Yoder, et al v. Town of Morristown, et al

Filing 105

MOTION to Amend/Correct 13 Answer to Complaint to clarify and supplement an affirmative defense Motion Hearing set for 4/3/2012 11:00 AM in Albany before Senior Judge Neal P. McCurn Response to Motion due by 3/19/2012 filed by Mark Blanchard, Christopher Coffin, Lanetta Kay Davis, Frank L. Putman, David Stout, III, Town of Morristown, Gary Turner, Howard Warren. (Attachments: # 1 Declaration Laws Declaration, # 2 Exhibit(s) A, # 3 Exhibit(s) B, # 4 Exhibit(s) C, # 5 Exhibit(s) D, # 6 Memorandum of Law, # 7 Appendix unreported case, # 8 Appendix unreported case, # 9 Appendix unreported case, # 10 Appendix unreported case, # 11 Appendix unreported case, # 12 Appendix unreported case, # 13 Appendix unreported case, # 14 Appendix unreported case, # 15 Affidavit certificate of service) Motions referred to Therese Wiley Dancks. (Laws, April)

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Caution
As of: Feb 17, 2012
FREDERICK ADLER, et al., Plaintiffs, -against- ALCIDE CORPORATION,
Defendant.
96 Civ. 1214 (DAB)
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK
1998 U.S. Dist. LEXIS 15219

September 29, 1998, Decided
September 30, 1998, Filed
DISPOSITION: [*1] Defendant's Motion for leave to
amend Answer to include affirmative defense,
counterclaim and third party claim for breach of fiduciary
duty GRANTED.
CASE SUMMARY:

PROCEDURAL POSTURE: Plaintiffs, royalty holders
and investors, sued defendant corporation and claimed
monies were owed to them under a royalty agreement for
sales of certain veterinary germicidal products made by
the corporation. The corporation moved for leave to
amend its answer to add an affirmative defense,
counterclaim, and third party claim, all based on an
alleged breach of fiduciary duty by the royalty holders.
The royalty holders opposed the motion.
OVERVIEW: The parties disputed whether the royalty
agreement covered sales of certain versions of a product
as well as sales of other products. The corporation moved
for leave to plead that a certain royalty holder, and a
proposed third party defendant, violated their fiduciary

duties as directors and officers of the corporation when
they voted to approve the royalty agreement that awarded
substantial financial benefits to their own pockets. The
royalty holders argued that the claim was time-barred,
and the amendment should be denied as frivolous,
prejudicial, and a cause of undue delay to this litigation.
The corporation disputed that the claim was beyond the
appropriate statute of limitations. The corporation also
argued that even if the claim was so construed, the
proposed amendment could still be brought under state
law. The court agreed that state law allowed the
corporation's claim to be brought. The royalty holders
further alleged that the proposed amendments based on
fiduciary breach were futile because there was no
evidence that the agreement in question was unfair, but
the royalty holders arguments rested on factual
allegations that were beyond the pleadings.
OUTCOME: The corporation's motion for leave to
amend its answer to include an affirmative defense, a
counterclaim, and a third party claim for breach of
fiduciary duty was granted. The court did not find that

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1998 U.S. Dist. LEXIS 15219, *1

undue prejudice or delay would result from allowing the
corporation's proposed amended counterclaim.
LexisNexis(R) Headnotes

Civil Procedure > Pleading & Practice > Pleadings >
Amended Pleadings > General Overview
Civil Procedure > Pleading & Practice > Pleadings >
Counterclaims > General Overview
[HN1] See Fed. R. Civ. P. 15(a).
Civil Procedure > Pleading & Practice > Pleadings >
Amended Pleadings > General Overview
[HN2] The United States Supreme Court emphasizes that
leave to amend should be denied only under limited
circumstances: In the absence of any apparent or declared
reason - such as undue delay, bad faith or dilatory motive
on the part of the movant, repeated failure to cure
deficiencies by amendments previously allowed, undue
prejudice to the opposing party by virtue of allowance of
the amendment, futility of amendment, etc. - the leave
should, as the rules require, be freely given.
Civil Procedure > Pleading & Practice > Pleadings >
Amended Pleadings > General Overview
Civil Procedure > Appeals > Standards of Review >
Abuse of Discretion
[HN3] Although the grant or denial of leave to amend is
within the discretion of that a district court, a decision
without any justifying reason may be an abuse of that
discretion and inconsistent with the spirit of the Federal
Rules of Civil Procedure.
Civil Procedure > Pleading & Practice > Pleadings >
Counterclaims > General Overview
Civil Procedure > Pleading & Practice > Pleadings >
Cross-Claims > General Overview
[HN4] Under N.Y. Crim. Proc. Law § 203(d), a
counterclaim that arises from the same transactions,
occurrences, or series of transactions and occurrences,
upon which the complaint depends may be maintained
even if it was barred when the action was commenced.
Codifying the doctrine of equitable recoupment, § 203(d)
is based on the principle that it would be highly
inequitable to permit a party to place a question before a
court and then prevent the opposing party from disputing

issues lying at the foundation of the claim. Recoupment
does not allow one transaction to be offset against
another, but only permits a transaction which is made the
subject of suit by a plaintiff to be examined in all its
aspects, and judgment to be rendered that does justice in
view of the one transaction as a whole.
Contracts Law > Breach > General Overview
Contracts Law > Remedies > Ratification
Governments > Fiduciary Responsibilities
[HN5] Courts find that counterclaims alleging fiduciary
breach arise from the same transaction upon which the
claim depended for the purposes of N.Y. Crim. Proc. Law
§ 203(d).
Civil Procedure > Pleading & Practice > Pleadings >
Counterclaims > General Overview
Civil Procedure > Pleading & Practice > Pleadings >
Cross-Claims > General Overview
Contracts Law > Remedies > Reformation
[HN6] New York courts clearly hold that counterclaims
for reformation do not enjoy the relief from the time-bar
embodied in N.Y. Crim. Proc. Law § 203(d).
Contracts Law > Defenses > Ambiguity & Mistake >
Mutual Mistake
Contracts
Law
>
Defenses
>
Fraud
&
Misrepresentation > General Overview
Contracts Law > Formation > Ambiguity & Mistake >
Mutual Mistake
[HN7] Recission is a remedy whereby a party seeks to
disaffirm a contract and return to the status that existed
before the transaction was executed. Reformation alters
the contract terms on the basis of an intent that should
have been but was not made explicit. Mutual mistake or
mistake of one party and fraud of the other with respect
to a material part of the contract permits reformation.
Civil Procedure > Pleading & Practice > Pleadings >
Amended Pleadings > Leave of Court
[HN8] Regarding a motion for leave to amend an answer,
that the amendments would not serve any purpose is a
valid ground to deny a motion for leave to amend.
However, if a movant has at least colorable grounds for
relief, justice does require leave to amend. Accordingly,
unless a proposed amendment is clearly frivolous or
legally insufficient on its face, the substantive merits of a

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1998 U.S. Dist. LEXIS 15219, *1

claim or defense should not be considered on a motion to
amend.
Civil Procedure > Pleading & Practice > Pleadings >
Amended Pleadings > Leave of Court
[HN9] If amending a pleading will cause prejudice to a
nonmoving party then leave to amend is only reluctantly
granted, if at all. To determine what constitutes prejudice
a court will consider whether the new claim would (1)
require an opponent to expend significant additional
resources to conduct discovery and prepare for trial; (ii)
significantly delay the resolution of the dispute; or (iii)
prevent a movant from bringing a timely action in
another jurisdiction. Delay alone is usually not a
sufficient reason for denying leave to amend. The amount
of delay must be balanced against the result of prejudice.
Civil Procedure > Pleading & Practice > Pleadings >
Amended Pleadings > General Overview
Civil Procedure > Discovery > Undue Burdens
[HN10] Parties, at times, are permitted to assert new
claims long after they acquire the facts necessary to
support such claims and, at times, are permitted to amend
a complaint on the eve of trial. Although allowing an
amendment may require additional discovery, that burden
does not necessarily qualify as undue prejudice.
COUNSEL: For PLAINTIFFS: Douglas Gross, Scott R.
Kipnis, Brian C. Kerr, HOFHEIMER, GARTLIR &
GROSS, LLP, New York, New York.
For PLAINTIFFS: COLEMAN & SUDOL, LLP, New
York, New York.
For DEFENDANTS: Leslie Gordon Fagen, Daniel J.
Leffell, John F. O'Sullivan, PAUL, WEISS, RIFKIND,
WHARTON & GARRISON, New York, New York.
For DEFENDANTS: Paul T. Meiklejohn, SEED AND
BERRY, LLP, Seattle, Washington.
JUDGES: DEBORAH A. BATTS, United States District
Judge.
OPINION BY: DEBORAH A. BATTS
OPINION

MEMORANDUM & ORDER

DEBORAH A. BATTS, United States District Judge.
Defendant has moved for leave to amend the Answer
to add an affirmative defense, counterclaim, and third
party claim, all based on an alleged breach of fiduciary
duty by Plaintiffs. Plaintiffs oppose the motion to amend.
For the reasons set forth below, the Court grants
Defendant's motion.
I. BACKGROUND
This suit was instigated by a group of royalty holders
and investors in Alcide Corporation who claim monies
are owed to them under a 1983 royalty agreement for
sales of certain [*2] veterinary germicidal products made
by Defendant. (Compl. PP 18, 20). In brief, the parties
dispute whether the royalty agreement covered sales of
certain versions of the product "Alcide" -- a teat dip for
cows originally made with the ingredient of lactic acid
and then reformulated with mandelic acid -- as well as
sales of products both made under expired patents and
developed from them. (Id. P 30-76).
Plaintiffs filed suit on February 20, 1996. This matter
was initially assigned to the Honorable Louis L. Stanton,
who ordered the submission of pre-trial materials on
February 3, 1997. The case was, however, reassigned to
this Court on July 29, 1996. By letter dated January 13,
1997, the parties jointly requested an adjournment of the
schedule set by Judge Stanton until the end of February,
1997, to allow the completion of depositions and
document discovery. Three days later, Defendant
requested a pre-motion conference to seek permission to
file a motion for leave to amend the answer. After
numerous letter submissions by both sides, the Court held
a conference on May 16, 1997. This Court ordered that
the parties choose either to proceed to mediation by June
16, 1997, or to serve [*3] the motion for leave to amend
by July 16, 1997. The parties opted for mediation. After
this course failed to produce an amicable settlement, the
parties notified the Court by letter dated October 27, 1997
of their desire to proceed with a motion schedule. The
Court granted that request, and a later extension of that
briefing schedule, such that the motion was submitted to
the Court on January 16, 1998.
Defendant moves for leave to plead that Plaintiffs
Alliger, Librizzi and Priser, and proposed third party
defendant Elliot Siff, 1 violated their fiduciary duties as
directors and officers of Alcide Corporation when they
voted as a majority of the board to approve the 1983

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1998 U.S. Dist. LEXIS 15219, *3

royalty agreement that awarded such substantial financial
benefits to their own pockets. See Proposed Counterclaim
PP 14-16, Def.'s Ex. 1. Plaintiffs argue that the claim is
time-barred, and the amendment should be denied as
frivolous, prejudicial and a cause of undue delay to this
litigation.
1 Elliot Siff is the general partner of Plaintiff
Old Hill Associates, and was President and a
member of the board of Alcide Corporation when
the royalty agreements were made. See Proposed
Counterclaim, P 5 (Def.'s Ex. 1).
[*4] II. DISCUSSION
[HN1] The Federal Rules of Civil Procedure state
that leave to amend "shall be freely given when justice so
requires." Fed. R. Civ. Pro. 15(a). See also Fed. R. Civ.
Pro. 13(f); Bank of New York v. Sasson, 786 F. Supp.
349, 352 (S.D.N.Y. 1992)(rule allowing counterclaims by
amendment follows the same standard). [HN2] The
United States Supreme Court has emphasized that leave
to amend should be denied only under limited
circumstances:
In the absence of any apparent or
declared reason -- such as undue delay,
bad faith or dilatory motive on the part of
the movant, repeated failure to cure
deficiencies by amendments previously
allowed, undue prejudice to the opposing
party by virtue of allowance of the
amendment, futility of amendment, etc. -the leave should, as the rules require, "be
freely given."
Foman v. Davis, 371 U.S. 178, 182, 9 L. Ed. 2d 222, 83
S. Ct. 227 (1962). Accord In re American Express Co.
Shareholder Litigation, 39 F.3d 395, 402 (2d Cir. 1994);
State Teachers Retirement Bd. v. Fluor Corp., 654 F.2d
843, 856 (2d Cir. 1981). [HN3] "Although the grant or
denial of leave to amend is within the discretion of the
district court, a decision [*5] 'without any justifying
reason' may be an 'abuse of that discretion and
inconsistent with the spirit of the Federal Rules.'" Evans
v. Syracuse City School District, 704 F.2d 44, 46 (2d Cir.
1983) (quoting Foman, 371 U.S. at 182)).
Plaintiffs argue that the proposed amendments would
be futile because any claims of fiduciary breach in
ratifying the 1983 royalty contract would be time-barred.

Defendant disputes that this claim is beyond the
appropriate statute of limitations. Defendant also
contends that even if the claim is so construed, the
proposed amendment could still be brought under Section
203(d) of the New York C.P.L.R..
The Court agrees that Section 203(d) allows
Defendant's claim to be brought, even if Defendant's
claim would otherwise be time-barred. [HN4] Under this
provision, a counterclaim that arises from "the same
transactions, occurrences or series of transactions and
occurrences, upon which the complaint depends" may be
maintained even if it was barred when the action was
commenced. N.Y.C.P.L.R. § 203(d). Codifying the
doctrine of "equitable recoupment," Section 203(d) is
based on the principle that "it would be highly inequitable
to permit a party to place a question [*6] before a court
and then prevent the opposing party from disputing issues
lying at the foundation of the claim." 118 East 60th
Owners, Inc. v. Bonner Properties, Inc., 677 F.2d 200,
203 (2d Cir. 1982). "Recoupment does not allow one
transaction to be offset against another, but only permits a
transaction which is made the subject of suit by a plaintiff
to be examined in all its aspects, and judgment to be
rendered that does justice in view of the one transaction
as a whole." Rochester Health Network, Inc. v. Rochester
Hosp. Serv. Corp., 123 A.D.2d 509, 507 N.Y.S.2d 100,
101 (N.Y. App. Div. 4th Dep't 1986).
Here, Plaintiffs brought suit to determine the terms
and scope of the 1983 royalty agreement. Defendant
argues that the broad interpretation urged by Plaintiffs
renders the royalty agreement one that would fail the
fairness test applicable when directors of a corporation
stand on both sides of a transaction. See Def.'s Mem. Law
at 12-13. E.g. Cinerama, Inc. v. Technicolor, Inc. 663
A.2d 1156, 1169 (Del. 1995). Thus, the allegations of
fiduciary breach hinge upon the central question under
litigation: the extent of the royalty rights awarded to the
directors when they [*7] ratified the agreement. In
comparable scenarios, [HN5] courts have found that
counterclaims alleging fiduciary breach arose from the
same transaction upon which the claim depended for the
purposes of Section 203(d). See e.g. Levine v. Angus,
1993 U.S. Dist. LEXIS 8465, No. 92 Civ. 2210, 1993 WL
227713, at *1, 2 (S.D.N.Y. June 22, 1993)(counterclaim
for breach of fiduciary duty and unjust enrichment
allowed in action for breach of royalty agreement); Falk
v. FFF Industries, Inc., 731 F. Supp. 134, 141-2
(S.D.N.Y. 1990)(counterclaim that salary increase taken

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1998 U.S. Dist. LEXIS 15219, *7

by director violated his employment contract was allowed
where director had brought suit to recover under the same
contract). See also American Home Assurance Co. v.
Belvedere Ins. Co., 1996 U.S. Dist. LEXIS 5157, *2-3,
No. 88 Civ. 4415, 1996 WL 191969, at *1, (S.D.N.Y.
April 19, 1996)(defense based on fraud in the inducement
allowed under Section 203(d)).
Plaintiffs argue that the proposed amendments are
asking in effect for reformation of the contract, thereby
placing them beyond the purview of Section 203(d).
[HN6] New York courts have clearly held that
counterclaims for reformation do not enjoy the relief
from the time-bar embodied in Section 203(d). See SCM
Corp. v. Fisher Park Lane [*8] Co., 40 N.Y.2d 788, 390
N.Y.S.2d 398, 401-2, 358 N.E.2d 1024 (N.Y.
1976)(landlord's proposed counterclaim to increase
tenant's liability for electricity expenses in lease terms
was not allowed since that claim went to "the negotiation
and articulation of the agreement made between the
parties prior to its execution"); 182 Franklin Street
Holding Corp. v. Franklin Pierrepont Assoc., 217 A.D.2d
508, 630 N.Y.S.2d 64, 66 (N.Y. App. Div. 1st Dep't,
1995)(counterclaim for reformation based on earlier
contract not allowed in action to enforce terms of note
and mortgage). The Court is not persuaded however, that
this line of authority directs the result here. The heart of
this dispute is the terms of the royalty contract: whether
payments must be make under expired patents, whether
certain products fall within two patents, and if not,
whether the agreement's other terms nonetheless provide
for royalty payments on those products. See Compl. PP
30-38. Where both parties are urging contradictory
interpretations of the same agreement upon the Court, it
is of little persuasive value to label one "a de facto claim
for reformation," and the other, a claim to enforce the
contract. [*9] See Pls.' Mem. Law at 12. Defendant
presents the proposed counterclaim of fiduciary breach as
a bar to Plaintiffs' recovery for breach of contract. See
Def.'s Proposed Amended Answer, Def.'s Ex. 1, at 18-19.
Defendant does not seek either to reform or rescind the
contract, 2 nor to recover the royalty payments made
pursuant to the 1983 agreement. Instead, Defendant
claims that payments have never been made for products
not covered under the patents, and that Plaintiffs' have
been aware of that fact since 1986. See Proposed
Counterclaim, Def.'s Ex. 1 P 17. Defendant also states
that payments for products made under one patent
stopped in April, 1995, when the patent expired. See id. P
18. On the basis of these allegations, and from the

portions of the contract included within the Complaint, it
is not apparent to the Court that the contract terms are as
self-evident as Plaintiffs claims. Since the litigation
centers upon the interpretation of contract terms, the
proposed amendment related to the apportionment of
benefits by fiduciaries to themselves under that contract
as it is interpreted, is sufficiently related to Plaintiffs'
claim for the purposes of Section 203(d). [*10]
2 [HN7] Recision is a remedy whereby a party
seeks to disaffirm the contract and return to the
status that existed before the transaction was
executed. See Banque Arabe Et Internationale
D'Investissement v. Maryland Nat'l Bank, 850 F.
Supp. 1199, 1212 (S.D.N.Y. 1994). Reformation
alters the contract terms on the basis of "an intent
that should have been but was not made explicit."
Heath v. State, 278 A.D. 8, 103 N.Y.S.2d 397, 399
(N.Y. App. Div., 3rd Dep't, 1951). Mutual
mistake or mistake of one party and fraud of the
other with respect to a material part of the
contract permits reformation. Thompson v.
Howell, 20 A.D.2d 963, 249 N.Y.S.2d 623, 624
(N.Y. App. Div. 4th Dep't, 1964).
Plaintiffs further allege that the proposed
amendments based on fiduciary breach are futile because
there is no evidence that the agreement in question was
unfair. See Pls.' Mem. of Law at 17. [HN8] "That the
amendments would not serve any purpose is a valid
ground to deny a motion for leave to amend." Kaster v.
Modification Systems, [*11] Inc., 731 F.2d 1014, 1018
(2d Cir. 1984). However, if the movant has "at least
colorable grounds for relief, justice does require leave to
amend." Id. (internal citations omitted). Accordingly,
"unless a proposed amendment is clearly frivolous or
legally insufficient on its face, the substantive merits of a
claim or defense should not be considered on a motion to
amend." Lerman v. Chuckleberry Publishing, Inc., 544 F.
Supp. 966, 968 (S.D.N.Y. 1982), rev'd on other grounds,
745 F.2d 123 (2d Cir. 1984). 3
3 This standard demands an inquiry akin to that
required by Rule 12(b)(6) of the Federal Rules of
Civil Procedure. CBS, Inc. v. Ahern, 108 F.R.D.
14, 18 (S.D.N.Y. 1985). Plaintiffs' argument that
Defendant's proposed counterclaim should be held
to a summary judgment standard because
discovery has been completed, is not supported by
the caselaw. See Pls.' Mem. Law at 6-7.

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1998 U.S. Dist. LEXIS 15219, *11

Defendant's claim of fiduciary breach is not meritless
on its face. The proposed amended Answer alleges that
the majority [*12] of the Board of Alcide Corporation
who approved the transaction also stood to gain from the
royalty agreement, and that the required disclosure of this
interest was not made. See Def.'s Proposed Amended
Answer, Def.'s Ex. 1, PP 14-16. Thus, the essential
elements for a breach of fiduciary duty are presented. See
generally Cinerama, 663 A.2d at 1169. Plaintiffs'
arguments to the contrary rest on factual allegations that
are beyond the pleadings. See Pls.' Mem. Law at 17-18. It
would therefore be inappropriate at this juncture for the
Court to prevent the amendment.
Plaintiffs also oppose the Defendant's motion for
leave to amend on the basis of undue delay, bad faith, and
prejudice to the opposing party. Plaintiffs argue that
Defendant "waited far too long to seek this amendment,"
that this unexplained delay indicates that Defendant "has
simply reconsidered a prior decision not to raise a
dubious defense," and that the need for further
depositions and possible impleading of additional parties
is sufficiently burdensome to warrant denial of leave to
amend. See Pls.' Mem. Law at 18, 21, and 22-24.
[HN9] If amending a pleading will cause prejudice to
the nonmoving party then [*13] leave to amend is only
reluctantly granted, if at all. Strauss v. Douglas Aircraft
Co., 404 F.2d 1152, 1155 (2d Cir. 1968); Peralta, 1989
U.S. Dist. LEXIS 6859, at *2. To determine what
constitutes prejudice the Court will consider whether the
new claim would "(1) require the opponent to expend
significant additional resources to conduct discovery and
prepare for trial; (ii) significantly delay the resolution of
the dispute; or (iii) prevent the [movant] from bringing a
timely action in another jurisdiction." Block v. First
Blood Associates, 988 F.2d 344, 350 (2d Cir. 1993)
(citing Tokio Marine and Fire Ins. Co. v. Employers Ins.
of Wausau, 786 F.2d 101, 103 (2d Cir. 1986). Delay
alone is usually not a sufficient reason for denying leave
to amend. United States v. Continental Ill. Nat'l Bank and
Trust Co. of Chicago, 889 F.2d 1248, 1254 (2d Cir.
1989); State Teachers, 654 F.2d at 856. The amount of
delay must be balanced against the result of prejudice.
Evans, 704 F.2d at 46-47.
Plaintiffs contend that the timing of Defendant's
request alone shows bad faith and/or dilatoriness. The
Court disagrees. Neither the pace of this litigation as a
whole, nor the [*14] fact that the request to amend was

made at a point when discovery was near completion, is
sufficiently egregious to indicate any such tactics were
employed by the Defendant. See e.g. Dweck v.
Pacificorp Capital, Inc., 1997 U.S. Dist. LEXIS 1940,
No. 91 Civ. 2905, 1997 WL 80537, at *1, 4 (S.D.N.Y.
Feb. 26, 1997)(allowing amendment after four years
transpired and just before summary judgment motion,
discussing other cases). While it is certainly preferable
for claims to be asserted as early as possible in the
discovery process, [HN10] "parties have been permitted
to assert new claims long after they acquired the facts
necessary to support such claims and have even been
permitted to amend a complaint on the eve of trial."
Hannah v. Metro-North Commuter Railroad Co., 753 F.
Supp. 1169, 1176 (S.D.N.Y. 1990)(citations omitted).
Although allowing the amendment may require additional
discovery, that burden does not necessarily qualify as
undue prejudice. See Tomlinson v. St. Paul Reinsurance
Mgmt. Corp., 1998 U.S. Dist. LEXIS 1728, No. 96 Civ.
4760, 1998 WL 65996, at *1, 4 (S.D.N.Y. Feb. 17,
1998)(citing additional cases).
Plaintiffs predict that the proposed amendment will
then obligate them to conduct depositions of two other
board members, [*15] to redepose at least two
individuals and the current management of Alcide
Corporation, to retain an additional expert on the question
of fairness, and to join two other directors who were
interested in the 1983 royalty agreement. See Pls.' Mem.
Law at 23-24. Defendant disputes that such extensive
discovery would be necessary as a result of the proposed
amendment. See Def.'s Mem. at 24. Using the Block
factors, additional cost might befall the Plaintiffs if it had
to redepose some of the witnesses. However, the cost of
any such extra discovery will be taken on by the
Defendant. Hence, no extra cost will befall the Plaintiffs.
Second, the Plaintiff's case may be delayed but only if
extra discovery is needed. If that is indeed the case, the
delay will be at most sixty days, which is minimal in light
of the fact that no trial date has been scheduled.
In light of the above considerations, the Court does
not find that undue prejudice or delay will result from
allowing Defendant's proposed amended counterclaim.
Accordingly, Defendant's motion for leave to amend is
hereby granted.
III. CONCLUSION
For the above reasons, the Court hereby GRANTS
Defendant's Motion for leave to [*16] amend the Answer

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1998 U.S. Dist. LEXIS 15219, *16

to include an affirmative defense, counterclaim and third
party claim for breach of fiduciary duty.

SO ORDERED.
Dated: New York, New York

Defendant shall file the Amended Answer within 20
days of the date of this Order. Plaintiffs shall file any
responsive pleading within 20 days of service of the
Amended Answer. Any additional discovery shall be
completed by January 25, 1999. Any party contemplating
making a dispositive motion must notify opposing
counsel by February 26, 1999, in accordance with the
Court's Individual Rules and Procedures.

September 29, 1998
Deborah A. Batts
U.S.D.J.