IN RE: Alice ROBERTS (2006)

In a proceeding, inter alia, to recover the proceeds of a life insurance policy, allegedly owing to the estate of Stephen M. Roberts, the petitioner appeals (1), as limited by her brief, from so much of an order of the Surrogate's Court, Nassau County (Riordan, J.), dated May 28, 2004, as denied that branch of her motion which was for summary judgment on the breach of contract claim, and (2) from an order of the same court dated December 16, 2004, which granted the respondent's motion for leave to amend his answer to add the defense of waiver.

ORDERED that the order dated May 28, 2004, is affirmed insofar as appealed from;  and it is further,

ORDERED that the order dated December 16, 2004, is affirmed;  and it is further,

ORDERED that one bill of costs is awarded to the respondent.

Until 1997 the petitioner's decedent, Stephen M. Roberts (hereinafter Roberts), and the respondent, Nathan Borg, were the majority shareholders of Charlene Fabrics Group, Inc. (hereinafter Charlene), a closely-held corporation.   On October 28, 1997, Charlene, Roberts, Borg, and Charlene's minority shareholder, Karim Abed, entered into two interdependent, multilateral agreements.   The first, entitled Agreement of Reorganization, provided, inter alia, for Charlene to transfer certain of its assets to a newly-formed corporation.   Upon consummation of the transactions contemplated in that agreement, Borg would become the sole shareholder of the new corporation, and have no further interest in Charlene.   The second agreement, which was made in contemplation of the reorganization, called for Borg, inter alia, to transfer to Roberts a certain term life insurance policy on Roberts' life, in the face amount of $1,000,000, and in which Borg was the named beneficiary.   It is undisputed that Borg never transferred the subject policy to Roberts. Upon Roberts' death, Borg received the proceeds of the policy, and the petitioner commenced the instant proceeding, inter alia, to recover those proceeds.

 Contrary to the petitioner's contention, the Surrogate's Court properly denied that branch of her motion which was for summary judgment on the breach of contract claim.   The petitioner established, prima facie, that Borg failed to perform one of his obligations under the second agreement.   However, the evidence tendered by Borg in opposition to the motion raised a triable issue of fact as to whether Roberts and/or Charlene had failed to perform their own contractual obligations, and whether Borg therefore had a valid excuse to withhold his performance (cf. First Frontier Pro Rodeo Circuit Finals v. PRCA First Frontier Circuit, 291 A.D.2d 645, 737 N.Y.S.2d 694;  Unloading Corp. v. State of New York, 132 A.D.2d 543, 517 N.Y.S.2d 276).   Accordingly, summary judgment was properly denied (see J.S. Gourmet v. Bretton Woods Home Owners Assn., 11 A.D.3d 583, 783 N.Y.S.2d 68).

 Furthermore, the Surrogate's Court providently exercised its discretion in granting Borg leave to amend his answer, as the proposed amendment was neither palpably insufficient nor patently devoid of merit, and there was no evidence that it would prejudice or surprise the petitioner (see CPLR 3025 [b];  Edenwald Contr. Co. v. City of New York, 60 N.Y.2d 957, 959, 471 N.Y.S.2d 55, 459 N.E.2d 164;  Iannone v. Iannone, 31 A.D.3d 713, 715-716, 820 N.Y.S.2d 86;  Bolanowski v. Trustees of Columbia Univ. in City of N.Y., 21 A.D.3d 340, 341, 800 N.Y.S.2d 560;  Crespo v. Pucciarelli, 21 A.D.3d 1048, 1049, 803 N.Y.S.2d 586).

The parties' remaining contentions either are without merit or need not be reached in light of our determination.