| Tag Mech. Sys., Inc. v V.I.P. Structures, Inc. |
| 2009 NY Slip Op 04455 [63 AD3d 1504] |
| June 5, 2009 |
| Appellate Division, Fourth Department |
| Tag Mechanical Systems, Inc., Respondent, v V.I.P. Structures,Inc., Appellant. |
—[*1] Costello, Cooney & Fearon, PLLC, Syracuse (Donald S. Dibenedetto of counsel), forplaintiff-respondent.
Appeal from an order and judgment (one paper) of the Supreme Court, Onondaga County(James P. Murphy, J.), entered January 10, 2008 in a breach of contract action. The order andjudgment granted plaintiff's motion for, inter alia, summary judgment and denied defendant'scross motion for leave to serve an amended answer.
It is hereby ordered that the order and judgment so appealed from is unanimously modifiedon the law by denying the motion and by granting that part of the cross motion for leave to servean amended answer to include the proposed affirmative defenses and counterclaims based oncommercial bribery with respect to the contracts for projects in Tahlequah, Oklahoma; Hazard,Kentucky; and Skaneateles, New York upon condition that defendant shall serve an amendedanswer within 30 days of service of the order of this Court with notice of entry and as modifiedthe order and judgment is affirmed without costs.
Memorandum: Plaintiff commenced this action seeking damages for, inter alia, defendant'salleged breach of contract, based upon a series of contracts pursuant to which plaintiff was toperform certain construction services for defendant. The complaint concerns four contracts,relating to projects in Tahlequah, Oklahoma; Hazard, Kentucky; Skaneateles, New York; andSyracuse, New York. Plaintiff moved for summary judgment on the complaint, seeking damagesin the total amount owed pursuant to the four contracts, and plaintiff sought dismissal ofdefendant's affirmative defenses and counterclaims. Defendant cross-moved for leave to serve anamended answer to include additional affirmative defenses and counterclaims based on fraud andcommercial bribery with respect to the Tahlequah, Hazard and Skaneateles contracts, as well aswith respect to an alleged fifth contract between the parties concerning construction servicesrendered by plaintiff at a project in Gas City, Indiana. We conclude that Supreme Court erred ingranting plaintiff's motion and in denying that part of defendant's cross motion for leave to servean amended answer to include the proposed affirmative defenses and counterclaims based oncommercial bribery with respect to the Tahlequah, Hazard and Skaneateles projects. Wetherefore modify the order and judgment accordingly.[*2]
Addressing first defendant's cross motion, we note thewell established principle that, " '[g]enerally, leave to amend a pleading should be freely grantedin the absence of prejudice to the nonmoving party where the amendment is not patently lackingin merit . . . , and the decision whether to grant leave to amend a [pleading] iscommitted to the sound discretion of the court' " (Carro v Lyons Falls Pulp & Paper, Inc., 56 AD3d 1276, 1277[2008]; see CPLR 3025 [b]; Edenwald Contr. Co. v City of New York, 60 NY2d957, 959 [1983]). In our view, the court properly denied that part of the cross motion seekingleave to serve an amended answer to include an affirmative defense and counterclaim based onfraud. The proposed amended answer contains no allegation of reasonable reliance upon arepresentation of plaintiff. Such an allegation is a necessary element of fraud (see Hoffend & Sons, Inc. v Rose &Kiernan, Inc., 19 AD3d 1056, 1058 [2005], affd 7 NY3d 152 [2006]), and thusthe failure to plead reliance renders defendant's proposed affirmative defense and counterclaimpatently without merit (see e.g. GelmacQuality Feeds, Inc. v Ronning, 23 AD3d 1019 [2005]; Dos v Scelsa &Villacara, 200 AD2d 705, 707 [1994], lv denied 84 NY2d 840 [1994]; cf.CPLR 3016 [b]; Pludeman v NorthernLeasing Sys., Inc., 10 NY3d 486, 492 [2008]). We further conclude, however, that thecourt erred in denying that part of defendant's cross motion seeking leave to serve an amendedanswer to include affirmative defenses and counterclaims based on commercial bribery. Here,defendant "sufficiently pleaded all the elements of [commercial bribery], i.e., that [plaintiff]conferred a benefit upon [defendant's] employee, without [defendant's] consent and with theintent to influence the employee's conduct" (Niagara Mohawk Power Corp. v Freed, 265AD2d 938, 939 [1999]).
The court properly denied that part of defendant's cross motion seeking leave to serve anamended answer to include a counterclaim based on commercial bribery with respect to the GasCity contract. That contract was not at issue in the complaint, and the proposed counterclaimseeks affirmative relief unrelated to any matters addressed during the course of discovery (see generally United States Fid. & Guar.Co. v Delmar Dev. Partners, LLC, 22 AD3d 1017, 1019-1020 [2005]). Indeed, to permitthat amendment well after the close of discovery would result in obvious prejudice to plaintiff(see generally CPLR 3025 [b]; Edenwald Contr. Co., 60 NY2d at 959).
Turning next to plaintiff's motion, we conclude that the court erred in granting those parts ofthe motion with respect to the Tahlequah, Hazard and Skaneateles contracts. Even assuming,arguendo, that plaintiff met its initial burden with respect to those parts of the motion (seegenerally Carltun on Bay Kosher Caterers v Makani, 295 AD2d 464 [2002]; Furia vFuria, 116 AD2d 694, 695 [1986]), we conclude on the record before us that there is an issueof fact whether plaintiff used bribery to induce an employee of defendant to enter into thosecontracts on defendant's behalf (see generally Zuckerman v City of New York, 49 NY2d557, 562 [1980]). The bribery, if proven, would prevent plaintiff from obtaining any recoverywith respect to those three contracts (cf. United States Fid. & Guar. Co., 22 AD3d at1019-1020).
Finally, we conclude that the court erred in granting that part of plaintiff's motion withrespect to the Syracuse contract. Plaintiff failed to submit that contract in support of its motionand, even assuming, arguendo, that plaintiff met its initial burden with respect to the Syracusecontract, we conclude that defendant raised a triable issue of fact by submitting evidence that itwas not a party to the Syracuse contract (see generally Zuckerman, 49 NY2d at 562).Present—Hurlbutt, J.P., Martoche, Fahey, Carni and Gorski, JJ. [See 20 Misc 3d1117(A), 2007 NY Slip Op 52560(U).]