Pieroni v Phillips Lytle LLP  2016 NY Slip Op 04618  Decided on June 10, 2016  Appellate Division, Fourth Department is an example of the “try-try-try again” school of litiagation.  The case arises from a car dealership gone bad against a big upstate corporate law firm which, in this case, represented Ford.

“§ 487 action against two individual attorneys and their law firm in connection with their representation of Ford Motor Credit Company LLC, formerly known as Ford Motor Credit Company (Ford Credit), in an underlying action (2007 action) commenced by Ford Credit. In the 2007 action, Ford Credit sought damages for breach of a floor plan and security agreement with an automobile dealership. In connection with the 2007 action, Ford Credit obtained an order of seizure with respect to certain vehicles. Ford Credit later amended the complaint therein to add as defendants the plaintiffs in this action, who were the purported buyers or participants in the transfer of those vehicles. In 2010, plaintiffs commenced an action (2010 action) against Ford Credit alleging causes of action for intentional infliction of economic harm, conversion, fraud, and tortious interference with contractual relations. Plaintiffs alleged that Ford Credit knew of the bona fide claims of plaintiffs to the vehicles and submitted false statements in support of its order to show cause to seize the vehicles. Plaintiffs later moved for leave to amend the complaint to add defendants to the 2010 action and to add a cause of action pursuant to Judiciary Law § 487. Supreme Court (Bannister, J.) denied the motion with respect to the individual defendants, and denied the motion with respect to the law firm without prejudice for reconsideration in the event plaintiffs submitted additional proof, as set forth in the court’s bench decision. Plaintiffs did not submit any additional proof, and their subsequent motion for leave to reargue was denied. Although plaintiffs appealed, that appeal was not decided before both the 2007 action and the 2010 action were transferred to federal court.”

“In March 2013, plaintiffs commenced the present action. The complaint is essentially identical to the proposed amended complaint they submitted in support of their motion for leave to amend the complaint in the 2010 action. Supreme Court (Caruso, J.) granted defendants’ motion to dismiss the complaint, and we now affirm.

We agree with defendants that this action is barred by collateral estoppel, and thus that[*2]the court properly granted their motion. The doctrine of collateral estoppel has two requirements: “[f]irst, the identical issue necessarily must have been decided in the prior action and be decisive of the present action and second, the party to be precluded from relitigating the issue must have had a full and fair opportunity to contest the prior determination” (Kaufman v Eli Lilly & Co., 65 NY2d 449, 455; see Ackman v Haberer, 111 AD3d 1378, 1379). The proposed amended complaint in the 2010 action and the complaint in the present action raise identical issues, and the court decided those issues when it denied the motion for leave to amend.

It is well settled that ” [l]eave to amend a pleading should be freely granted in the absence of prejudice to the nonmoving party where the amendment is not patently lacking in merit’ ” (Holst v Liberatore, 105 AD3d 1374, 1374; see Tag Mech. Sys., Inc. v V.I.P. Structures, Inc., 63 AD3d 1504, 1505). A review of the decision of the court (Bannister, J.) shows that the court denied the motion because “the proposed amendment was palpably insufficient or patently devoid of merit” (Holst, 105 AD3d at 1374); the motion was not denied based on technical pleading defects (see Jericho Group Ltd. v Midtown Dev., L.P., 67 AD3d 431, 431, lv denied 14 NY3d 712; cf. Hodge v Hotel Empls. & Rest. Empls. Union Local 100 of AFL-CIO, 269 AD2d 330, 330-331). In addition, although the motion was denied without prejudice with respect to the law firm, plaintiffs never submitted any additional proof in their subsequent motion for leave to reargue. We reject plaintiffs’ further contention that they did not have a full and fair opportunity to contest the determination.”