Case ID: ad2d_162/html/0961-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Thomas A. Brinati, as Executor of Jerome S. Morris, Deceased, Respondent, v Southlake Properties Corporation et al., Defendants, and Russ Kidd, Inc., et al., Intervenors-Appellants.
   Order unanimously reversed on the law with costs and motion granted. Memorandum: Leave to amend pleadings should be freely granted (see, CPLR 3025 [b]). In the instant case, because the intervenors’ claim of criminal usury is supported by sufficient proof, we conclude that Supreme Court erred in denying their motion for leave to amend their answer (cf., Newton v Aqua Flo Co., 106 AD2d 919). Intervenors provided documentary evidence that a $25,000 check was immediately endorsed back to plaintiffs decedent as part of the $100,000 loan transaction, and submitted an affidavit from one of the participants in the transaction that the $25,000 was prepaid interest. The evidence, when liberally construed, is sufficient to support the defense of criminal usury. The intervenors, who had no knowledge of the alleged corporate loan, should be afforded an opportunity to conduct discovery to determine the true nature of the transaction. Finally, whether intervenors were privy to the loan transaction is of no moment because they were permitted to intervene and, on behalf of the corporation, assert defenses that might not otherwise have been alleged because of the other corporate shareholders’ involvement in the transaction. (Appeal from order of Supreme Court, Chautauqua County, Ricotta, J.— amended answer.) Present—Dillon, P. J., Denman, Pine, Law-ton and Davis, JJ.