Walsam 316 v 316 Bowery Realty Corp. 2024 NY Slip Op 02288 Decided on April 30, 2024 Appellate Division, First Department is the story of a real estate/rent overcharge proceeding between sophisticated commercial entities which, almost incidentally included a legal malpractice claim. Amendment of the legal malpractice claim was denied.

“Order, Supreme Court, New York County (Margaret A. Chan, J.) entered on or about April 8, 2022, which, insofar as appealed from as limited by the briefs, denied the motion of defendant 316 Bowery Realty Corp. (Bowery) for leave to amend its answer to assert new counterclaims seeking reimbursement of amounts contributed to the settlement of a rent overcharge proceeding and for summary judgment dismissing the cause of action for breach of contract (second cause of action), unanimously affirmed, with costs. Order, same court and Justice, entered January 3, 2023, which, to the extent appealable, granted Bowery’s motion for leave to reargue so much of its motion for summary judgment as sought dismissal of the cause of action for breach of contract (second cause of action), and upon reargument, adhered to its prior determination, unanimously affirmed, with costs. Order, same court and Justice, entered on or about May 25, 2023, which denied Bowery’s motion for leave to renew its prior motion for leave to amend its answer to add counterclaims and denied Bowery’s motion to strike plaintiffs’ untimely opposition papers, unanimously affirmed, with costs.

Supreme Court providently denied Bowery’s motion for leave to amend its answer to assert new counterclaims seeking reimbursement from plaintiffs of certain amounts paid by Bowery toward the settlement of a rent overcharge proceeding, as the proposed counterclaims were “palpably insufficient or clearly devoid of merit” (MBIA Ins. Corp. v Greystone & Co., Inc., 74 AD3d 499, 500 [1st Dept 2010]). With respect to the proposed counterclaim titled “money judgment” (the third proposed counterclaim), Bowery failed to plead an underlying claim for the relief, but merely made a conclusory statement of the relief sought (see e.g. Cohen v Cohen, 25 AD3d 363, 363 [1st Dept 2006]). Bowery’s reference to the parties’ reservation of rights in the various settlement agreements is not persuasive because, as Supreme Court noted, a reservation of rights does not create new rights (Dee Cee Assoc. LLC v 44 Beehan Corp., 148 AD3d 636, 640 [1st Dept 2017]), and Bowery could have, but did not, negotiate for an express right to reimbursement.”

“Based on the foregoing, Supreme Court providently denied leave to renew based on the allegations in plaintiffs’ December 19, 2022 amended legal malpractice complaint against its counsel in the overcharge proceeding, as there was no need to resort to extrinsic evidence in interpreting the unambiguous terms of the various agreements (see Ashwood Capital, Inc. v OTG Mgt., Inc., 99 AD3d 1, 7-8 [1st Dept 2012]). The proposed amendments were devoid of merit and thus, the court did not need to consider plaintiffs’ late-filed opposition papers in order to deny renewal. Bowery was not prejudiced by the court’s acceptance of the untimely papers under CPLR 2004, as the court accepted and considered Bowery’s reply (see Sanchez v Steele, 149 AD3d 458, 458 [1st Dept 2017]).”