Opinion
October 25, 1993
Appeal from the Supreme Court, Richmond County (Cusik, J.).
Ordered that the order is affirmed, with costs.
Contrary to the plaintiff's contentions, the court did not improvidently exercise its discretion by granting the defendant's motion for leave to serve an amended answer interposing an affirmative defense of discharge in bankruptcy. Pursuant to CPLR 3025 (b), leave to serve an amended pleading shall be freely given upon such terms as are just. It is well established that the decision to grant leave to amend rests within the sound discretion of the trial court, and is to be made on a case-by-case basis (see, Hauptman v. New York City Health Hosps. Corp., 162 A.D.2d 588; Bertan v. Richmond Mem. Hosp. Health Ctr., 106 A.D.2d 362; Matter of Department of Social Servs. v. Jay W., 105 A.D.2d 19, 22). Although leave to amend is liberally given, a proposed amendment that would create prejudice or surprise to the opposing party resulting directly from the delay should not be granted (see, Barbour v. Hospital for Special Surgery, 169 A.D.2d 385; Hauptman v. New York City Health Hosps. Corp., supra; Matter of Department of Social Servs. v. Jay W., supra).
The plaintiffs are correct that the doctrine of laches may be invoked to defeat a motion for leave to amend pleadings (see, e.g., McCaskey, Davies Assocs. v. New York City Health Hosps. Corp., 59 N.Y.2d 755). A belated motion for leave to amend will be defeated by a claim of laches where two elements are present: delay, and prejudice to the nonmoving party resulting directly from the delay (see, Fahey v. County of Ontario, 44 N.Y.2d 934; Sindle v. New York City Tr. Auth., 33 N.Y.2d 293; Matter of Schilling v. Dunne, 119 A.D.2d 179). However, in the instant case, notwithstanding the lengthy delay between the time of the discharge in bankruptcy and the time the defendant moved for leave to raise its alleged affirmative defense, and notwithstanding the defendant's failure to proffer an excuse for the delay, we find that the granting of the defendant's motion was not improvident because the plaintiffs have not demonstrated that they have suffered any significant prejudice as a result of the delay. The plaintiffs claim that they were never notified of the pendency of the proceedings in Bankruptcy Court and were thereby deprived of an opportunity to contest the defendant's bankruptcy claims. However, the plaintiffs may still raise this claim in reply to the defense. Pursuant to 11 U.S.C. § 523 (a) (3), a discharge in bankruptcy does not apply to creditors who are not listed, scheduled, or notified of the proceeding in time to afford an opportunity to file opposition in the Bankruptcy Court (see, In re David, 106 B.R. 126; In re Bowen v. Franks, 102 B.R. 752; In re Ford, 87 B.R. 641; Matter of Coppi, 75 B.R. 81; In re Iannacone, 21 B.R. 153). Rather, where a defendant attempts to establish an affirmative defense of discharge in bankruptcy and a plaintiff claims never to have been listed, scheduled, or notified of the bankruptcy proceedings, the issue of whether or not the plaintiff's claim was in fact discharged is a matter within the subject matter jurisdiction of a State court (see, Whitaker v. Kidd, 136 A.D.2d 941; State of New York v. Perkins, 112 A.D.2d 485; State of New York Higher Educ. Servs. Corp. v Quell, 104 A.D.2d 11). Accordingly, the plaintiffs have not been deprived of an opportunity to challenge the effect of the alleged bankruptcy discharge. They may, as the Supreme Court properly found, raise this issue at the trial of this matter. Since they will have suffered no prejudice as a result of the delay, the mere fact of the delay is insufficient to defeat the defendant's motion for leave to serve an amended answer (see, Misuk Buley v Beacon Tex-Print, 118 A.D.2d 630; Barnes v. County of Nassau, 108 A.D.2d 50; Krupp v. Aetna Life Cas. Co., 104 A.D.2d 857).
We have reviewed the plaintiff's remaining contentions and find them to be without merit. Thompson, J.P., Miller, Lawrence and Copertino, JJ., concur.