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Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: November 14, 2018

Because Court Allowed Plaintiff to Amend Complaint, Court Erred in Deciding Summary Judgment Motion Before Defendant Answered Amended Complaint

On November 7, 2018, the Second Department issued a decision in R&G Brenner Income Tax Consultants v. Gilmartin2018 NY Slip Op. 07470, holding that because the IAS court allowed the plaintiff to amend its complaint, the court erred in deciding the plaintiff’s summary judgment motion before the defendant had answered the amended complaint, explaining:

Here, contrary to the defendant’s contention, the Supreme Court providently exercised its discretion in allowing the plaintiff to amend its complaint. The defendant failed to show that he was prejudiced or surprised by the proposed amendments.

However, the Supreme Court should not have awarded the plaintiff summary judgment on the issue of liability on the first, third, and fourth causes of action in the amended complaint, while simultaneously allowing the plaintiff to serve the amended complaint. When an amended complaint has been served, it supersedes the original complaint and becomes the only complaint in the case. Since an amended complaint supplants the original complaint, it would unduly prejudice a defendant if it were bound by an original answer when the original complaint has no legal effect. As a result, an amended complaint should ordinarily be followed by an answer. Here, the court should not have awarded the plaintiff summary judgment on the issue of liability on the causes of action in the amended complaint before the defendant had answered the amended complaint.

(Internal quotations and citations omitted).

Cases in the Commercial Division of the New York courts usually involve a motion to dismiss at the outset and then a motion for summary judgment at the close of discovery, so such motions are a big part of our practice. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions about seeking or opposing a motion for pre-trial dismissal of a commercial lawsuit.

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