HILL PLAZA ENTERPRISES NY LLC v. TERRIS (2024)

ORDERED that the order is reversed, without costs, tenant's motion for leave to amend her answer is granted and the proposed amended answer is deemed timely filed and served.

In this nonpayment proceeding commenced in September 2019, tenant moved to dismiss the petition on the ground that the arrears had been satisfied and for leave to conduct discovery related to her overcharge counterclaim based on an alleged fraudulent deregulation scheme. The Civil Court granted tenant's motion by order dated March 9, 2020. In 2022, tenant moved, due to a change in the law that occurred in 2020, for leave to amend her answer to sufficiently plead a fraudulent deregulation scheme in support of her overcharge counterclaim. The Civil Court denied the motion, as it found no excuse for the delay in moving for leave to amend and because tenant did not establish a claim of fraud and the amendment did not contain new facts or allegations.

“In the absence of prejudice or surprise resulting directly from the delay in seeking leave, applications to amend or supplement a pleading are to be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit” (Toiny, LLC v Rahim, 214 AD3d 1023, 1024 [2023] [internal quotation marks omitted]). “The burden of demonstrating prejudice or surprise, or that a proposed amendment is palpably insufficient or patently devoid of merit, falls upon the party opposing the motion” (Wells Fargo Bank, N.A. v Spatafore, 183 AD3d 853, 853 [2020]). The determination to permit or deny an amendment is within the sound discretion of the trial court (see US Bank N.A. v Murillo, 171 AD3d 984, 986 [2019]).

Notwithstanding the two-year delay (see Nationstar Mtge., LLC v Jean-Baptiste, 178 AD3d 883, 886 [2019] [“Mere lateness is not a barrier to (an) amendment”] [internal quotation marks omitted]), the Civil Court improvidently exercised its discretion in denying tenant's motion for leave to amend her answer as landlord did not meet its burden to show prejudice or surprise (see Matter of Chustckie, 203 AD3d 820, 822 [2022]). Further, tenant's proposed amendment was “neither palpably insufficient nor patently devoid of merit” (Toiny, LLC v Rahim, 214 AD3d at 1024).

Accordingly, the order is reversed, tenant's motion for leave to amend her answer is granted, and the proposed amended answer is deemed timely filed and served.

BUGGS, J.P., OTTLEY and HOM, JJ., concur.