FISCHER v. MICHAEL BANQUET FACILITY INC (2016)

Plaintiffs move to amend their complaint to add two individuals as defendants in this action, Joseph Gargano and his son, Joseph A. Gargano (the Garganos). Plaintiffs filed this class action lawsuit on October 7, 2014. On February 9, 2015, this court granted plaintiffs' motion for class certification. On April 13, 2015, the court granted plaintiffs' motion for summary judgment, finding that defendant did not ensure that reasonable customers understood that the mandatory charges had added to the customers' bills were not gratuities.

On July 24, 2015, defendant produced a complete list of names and contact information for their current and former employees. Defendant also produced documents and information responsive to plaintiffs' discovery requests the following month. Plaintiffs' motion to amend the complaint was made on December 9, 2015, and the parties stipulated to adjourn the return date of that motion a number of times until it was ultimately heard on September 15, 2016.

Leave to amend a complaint shall be freely given, absent a showing of prejudice or surprise or that the amendment is totally devoid of merit (CPLR § 3025; see also Consolidated Payroll Services., Inc. v. Berk, 18 AD3d 415, 415 [2d Dept 2015] ). Plaintiffs claim that there was no significant delay in making the motion to amend the complaint once plaintiffs' counsel became aware of the facts set forth in the proposed amended complaint. This court agrees. Also, the basis for the proposed amendments is plaintiffs' contention that the Garganos exercised operational control of the corporation, which may subject them to individual liability (see Irizarry v. Catsimatidis, 722 F3d 99, 110 [2d Cir 2013] ). The court cannot find the proposed amendments to be totally devoid of merit, despite the fact that the elder Gargano's role in the corporation appears to be far less significant than that of his son.

However, on the issue of prejudice, the Garganos have demonstrated that if the complaint is amended, they will (1) be bound by the court's prior determinations as to class certification and liability; and (2) be exposed to two years of liability that would otherwise be time barred under the statute of limitations. While it is true that as owners of a company, they were aware of the lawsuit and the facts upon which the motions were predicated, they also were aware of limited assets of the corporation. The court appreciates that the Garganos were free to make a tactical decision to not defend aspects of the litigation.

Based upon the prejudicial effect on the Garganos, plaintiffs' motion to amend is hereby denied. Plaintiffs may proceed against the Garganos individually in the separate action they have already commenced, and the court may consider consolidation or joinder of the two actions.

Submit order accordingly.

Henry J. Nowak, J.