudice, however, requires that "the defendant has been hindered inthe preparation of his [or her] case or has been prevented from taking some measure in support ofhis [or her] position" (Loomis v Civetta Corinno Constr. Corp., 54 NY2d 18, 23 [1981];see Whalen v Kawasaki Motors Corp., U.S.A., 92 NY2d 288, 293 [1998]). Thedefendants have made no such showing here. Exposure to additional liability does not, in itself,constitute prejudice (see Loomis v Civetta Corinno Constr. Corp., 54 NY2d at 23). TheSupreme Court therefore improvidently exercised its discretion in denying leave to amend to addthe cause of action on the performance bond (see Spring Sheet Metal & Roofing Co. vCounty of Monroe Indus. Dev. Agency, 226 AD2d 1064, 1065 [1996]).
Leave to amend to add a party is subject to the same permissive standard. Where the claimagainst the new party would otherwise be barred by the applicable statute of limitations, the [*3]claim may nonetheless be asserted upon demonstrating that "(1)both claims arose out of the same conduct, transaction, or occurrence, (2) the new party is unitedin interest with the original defendant, and by reason of that relationship can be charged withsuch notice of the institution of the action that the new party will not be prejudiced inmaintaining its defense on the merits by the delayed, otherwise stale, commencement, and (3) thenew party knew or should have known that, but for a mistake by the plaintiff as to the identity ofthe proper parties, the action would have been brought against that party as well" (Austin vInterfaith Med. Ctr., 264 AD2d 702, 703 [1999]; see Porter v Annabi, 38 AD3d 869, 870 [2007]; Pappas v 31-08Café Concerto, 5 AD3d 452, 453 [2004]). Since the plaintiff's claim against Travelersand its parent, St. Paul, arises from the assumption of the obligations that are otherwise at issuein this action, the plaintiff's motion here satisfies all of these requirements.
The defendants' argument that the plaintiff acted unreasonably in failing to act promptly toadd Travelers and St. Paul as parties is not a basis for denying the motion. Only an excuse, not areasonable excuse, is necessary to support the plaintiff's application to add a new defendant, aslong as the delay was not intentional (see Buran v Coupal, 87 NY2d 173, 181 [1995]; Davis v Larhette, 39 AD3d 693,694 [2007]; DeLuca v Baybridge atBayside Condominium I, 5 AD3d 533, 535 [2004]). Since the plaintiff tendered such anexcuse, and there is no evidence that the plaintiff's failure to move more quickly was intentional,the motion should have been granted. Spolzino, J.P., Krausman, Goldstein and Dickerson, JJ.,concur.