Court Opinion

ID: 5868907
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:41:40.543083+00
Date Added: 2024-06-11T08:44:38.878503
License: Public Domain

Mikoll, J., dissents and votes to affirm in the following memorandum. Mikoll, J. (dissenting).
I respectfully dissent. Special Term did not abuse its discretion in granting plaintiff’s motion to amend its complaint. Amendments are to be freely granted as long as there is no showing of surprise or prejudice (Bronson v Potsdam Urban Renewal Agency, 74 AD2d 967). H Plaintiff has amended the title of the third cause of action in its complaint to aver a theory of recovery based on fraud. The allegations supporting the cause of action had been incorporated into the complaint since 1979, when it was discovered by plaintiff that defendant Celotex Corporation knew the cause of roof failures, such as had occurred here, beginning back in 1965. When the amendment was made, the pertinent Statutes of Limitation had not yet run since the facts giving rise to the fraud cause of action were not discovered until after 1977 and plaintiff had six years in which to commence the fraud cause of action (CPLR 213, subd 8). 11 For purposes of the Statute of Limitations, a claim in an amended pleading is deemed to relate back to the original pleading as long as notice of the occurrence out of which the new matter arose was contained therein (CPLR 203, subd [e]; Siegel, NY Prac, §§ 49, 237, pp 51, 291). Defendants were apprised of all the necessary elements of fraud in 1979: representation of a material existing fact, falsity, scienter, deception and injury. Plaintiff raised no new unknown or unalleged facts in its amended cause of action. 111 find no prejudice or surprise to defendants. Defendants were fully aware of the allegations supporting the fraud cause of action and, in fact, defendants responded to these allegations in their answer. 11 Under the instant circumstances, I find inapplicable the cases cited for the general proposition that allegations of fraud which are merely incidental to the underlying cause of action which is time barred cannot resurrect such a cause of action. In the cases cited by the majority, the fraud causes of action were based on bare allegations of intent, inserted belatedly as a subterfuge to avoid the expired Statute of Limitations. Here, the fraud is not incidental to the contract cause of action and plaintiff’s complaint does not make bare allegations of intent. The complaint is based on intercorporate memoranda tending to show the fraud committed by defendants. The fraud alleged is independent of the contract of sale. The cause of action for breach of contract existed without the allegations of fraud. The deciding factor here is that Celotex is alleged to have known that the product used for the roofing was not what Celotex represented it to be, that it would not do what Celotex represented it could do, and that plaintiff was induced by the false representations to part with its money. The deceit continued even after leaks developed and Celotex did not reveal the true nature of its product, which was known to them not to be what they originally represented it to be and what they continued to represent it to be. The seminal case in the field, Glover v National Bank of Commerce (156 App Div 247, 256, affd 219 NY 618), summarizes the appropriate test of the sufficiency succinctly: “[T]here would be no injury except for the fraud.” Plaintiff’s cause of action meets that criteria and the amendment was appropriately granted. 11 The order should be affirmed.