Summary
In Breco Environmental Contractors, Inc., v. Town of Smithtown, 307 AD2d 330, 332 (2d Dept. 2003), the Court partially granted defendant's request to add affirmative defenses and counterclaims, holding that "motions for leave to amend pleadings are liberally granted in the absence of prejudice or surprise."
Summary of this case from Francis v. Bien-AimeOpinion
2002-08676
Argued June 2, 2003.
July 28, 2003.
In an action, inter alia, to recover damages for breach of contract, the defendant third-party plaintiff, Town of Smithtown, appeals, as limited by its brief, from so much of an order of the Supreme Court, Suffolk County (Catterson, J.), entered August 26, 2002, as denied those branches of its motion which were for leave to amend its answer to assert an affirmative defense of unconscionability, and counterclaims for reformation, cardinal change, and rescission, and the plaintiff, Breco Environmental Contractors, Inc., cross-appeals from so much of the same order as granted that branch of the motion of the Town of Smithtown which was for leave to amend its answer to assert a counterclaim alleging fraud.
Sinnreich Safar LLP, Central Islip, N.Y. (Jonathan Sinnreich and JoAnn Bodemer of counsel), for defendant third-party plaintiff-appellant-respondent.
Goldberg Connolly, Rockville Centre, N.Y. (David E. Wolff, Robert C. Buff, Burt P. Natkins, Geoffrey S. Pope, and Susana M. Chavez of counsel), for respondent-appellant.
Before: MYRIAM J. ALTMAN, J.P., GABRIEL M. KRAUSMAN, DANIEL F. LUCIANO, STEPHEN G. CRANE, JJ.
DECISION ORDER
ORDERED that the order is affirmed insofar as appealed from; and it is further,
ORDERED that the order is reversed insofar as cross-appealed from, and that branch of the motion of the Town of Smithtown which was for leave to amend its answer to include a counterclaim alleging fraud is denied; and it is further,
ORDERED that one bill of costs is awarded to the respondent-appellant.
Breco Environmental Contractors, Inc. (hereinafter Breco), and the Town of Smithtown entered into a contract after competitive bidding for the closure and capping of the Town's Kings Park landfill. Under the contract, Breco was required to provide and place fill (called "contour grading material" in the contract), in order to achieve certain predetermined design slopes and elevations, prior to the placement of the cap. The contract provided that Breco was to be paid based upon a fixed price for each "unit" or cubic yard of contour grading material brought to the site. The bid documents prepared by the Town's engineer, the third-party defendant R.E. Pustorino, P.C. (hereinafter Pustorino), estimated that 150,000 cubic yards of fill would be required. Breco, based upon its own investigation, estimated that 218,691 cubic yards would be needed. Ultimately, Breco allegedly delivered 265,393 cubic yards of fill. When the Town refused to pay for more than 164,834 cubic yards, Breco, inter alia, commenced this action to recover damages for breach of contract.
The Town subsequently moved for leave to amend its answer to assert the affirmative defense of unconscionability and to allege counterclaims for reformation, cardinal change, rescission, and to recover damages for fraud. The proposed fraud counterclaim alleged that Breco misrepresented on its "truck tickets" the amount of fill delivered to the site, knowing that neither the Town nor Pustorino had established a method for verifying the amounts delivered. The Town further alleged that Breco was motivated to overstate the amounts of fill delivered because it had inflated that part of its bid price which was for fill, knowing that substantially more fill would be required than estimated in the bid specifications. The Supreme Court denied those branches of the motion which were for leave to amend the Town's answer to assert the affirmative defense of unconscionability and the counterclaims for reformation, cardinal change, and rescission, but granted that branch of the motion which was for leave to amend the answer to assert a counterclaim alleging fraud.
Motions for leave to amend pleadings are liberally granted in the absence of prejudice or surprise ( see Leszczynski v. Kelly McGlynn, 281 A.D.2d 519, 520; Corsale v. Pantry Pride Supermarket, 197 A.D.2d 659, 660). Leave will be denied where the proposed amendment is palpably insufficient as a matter of law or is totally devoid of merit ( see Tarantini v. Russo Realty Corp., 273 A.D.2d 458, 459). The Supreme Court correctly denied those branches of the Town's motion which were for leave to assert the affirmative defense of unconscionability ( see Gillman v. Chase Manhattan Bank, 73 N.Y.2d 1, 10-12), and counterclaims for reformation ( see Chimart Assocs. v. Paul, 66 N.Y.2d 570, 573-574; Kadish Pharmacy v. Blue Cross and Blue Shield of Greater N.Y., 114 A.D.2d 439), cardinal change ( see Depot Constr. Corp. v. State of New York, 19 N.Y.2d 109, 112-113; Waltech Constr. Corp. v. Town of Thompson, 237 A.D.2d 716, 717-718), and rescission ( see Babylon Assocs. v. County of Suffolk, 101 A.D.2d 207, 215). However, the Supreme Court erred in granting that branch of the motion which was for leave to amend the answer to assert a counterclaim alleging fraud. The Town, on notice that over 225,000 cubic yards of fill would be required, cannot have justifiably relied on any alleged misrepresentations by Breco concerning the fill requirements ( see Stuart Silver Assocs. v. Baco Dev. Corp., 245 A.D.2d 96, 98-99). Similarly, the Town could have devised a method of monitoring the quantities of fill actually delivered. Its failure to do so deprives it of justifiable reliance ( see Danann Realty Corp. v. Harris, 5 N.Y.2d 317, 322; Pinney v. Beckwith, 202 A.D.2d 767, 768). Moreover, the gist of the fraud counterclaim is nothing more than a claim of breach of contract, which is not independently viable ( see Clark-Fitzpatrick v. Long Is. R.R. Co., 70 N.Y.2d 382, 389; Rubinberg v. Correia Designs, 262 A.D.2d 474, 475; Krantz v. Chateau Stores of Canada, 256 A.D.2d 186, 187; cf. Middle Country Cent. School Dist. v. J. F. O'Healy Constr. Corp., 230 A.D.2d 777, 778; Banc of Am. Commercial Fin. Corp. v. Issacharoff, 188 Misc.2d 790, 796).
The Town's remaining contentions are without merit.
ALTMAN, J.P., KRAUSMAN, LUCIANO and CRANE, JJ., concur.