Mallory Factor Inc. v. Schwartz

• Decision Date: 10 January 1989
• Citation: 146 A.D.2d 465,536 N.Y.S.2d 752
• Parties: MALLORY FACTOR INC., Plaintiff-Appellant-Respondent, v. Leonard SCHWARTZ, Defendant-Respondent-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 752

536 N.Y.S.2d 752

146 A.D.2d 465

MALLORY FACTOR INC., Plaintiff-Appellant-Respondent, v. Leonard SCHWARTZ, Defendant-Respondent-Appellant.

Supreme Court, Appellate Division,

First Department.

Jan. 10, 1989.

S. Metcalf, New York City, for plaintiff-appellant-respondent.

M.R. Lee, New York City, for defendant-respondent-appellant.

Before MURPHY, P.J., and ROSS, KASSAL and WALLACH, JJ.

MEMORANDUM DECISION.

Mallory Factor, Inc. (MFI), a public relations firm, hired the defendant, Leonard Schwartz, as an account executive in June 1982. Under the terms of the employment agreement, Schwartz agreed that, upon termination of his employment, he would not solicit any MFI account for a period of eighteen months.

In 1983, Schwartz was assigned an account with the government of St. Maarten. In April 1985, while still in the employ of MFI, Schwartz travelled to St. Maarten with an executive of Kanan, Corbin, Schupak & Aronow, Inc. (KCS & A), a competitor of MFI. Schwartz testified that the purpose of his trip was to meet with representatives from St. Maarten to discuss transferring the St. Maarten account from MFI to KCS & A. Soon after his return from this meeting, Schwartz resigned from MFI and commenced employment with KCS & A.

Although MFI ultimately did not lose the St. Maarten account, plaintiff claimed it was required to devote an inordinate amount of its time and resources to regain their client's confidence.

MFI commenced this action in May 1985, setting forth three causes of action. The first cause, and the only one for which damages were sought, alleged Schwartz' breach of his common law fiduciary duties of loyalty and good faith to his employer. The second, alleged that defendant had tortiously interfered with plaintiff's contractual relationship with the government of St. Maarten. The last cause was predicated on Schwartz' alleged breach of the above-discussed eighteen-month restrictive covenant contained in his employment agreement. The second and third causes requested injunctive relief only.

Citing defendant's own admissions, the motion court granted plaintiff's motion for summary judgment as to liability on the first cause of action, but denied the plaintiff's motion to amend its second and third causes and for summary judgment thereon as to liability.

The motion court's denial of MFI's motion for leave to amend was apparently based upon the circumstance that MFI's request for leave to serve an amended complaint was made only in its memorandum of law. This was error. It is well established that a party may amend a pleading, or supplement it by setting forth additional or subsequent transactions or occurrences, at any time by leave of court or by stipulation of all parties. CPLR 3025(b). A formal defect will not defeat an otherwise meritorious motion, provided that the motion is timely made and the merits of the case are adequately presented in the supporting documents. (Matter of Great Eastern Mall v. Condon, 36 N.Y.2d 544, 369 N.Y.S.2d 672, 330 N.E.2d 628; see also, Matter of Nelson v. Coughlin, 115 A.D.2d 131, 495 N.Y.S.2d 528.) In addition, CPLR 2001 states that at any stage of an action, the court may permit a defect to be corrected or, if a party is not prejudiced, to be disregarded. (Pace v. Perk, 81 A.D.2d 444, 440 N.Y.S.2d 710). Absent prejudice or unfair surprise, requests for leave to amend should be granted. (Daigle v. Texas International Co., 109 A.D.2d 648, 486 N.Y.S.2d 236.)

Clearly, there has been neither prejudice nor unfair surprise to the defendant. MFI sought leave to amend its complaint only after it was revealed during discovery that defendant engaged in activity prejudicial to plaintiff's interests after leaving MFI. These revelations were obtained from the defendant himself. MFI's proposed amendment which, as is here relevant, was intended only to particularize a claim for damages as to the third cause of action, and which did not change the parties to the action or the previously...