ST NICHOLAS 126 v. REPUBLIC INVESTMENT COMPANY LLC (2021)

Order, Supreme Court, New York County (Gerald Lebovits, J.), entered on or about March 12, 2020, which denied plaintiff's motion for leave to amend the complaint to add claims for the diminution of the value of air rights, and for legal and engineering fees, unanimously modified, on the law, to the extent of granting leave to amend the complaint to assert a claim for diminution of the value of air rights, and otherwise affirmed, without costs.

Plaintiff claims that while defendants were developing a parcel of land adjacent to its premises, they engaged in unauthorized excavation and construction under its premises, causing damage to its building.  The motion court improvidently denied plaintiff leave to amend its complaint to assert a claim for diminution of the value of air rights (see generally Davis v. South Nassau Communities Hosp., 26 N.Y.3d 563, 580, 26 N.Y.S.3d 231, 46 N.E.3d 614 [2015]).  Plaintiff's proposed amended complaint sufficiently alleged that it has air rights over its premises, and that defendants' actions diminished the value of those rights.  At this stage, plaintiff was not required to support its allegations with evidence or an affidavit of merit (see Sorge v. Gona Realty, LLC, 188 A.D.3d 474, 475, 131 N.Y.S.3d 876 [1st Dept. 2020];  Miller v. Cohen, 93 A.D.3d 424, 425, 939 N.Y.S.2d 424 [1st Dept. 2012];  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];  see also MBIA Ins. Corp. v. Greystone & Co., Inc., 74 A.D.3d 499, 500, 901 N.Y.S.2d 522 [1st Dept. 2010];  Boliak v. Reilly, 161 A.D.3d 625, 625, 78 N.Y.S.3d 32 [1st Dept. 2018]).

In opposing leave to amend, defendants failed to show prejudice to warrant the motion's denial.  They argued that they would be prejudiced by amendment, because they offered to settle the action by paying for the damages to plaintiff's building, and because they would have to engage in additional discovery, further extending litigation.  However, additional discovery, extended litigation, and increased liability exposure does not result in prejudice warranting denial of plaintiff's motion, where significant discovery is outstanding (see Jacobson v. McNeil Consumer & Specialty Pharms., 68 A.D.3d 652, 654–655, 891 N.Y.S.2d 387 [1st Dept. 2009];  Antwerpse Diamantbank N.V. v. Nissel, 27 A.D.3d 207, 208, 810 N.Y.S.2d 180 [1st Dept. 2006]).  Moreover, the record indicates that defendants have not offered to settle plaintiff's claim for punitive damages.

The motion court providently exercised its discretion in denying plaintiff's motion to the extent it sought leave to amend the complaint to add a claim for legal and engineering fees.  Plaintiff failed to cite any agreement, statute, or court rule that authorized an award of fees (see Matter of Part 60 Put–Back Litig., 36 N.Y.3d 342, 361, 141 N.Y.S.3d 410, 165 N.E.3d 180 [2020]).  Plaintiff's argument in support of fees is essentially a policy argument, which is best addressed to the legislature (see Bright Homes, Inc. v. Wright, 8 N.Y.2d 157, 162, 203 N.Y.S.2d 67, 168 N.E.2d 515 [1960]).

We reject defendants Vertigo Ventures LLC and Joseph Nehmadi's request for sanctions as unwarranted.