Opinion
January 8, 1998
Appeal from the Supreme Court, New York County (Elliott Wilk, J.).
Defendant is a cooperative corporation in which plaintiff is a shareholder and tenant of Penthouse C pursuant to a proprietary lease. This action was commenced in December 1991 and seeks compensatory and punitive damages of several million dollars for physical damage to plaintiff's dwelling unit and for emotional distress. In August 1992, plaintiff commenced a derivative action on behalf of herself and all other similarly situated shareholders alleging that the individual directors breached their fiduciary duties by failing to make adequate repairs, engaging in mismanagement and making misrepresentations concerning the physical condition of the premises and the amount of funds expended for maintenance and repair. The derivative action, which is still pending, has been the subject of an appeal before this Court ( Konrad v. 136 E. 64th St. Corp., 209 A.D.2d 228). In 1994, the complaint in the instant action was amended to add the eighth cause of action, alleging that employees of defendant cooperative corporation broke into plaintiff's apartment. In October 1996, by the order subject to appeal, plaintiff was granted leave to serve a second amended complaint to add a ninth cause of action against the individual directors alleging that their disparate treatment of plaintiff constitutes a breach of their fiduciary duty to her.
Leave to amend a pleading is freely granted (CPLR 3025 [b]). However, concern for the conservation of judicial resources warrants examination of the merit underlying a proposed cause of action ( East Asiatic Co. v. Corash, 34 A.D.2d 432, 434; see also, Mayers v. D'Agostino, 58 N.Y.2d 696, 698). Where no cause of action is stated, leave to amend will be denied ( Crimmins Contr. Co. v. City of New York, 74 N.Y.2d 166; Daniels v. Empire-Orr, Inc., 151 A.D.2d 370, 371).
The proposed amendment to the complaint does considerably more than assert an additional cause of action. It asserts novel claims, not merely novel theories, against persons sought to be named as additional parties to the action ( Bank of N.Y. v. Irwin Intl. Imports, 197 A.D.2d 462; Napoli v. Canada Dry Bottling Co., 166 A.D.2d 696). Defendants have made the requisite assertion of prejudice resulting from the need to prepare a defense on behalf of the additional parties ( Napoli v. Canada Dry Bottling Co., supra; cf., Detrinca v. De Fillippo, 165 A.D.2d 505, 510), and plaintiff has offered no excuse for her delay in bringing the motion to amend the pleadings ( Caruso v. Anpro, Ltd., 215 A.D.2d 713, 714). Finally, plaintiff has failed to assert that the facts underlying the proposed new cause of action were either unknown to her or undiscoverable at the time the original complaint was served ( supra; Bonanni v. Straight Arrow Publs., 133 A.D.2d 585, 587; Balport Constr. Co. v. New York Tel. Co., 134 A.D.2d 309, 312).
The duty owed by a director is that of a fiduciary to a corporation and to its shareholders, collectively, and the courts are generally prohibited by the business judgment rule from inquiring into the propriety of actions taken by the directors on its behalf ( Matter of Levandusky v. One Fifth Ave. Apt. Corp., 75 N.Y.2d 530, 537-538 [CPLR article 78 proceeding]). A review of the allegations contained in the proposed ninth cause of action reveals that the misconduct alleged was occasioned by the board of directors acting in its corporate capacity or by board members acting within the scope of their corporate duties ( Bonanni v. Straight Arrow Publs., supra, at 586). However, in support of her proposed amendment to the complaint, plaintiff contends, inter alia, that she was subjected to disparate treatment by the members of the board ( Bryan v. West 81 St. Owners Corp., 186 A.D.2d 514, 515). In DeCastro v. Bhokari ( 201 A.D.2d 382, 383) this Court stated: "While unequal treatment of shareholders is sufficient to overcome the directors' insulation from liability under the business judgment rule ( see, Ackerman v. 305 E. 40th Owners Corp., 189 A.D.2d 665, 667), individual directors and officers may not be subject to liability absent the allegation that they committed separate tortious acts ( see, Murtha v. Yonkers Child Care Assn., 45 N.Y.2d 913, 915; cf., Bank of N.Y. v. Berisford Intl., 190 A.D.2d 622)". That the cooperative corporation's board of directors may have taken action that "deliberately singles out individuals for harmful treatment" ( Matter of Levandusky v. One Fifth Ave. Apt. Corp., supra, at 540) does not, ipso facto, expose the individual board members to liability. The proposed cause of action ascribes no independent tortious conduct to any individual director, and plaintiff's proposed ninth cause of action is therefore deficient as a matter of law. Accordingly, we conclude that Supreme Court improvidently exercised its discretion in granting plaintiff leave to amend the complaint.
In addition, certain acts asserted on appeal to provide a basis for plaintiff's conclusory allegations of separate tortious conduct are time-barred. Supreme Court incorrectly applied a six-year Statute of Limitations to these acts, reasoning that "the genesis of the claim is a contractual relationship" (citing Butler v. Gibbons, 173 A.D.2d 352 [failure to account]). However, we note that Butler v. Gibbons limits application of the six-year period to claims sounding in contract or quasi-contract ( see, Baratta v. Kozlowski, 94 A.D.2d 454, 463-464 [bailment contract]).
Concur — Milonas, J.P., Rubin, Mazzarelli and Andrias, JJ.