Summary
This Appellate Division, Second Department decision affirms a lower court's order denying the plaintiff's motion for leave to amend its complaint to add individual defendants and new causes of action under the faithless agent doctrine. The court held that the trial court properly exercised its discretion in denying the amendment due to the plaintiff's unreasonable delay, lack of a reasonable excuse, demonstrated prejudice to the defendants, and the proposed amendments' patent lack of merit. The underlying action involves breach of contract claims against the plaintiff's insurance broker and third-party administrators regarding mishandled workers' compensation claims.
Topics
Practice areas
Questions Presented
- Did the trial court abuse its discretion in denying NYBOCT's motion for leave to amend the complaint under CPLR 3025(b)?
Holdings
- The trial court did not abuse its discretion; the denial of the motion to amend was affirmed.
Key quotations
“"Motions pursuant to CPLR 3025(b) for leave to amend a pleading are addressed to the sound discretion of the court" (Greater Bright Light Home Care Servs., Inc. v Jeffries‑El, 199 AD3d 777, 779).”
“"Applications for leave to amend pleadings under CPLR 3025(b) should be freely granted unless the proposed amendment would unfairly prejudice or surprise the opposing party, or is palpably insufficient or patently devoid of merit." (TD Bank, N.A. v Keenan, 221 AD3d 1040, 1041).”
“"When leave is sought on the eve of trial, judicial discretion should be exercised sparingly." (Morris v Queens Long Is. Med. Group, P.C., 49 AD3d 827, 828).”
Factual background
In August 2017 NYBOCT filed suit against its insurance broker Arthur Gallagher, third‑party administrator RMPG (2007‑2010), and GBS (2011‑2015) alleging breach of contract, breach of fiduciary duty, and fraud for mishandling a workers’ compensation claim that caused the excess insurer to deny coverage, resulting in substantial damages. After the court dismissed all but the breach‑of‑contract claims, NYBOCT sought to amend the complaint in May 2021 to add individuals and a faithless‑agent claim.
Procedural history
NYBOCT sued Gallagher, RMPG, and GBS for breach of contract, fiduciary duty, and fraud. The trial court dismissed all causes except breach of contract, and after discovery NYBOCT moved to amend the complaint to add parties and a faithless‑agent claim. The trial court denied the motion. NYBOCT appealed.