| RCLA, LLC v 50-09 Realty, LLC |
| 2008 NY Slip Op 01321 [48 AD3d 538] |
| February 13, 2008 |
| Appellate Division, Second Department |
| RCLA, LLC, Appellant, v 50-09 Realty, LLC, et al.,Respondents. |
—[*1] Berger & Sklaw, LLP, New York, N.Y. (Laurence M. Sklaw of counsel), forrespondents.
In an action to recover a brokerage commission, the plaintiff appeals from an order of theSupreme Court, Kings County (Demarest, J.), dated January 4, 2007, which denied its motion forleave to serve an amended complaint and granted those branches of the defendants' motion whichwere pursuant to CPLR 3211 (a) (7) to dismiss the complaint for failure to state a cause of actionand for summary judgment on their counterclaim to the extent of awarding the defendants thesum of $125,000.
Ordered that the order is reversed, on the law and in the exercise of discretion, with costs, theplaintiff's motion for leave to serve an amended complaint is granted, that branch of thedefendants' motion which was to dismiss the complaint pursuant to CPLR 3211 (a) (7) is deniedas academic, that branch of the defendants' motion which was for summary judgment on thecounterclaim is denied, and the proposed amended verified complaint, annexed to the plaintiff'smotion papers, is deemed served.
"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 here, the plaintiff's motion should have been granted. Theaffidavit of the plaintiff's managing member, William Foster, alleged sufficient factsdemonstrating the plaintiff's role as an agent of the lender herein. Further, the affidavit of thedefendant Cheskel Schwimmer admitted this fact by stating that "[t]hroughout the transaction,RCLA represented that it was acting as an agent or alter ego of the lender." Accordingly, the[*2]proposed amendment was not patently devoid of merit(see Kreuter v Tsucalas, 287 AD2d 50 [2001]; Eaton Assoc. v Highland BroadcastingCorp., 81 AD2d 603 [1981]).
Further, there was no showing of prejudice here. Prejudice requires that "the defendant hasbeen hindered in the preparation of his case or has been prevented from taking some measure insupport of his 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. The defendants cannot claim prejudice or surprise sincethe proposed amendment arises out of the same facts as those underlying the original complaint.Exposure to additional liability does not, in itself, constitute prejudice (see Loomis v CivettaCorinno Constr. Corp., 54 NY2d at 23). The Supreme Court therefore improvidentlyexercised its discretion in denying the plaintiff's motion for leave to amend.
In addition, the defendants were not entitled to summary judgment on their counterclaim,since, in opposition to the defendants' prima facie showing, the plaintiff raised triable issues offact regarding the relationship between the plaintiff and the defendants in the underlyingtransaction, as highlighted by Schwimmer's own admissions in his affidavit (see Alvarez vProspect Hosp., 68 NY2d 320, 324 [1986]).
Lastly, in light of our determination that the plaintiff's motion for leave to serve an amendedcomplaint should have been granted, that branch of the defendants' motion which was to dismissthe original complaint for failure to state a cause of action pursuant to CPLR 3211 (a) (7) shouldhave been denied as academic. Spolzino, J.P., Ritter, Miller and Dickerson, JJ., concur.