SIRE SPIRITS LLC v. LLC (2025)

Order, Supreme Court, New York County (Melissa A. Crane, J.), entered on or about October 18, 2024, which, to the extent appealed from as limited by the briefs, denied plaintiffs’ motion for leave to amend its first amended complaint by adding a demand in the prayer for relief for damages based on the alleged diminution of value of plaintiffs’ “enterprise value,” unanimously affirmed, with costs.  Order, same court and Justice, entered on or about December 16, 2024, which denied plaintiffs’ motion to renew the motion for leave to amend, unanimously affirmed, with costs.

Plaintiffs’ proposed amendment to the prayer for relief in its pleading, which sought recovery based on profits not realized as a result of the alleged fraud, violated the out-of-pocket damages rule (Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413, 421, 646 N.Y.S.2d 76, 668 N.E.2d 1370 [1996]).  Accordingly, the proposed amendment was palpably insufficient, and the court properly denied it (see Mashinsky v. Drescher, 188 A.D.3d 465, 466, 131 N.Y.S.3d 891 [1st Dept. 2020].  Plaintiffs fail to explain how expert discovery would have availed them, because the court ruled as a matter of law based on plaintiffs’ own characterization of their damages.

Because plaintiffs failed to identify any previously unavailable evidence that would have affected the prior determination, the court did not abuse its discretion in denying the motion to renew (McGookin v. Berishai, 187 A.D.3d 472, 474, 133 N.Y.S.3d 250 [1st Dept. 2020]).