STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. CLARKE (2025)

Order, Supreme Court, Bronx County (Paul L. Alpert, J.), entered on or about June 25, 2024, which granted defendant's motion for leave to reargue his motion to amend the answer to assert counterclaims for breach of contract and declaratory relief and, upon reargument, adhered to its prior determination, unanimously modified, on the law, to grant the motion to amend as to the counterclaim for breach of contract, except for the demand for consequential damages, and otherwise affirmed, without costs.

As plaintiffs do not dispute, the court should not have adhered to its prior determination on the basis that defendant failed to submit an affidavit of merit in support of his motion for leave to amend (see Hickey v. Steven E. Kaufman, P.C., 156 A.D.3d 436, 436, 66 N.Y.S.3d 474 [1st Dept. 2017], lv denied 32 N.Y.3d 905, 2018 WL 4440619 [2018]).  Insofar as Non–Linear Trading Co. v. Braddis Assoc., 243 A.D.2d 107, 675 N.Y.S.2d 5 (1st Dept. 1998) held that a motion for leave to amend a pleading must be supported by an affidavit of merit (see id. at 116, 675 N.Y.S.2d 5), it should not be followed.

The court should not have denied leave to amend the answer to add the counterclaim for breach of contract, as the claim “is not palpably insufficient as a matter of law” (Mashinsky v. Drescher, 188 A.D.3d 465, 466, 131 N.Y.S.3d 891 [1st Dept. 2020]).  Even if defendant's counterclaim has a basis in statutory and regulatory rights, the claim is of a “fundamentally contractual nature” (Mandarino v. Travelers Prop. Cas. Ins. Co., 37 A.D.3d 775, 776, 831 N.Y.S.2d 452 [2d Dept. 2007];  see also Matter of Travelers Indem. Co. of Conn. v. Glenwood Med., P.C., 48 A.D.3d 319, 853 N.Y.S.2d 26 [1st Dept. 2008]).  Plaintiffs' reliance on Allstate Ins. Co. v. Belt Parkway Imaging, P.C., 33 A.D.3d 407, 409, 823 N.Y.S.2d 9 (1st Dept. 2006) is unavailing.  However, defendant fails to rebut plaintiffs' challenge to the counterclaim's demand for consequential damages (see Genovese v. State Farm Mut. Auto. Ins. Co., 106 A.D.3d 866, 868, 965 N.Y.S.2d 577 [2d Dept. 2013]).

The court providently exercised its discretion in denying leave to amend as to defendant's counterclaim for declaratory relief.  That counterclaim is palpably insufficient because it essentially seeks an advisory opinion as to hypothetical future claims (see Pettie v. Bronx Neighborhood Hous. Servs. CDC Inc., 230 A.D.3d 454, 455, 218 N.Y.S.3d 35 [1st Dept. 2024];  Matter of Ideal Mut. Ins. Co., 174 A.D.2d 420, 421, 571 N.Y.S.2d 18 [1st Dept. 1991]).

We have considered the remaining arguments and find them unavailing.