COURAGEOUS SYNDICATE, INC. v. PEOPLE-TO-PEOPLE SPORTS COMM., INC.


141 A.D.2d 599 (1988)

Courageous Syndicate, Inc., et al., Appellants, v. People-to-People Sports Committee, Inc., et al., Respondents

Appellate Division of the Supreme Court of the State of New York, Second Department.

June 13, 1988


Ordered that the order is affirmed insofar as appealed from, with costs.

It is without question that motions to amend pleadings "shall be freely given upon such terms as may be just with the decision to allow or disallow the amendment committed to the court's discretion" (Rothfarb v Brookdale Hosp., 139 A.D.2d 720, 721-722, citing CPLR 3025 [b]; Barnes v County of Nassau, 108 A.D.2d 50, 52; Koch v St. Francis Hosp., 112 A.D.2d 142; Scarangello v State of New York, 111 A.D.2d 798). Moreover, "`[w]hile a court has broad discretion in deciding whether leave to amend should be granted, it is considered an improvident exercise of discretion to deny leave to amend in the absence of an inordinate delay and a showing of prejudice'" (Rothfarb v Brookdale Hosp., supra, at 722, quoting from Scarangello v State of New York, supra, at 799). "`[I]t is likewise true that the merits of a proposed amendment will not be examined on the motion to amend — unless the insufficiency or lack of merit is clear and free from doubt'" (Rothfarb v Brookdale Hosp., supra, at 722, quoting from Norman v Ferrara, 107 A.D.2d 739, 740). However, when such an examination is necessary, leave to amend should be denied where "the amendment sought is palpably improper or insufficient as a matter of law" (Barnes v County of Nassau, supra, at 52).

This court has repeatedly observed that "no cause of action to recover damages for fraud arises when the only fraud charged relates to a breach of contract" (Edwil Indus. v Stroba Instruments Corp., 131 A.D.2d 425; see, Spellman v Columbia Manicure Mfg. Co., 111 A.D.2d 320; Gould v Community Health Plan, 99 A.D.2d 479). In the case at bar, the plaintiffs' proposed third cause of action alleges, essentially, that the defendants fraudulently induced them to enter into the contract when the defendants had no intention of abiding by its terms. Accordingly, leave to amend was properly denied "[s]ince the cause of action at issue here does not allege the breach of a duty extraneous to, or distinct from the contract between the parties" (Edwil Indus. v Stroba Instruments Corp., supra; see, North Shore Bottling Co. v Schmidt & Sons, 22 N.Y.2d 171; Channel Master Corp. v Aluminium Ltd. Sales, 4 N.Y.2d 403).

Additionally, the court properly dismissed the complaint as against the defendant Leonard Milton personally. Generally, a "`director of a corporation is not personally liable to one who has contracted with the corporation on the theory of inducing a breach of contract, merely due to the fact that, while acting for the corporation, he has made decisions and taken steps that resulted in the corporation's promise being broken'" (Murtha v Yonkers Child Care Assn., 45 N.Y.2d 913, 915, on remand 69 A.D.2d 813, quoting from Matter of Brookside Mills [Raybrook Textile Corp.], 276 App Div 357, 367; see, Burger v Brookhaven Med. Arts Bldg., 131 A.D.2d 622, 623; Citicorp Retail Servs. v Wellington Mercantile Servs., 90 A.D.2d 532). Moreover, "`[A] corporate officer who is charged with inducing the breach of a contract between the corporation and a third party is immune from liability if it appears that he is acting in good faith * * * [and did not commit] independent torts or predatory acts directed at another'" (Murtha v Yonkers Child Care Assn., supra, at 915, quoting from Buckley v 112 Cent. Park S., 285 App Div 331, 334). The complaint must allege that the officers' or directors' "acts were taken outside the scope of their employment or that they personally profited from their acts" (Citicorp Retail Servs. v Wellington Mercantile Servs., supra, at 532). We find that, although entitled "fraud", the plaintiffs' second cause of action merely states a breach of contract claim and, furthermore, that the allegations contained therein do not represent that the defendant Leonard Milton "acted for personal profit or committed independently tortious acts" (Citicorp Retail Servs. v Wellington Mercantile Servs., supra, at 533; Handy v Geften Realty, 129 A.D.2d 556, 557; Conway v Bayley Seton Hosp., 104 A.D.2d 1018, 1019).

Finally, we find the document demand in question to be palpably improper, as the information sought relating to golf competitions sponsored by the defendants is not relevant to the issue in this case.


Comment

1000 Characters Remaining

Leagle.com reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

User Comments

Listed below are the cases that are cited in this Featured Case. Click the citation to see the full text of the cited case. Citations are also linked in the body of the Featured Case.

Cited Cases

  • No Cases Found

Listed below are those cases in which this Featured Case is cited. Click on the case name to see the full text of the citing case.

Citing Cases