| Miller v Cohen |
| 2012 NY Slip Op 01570 [93 AD3d 424] |
| March 1, 2012 |
| Appellate Division, First Department |
| Harvey S. Shipley Miller, as Trustee of the Trust Known as JudithRothschild Foundation, Appellant, v Todd Cohen et al., Defendants, and Martin Cohenet al., Respondents. |
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Goldberg & Rimberg PLLC, New York (Brad Coven of counsel), for respondents.
Order, Supreme Court, New York County (Milton A. Tingling, J.), entered March 31, 2011,which granted the motion of defendants Martin Cohen, CJR Associates LP, Marc Lowenberg,Lowenberg Family Limited Partnership, Lowenberg II Family Limited Partnership andLowenberg III Family Limited Partnership for summary judgment dismissing the third cause ofaction to pierce the corporate veil of Icon Group LLC, and which denied plaintiff's cross motionfor leave to amend the complaint to add a fraudulent conveyance claim, unanimously reversed,on the law, the third cause of action reinstated, and leave to amend the complaint granted, withcosts.
Movants failed to sustain their burden of demonstrating that Icon Group, against whichplaintiff obtained a judgment in a prior action, was not their alter ego, that the corporateformalities were observed, and that they were solely investors in projects developed by IconGroup. Icon Group's principals testified that it did not have an independent source of funds andthat its investment decisions were dependent on funding from movants. Thus, Icon Group did nothave business discretion to enter into contracts, absent movants' assent, and it was not treated asan independent profit center (see Matter of Morris v New York State Dept. of Taxation &Fin., 82 NY2d 135, 141 [1993]). There was also evidence that Icon group paid some ofmovants' personal expenses. Moreover, plaintiff contends that he did not have adequatediscovery, and the testimony of Icon Group's principals in the prior action was evasive andnonresponsive. Movants failed to sustain their burden of demonstrating the absence of a triableissue of fact on this cause of action.
The court also improperly denied plaintiff's cross motion for leave to amend the complaint toassert fraudulent conveyance claims. On a motion for leave to amend a pleading, movant neednot establish the merit of the proposed new allegations, but must "simply show that [*2]the proffered amendment is not palpably insufficient or clearlydevoid of merit" (see MBIA Ins. Corp. vGreystone & Co., Inc., 74 AD3d 499, 500 [2010]). Here, the court prematurely reachedthe merits of the proposed amendment, which was adequately pleaded and not clearly devoid ofmerit. Concur—Tom, J.P., Acosta, DeGrasse and Román, JJ. [Prior CaseHistory: 2011 NY Slip Op 30751(U).]