Bellini v. Gersalle Realty Corp.

— Order, Supreme Court, New York County (Preminger, J.), entered On March 20, 1985, which denied the defendants-appellants’ motion for summary judgment dismissing that portion of the complaint asserted on behalf of Kingsbury Properties, Inc. and which granted the plaintiffs cross motion to amend the complaint, affirmed, with costs. This appeal involves two actions, consolidated by Special Term, each of which arose from a fire on March 21, 1979, at 241 East 60th Street in Manhattan. On that date plaintiff Jacques Bellini, Inc. (Bellini, Inc.) designed and sold custom clothes on two floors of the premises and Jacques Bellini occupied two additional floors of the premises as his personal residence, pursuant to a 21-year net lease dated August 21, 1972. The lease between Sutton Associates and Bellini, Inc. obligated the latter to obtain insurance, covering, inter alia, the building, personal property, rents, and earnings against all risks, and to make all necessary repairs. On or about June 3, 1977, Sutton Associates notified Bellini, Inc. to commence paying rent to Kingsbury Properties, Inc. (Kingsbury). Bellini, Inc. accordingly amended the indorsement on its policy with Quincy Mutual Life Insurance Company (Quincy Mutual) to name Kingsbury as the new mortgagee and loss payee. Quincy Mutual adjusted the claim submitted by Bellini, Inc. Quincy Mutual, as subrogee to Bellini, Inc. and Kingsbury, and Jacques Bellini then commenced separate actions against the defendant Gersalle Realty Corporation, the owner of the adjacent building wherein the fire allegedly originated. Jacques Bellini also named its officer Gertrude Cohen and the City of New York as defendants. The complaint in the subrogation action alleged that Kingsbury owned the building and, in the second cause of action, asserted a claim on Kingsbury’s behalf for damages to the building and loss of income in the amount of $156,000. The actions were consolidated shortly after issue was joined. By notice of motion, dated November 2, 1984, defendants moved for partial summary judgment, alleging that Kingsbury was not the true owner, no cause of action existed in its favor, and therefore that portion of the complaint which asserted a cause of action for damages to the building should be dismissed. Defendants’ affirmation in support of the motion averred that the Statute of Limitations had expired on an action by the owner before defendants discovered its true identity. Further, a title search confirmed that Kingsbury only collected rents as managing agent for the actual fee owner of [347] the premises, Ardmore Management Company. Plaintiffs cross-moved to amend the complaint pursuant to CPLR 3025 (b), or to correct the defect or mistake therein pursuant to CPLR 2001 by, inter alia, dropping Kingsbury as a party and asserting the challenged cause of action instead on behalf of Bellini, Inc. Special Term granted the cross motion to amend and correct the complaint in this manner and denied the motion for summary judgment. This appeal ensued. - We believe that Special Term’s determination to grant the motion to amend the complaint was a proper exercise of discretion consonant with the liberal policies of the CPLR regarding the construction, and the amendment, of pleadings. (CPLR 3025, 3026; see also, CPLR 104, 203 [6] [e].) Leave to amend should be freely given in the absence of prejudice to the other party traceable to the omission from the original pleading, some change of position, hindrance in the preparation of a case, or significant trouble or expense that could have been avoided had the original pleading contained what the amended one seeks to add. (Wyso v City of New York, 91 AD2d 661, 662 [2d Dept 1982].) Such prejudice does not exist where the motion simply amends the ad damnum clause and thus results in exposure to greater liability. (Stornelli v Aakron Rule Corp., 89 AD2d 1060 [4th Dept 1982].) In our view, the inclusion of Kingsbury was a mistake, the correction of which does not prejudice defendants. Contrary to the observation of our dissenting colleague, Bellini, Inc. had an independent right of action for damages to the building based upon its status as net lessee. Bellini, Inc.’s status under the net lease is akin to ownership. The net lease vested the burdens of ownership in Bellini, Inc. including the obligation to insure the building against all risks and to make all necessary repairs. (See, Chicago City Bank & Trust Co. v Ceres Terms., 93 Ill App 3d 623, 417 NE2d 798, 805 [App Ct, 1st Dist 1981]). Having paid Bellini, Inc.’s entire claim under compulsion of its insurance contract, Quincy Mutual is entitled to stand in its place. We cannot agree with the dissent that the subject amendment has the effect of reviving a time-barred action. It is well settled that amendment of a pleading to assert a new cause of action, even one which technically belongs to different persons, or to substitute new parties, related to the original parties, is not precluded because an independent, de novo action would be time barred. The amendment may relate back to the earlier pleading so long as the earlier pleading gave the adverse party sufficient notice of the transaction out of which [348] the new claim arises. (CPLR 203 [e]; Caffaro v Trayna, 35 NY2d 245 [1974]; Covino v Alside Aluminum Supply Co., 42 AD2d 77 [4th Dept 1973]; Krupnicki v Snider, 78 AD2d 1000 [4th Dept 1980].) A fortiori, here Special Term properly permitted an amendment which shifted the second cause of action set forth in the original complaint to the properly named plaintiff who might have asserted it ab initio. Defendants cannot complain since they have always been parties to the litigation. (Covino v Alside Aluminum Supply Co., supra, at p 81.) They cannot point to any significant respect in which they have been confused or misled. We agree with Special Term that the court’s reasoning in Caffaro v Trayna (supra), concerning lack of prejudice due to timely notice, has persuasive application here. There the court held that the complaint in an action for personal injury could be amended to assert a wrongful death claim because the defendant had timely notice of the transaction out of which the claim had arisen and the amendment did not "significantly expand the scope of proof or the relevant legal considerations on the issue of liability.” (Caffaro v Trayna, supra, at p 251.) Here, as in Caffaro, considerations of judicial repose or foreclosure of stale claims are not so persuasive as to compel the invocation of the Statute of Limitations. In our view, the subject amendment does not frustrate the principle underlying purpose of the Statute of Limitations, which is to compel the exercise of a right of action within a reasonable time so that a defendant has an opportunity to prepare an adequate defense. (See, Siegel, NY Prac § 49, at 17 [1985 Pocket Part].) Lennox v Rhodes (39 AD2d 801 [3d Dept 1972]), relied upon by the dissent, involves jurisdictional considerations stemming from untimely service of process that are not presented herein. Parenthetically, we note that as the subject amendment relates back to the original complaint pursuant to CPLR 203, it makes no difference that the lease no longer exists and that Jacques Bellini, Inc. has filed articles of dissolution. Concur — Kupferman, J. P., Ross, Milonas and Rosenberger, JJ.