Edenwald Contracting Co., Inc. v. City of New York, 60 N.Y.2d 957 (1983)
Permission to amend pleadings should be freely given unless the delay causes significant prejudice to the opposing party.
Summary
Edenwald Contracting Co. sued the City of New York for damages based on unexpected cost overruns in a street repaving contract. The City initially failed to raise Edenwald’s prior written waivers of claims. Six and a half years into the litigation, the City sought to amend its answer to include the defense of “waiver and release.” The trial court initially denied the amendment but later reversed itself, granting summary judgment to the City. The Appellate Division reversed, citing lack of consideration, laches, and abuse of discretion. The Court of Appeals reversed the Appellate Division, holding that the trial court did not abuse its discretion in allowing the amendment, and remitted the case to the Appellate Division to exercise its discretion on the City’s motion to amend.
Facts
In 1970, Edenwald Contracting Co. entered into a street repaving contract with the City of New York.
During 1971, Edenwald signed letters agreeing to “waive and release all claims which we may have against the City of New York, arising out of the aforesaid contract” to secure contract extensions and expedite payments.
Edenwald later sued the City for damages due to unexpected cost overruns not covered by the contract.
The City did not initially raise Edenwald’s waiver letters as a defense.
Six and a half years after the suit began, the City moved to amend its answer to include the defense of “waiver and release.”
Procedural History
The trial court initially denied the City’s motion to amend and granted summary judgment to Edenwald on liability.
On reargument, the trial court reversed itself, permitted the amendment, and granted summary judgment to the City based on the waiver letters, citing Mars Assoc. v. City of New York.
The Appellate Division reversed, holding that there was no consideration for the waiver, the City was guilty of laches, and the trial court abused its discretion.
The Court of Appeals reversed the Appellate Division and remitted the case.
Issue(s)
Whether the trial court abused its discretion by allowing the City to amend its answer six and a half years into the litigation to include the affirmative defense of waiver and release.
Holding
No, because the trial court did not abuse its discretion as a matter of law in permitting the City to amend its answer, as mere lateness in seeking amendment is not a barrier unless coupled with significant prejudice to the other side.
Court’s Reasoning
CPLR 3025(b) states that permission to amend pleadings should be “freely given,” and the decision to allow or disallow the amendment is within the court’s discretion, citing Murray v. City of New York, 43 N.Y.2d 400, 404-405.
The Court of Appeals stated, “Mere lateness is not a barrier to the amendment. It must be lateness coupled with significant prejudice to the other side, the very elements of the laches doctrine.” (Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR 3025:5, p 477.)
The prejudice asserted by Edenwald was the inability to locate a former city employee who allegedly would have testified that the waiver letters were not intended to release all claims.
However, the Court noted that the City disclosed the witness’s address and phone number in its renewed motion, and Edenwald failed to demonstrate that it would suffer significant prejudice.
Therefore, the Court of Appeals reversed the Appellate Division’s ruling and remitted the case to the Appellate Division for an exercise of its discretion regarding the City’s motion to amend, implying the Appellate Division should consider whether any prejudice remained after the witness information was provided.