| Spitzer v Schussel |
| 2008 NY Slip Op 01022 [48 AD3d 233] |
| February 5, 2008 |
| Appellate Division, First Department |
| Eliot Spitzer, as Attorney General of the State of New York,Appellant, v Rick Schussel et al., Respondents. |
—[*1] Epstein Becker & Green, P.C., New York City (John R. Sachs, Jr. of counsel), forrespondents.
Order, Supreme Court, New York County (Rosalyn Richter, J.), entered September 18, 2006,which denied plaintiff's motion to amend the complaint to assert two additional causes of actionagainst defendant Schussel individually, unanimously affirmed, without costs.
Generally, leave to amend a pleading is freely granted in the absence of prejudice or surpriseto the opposing party. Mere lateness is not a barrier to amendment. To establish prejudice, whichmust be significant (see Edenwald Contr. Co. v City of New York, 60 NY2d 957 [1983]),there must be some indication that the opposing party will have been hindered in the preparationof its case or prevented from taking some measure to support its position (see Loomis vCivetta Corinno Constr. Corp., 54 NY2d 18 [1981]). To conserve judicial resources,however, examination of the underlying merit of the proposed amendment is mandated. Whereno cause of action has been stated to begin with, leave to amend will be denied (see Nab-TernConstructors v City of New York, 123 AD2d 571 [1986]).
With regard to the proposed declaratory judgment, although no prejudice has been shown bydefendants—i.e. concerns about lack of discovery with respect to this claim could havebeen mitigated by the court (seeMasterwear Corp. v Bernard, 3 AD3d 305, 307 [2004]), and mere lateness in seekingleave to amend is not a barrier to amendment—the proposed cause of action lacks merit,and leave to amend should thus have been denied on this ground. In any event, the declaratoryjudgment cause of action is duplicative of the cause of action for an accounting in the originalcomplaint, and is thus unnecessary and inappropriate (see Apple Records v CapitolRecords, 137 AD2d 50 [1988]). In addition, plaintiff premises his request to add thedeclaratory judgment claim on the potential for a breach of contract action asserted by defendantSchussel against the New Dance Group Studio. The hypothetical possibility that a lawsuit mightbe filed is not sufficiently immediate and real to constitute a justiciable controversy (see Waterways Dev. Corp. v Lavalle,28 AD3d 539 [2006]).
With regard to plaintiff's proposed cause of action for violation of Executive Law § 63(12), which is premised on defendant Schussel's alleged filing of false financial reports on behalfof the nonprofit New Dance Group Studio, the court improperly based its determination to denyleave to amend on the lateness in filing of the motion. This delay was due to the fact that [*2]plaintiff only received the information necessary to support such aclaim during discovery; he cannot be faulted for waiting until critical depositions werecompleted. Assuming the motion was late, defendants once again failed to show actual prejudice,given that any concerns about the lack of discovery with respect to this claim could have beenaddressed by the motion court. However, the motion should have been denied because the claimlacks merit. Since the conduct at issue was for charitable purposes and defendant Schussel wasnot carrying on or conducting business, the section 63 (12) claim cannot be maintained as amatter of law (see Matter of Lefkowitz v Burden, 22 AD2d 881 [1964]).Concur—Tom, J.P., Saxe, Gonzalez, Buckley and Catterson, JJ.