Defendant Izzo moves: pursuant to CPLR Rule 3025 (b) for leave to serve and file an amended answer, alleging an affirmative defense that plaintiff executed a general release in favor of defendant Izzo and his insurance carrier, Tower Insurance Company of New York (Tower); and, pursuant to CPLR Rule 3211(a) (5), for dismissal of plaintiff's complaint, on the grounds that plaintiff gave a general release to defendant and Tower. The first branch of the motion, to amend the answer, is granted, but the second branch of the motion, to dismiss the complaint, which will be treated as a motion for summary judgment, is denied due to the existence of triable issues of fact with respect to what the parties contemplated with respect to the terms of plaintiff's general release to defendant Izzo and Tower.

The instant action for personal injury arose from an October 8, 2003 motor vehicle accident involving two cars on Flatbush Avenue, near the intersection with Dean Street, in Brooklyn, New York. The action was commenced in February 2005 by plaintiff's verified complaint [exhibit A of motion] and issue was joined with defendant Izzo's answer in April 2005 [exhibit B of motion]. Defendant "John Doe" is the alleged operator of defendant Izzo's vehicle, but defendant Izzo, in his answer, admits being the operator of his motor vehicle at the time of the accident.

Defendant Izzo's motion seeks leave to add a tenth affirmative defense to his answer, that "plaintiff's action cannot be maintained because of a release provided to [*2]defendant John Izzo and his general liability insurer" [exhibit C of motion - proposed amended answer with proposed tenth affirmative defense]. Defendant Izzo claims that plaintiff executed an undated general release for $1,975.80, notarized on December 17, 2003, releasing defendant Izzo and Tower [exhibit D of motion]. Defendant claims that the proposed amended answer will not prejudice plaintiff because discovery has not been completed, and the motion was filed before a preliminary conference has been held. Further, defendant claims that there can be no claim of surprise to plaintiff, because he should have been aware of what he had signed and that the header on the fax with the release shows the name of plaintiff's attorney of record, Phil Felice, Esq.

Therefore, if the Court grants leave to defendant to amend the answer the action should be dismissed, pursuant to CPLR Rule 3211 (a) (5). Defendants' counsel, in paragraph 15 of his motion, claims:

The plain, unambiguous language of the Release (Exhibit D) makes it

clear that plaintiff cannot maintain this lawsuit against defendant John

Izzo. The release is dated December 17, 2003. It releases defendant

from any claims, etc. . . . that occurred up to that date. With the date

of the alleged accident (October 8, 2003) being before the Release . . .

that accident cannot serve as a basis for a lawsuit.

Attached as exhibit A to plaintiff's trial counsel's affirmation in opposition is an affirmation from plaintiff's attorney of record, Mr. Felice, who states that plaintiff retained him on November 5, 2003. On November 17, 2003, Mr. Felice sent a letter of representation to Mr. Anthony Turner, an auto claims examiner for Tower [exhibit B of affirmation in opposition]. The letter stated that Mr. Felice would represent plaintiff Fox "with certain personal injuries sustained as a result of your assured's negligence."

Mr. Turner, on October 31, 2003, prior to Mr. Felice's engagement by Mr. Fox, sent a letter to plaintiff [exhibit C of affirmation in opposition], which stated:

Re: Property damage to your 1999 Chevrolet Astro on October 8, 2003 . . .

Dear Claimant:

This will confirm that your property damage has been settled for

$1,975.80.

Enclosed is a General Release containing the terms of the settlement.

Please sign the release before a notary and send the executed release

to our office. A settlement check will be issued upon our receipt of

the executed release. [Emphasis added]

Plaintiff, in his affidavit [exhibit D of affirmation in opposition], claimed that Tower, after inspecting his car, offered him $1,975.80 to settle the property damage to his motor vehicle. He states that:

I was never informed either verbally nor in writing [sic], that this

amount also covered my pain and suffering and injuries sustained in the

accident. Further, the release I signed does not state that this release

also covered bodily injury claims. I was never advised by my attorney, [*3]

Mr. Felice, nor by any attorney, to sign the release, and I signed the

release on my own. I did not consult with counsel because the release

only concerned property damage. [Emphasis added]

Plaintiff, after explaining that he retained Mr. Felice in mid-November 2003, stated that Mr. Felice sent the above-referenced letter of representation to Tower. Mr. Fox then alleged that "[i]t is harsh and unfair to have the carrier ignore this attorney representation, and to continue to accept the release, and then seek to argue that the property damage release also releases the Defendants and the insurance carrier from bodily injury claims as well as property damage."

CPLR § 3025 (b) allows a party to "amend his pleading . . . at any time by leave of court or by stipulation of all parties. Leave shall be freely given upon such terms as may be just including the granting of costs and continuances." In Edenwald Contracting Co., Inc. v City of New York, 60 NY2d 957, 959 (1983), the Court instructed:

Permission to amend pleadings should be "freely given" (CPLR

3025 subd [b]). The decision to allow or disallow the amendment is

committed to the court's discretion. (Murray v City of New York, 43

NY2d 400, 404-405). "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.)

In the instant case, granting leave to defendant to amend the answer to allow for the affirmative defense of release does not prejudice plaintiff. Plaintiff's verified bill of particulars [exhibit E of motion] was served one week before the motion was made. Depositions have not yet been scheduled. Plaintiff is well aware of the existence of the December 17, 2003 release and the possibility that defendant will attempt to make use of it. Thus, plaintiff is unable to demonstrate any prejudice or surprise if defendant is granted leave to file and serve an amended answer containing the affirmative defense of release. Bolanowski v Trustees of Columbia University in City of New York, 21 AD3d 340 (2d Dept 2005); Public Adm'r of Kings County v Hossain Const. Corp., 27 AD3d 714 (2d Dept 2006); Emilio v Robison Oil Corp., 28 AD3d 417 (2d Dept 2006). Leave is granted to defendant to amend his answer to include the affirmative defense of release.

The proponent of summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case. See Alvarez v Prospect Hospital, 68 NY2d 320, 324 (1986); Zuckerman v City of New York, 49 NY2d 557, 562 (1980); Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 (1957). Failure to make such a showing requires denial of the motion, regardless of the sufficiency of the opposing papers. Matter of Redemption Church of Christ v Williams, 84 AD2d 648, 649 (3d Dept 1981); Greenberg v Manlon Realty, 43 AD2d 968, 969 (2d Dept 1974); Winegrad v New York University Medical Center, 64 NY2d 851 (1985).

CPLR Rule 3212 (b) requires that for a court to grant summary judgment the court must determine if the movant's papers justify holding as a matter of law, "that the cause of action or defense has no merit." The evidence submitted in support of the movant must be viewed in the light most favorable to the nonmoving party. Marine Midland Bank, N.A. v Dino & Artie's Automatic Transmission Co., 168 AD2d 610 (2d Dept 1990). Summary judgment shall be granted only where there are no issues of material fact and the evidence requires the court to direct judgment in favor of the movant as a matter of law. Friends of Animals, Inc., v Associated Fur Mfrs., 46 NY2d 1065 (1979).

With leave granted to defendant to amend his answer to include the affirmative defense of release, defendant moves for dismissal based upon plaintiff's general release, notarized on December 17, 2003. A release, according to McMahan & Co. v Bass, 250 AD2d 460, 461 (1st Dept 1998), is a "provision that intends a present abandonment of a known right or claim." Further, releases are "governed by principles of contract law." Mangini v McClurg, 24 NY2d 556, 562 (1969). The Court of Appeals, in Da Silva v Musso, 53 NY2d 543, 550 (1981), held that "[u]nder long accepted principles one who signs a document is, absent fraud or other wrongful act of the other contracting party, bound by its contents." In Mangini v McClurg, supra, at 563, the Court held that "the traditional bases for setting aside written agreements, namely, duress, illegality, fraud, or mutual mistake, must be established or else the release stands. In the instance of mutual mistake, the burden of persuasion is on the one who would set the release aside."

To determine if the release given by plaintiff to defendant and Tower should be set aside, the unique circumstances under which it was prepared and executed must be examined. In Cahill v Regan, 5 NY2d 292, 299 (1959) the Court instructed:

Although the effect of a general release, in the absence of fraud or

mutual mistake, cannot be limited or curtailed (see Lucio v. Curran,

2 NY2d 157, 161; Kirchner v New Home Sewing Mach. Co., 135 NY

182, 188), its meaning and coverage necessarily depend, as in the

case of contracts generally, upon the controversy being settled and

upon the purpose for which the release was actually given. Certainly, [*4]

a release may not be read to cover matters which the parties did not

desire or intend to dispose of.

Plaintiff, in the instant case, received the October 31, 2003-letter from Mr. Turner, Tower's representative, informing him that "[t]his will confirm that your property damage has been settled for $1,975.80," and that "[a] settlement check will be issued upon our receipt of the executed release." Mr. Fox, without consulting his counsel, signed the general release. Plaintiff's affidavit unequivocally states his understanding that he signed the general release to settle his property damage claim only, not his personal injury claim.The Court of Appeals, in Chimart Associates v Paul, 66 NY2d 570, 573 (1986), instructed that:

In the proper circumstances, mutual mistake or fraud may

furnish the basis for reforming a written agreement. Indeed, the

concepts are closely related. In a case of mutual mistake, the parties

have reached an oral agreement and, unknown to either, the signed

writing does not express that agreement (see Harris v Uhlendorf,

24 NY2d 463; Hart v Blabey, 287 NY 257). In a case of fraud,

the parties have reached agreement and, unknown to one party but

known to the other (who has misled the first), the subsequent writing

does not properly express that agreement (see, Barasch v Pennsylvania

Term. Real Estate Corp., 26 NY2d 77, 86; Welles v Yates, 44 NY 525).

See Aventine Inv. Management, Inc. v Canadian Imperial Bank of Commerce, 265 AD2d 513 (2d Dept 1999). Further, in the Aventine decision, at 513-514, the Court held that:

Within every contract is an implied covenant of good faith

and fair dealing (see, Rowe v Great Atl. & Pac. Tea Co., 46 NY2d 62).

This covenant is breached when a party to a contract acts in a manner

that, although not expressly forbidden by any contractual provision,

would deprive the other party of the right to receive the benefits under

their agreement.

See AFBT-II, LLC. v Country Village on Mooney Pond, Inc., 305 AD2d 340 (2d Dept 2003); P.T, & L. Contracting Corp. v Trataros Const. Inc., ___ AD3d ___, 2006 NY Slip Op 03864 (2d Dept May 16, 2006).

As stated above in Chimart Associates v Paul, based upon the October 31, 2003-letter, the parties agreed to a property damage settlement of $1,975.80, but "unknown to one party but known to the other (who has misled the first), the subsequent writing does not properly express that agreement." The Court of Appeals, in Booth v 3669 Delaware, Inc., 92 NY2d 934, 935 (1998), held that "[a] release obtained through fraud may be [*5]rendered invalid." In Locascio v James V. Aquavella, M.D., P.C., 185 AD2d 689 (4th Dept 1992), the Court noted that, "fraud may exist in the inducement of a contract." The Court of Appeals in discussing fraud in the inducement of a contract, in Gaidon v Guardian Life Ins. Co. of America, 94 NY2d 330, 348 (1999), held that "[f]raud has generally been defined by behavior involving intentional, false representations and other connotations of scienter such as willfulness, knowledge, design and bad faith (see, e.g, Channel Master Corp. v Aluminum Ltd. Sales, 4 NY2d 403, 407-408; Reno v Bull, 226 NY 546, 550)." See New York University v Continental Ins. Co., 87 NY2d 308 (1995); National Union Fire Ins. Co. of Pittsburgh, Pa. v Worley, 257 AD2d 228 (1st Dept 1992).

In the instant action there is a triable issue of fact as to whether Tower's representative breached the implied covenant of good faith and fair dealing by fraudulently inducing plaintiff to sign the general release. The Court is faced with the issue of whether Mr. Turner's October 31, 2003-letter was a Halloween trick to fraudulently induce plaintiff to sign the enclosed general release to settle all his claims against defendant, or a Halloween treat to settle only plaintiff's property damage claim. Since a trial is necessary to resolve the trick or treat question, this Court cannot grant summary judgment to defendant.

Accordingly, it is,

ORDERED, that branch of defendant Izzo's motion, pursuant to CPLR Rule 3025 (b), for leave to serve and file an amended answer, alleging an affirmative defense that plaintiff executed a general release in favor of defendant and his insurance carrier is granted; and it is further

ORDERED, that branch of defendant Izzo's motion, pursuant to CPLR Rule 3211(a) (5), for dismissal of plaintiff's complaint because plaintiff gave a general release to defendant and his insurance carrier is denied.

This constitutes the Decision and Order of the Court.

E N T E R

________________________________

HON. ARTHUR M. SCHACK

J. S.C.