MT BEACON PROPERTIES LLC v. CITY OF POUGHKEEPSIE (2026)

DECISION & ORDER

In an action, inter alia, to set aside a tax lien sale and a tax deed dated January 26, 2021, the defendant City of Poughkeepsie appeals from an order of the Supreme Court, Dutchess County (Michael G. Hayes, J.), dated October 30, 2023.  The order granted the plaintiff's motion pursuant to CPLR 3025 for leave to serve an amended complaint.

ORDERED that the order is reversed, on the law and in the exercise of discretion, with costs, and the plaintiff's motion pursuant to CPLR 3025 for leave to serve an amended complaint is denied.

After the plaintiff's property was sold by the defendant City of Poughkeepsie to discharge a tax lien on the property and the property was thereafter conveyed to an assignee of the successful bidder by tax deed, the plaintiff commenced this action, inter alia, to set aside a tax lien sale and a tax deed and for a judgment declaring that it is the sole and lawful owner of the subject property.  The plaintiff moved for summary judgment on the second and third causes of action and declaring that it is the sole and lawful owner of the property, and the defendants cross-moved, inter alia, for summary judgment dismissing the complaint.  The Supreme Court, in effect, granted the plaintiff's motion, granted that branch of the defendants' cross-motion which was for summary judgment dismissing the first cause of action, and otherwise denied the remaining branches of the defendants' cross-motion.  The court then issued a judgment dated March 23, 2023, among other things, setting aside the tax lien sale and the tax deed and declaring that the plaintiff is the sole and lawful owner of the property.

The plaintiff then moved pursuant to CPLR 3025 for leave to serve an amended complaint to assert a cause of action to recover damages for “constitutional tort” based upon alleged due process violations in connection with the tax lien sale and the conveyance of the property.  The City opposed the motion.  By order dated October 30, 2023, the Supreme Court granted the motion.  The City appeals.

“[I]n the absence of prejudice or surprise to the opposing party, leave to amend a pleading should be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit” (Gurewitz v. City of New York, 175 A.D.3d 655, 657, 108 N.Y.S.3d 33 [internal quotation marks omitted];  see CPLR 3025[b] ).  The party opposing the motion bears the burden of demonstrating prejudice or surprise (see Avenue 37, LLC v. Imperial Palace II, Inc., 244 A.D.3d 1038, 1039–1040, 249 N.Y.S.3d 104).

Here, the City demonstrated that it would be prejudiced by the late amendment because it had not conducted discovery relating to any claim for damages (see Gurewitz v. City of New York, 175 A.D.3d at 657–658, 108 N.Y.S.3d 33).  Further, to the extent that the Supreme Court granted the plaintiff's motion for leave to serve an amended complaint pursuant to CPLR 3025(c), under which a court “may permit pleadings to be amended before or after judgment to conform them to the evidence,” this was an improvident exercise of discretion, as no evidence of damages was ever adduced.

Accordingly, we reverse the order appealed from and deny the plaintiff's motion pursuant to CPLR 3025 for leave to serve an amended complaint.

IANNACCI, J.P., BRATHWAITE NELSON, WOOTEN and TAYLOR, JJ., concur.