JARED CALVIN LLOYD JARED LLOYD v. SP LLC SPJJ LLC DENISE KERR MANUEL LEMA NATHANIEL SOMMER AARON SOMMER PHILLIP SCHONBERGER JOSEPH SCHONBERGER STEVEN SCHONBERGER JEFFREY SCHONBERGER (2026)

The following papers were read and considered on this motion by Plaintiff, pursuant to Civil Practice Law and Rules § 3025(b), for leave to amend her verified summons and complaint to assert a claim for piercing the corporate veil against defendants Evergreen Court Home for Adults SP LLC, SPJJ LLC, Phillip Schonberger, Joseph Schonberger, Steven Schonberger, and Jeffrey Schonberger:

PAPERS NUMBERS

Notice of Motion 211

Affirmation of Charles E. Green, Esq., in Support, dated August 14, 2026 212

Exhibits A—N 213—226

Affidavit of Service 227

Affirmation of David T. Verschell, Esq., in Opposition, dated September 4, 2026 244

Memorandum of Law in Opposition of the Evergreen Defendants 245

Exhibits 1—9 246—254

Affirmation of Martin M. Adler, Esq., in Opposition, dated September 4, 2026 255

Affidavit of Service 256

Reply Affirmation of Charles E. Green, Esq., dated September 10, 2026 257

Exhibits O—W 258—266

Affidavit of Service 267

Upon the foregoing papers, the motion is granted in part and denied in part, as set forth

below.

I. BACKGROUND

A. The Action

This is an action to recover damages for wrongful death and conscious pain and suffering arising from a fire at the Evergreen Court Home for Adults in Spring Valley, New York, on or about March 23, 2021. Plaintiff's decedent, Jared Lloyd, a volunteer firefighter with the Spring Valley Fire Department, responded to the fire and was killed when he became trapped inside the building, which ultimately collapsed. The facility was operated by defendant Evergreen Court Home for Adults SP LLC ("Evergreen") and the real property was owned by defendant SPJJ LLC ("SPJJ") (together, the "Corporate Defendants"). Defendants Phillip, Joseph, Steven, and Jeffrey Schonberger (the "Schonberger Defendants") are members of the Corporate Defendants (collectively with the Corporate Defendants, the "Evergreen Defendants").

Plaintiff commenced this action on September 6, 2022. A second action commenced by Plaintiff under Index No. 030643/2023 was consolidated with this action by Decision and Order dated September 14, 2023. By Decision and Order dated May 13, 2025, the Court dismissed the claims against the former municipal defendants, the Village of Spring Valley and certain of its personnel.

According to Plaintiff's counsel, the Corporate Defendants carried $2 million in combined primary and excess liability coverage per occurrence with Church Mutual, while procuring approximately $10,005,467 in building coverage. See Green Aff. ¶ 3. Plaintiff further alleges that, after the fire, substantially all of the property-damage insurance proceeds were distributed to the Schonberger Defendants, and that in or about March 2026, while this action was pending, SPJJ granted a $1 million mortgage to non-party Gloria Schonberger, the mother of the Schonberger Defendants, encumbering the vacant lot on which the facility once stood, which plaintiff describes as SPJJ's sole remaining asset. See Green Aff., Ex. M ¶¶ 142, 148—150. The mortgage was executed by Joseph, Steven, and Jeffrey Schonberger as members and managers of SPJJ. See Green Aff., Ex. H [NYSCEF Doc. No. 220].

Separately, in December 2021, defendant Phillip Schonberger commenced an action in this Court against his brothers and various Schonberger-affiliated entities, including the Corporate Defendants as nominal defendants, under Index No. 036712/2021 (the "sibling litigation"). In his verified complaint in that action, Phillip alleged, among other things, that the Schonberger entities "operate as a single entity in their financial and organizational affairs," that funds were commingled and diverted, and that corporate formalities, including the maintenance of proper books and records, were disregarded. See Green Aff., Ex. E [NYSCEF Doc. No. 217].

In a sworn certification originally submitted in related litigation in the Superior Court of New Jersey, Chancery Division, Ocean County (Docket No. C-118-21), Steven Schonberger described the entities as being administered from a common "back office" in Lakewood, New Jersey, and stated that substantial personal expenses of the members had been paid by the entities. See Green Aff., Ex. G [NYSCEF Doc. No. 219]. An email from Joseph Schonberger to his brothers, filed in the sibling litigation, reflects that SPJJ's owners voted to distribute the property- damage insurance proceeds and to discontinue monthly draws, and that SPJJ had been paying, through those draws, the owners' and their spouses' life insurance, automobile leases, health, dental, and automobile insurance, telephone, toll, and tuition expenses. See Green Aff., Ex. F [NYSCEF Doc. No. 218].

B. The August 11, 2026, Decision and Order

On July 28, 2026, plaintiff deposed Joseph Schonberger, individually and as SPJJ's designee. Defense counsel directed the witness not to answer questions concerning, among other subjects, the disposition of the insurance proceeds, the March 2026 mortgage, the role of non-party SFS Management Group, LLC, distributions and personal expenses paid by the entities, and the litigation among the Schonberger brothers. On plaintiff's letter application (NYSCEF Doc. No. 200) and the Evergreen Defendants' opposition (NYSCEF Doc. No. 207), and following argument on August 10, 2026, the Court, by Decision and Order dated August 11, 2026 (NYSCEF Doc. No. 209), directed further testimony concerning the insurance proceeds, the mortgage, and SFS Management Group's operational role, but denied, without prejudice, plaintiff's request to compel testimony regarding the personal expenses, draws, and benefits paid to the individual defendants and the substance of the litigation among the brothers, because the complaint as then pleaded asserted no veil-piercing or alter-ego theory to which that inquiry was material.

C. The Proposed Amendment

Three days later, Plaintiff made the instant motion. The proposed verified amended complaint (Green Aff., Ex. M [NYSCEF Doc. No. 225]; Ex. N [redline, NYSCEF Doc. No. 226]) retains the first cause of action, for conscious pain and suffering (¶¶ 125—130), and the second, for wrongful death (¶¶ 131—136), and adds a "Third Cause of Action for Piercing the Corporate Veil/Alter Ego" (¶¶ 137—153). That pleading defines all four brothers, Joseph, Steven, Jeffrey, and Phillip, collectively as the "Individual Schonberger Defendants" and alleges that the Corporate Defendants were their alter egos, instrumentalities, and mere conduits (¶ 138); that they operated the Corporate Defendants as a single enterprise from a common office together with other family- owned entities (¶ 139); that they commingled entity funds with their own and caused the entities to pay their and their spouses' personal and household expenses, including life, health, dental, and automobile insurance, automobile leases, telephone and E-ZPass charges, and tuition, and to make cash distributions to them without corporate formality (¶¶ 140—141); and that, "[a]fter the claims herein arose," they caused the Corporate Defendants to distribute to themselves substantially all of the insurance proceeds paid on account of the fire, leaving the entities with no asset other than vacant, non-income-producing real property (¶ 142).

The proposed pleading identifies the sources of those allegations: Joseph Schonberger's February 21, 2022 email to his brothers concerning the distribution (¶ 143); Phillip Schonberger's verified complaint in the sibling litigation, alleging that Joseph, Steven, and Jeffrey controlled the Corporate Defendants, improperly distributed insurance proceeds obtained to rebuild the premises, commingled funds, and disregarded corporate formalities, and that the Schonberger entities operate as one (¶¶ 144—145); and Steven Schonberger's sworn certification describing a single "back office" in Lakewood, New Jersey, and the payment of Phillip Schonberger's personal expenses by the entities in amounts ranging, by Steven's account, between $550,000 and $820,000 per year (¶¶ 146—147). It further alleges that in or about March 2026, while this action was pending, SPJJ, "on behalf of defendants Joseph Schonberger, Steven Schonberger, and Jeffrey Schonberger," encumbered its remaining real property with a $1,000,000 mortgage in favor of their mother, an insider, without fair consideration (¶¶ 148—150). The pleading concludes that the Individual Schonberger Defendants used their domination "to strip said entities of assets and render them unable to satisfy a judgment herein, to Plaintiff's injury" (¶ 151); that they are personally liable, jointly and severally, for any judgment rendered against the Corporate Defendants (¶ 152); and that Plaintiff has been damaged in a sum exceeding the jurisdiction of all lower courts, together with punitive damages (¶ 153). The ad damnum clause demands judgment "on the Third Cause of Action" in a sum exceeding the jurisdiction of all lower courts (Ex. M, Wherefore clause [c]).

The redline also reflects changes unrelated to veil piercing: the deletion of the allegations, causes of action, and notice-of-claim conditions precedent pertaining to the municipal defendants dismissed by the May 13, 2025, Decision and Order, including the allegations concerning falsified inspection reports and the related Penal Law provisions; the correction of defendant Manuel Lema's name and address; and the updating of counsel's firm name and address (Ex. N). No party addresses or objects to those changes. Exhibit M is also preceded by a document denominated a "Supplemental Summons."

D. The Parties' Contentions

Plaintiff contends that leave should be freely given; that the Evergreen Defendants can claim no surprise, since the underlying materials originated with them and Plaintiff's July 29, 2026 letter expressly announced her intention to pursue a veil-piercing theory; that no cognizable prejudice exists because discovery remains open and no note of issue has been filed; and that the proposed pleading adequately alleges both domination and its use to perpetrate a wrong against her.

The Evergreen Defendants, through counsel for Evergreen, SPJJ, Joseph, Steven, and Jeffrey Schonberger, respond that: (1) veil piercing is not an independent cause of action; (2) the new allegations are conclusory, are borrowed from contested and unadjudicated pleadings in the sibling litigation, and, as to the insurance distribution and the mortgage, are lawful post-occurrence corporate transactions irrelevant to veil piercing; (3) the pleading fails to allege any nexus between the alleged abuse of the corporate form and Plaintiff's injury, relying principally on Tabchouri v Hard Eight Rest. Co., LLC, 219 AD3d 528 [2d Dept 2023]; and (4) Plaintiff offers no reasonable excuse for waiting four years to assert a theory grounded in materials publicly filed before this action was commenced, and the amendment would require new motion practice, document discovery, and depositions. In support, they submit, among other things, Steven Schonberger's affidavit in the sibling litigation disputing his brother's allegations (Verschell Aff., Ex. 1 [NYSCEF Doc. No. 246]) and a November 20, 2025, press release of the County of Rockland which, they contend, shows that the mortgage was obtained to satisfy a County judgment for fines and penalties (Verschell Aff., Ex. 9 [NYSCEF Doc. No. 254]).

Phillip Schonberger, through separate counsel, adopts those arguments and further contends that the proposed pleading alleges no conduct by him constituting domination, that he had no management or operational role in the Corporate Defendants for years before the fire, and that he was not a signatory to either the insurance-proceeds distribution or the mortgage. In reply, plaintiff contends, among other things, that Phillip Schonberger's opposition is not affirmed in the form required by Civil Practice Law and Rules § 2106 and should be disregarded.

II. DISCUSSION

A. Applicable Law

Leave to amend a pleading "shall be freely given." Civil Practice Law and Rules § 3025[b]. Absent prejudice or surprise resulting directly from the delay in seeking leave, such applications are to be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit. See Kimso Apts., LLC v Gandhi, 24 NY3d 403, 411 [2014]; See also Lucido v Mancuso, 49 AD3d 220, 229 [2d Dept 2008]. "No evidentiary showing of merit is required under CPLR 3025(b)"; the court need only determine whether the proposed amendment is palpably insufficient to state a claim or patently devoid of merit. See Lucido v Mancuso, 49 AD3d at 229. The party opposing amendment bears the burden of establishing prejudice or surprise, or that the amendment is palpably insufficient or patently devoid of merit.

Prejudice, in this context, is not mere exposure to greater liability or the burden of additional litigation. It requires a showing that the opposing party "has been hindered in the preparation of his case or has been prevented from taking some measure in support of his position" (Loomis v Civetta Corinno Constr. Corp., 54 NY2d 18, 23 [1981]), that is, "some change in position or hindrance in the preparation of its case which could have been avoided had the original pleading contained the proposed amendment." Whalen v Kawasaki Motors Corp., U.S.A., 92 NY2d 288, 293 [1998]. "Mere lateness is not a barrier to the amendment. It must be lateness coupled with significant prejudice to the other side." Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959 [1983] [internal quotation marks omitted]. At the same time, where the amendment comes late in a long-pending action, "the court should consider how long the amending party was aware of the facts upon which the motion was predicated, whether a reasonable excuse for the delay was offered, and whether prejudice resulted therefrom." Rice-Tamsen v Tamsen, 214 AD3d 685, 686 [2d Dept 2023] [internal quotation marks omitted]; See Migdal v MNT Props., LLC, 206 AD3d 903, 904 [2d Dept 2022].

Because the proposed amendment invokes the doctrine of piercing the corporate veil, its sufficiency is measured against the substantive pleading standard for that doctrine. A party seeking to pierce the corporate veil "must allege facts that, if proved, establish that the party against whom the doctrine is asserted (1) exercised complete domination over the corporation with respect to the transaction at issue, and (2) through such domination, abused the privilege of doing business in the corporate form to perpetrate a wrong or injustice against the plaintiff such that a court in equity will intervene." Goldberg v KOSL Bldg. Group, LLC, 236 AD3d 995, 997—998 [2d Dept 2025] [internal quotation marks omitted]; See Matter of Morris v New York State Dept. of Taxation & Fin., 82 NY2d 135, 141—142 [1993]; East Hampton Union Free School Dist. v Sandpebble Bldrs., Inc., 16 NY3d 775, 776 [2011]. Relevant factors include "the failure to adhere to LLC formalities, inadequate capitalization, commingling of assets, and the personal use of LLC funds." Grammas v Lockwood Assoc., LLC, 95 AD3d 1073, 1075 [2d Dept 2012]. Domination alone is not enough; "some showing of a wrongful or unjust act toward plaintiff is required." Matter of Morris, 82 NY2d at 142. Conversely, "a fact-laden claim to pierce the corporate veil is unsuited for resolution on a pre-answer, pre-discovery motion to dismiss." Cortlandt St. Recovery Corp. v Bonderman, 31 NY3d 30, 47 [2018], a caution that applies with at least equal force when the question is merely whether leave to plead should be granted.

B. The Civil Practice Law and Rules § 2106 Objection

Plaintiff asks the Court to disregard Phillip Schonberger's opposition because his counsel's affirmation omits the language prescribed by Civil Practice Law and Rules § 2106 (as amended effective January 1, 2024). The affirmation does deviate from the statutory form. However, it consists almost entirely of legal argument rather than factual averments, Plaintiff has fully responded to it on the merits, and plaintiff identifies no prejudice to any substantial right. The Court therefore disregards the defect. See Civil Practice Law and Rules § 2001. In any event, as discussed below, the disposition as to Phillip Schonberger rests upon plaintiff's own submissions, not upon any contested factual assertion in his counsel's affirmation.

C. Proposed Amendment

The Evergreen Defendants are correct that New York "does not recognize a separate cause of action to pierce the corporate veil." Crawford v Integrated Asset Mgt. Servs., LLC, 236 AD3d 750, 751—752 [2d Dept 2025] [internal quotation marks omitted]. An attempt to pierce the corporate veil "does not constitute a cause of action independent of that against the corporation; rather it is an assertion of facts and circumstances which will persuade the court to impose the corporate obligation on its owners." Matter of Morris, 82 NY2d at 141. A pleaded "third cause of action" that seeks nothing more than to pierce the veil, and that is not tethered to a substantive claim, would be subject to dismissal under Civil Practice Law and Rules § 3211(a)(7). See Crawford, 236 AD3d at 751—752.

The proposed pleading here is framed in exactly that manner. It denominates veil piercing a "Third Cause of Action," alleges that plaintiff "has been damaged" on it in an amount exceeding the jurisdiction of the lower courts, "together with punitive damages" (Ex. M ¶ 153), and demands a separate money judgment "on the Third Cause of Action." Ex. M, Wherefore clause [c]. Veil piercing, however, creates no independent injury and supports no independent recovery; it is a means of imposing upon the owners a liability that the entity itself is found to bear. See Matter of Morris, 82 NY2d at 141. To that extent, the proposed amendment is palpably insufficient.

That defect, however, is one of labeling, and it does not end the inquiry. Pleadings are to be liberally construed, and defects are to be ignored if a substantial right of a party is not prejudiced. See Civil Practice Law and Rules § 3026. The proposed pleading incorporates by reference all of the preceding allegations, including the wrongful death and conscious pain and suffering causes of action asserted against the Corporate Defendants, and the relief it seeks is the imposition of the Corporate Defendants' obligations on those claims upon their members. The Appellate Division has repeatedly addressed, on the merits, "so much of the . . . complaint as sought to pierce the corporate veil" to impose personal liability for the underlying claims. See Goldberg, 236 AD3d at 997—998; see Archival, Inc. v 177 Realty Corp., 220 AD3d 909, 911 [2d Dept 2023].

The appropriate course, therefore, is not to deny leave on the ground of mislabeling, but to deny leave to plead veil piercing as a freestanding cause of action and to require that the amended pleading present the veil-piercing allegations as the basis upon which plaintiff seeks to hold the members liable for the Corporate Defendants' obligations on the existing causes of action. Paragraph 153 and clause (c) of the ad damnum clause, which seeks separate recovery on the purported third cause of action, shall be omitted. The Court turns to whether the remaining allegations, so construed, are palpably insufficient.

D. Sufficiency of the Veil-Piercing Allegations as to Joseph, Steven, and Jeffrey Schonberger

Domination. The Evergreen Defendants characterize the new allegations as a recitation of veil-piercing factors untethered to facts. Some paragraphs, read in isolation, are indeed framed in the vocabulary of the doctrine. But the pleading must be read as a whole, and, so read, it is anchored in specific, identified sources: a verified pleading by one of the members alleging that the entities operate as a single enterprise, that funds were commingled and diverted, and that books and records were not properly maintained; a sworn certification by another member acknowledging a common back office and the payment of members' personal expenses by the entities; an email by a third member describing the payment, through SPJJ's monthly draws, of the owners' and their spouses' insurance premiums, automobile leases, telephone and toll charges, and tuition; and a recorded mortgage executed by Joseph, Steven, and Jeffrey Schonberger as SPJJ's members and managers See Ex. M ¶¶ 139—147, 149; Green Aff., Exs. E—H [NYSCEF Doc. Nos. 217—220]. These allegations go directly to recognized indicia of domination, including commingling of assets, disregard of formalities, and the personal use of entity funds. See Grammas, 95 AD3d at 1075; Archival, Inc., 220 AD3d at 911. They are a far cry from the bare conclusions found wanting in the authorities on which defendants rely.

Defendants' principal response is factual: Steven Schonberger's affidavit in the sibling litigation asserts that each entity has its own operating agreement, bank accounts, tax returns, and roster, and that payments to members were authorized compensation properly reflected on their K-1s. See Verschell Aff., Ex. 1. That affidavit may ultimately carry the day. But it is a contested sworn submission from other litigation, offered in response to a sworn pleading by a co-member, and the competing accounts were, as the opposing parties themselves emphasize, never adjudicated. On a motion under Civil Practice Law and Rules § 3025(b), the Court does not resolve such disputes or weigh the relative credibility of the brothers' sworn statements. See Lucido v Mancuso, 49 AD3d at 229. Nor does the fact that Plaintiff draws upon allegations first made by Phillip Schonberger render them conclusory; their source in a verified pleading by a member of the very entities in question, coupled with corroborating documents authored by other members, supplies a factual basis that is more, not less, substantial than the ordinary pleading.

Wrong or injustice against plaintiff. The Evergreen Defendants and Phillip Schonberger argue, relying on Tabchouri, that Plaintiff alleges no nexus between the alleged abuse of the corporate form and the fire that caused her decedent's death. That argument misapprehends both the doctrine and the theory pleaded.

Plaintiff does not contend that domination of the Corporate Defendants caused the fire. Her claim against the Corporate Defendants for the fire is pleaded in negligence and stands on its own. What the veil-piercing allegations assert is that, after the Corporate Defendants' alleged liability to Plaintiff arose, the members who controlled them used that control to strip the entities of their assets: distributing to themselves the property-damage insurance proceeds that represented the principal value of SPJJ's destroyed building, and later encumbering SPJJ's only remaining asset with a $1 million mortgage in favor of a family member while this action was pending. The "transaction attacked" (Matter of Morris, 82 NY2d at 141) is thus the alleged diversion of assets, and the "wrong or injustice against the plaintiff" is the alleged frustration of her ability to recover on the Corporate Defendants' obligation to her. The Court of Appeals has framed the inquiry in precisely these terms, requiring the Plaintiff to "adequately allege the existence of a corporate obligation" and that the Defendant exercised complete domination and control and "abused the privilege of doing business in the corporate form to perpetrate a wrong or injustice." Cortlandt St. Recovery Corp., 31 NY3d at 47—48 [internal quotation marks omitted]. Nothing in that formulation requires that the abuse of the corporate form has generated the underlying obligation.

The Second Department has sustained veil-piercing allegations of exactly this kind. In Archival, Inc. v 177 Realty Corp., the plaintiff alleged that, following the sale of the corporation's property, its owners "withdrew all the proceeds from the sale and disbursed those proceeds to themselves, leaving the corporation assetless and insolvent," thereby rendering it, "in effect, judgment proof"; the Court held those allegations, together with allegations of commingling and disregard of formalities, sufficient to plead both domination and an abuse of the corporate form to perpetrate a wrong against the plaintiff. See 220 AD3d at 911. Likewise, in Goldberg v KOSL Bldg. Group, LLC, allegations that the individual defendant commingled assets and left the entity undercapitalized so as to make it "judgment proof" sufficed. See 236 AD3d at 998. The obligation in those cases sounded in contract; the Court perceives no principled basis, and Defendants offer none, for affording a tort creditor less protection against the post-liability diversion of a debtor entity's assets than a contract creditor receives.

Tabchouri is not to the contrary. There, the plaintiff alleged that the bar operator "was left undercapitalized, underinsured, and unable to meet its corporate obligations," and the Second Department held those allegations "speculative and conclusory." 219 AD3d at 532. The pleading identified no transaction by which the owners had used their domination to injure the plaintiff. The proposed pleading here does not rest on any such theory. Although Plaintiff's counsel emphasizes that the Corporate Defendants carried only $2 million in liability coverage (Green Aff. ¶ 3), that assertion does not appear among the veil-piercing allegations, and properly so: under Tabchouri, the level of liability insurance a business elects to carry is not, without more, a wrong perpetrated through abuse of the corporate form. What Plaintiff pleads is considerably more. She identifies specific transactions, their approximate dates and amounts, the persons who authorized them, and the documents evidencing them, all occurring after the fatal fire that gave rise to the Corporate Defendants' alleged liability to her. That is the specificity Tabchouri found lacking.

Defendants' remaining contentions on this point present issues of fact or of ultimate merit, not palpable insufficiency. That the insurance proceeds were distributed as taxable member draws, or that the mortgage was a "rescue effort" to satisfy a County judgment for fines and penalties, may furnish a defense; Plaintiff counters that the same members who caused roughly $10 million in insurance proceeds to be distributed to themselves later borrowed from their mother against SPJJ's only remaining asset to pay the entity's debts. The County's press release (Verschell Aff., Ex. 9) does not conclusively establish the purpose or propriety of the mortgage, still less the propriety of the earlier distribution, and the Court will not resolve that dispute on this motion. Nor is the amendment rendered meritless by Defendants' observation that Plaintiff might, after judgment, pursue the transfers through other remedies, such as an action to avoid them under article 10 of the Debtor and Creditor Law. The availability of an alternative avenue of relief does not render a properly pleaded basis for veil piercing palpably insufficient.

Finally, Defendants contend that the Court's August 11, 2026, Decision and Order permitted questioning regarding the insurance proceeds and the mortgage "precisely because those topics are not aimed at piercing the corporate veil." That order resolved the permissible scope of deposition questioning under the pleading as it then stood. It made no determination regarding the sufficiency of a veil-piercing theory, which was not before the Court, and it is not a holding that those transactions are irrelevant to.

Accordingly, construed as allegations supporting the imposition of the Corporate Defendants' obligations on the first and second causes of action upon Joseph, Steven, and Jeffrey Schonberger, the proposed amendment is neither palpably insufficient nor patently devoid of merit. The allegation that the Corporate Defendants were operated as a single enterprise together with other family-owned entities (Ex. M ¶ 139) is pleaded as an indicium of domination, not as a basis for imposing the obligations of one Corporate Defendant upon the other, and the Court construes it accordingly. The Court expresses no view on whether Plaintiff will ultimately be able to prove any of them.

E. Phillip Schonberger

The analysis differs as to Phillip Schonberger. The doctrine reaches only a party who "exercised complete domination over the corporation with respect to the transaction at issue" (Goldberg, 236 AD3d at 997—998 [internal quotation marks omitted]). The proposed pleading reaches Phillip only by including him in the collective definition of the "Individual Schonberger Defendants." See Ex. M ¶ 138. When it turns to particulars, it tells a different story. The mortgage is alleged to have been granted "on behalf of" Joseph, Steven, and Jeffrey Schonberger, not Phillip (¶ 149). The verified complaint on which Plaintiff principally relies is Phillip's own, and, as the proposed pleading itself describes it, its gravamen is that his three brothers controlled the Corporate Defendants and improperly distributed the insurance proceeds (¶ 144). And Steven Schonberger's certification, as pleaded, describes entity payments of Phillip's personal expenses (¶ 147), which speaks to what Phillip received, not to what he controlled. Plaintiff does not dispute that Phillip signed neither the SPJJ acknowledgment concerning the distribution nor the mortgage; she contends only that his non-participation is "of no consequence" because he received entity funds and personal benefits and remains a member (Green Reply Aff. ¶ 10). Indeed, Plaintiff herself recounts that, according to Phillip's verified complaint, he was removed from and thereafter barred from the entities' office in 2018 when he sought access to their financial records. See Green Reply Aff. ¶ 27; Green Aff., Ex. E.

A member's receipt of distributions or entity-paid benefits, without more, is not domination of the entity, and an allegation that Phillip Schonberger benefited from conduct directed by others does not satisfy the first element of the doctrine as to him. Because the proposed pleading's collective assertion of domination as to Phillip Schonberger is conclusory and is contradicted by its own particular allegations and by Plaintiff's own submissions, it fails to allege facts that, if proved, would show that he dominated the Corporate Defendants with respect to the transactions attacked, the amendment is palpably insufficient insofar as it seeks to impose the Corporate Defendants' obligations upon him. That branch of the motion is denied, without prejudice to renewal should discovery disclose facts establishing his participation in, or control over, the transactions at issue. This determination does not affect Plaintiff's existing claims against Phillip Schonberger as originally pleaded.

F. The Remaining Changes in the Proposed Pleading

The remaining changes reflected in the redline, namely the deletion of allegations, causes of action, and conditions precedent pertaining to the dismissed municipal Defendants, the correction of Defendant Manuel Lema's name and address, and the updating of counsel's information, conform the pleading to the May 13, 2025, Decision and Order and to the amended caption, are unopposed, and are permitted. Because the amendment adds no new party, the "Supplemental Summons" annexed to Exhibit M is unnecessary, and the amended pleading may be served upon counsel for the appearing parties. See Civil Practice Law and Rules § 2103[b]. The Court further notes that the proposed pleading dates the fire as March 23, 2021, in one paragraph and March 22, 2021, in another (compare Ex. M ¶ 122, with ¶ 142); Plaintiff shall correct that inconsistency in the pleading served.

G. Delay, Prejudice, and Surprise

The Court does not accept Plaintiff's explanation for the timing of this motion without reservation. Much of the material on which the proposed amendment rests, including Phillip Schonberger's verified complaint, Steven Schonberger's certification, Joseph Schonberger's email, and the documents concerning the distribution of the insurance proceeds, was filed in the sibling litigation before or shortly after this action was commenced, and Plaintiff's counsel was deploying those materials at depositions in May 2026. Counsel's stated preference for developing evidence through deposition testimony before pleading the theory does not fully account for a delay of nearly four years. A pleading requires factual allegations, not proof, and much of what Plaintiff now alleges could have been alleged earlier.

But the record also shows why the motion was made when it was. The most significant transaction pleaded, the March 2026 mortgage, occurred only five months before the motion was made, and the motion followed by three days this Court's August 11, 2026, determination that discovery directed to an alter-ego theory could not proceed absent a pleaded basis for it. Under these circumstances, the delay does not reflect a deliberate decision to await the eve of trial. More to the point, delay, however imperfectly explained, is not by itself a basis to deny leave; it must be "coupled with significant prejudice to the other side." Edenwald Contr. Co., 60 NY2d at 959 [internal quotation marks omitted].

The opposing Defendants have not shown such prejudice. No note of issue has been filed, and no trial date has been set. Discovery remains open: Plaintiff served a further demand for discovery and inspection on September 1, 2026, to which responses remain outstanding (Green Reply Aff., Ex. W [NYSCEF Doc. No. 266]), and, at the time this motion was made, the continued deposition of Joseph Schonberger and other depositions remained pending. This posture bears no resemblance to the circumstances in which the Second Department has found prejudice, such as an attempt to interject a veil-piercing theory for the first time at trial, (see Americore Drilling & Cutting, Inc. v EMB Contr. Corp., 198 AD3d 941, 946—947 [2d Dept 2021]), or an amendment sought years after the note of issue had been filed and discovery closed. See Migdal v MNT Props., LLC, 206 AD3d at 904—905.

Nor can the Evergreen Defendants claim surprise. The facts underlying the amendment concern their own transactions and their own sworn statements, and Plaintiff's July 29, 2026 letter expressly announced her intention to pursue a veil-piercing theory. The opposing Defendants' submissions, in substance, do not claim surprise; they claim burden. The prospect of additional document discovery, further depositions, and motion practice addressed to the new allegations is the ordinary consequence of any amendment and does not constitute prejudice within the meaning of Loomis and Whalen. Defendants' assertions that witnesses "may" be unavailable, that memories "may" have faded, and that records "may" have been discarded are speculative and unsupported by any showing that any particular evidence has in fact been lost. The alleged wrong concerns transactions occurring in 2022 and 2026, and the principal actors are parties to this action.

The Court is likewise unpersuaded by the contention that the amendment would prejudice the Evergreen Defendants by prompting them to pursue third-party claims against the previously dismissed municipal defendants. Those prospective claims concern the circumstances of the fire and the firefighting response, not the Corporate Defendants' finances; they are not occasioned by the amendment, and any hindrance in pursuing them, by counsel's own account, stems from the timing of the Evergreen Defendants' own litigation choices. Nothing in this Decision and Order addresses whether any such claims could be asserted. Similarly, the suggestion that the amendment may complicate the sibling litigation or a rabbinical arbitration among the brothers is speculative, and the Evergreen Defendants identify no concrete respect in which their rights in those proceedings would be impaired.

Any legitimate concern regarding the orderly progress of this aged case is properly addressed through case management rather than by denying leave. Discovery on the veil-piercing allegations will be confined to those allegations and conducted on an expedited schedule, and the parties may seek appropriate relief, including a separate trial of the veil-piercing issues pursuant to CPLR 603, at the appropriate time. The Court also notes that its August 11, 2026, Decision and Order denied, without prejudice, Plaintiff's request to compel testimony concerning personal expenses, draws, and benefits and the substance of the sibling litigation because no veil-piercing theory was then pleaded. That predicate no longer obtains as to Joseph, Steven, and Jeffrey Schonberger, and the scope of further discovery on those subjects will be addressed at the conference directed below.

III. CONCLUSION

In arriving at this decision, the Court has reviewed, evaluated, and considered all the issues framed by these motion papers and the failure of the Court to specifically mention any particular issue in this Decision and Order does not mean that it has not been considered by the Court in light of the appropriate legal authority.

Accordingly, it is hereby

ORDERED that Plaintiff's motion (Motion Seq. No. 7) for leave to amend the verified complaint pursuant to Civil Practice Law and Rules § 3025(b) is GRANTED to the extent that Plaintiff is granted leave to serve and file a verified amended complaint substantially in the form annexed to the motion as Exhibit M (NYSCEF Doc. No. 225), modified as set forth below, alleging facts upon which Plaintiff seeks to pierce the corporate veil of defendants Evergreen Court Home for Adults SP LLC and SPJJ LLC and to impose their obligations on the first and second causes of action upon defendants Joseph Schonberger, Steven Schonberger, and Jeffrey Schonberger, and is otherwise DENIED; and it is further

ORDERED that the branch of the motion seeking leave to assert piercing the corporate veil as an independent cause of action is DENIED, and the verified amended complaint shall (i) not denominate the allegations of paragraphs 137 through 152 of Exhibit M as a cause of action, but shall instead set them forth under an appropriate heading as the basis upon which Plaintiff seeks to impose liability on the first and second causes of action; (ii) omit paragraph 153 and clause (c) of the ad damnum clause of Exhibit M; and (iii) correct the date of the fire alleged in paragraph 142 to conform to paragraph 122; and it is furtherORDERED that the branch of the motion seeking leave to assert veil-piercing allegations against defendant Phillip Schonberger is DENIED, without prejudice to renewal upon a proper showing as set forth above, and the verified amended complaint shall omit Phillip Schonberger from the defined term "Individual Schonberger Defendants" and from the imposition of liability alleged in paragraphs 138 and 152 of Exhibit M; and it is further

ORDERED that the remaining changes reflected in Exhibit N (NYSCEF Doc. No. 226), conforming the pleading to the Decision and Order dated May 13, 2025, and correcting the name and address of defendant Manuel Lema and the information of Plaintiff's counsel, are permitted; and it is further

ORDERED that, as the amendment adds no new party, no supplemental summons is required, and the verified amended complaint shall be served upon counsel for all appearing parties via NYSCEF; and it is further

ORDERED that Plaintiff shall serve and file the verified amended complaint, in conformity with this Decision and Order, within twenty (20) days of the date of entry of this Decision and Order; and it is further

ORDERED that Defendants shall serve their answers to the verified amended complaint within twenty (20) days after service thereof (Civil Practice Law and Rules § 3025[d]); and it is further

ORDERED that discovery concerning the veil-piercing allegations shall be limited to those allegations and shall proceed on an expedited basis, on a schedule to be set by the Court; and it is further

ORDERED that counsel for all parties shall appear for a compliance conference on November 12, 2026, at 10:30 a.m., at which the Court will set a schedule for the service of responsive pleadings and for discovery on the veil-piercing allegations, address the scope of further deposition testimony in light of this Decision and Order and the Court's Decision and Order dated August 11, 2026, and fix a revised date for the filing of the Note of Issue; and it is further

ORDERED that Plaintiff shall serve a copy of this Decision and Order with notice of entry upon all parties via NYSCEF within five (5) days of entry.

The foregoing constitutes the Decision and Order of the Court as to Motion Seq. No. 7.

Dated: October 6, 2026

New City, New York

HON. JOHN P. COLLINS, JR., J.S.C.

John P. Collins, Jr., J.