LAM v. XIAO (2026)

DECISION & ORDER

In an action, inter alia, for a judgment declaring a deed and a mortgage null and void, the plaintiff appeals from an order of the Supreme Court, Queens County (Carmen R. Velasquez, J.), entered September 18, 2024.  The order granted the separate motions of the defendant First Central Savings Bank, the defendant Prime Title & Settlement, and the defendant Kim Marie DeFrancisci pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against each of them and denied the plaintiff's separate cross-motions pursuant to CPLR 3025(b) for leave to amend the complaint to add causes of action alleging negligence and aiding and abetting fraud against those defendants.

ORDERED that the order is affirmed, with one bill of costs.

In 2023, the plaintiff commenced this action against the defendants Qing Yun Xiao, Su Zeng Liang, First Central Savings Bank (hereinafter the bank), Prime Title & Settlement (hereinafter the title company), and Kim Marie DeFrancisci (hereinafter the title closer), inter alia, seeking to void a conveyance of an interest in the plaintiff's property in Queens (hereinafter the property) and a mortgage encumbering the property.  The plaintiff alleged that Qing Yun Xiao and Su Zeng Liang tricked her into giving them her personal information and that they used this information to “fraudulently transfer” half of the plaintiff's interest in the property to Su Zeng Liang and to obtain a mortgage using the property as collateral.  The plaintiff further alleged that the bank, the title company, and the title closer knew about the fraud and assisted in perpetrating the fraud against the plaintiff.

The bank, the title company, and the title closer each separately moved pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against each of them.  The plaintiff filed three separate cross-motions pursuant to CPLR 3025(b) for leave to amend the complaint to add causes of action against the bank, the title company, and the title closer alleging negligence and aiding and abetting fraud.  In an order entered September 18, 2024, the Supreme Court granted the motions of the bank, the title company, and the title closer, and denied the plaintiff's cross-motions.  The plaintiff appeals.

On a motion to dismiss pursuant to CPLR 3211(a)(7), the complaint is to be afforded a liberal construction, the facts alleged are presumed to be true, the plaintiff is afforded the benefit of every favorable inference, and the court is to determine only whether the facts as alleged fit within any cognizable legal theory (see CPLR 3026;  Leon v. Martinez, 84 N.Y.2d 83, 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511).  “[H]owever, allegations consisting of bare legal conclusions as well as factual claims flatly contradicted by documentary evidence are not entitled to any such consideration” (Myers v. Schneiderman, 30 N.Y.3d 1, 11, 62 N.Y.S.3d 838, 85 N.E.3d 57 [internal quotation marks omitted] ).

To establish fraud by a defendant, the plaintiff must demonstrate that the defendant made a material misrepresentation of a fact, that the defendant knew of its falsity and intended to induce the plaintiff's reliance, that the plaintiff justifiably relied on the misrepresentation, and that the plaintiff sustained damages (see Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 559, 883 N.Y.S.2d 147, 910 N.E.2d 976;  Ross v. Louise Wise Servs., Inc., 8 N.Y.3d 478, 488, 836 N.Y.S.2d 509, 868 N.E.2d 189).  “A claim rooted in fraud must be pleaded with the requisite particularity under CPLR 3016(b)” (Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d at 559, 883 N.Y.S.2d 147, 910 N.E.2d 976;  see CPLR 3016[b] ).

Here, liberally construing the allegations in the complaint in the light most favorable to the plaintiff, the complaint failed to state a cause of action sounding in fraud against the bank, the title company, and the title closer, since the plaintiff failed to allege that any of those defendants intentionally misrepresented a material fact for the purpose of inducing the plaintiff to rely upon that misrepresentation or that the plaintiff relied on any alleged misrepresentation made by those defendants (see Clevenger v. Yuzek, 222 A.D.3d 931, 935, 203 N.Y.S.3d 114;  Oppedisano v. D'Agostino, 196 A.D.3d 497, 500, 151 N.Y.S.3d 150).  Further, the causes of action sounding in fraud insofar as asserted against the bank, the title company, and the title closer were only supported by conclusory allegations (see Oppedisano v. D'Agostino, 196 A.D.3d at 500, 151 N.Y.S.3d 150).

Although leave to amend a pleading should be freely given in the absence of prejudice or surprise to the opposing party (see CPLR 3025[b] ), “a motion for leave to amend should be denied where the proposed amendment is palpably insufficient or patently devoid of merit” (1934 Bedford, LLC v. Gutman Weiss, P.C., 219 A.D.3d 1271, 1271–1272, 195 N.Y.S.3d 761;  see Buccigrossi v. Glatman, 214 A.D.3d 696, 696, 183 N.Y.S.3d 317).  “A determination whether to grant such leave is within the Supreme Court's broad discretion, and the exercise of that discretion will not be lightly disturbed” (Gitlin v. Chirinkin, 60 A.D.3d 901, 902, 875 N.Y.S.2d 585).  Here, the Supreme Court providently exercised its discretion in denying the plaintiff's cross-motions for leave to amend the complaint to add causes of action alleging negligence and aiding and abetting fraud against the bank, the title company, and the title closer.  The proposed amendments were palpably insufficient and patently devoid of merit as the allegations supporting them were speculative and conclusory (see Currid v. City of New York, 241 A.D.3d 777, 780–781, 241 N.Y.S.3d 341;  Singh v. T–Mobile, 232 A.D.3d 662, 667, 222 N.Y.S.3d 545;  Precious Care Mgt., LLC v. Monsey Care, LLC, 221 A.D.3d 922, 924, 201 N.Y.S.3d 104).

BRATHWAITE NELSON, J.P., WOOTEN, TAYLOR and GOLDBERG VELAZQUEZ, JJ., concur.