| Darby Group Cos., Inc. v Wulforst Acquisition, LLC |
| 2015 NY Slip Op 06210 [130 AD3d 866] |
| July 22, 2015 |
| Appellate Division, Second Department |
[*1]
| Darby Group Companies, Inc.,Plaintiff, v Wulforst Acquisition, LLC, et al., Appellants, and People's UnitedBank, as Successor by Merger to the Bank of Smithtown, Respondent, et al.,Defendants. |
Edward G. McCabe, Bohemia, N.Y., for appellants.
Jaspan Schlesinger LLP, Garden City, N.Y. (Antonia M. Donohue and Scott B.Fisher of counsel), for respondent.
In an action to foreclose a mortgage, the defendants Wulforst Acquisition, LLC, NeilRego, and George Heinlein appeal, as limited by their brief, from so much of an order ofthe Supreme Court, Suffolk County (Whelan, J.), dated July 11, 2013, as granted thatbranch of the motion of the defendant People's United Bank, successor by merger to theBank of Smithtown, which was pursuant to CPLR 3211 (a) to dismiss their cross claimalleging fraud asserted against it, and denied their cross motion pursuant to CPLR 3025(b) for leave to amend their answer to assert a cross claim alleging breach of contractagainst the defendant People's United Bank, successor by merger to the Bank ofSmithtown.
Ordered that the order is affirmed insofar as appealed from, with costs.
In January 2013, the plaintiff commenced this action to foreclose a consolidatedmortgage securing certain real property in Baiting Hollow (hereinafter the subjectproperty). The underlying note was executed by the defendants Neil Rego and GeorgeHeinlein. The defendant Wulforst Acquisition, LLC, of which Rego and Heinlein aremembers, is the record owner of the subject property. The defendant People's UnitedBank, successor by merger to the Bank of Smithtown (hereinafter the Bank), holds acollateral mortgage on the subject property, and was the holder of certain debts(hereinafter the subject debts) which were purchased by Wulforst Acquisition, LLC,Rego, and Heinlein (hereinafter collectively the Acquisition defendants), andconsolidated into the underlying note. In their answer, the Acquisition defendants, interalia, asserted a cross claim against the Bank alleging fraud. The Acquisition defendantscontended that they would not have entered into the consolidated mortgage transactionwith the plaintiff, or executed the underlying note, had the Bank not represented incertain documents that there were outstanding letters of credit securing the subject debts.The Bank moved, inter alia, pursuant to CPLR 3211 (a) to dismiss that cross claim, andthe Acquisition defendants cross-moved pursuant to CPLR 3025 (b) for leave to amendtheir answer to assert a cross claim alleging breach of contract against the Bank. TheSupreme Court granted that branch of the Bank's motion and denied the crossmotion.
A motion to dismiss pursuant to CPLR 3211 (a) (1) is properly granted where thedocumentary evidence submitted utterly refutes the factual allegations of the pleadingand [*2]conclusively establishes a defense to the claim asa matter of law (see Attias vCostiera, 120 AD3d 1281 [2014]; Cives Corp. v George A. Fuller Co., Inc., 97 AD3d 713,714 [2012]; Kappa Dev. Corp. vQueens Coll. Point Holdings, LLC, 95 AD3d 1178 [2012]; Fontanetta v John Doe 1, 73AD3d 78, 83 [2010]). Here, the contract between the Acquisition defendants and theBank, pursuant to which the Acquisition defendants purchased the subject debts,contained a provision by which the Acquisition defendants released the Bank from anyand all claims arising out of or related to the underlying note and the consolidatedmortgage. A valid release constitutes a complete bar to an action on a claim which is thesubject of the release (seeSicuranza v Philip Howard Apts. Tenants Corp., 121 AD3d 966 [2014]; Nucci v Nucci, 118 AD3d762 [2014]; Rivera vWyckoff Hgts. Med. Ctr., 113 AD3d 667 [2014]). Accordingly, the Acquisitiondefendants' cross claim alleging fraud is barred by the contractual release provision (see Centro Empresarial CempresaS.A. v América Móvil, S.A.B. de C.V., 17 NY3d 269 [2011]).
The Supreme Court providently exercised its discretion in denying the Acquisitiondefendants' cross motion for leave to amend their answer. The determination to permit ordeny leave to amend a pleading is committed to the sound discretion of the trial court (see HSBC Bank v Picarelli,110 AD3d 1031 [2013]; Aurora Loan Servs., LLC v Dimura, 104 AD3d 796[2013]; Lucido v Mancuso,49 AD3d 220, 229 [2008]) and, although leave to amend a pleading is freelygranted, where the proposed amendment is palpably insufficient or patently devoid ofmerit, leave to amend should be denied (see CPLR 3025 [b]; Ciminello v Sullivan, 120AD3d 1176 [2014]; Marcum, LLP v Silva, 117 AD3d 917 [2014]). Here, theproposed amendment was patently devoid of merit, as it failed to set forth the contractprovisions that the Bank allegedly breached, a necessary element for a breach of contractclaim.
In light of our determination, we need not reach the Acquisition defendants'remaining contentions. Skelos, J.P., Dillon, Duffy and LaSalle, JJ., concur. [PriorCase History: 2013 NY Slip Op 31570(U).]