DIRECTV LLC v. NEXSTAR BROADCASTING INC (2021)

Order, Supreme Court, New York County (Andrea Masley, J.), entered on or about March 9, 2021, which granted plaintiff's motion for leave to amend its complaint, unanimously affirmed, without costs.

It was not an improvident exercise of the court's discretion to grant the motion (see e.g. Loewentheil v. White Knight, Ltd., 71 A.D.3d 581, 898 N.Y.S.2d 21 [1st Dept. 2010]), as the proposed new claim was neither “palpably improper [n]or insufficient as a matter of law” (McGhee v. Odell, 96 A.D.3d 449, 450, 946 N.Y.S.2d 134 [1st Dept. 2012] [internal quotation marks omitted]).

The fraud claim is not duplicative of the contract claim;  the instant action is not a mere “insincere promise” case (cf.  RKA Film Fin., LLC v. Kavanaugh, 171 A.D.3d 678, 679, 99 N.Y.S.3d 267 [1st Dept. 2019]).  Instead, plaintiff relies on the theory of a misleading partial disclosure, alleging that it would not have entered into this contract if it knew of the true facts (see e.g. Basis Yield Alpha Fund [Master] v. Goldman Sachs Group, Inc., 115 A.D.3d 128, 135, 980 N.Y.S.2d 21 [1st Dept. 2014]).  The damages sought by the two causes of action are different;  the fraud claim seeks more than the contract claim (see Ambac Assur. Corp. v. Countrywide Home Loans Inc., 179 A.D.3d 518, 520, 118 N.Y.S.3d 13 [1st Dept. 2020]).

Defendant's contention that plaintiff's fraud claim is “palpably insufficient as a matter of law” (Meiterman v. Corporate Habitat, 173 A.D.3d 593, 594, 103 N.Y.S.3d 406 [1st Dept. 2019]) because it fails to allege facts showing a misrepresentation of a present fact is unavailing.  A fraud claim can be based on “a misrepresentation or a material omission of fact” (Ambac Assur. Corp. v. Countrywide Home Loans, Inc., 31 N.Y.3d 569, 578, 81 N.Y.S.3d 816, 106 N.E.3d 1176 [2018] [internal quotation marks omitted]).  A misleading partial disclosure can be actionable as fraud (see e.g. Juman v. Louise Wise Servs., 254 A.D.2d 72, 74, 678 N.Y.S.2d 611 [1st Dept. 1998]).

Defendant's argument that the amended complaint does not allege facts to support justifiable reliance (because plaintiff failed to conduct due diligence) is also unavailing.  The pleading alleges, “WHAG's impending loss of its NBC affiliation ․ was not publicly disclosed or otherwise available to” plaintiff.  It also alleges that defendant “even concealed the looming loss of WHAG's NBC affiliation from WHAG's own staff.”  This is not a case where plaintiff could have ascertained the specific risk that it claims was not disclosed to it by reading publicly filed documents (cf.  Northern Group Inc. v. Merrill Lynch, Pierce, Fenner & Smith Inc., 135 A.D.3d 414, 422, 22 N.Y.S.3d 421 [1st Dept. 2016]).

We have considered defendant's other arguments and find them unavailing.