Court Grants Motion To Amend Complaint Where Amendments Were Based On Documents Produced By Defendants In Discovery

On May 26, 2024, Justice Joel M. Cohen granted plaintiffs’ motion to amend. The plaintiffs in Behar v. 5 Star Legal Funding, LLC, Index No. 657390/2020, who invested in certain litigation funds and advances as limited partners, asserted multiple claims against defendants alleging that defendants engaged in a pattern and practice of mismanagement, misuse, misappropriation, and diversion of plaintiffs’ funds. After discovery, plaintiffs moved to file their Second Amended Complaint. The Court granted the motion, explaining:

Here, Plaintiffs argue that their proposed amendments arise, at least in part, from documents produced by Defendants pursuant to Court order. Plaintiffs added allegations to their claims for breach of contract, breach of the implied covenant, breach of fiduciary duty, breach of loyalty, corporate waste and mismanagement, and constructive trust. Defendants' arguments as to the merits of the proposed claims - as to which the Court expresses no view at this time – do not warrant denial of the motion to amend, and there is no assertion of prejudice.

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The attorneys at Schlam Stone & Dolan frequently litigate motions to amend. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.