Masterwear Corporation v. Bernard

• Decision Date: 06 January 2004
• Docket Number: 1397N,1398N
• Citation: 771 N.Y.S.2d 72,2004 NY Slip Op 00004,3 A.D.3d 305
• Parties: MASTERWEAR CORPORATION et al., Respondents, et al., Plaintiff, v. NORMAN BERNARD, Appellant, and ALBERT S. MUSHKIN, Respondent, et al., Defendant.
• Court: New York Supreme Court — Appellate Division

3 A.D.3d 305

771 N.Y.S.2d 72

2004 NY Slip Op 00004

MASTERWEAR CORPORATION et al., Respondents, et al., Plaintiff, v. NORMAN BERNARD, Appellant, and ALBERT S. MUSHKIN, Respondent, et al., Defendant.

1397N

1398N

Appellate Division of the Supreme Court of the State of New York, First Department.

January 6, 2004.

Order, Supreme Court, New York County (Charles Ramos, J.), entered December 10, 2002, which, to the extent appealed from, denied the motion of defendant-appellant Norman Bernard to amend his counterclaim to assert a bonus claim under a section of the parties' agreement different from the section originally pleaded and to amend his answer to assert a cross claim against defendant-respondent Albert S. Mushkin, unanimously modified, on the law, and defendant-appellant's motion granted only to the extent of permitting him to plead the proposed cross claim against defendant-respondent Albert S. Mushkin and otherwise affirmed, with costs to defendant-appellant. Appeal from that part of the order which denied defendant-appellant leave to plead an eighth alleged affirmative defense against the Masterwear plaintiffs unanimously dismissed, with costs, as moot, in light of the order of the same court and Justice entered on or about July 10, 2003, which granted reargument and, upon reargument, granted such relief. Order, same court and Justice, entered March 12, 2003, which, after an in camera inspection ordered by this Court, denied defendant-appellant's motion to compel disclosure of the settlement agreement between plaintiffs and defendant Mushkin, unanimously reversed, on the law and the facts, with costs, the disposition vacated and the matter remanded to the motion court for further proceedings in accordance with the decision herein.

Defendant-appellant Norman Bernard's motion to amend his answer should have been granted in all respects. In the absence of prejudice or unfair surprise, requests for leave to amend should be granted freely (see McQuaig v Olympia & York 125 Broad St. Co., 247 AD2d 273, 274 [1998]). As subsequently recognized by the motion court on reargument, its prior refusal to allow amendment in order to assert the eighth affirmative defense against the Masterwear plaintiffs was not a proper exercise of discretion because mere lateness is not a barrier to an amendment. Lateness must be coupled with significant prejudice which is not found in the mere exposure of Masterwear to greater liability. Thus, in light of the motion court's subsequent grant of such relief on reargument, that part of the appeal has been rendered moot.

As for the proposed addition of the cross claim against Mushkin, which relief was originally denied solely on the ground that contribution and indemnity may only be asserted in a tort action, the motion court also recognized on reargument that the claims against Bernard for conversion, fraud and breach of fiduciary responsibilities are tort claims. Nevertheless, it held that a cross claim for contribution was still not appropriate because claims for contribution pursuant to CPLR 1401 are available only for claims of personal injury, injury to property or wrongful death, and no such claims are made against Bernard. However, it is settled that any tortious act (other than personal injury), including conversion, resulting in...