Summary
holding that a fraud claim against the manager of a limited liability company was not duplicative of a breach of contract claim against the limited liability company, as the fraud was based upon representations made by the manager that were separate and apart from the limited liability company's obligations under the operating agreement
Summary of this case from Michael v. GLD Foremost Holdings, LLCOpinion
651841/13, 15680N, 15679
07-09-2015
FORTY CENTRAL PARK SOUTH, INC., et al., Plaintiffs–Respondents, v. Joseph ANZA, et al., Defendants–Appellants.
Levine & Associates, P.C., Scarsdale (Michael Levine of counsel), for appellants. Balestriere Fariello, New York (Thomas J. Foley of counsel), for respondents.
Levine & Associates, P.C., Scarsdale (Michael Levine of counsel), for appellants.
Balestriere Fariello, New York (Thomas J. Foley of counsel), for respondents.
GONZALEZ, P.J., FRIEDMAN, RENWICK, MOSKOWITZ, CLARK, JJ.
Opinion Order, Supreme Court, New York County (Saliann Scarpulla, J.), entered October 17, 2014, which, to the extent appealed from as limited by the briefs, granted plaintiffs' motion to amend the complaint to add a cause of action against additional defendant Anza Capital Partners LLC, and order, same court and Justice, entered on or about February 6, 2015, which denied defendants' motion to dismiss the amended complaint or strike certain paragraphs, and limited their discovery to five additional interrogatories, unanimously affirmed, with costs.
Plaintiffs moved to amend the complaint to assert a cause of action for breach of contract against additional defendant Anza Capital Partners LLC (ACP), after their cause of action for fraudulent inducement was dismissed on the ground that the supporting allegations only gave rise to a breach of contract cause of action (Forty Cent. Park South, Inc. v. Anza, 117 A.D.3d 523, 985 N.Y.S.2d 543 [1st Dept.2014] ). Defendants failed to demonstrate substantial prejudice or surprise resulting from the amendment (see JPMorgan Chase Bank, N.A. v. Low Cost Bearings N.Y. Inc., 107 A.D.3d 643, 969 N.Y.S.2d 19 [1st Dept.2013] ). The need for additional discovery does not constitute substantial prejudice (Jacobson v. McNeil Consumer & Specialty Pharms., 68 A.D.3d 652, 654, 891 N.Y.S.2d 387 [1st Dept.2009] ). Nor does the amended complaint add significant factual allegations.
The added breach of contract claim states a cause of action by alleging that the parties entered into an operating agreement, that plaintiffs performed by investing $500,000, that defendant Anza, as manager of ACP, caused ACP to fail to perform its obligations by, among other things, causing it not to use the investment for its proscribed purpose and permitting withdrawals in violation of specified provisions of the operating agreement, and that plaintiffs were damaged as a result (see Harris v. Seward Park Hous. Corp., 79 A.D.3d 425, 426, 913 N.Y.S.2d 161 [1st Dept.2010] ).
The cause of action for fraud is adequately pleaded, as we held in the prior appeal (117 A.D.3d 523, 985 N.Y.S.2d 543 [1st Dept.2014] ). Moreover, the fraud cause of action against Anza is not duplicative of the breach of contract cause of action against ACP, since it is based upon representations that Anza made that are separate and distinct from ACP's obligations under the operating agreement (see Manas v. VMS Assoc., LLC, 53 A.D.3d 451, 453, 863 N.Y.S.2d 4 [1st Dept.2008] ).
The paragraphs of the complaint that defendants seek to strike are not scandalous or prejudicial and are relevant to the causes of action pleaded (see Soumayah v. Minnelli, 41 A.D.3d 390, 392, 839 N.Y.S.2d 79 [1st Dept.2007] ; New York City Health & Hosps. Corp. v. St. Barnabas Community Health Plan, 22 A.D.3d 391, 802 N.Y.S.2d 363 [1st Dept.2005] ; CPLR 3024 [b] ).
Since the record makes clear that defendants have had ample opportunity to conduct discovery on both causes of action, the court properly limited their discovery.
We have considered defendants' remaining contentions and find them unavailing.