| Marcum, LLP v Silva |
| 2014 NY Slip Op 03664 [117 AD3d 917] |
| May 21, 2014 |
| Appellate Division, Second Department |
[*1]
| Marcum, LLP, Formerly Known as Marcum &Kliegman, LLP, Respondent, v Jerry Silva et al.,Appellants. |
Law Offices of Steven Cohn, P.C., Carle Place, N.Y. (Susan E. Dantzig of counsel),for appellant Jerry Silva, and Jeffrey F. Levine, New York, N.Y., for appellant StevenSilva (one brief filed).
Moritt Hock & Hamroff, LLP, Garden City, N.Y. (Robert M. Tils andStephen J. Ginsberg of counsel), for respondent.
In an action to recover damages for breach of contract, the defendants appeal, aslimited by their brief, from so much of an order of the Supreme Court, Nassau County(DeStefano, J.), dated September 12, 2012, as denied those branches of their separatecross motions which were pursuant to CPLR 3025 (b) for leave to amend their answersto assert proposed counterclaims and the first through sixth, eighth, and ninth proposedaffirmative defenses.
Ordered that the order is modified, on the law, by deleting the provision thereofdenying those branches of the defendants' separate cross motions which were for leave toamend their answers to assert the fourth, eighth, and ninth proposed affirmative defenses,and substituting therefor a provision granting those branches of the cross motions; as somodified, the order is affirmed insofar as appealed from, without costs ordisbursements.
In the absence of prejudice or surprise to the opposing party, leave to amend apleading should be freely granted unless the proposed amendment is palpably insufficientor patently devoid of merit (see CPLR 3025 [b]; Bernardi v Spyratos, 79 AD3d684, 688 [2010]; Lucido vMancuso, 49 AD3d 220 [2008]). The determination to permit or denyamendment is committed to the sound discretion of the trial court (see CPLR3025 [b]; Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959[1983]).
Here, the Supreme Court properly determined that the first proposed counterclaimand the first two proposed affirmative defenses, premised on the plaintiff's allegedviolation of section 15 (a) of the Securities Exchange Act of 1934 (15 USC§ 78o [a]), were time-barred (see Obstfeld v Thermo Niton Analyzers, LLC, 108 AD3d658 [2013]; Carter Fin. Corp. v Atlantic Med. Mgt., 262 AD2d 178 [1999]).Further, the proposed counterclaims sounding in fraud and negligent misrepresentationfailed to sufficiently plead the required element of justifiable reliance (see Nigro v Lee, 63 AD3d1490 [2009]; Sitar vSitar, 61 AD3d 739 [2009]), or that the plaintiff was under a duty to disclose itsregistration status (see Bitter vRenzo, 101 AD3d 465 [2012]; Barrett v Freifeld, 77 AD3d 600 [2010]). The [*2]proposed unjust enrichment counterclaim was also basedupon the plaintiff's allegedly wrongful failure to disclose its registration status, andlikewise failed to sufficiently plead that the plaintiff was under a duty to disclose itsstatus (see Bitter v Renzo,101 AD3d 465 [2012]; Barrett v Freifeld, 77 AD3d 600 [2010]). The proposedcounterclaim alleging breach of fiduciary duty failed to sufficiently plead the existence ofa fiduciary relationship during the relevant period of time (see Bitter v Renzo, 101 AD3d465 [2012]; Staffenberg vFairfield Pagma Assoc., L.P., 95 AD3d 873 [2012]). Accordingly, the SupremeCourt properly determined that the proposed counterclaims and the first two proposedaffirmative defenses were palpably insufficient or patently devoid of merit, and leave toamend the answers to assert them was properly denied (see Blinds To Go [US], Inc. vTimes Plaza Dev., L.P., 111 AD3d 776 [2013]).
Further, the Supreme Court properly determined that the proposed third, fifth, andsixth affirmative defenses were palpably insufficient or patently devoid of merit. Anovation requires a valid new contract (see Old Oak Realty v Polimeni, 232AD2d 536 [1996]; Wasserstrom v Interstate Litho Corp., 114 AD2d 952 [1985]).Thus, the proposed third affirmative defense, which alleged the existence of a novationthat was barred by the statute of frauds, asserts a legal impossibility, since if the existenceof a novation is established, it removes the case from the defense of the statute of frauds(see Town & Country Linoleum & Carpet Co. v Welch, 56 AD2d 708[1977]). The defendants failed to sufficiently plead the required elements of estoppel (see Fundamental PortfolioAdvisors, Inc. v Tocqueville Asset Mgt., L.P., 7 NY3d 96, 106-107 [2006]), orof accord and satisfaction (seeProfex, Inc. v Town of Fishkill, 65 AD3d 678 [2009]). The defendants' attemptto supplement their allegations of estoppel for the first time in their reply brief on appealis improper (see Matter of Smithv Smith, 104 AD3d 860 [2013]; Disunno v WRH Props., LLC, 97 AD3d 780 [2012]).Accordingly, the Supreme Court properly denied leave to amend the answers to assertthese proposed affirmative defenses (see Blinds To Go [US], Inc. v Times Plaza Dev., L.P., 111AD3d 776 [2013]).
However, the Supreme Court should have granted leave to amend the answers toassert the proposed fourth affirmative defense, which alleged waiver, and the proposedeighth and ninth affirmative defenses, which alleged the failure of a condition precedent.Waiver "requires no more than the voluntary and intentional abandonment of a knownright which, but for the waiver, would have been enforceable" (Nassau Trust Co. vMontrose Concrete Prods. Corp., 56 NY2d 175, 184 [1982]; see Hadden vConsolidated Edison Co. of N.Y., 45 NY2d 466, 469 [1978]). The defendantssufficiently alleged that the plaintiff waived its entitlement to the remaining contract sumby entering into a second agreement. The proposed affirmative defenses asserting thefailure of a condition precedent concern the terms of the alleged oral agreements, and setforth allegations based on factual matters that are not palpably insufficient or patentlydevoid of merit. As the plaintiff would not be prejudiced or surprised by the assertion ofthese proposed affirmative defenses, leave to amend the answers to assert them shouldhave been granted (see CPLR 3025 [b]; Bernardi v Spyratos, 79 AD3d at688).
The defendants have abandoned any contentions regarding their proposed seventhaffirmative defense by failing to address it in their brief (see Nassau Point Prop. OwnersAssn., Inc. v Tirado, 29 AD3d 754, 757 [2006]). Dillon, J.P., Balkin, Miller andMaltese, JJ., concur. [Prior Case History: 37 Misc 3d 1220.]