Defendant in Action No. 2,^[FN1] Diane Madey ("Madey") moves for leave to serve a second amended answer in that action. [*2]

In 1986, Madey purchased an undeveloped parcel of land in Farmingdale, New York from Ronald and Alice Harmon. Madey planned to subdivide the property and build one family homes on the property.

Little was done to develop the property between 1986 and 1997.

In 1997, Gregory W. Carman, Jr. ("Carman"), the defendant in Action No. 1 and the plaintiff in Action No. 2, became involved in the development of the property. At that time, Madey and Carman incorporated Hardscrabble Acres Inc. ("Hardscrabble Acres") as their vehicle for the development of this property. Madey and Carman also entered into a Shareholders Agreement that set forth the parties' rights and obligations relating to the property and the project (the "1997 Agreement").

The property was subdivided into 4 separate lots. A one family home was to be constructed on each lot.

The venture faced delays and was constantly behind in its construction schedule. These and other problems increased the cost of construction and rendered the financing obtained for the project insufficient.

In 2001, Madey and Carman entered into an agreement relating to the development of the property (the "2001 Agreement"). The 2001 Agreement superceded and replaced The 1997 Agreement. Pursuant to the 2001 Agreement, Madey and Carman each acquired one lot. Hardscrabble Acres was to develop the other two lots. The lot Madey acquired was designated at 10 Marie Thomas Court.

Carman provided money to Madey that she was going to use to build the house on the lot she acquired pursuant to the 2001 Agreement. Carman took back a mortgage on 10 Marie Thomas Court as security for the repayment of the money he had loaned to Madey.

Action No. 1 was commenced by Madey seeking damages sustained by Madey, Hardscrabble Acres, Inc. and Heritage Homes at Bethpage Park Estates, Inc. arising out of Carman's alleged breaches of the 1997 and 2001 Agreements, breach of fiduciary duty and legal malpractice. This Court's December 6, 2006 order granted Carman summary judgment dismissing the complaint.

Madey moved to renew and reargue. Her application was denied by this Court's June 29, 2007 order.

Action No. 2 is brought by Carman to foreclose on the mortgage made by Madey to him. Carman alleges he loaned Madey $125,000 which was secured by the aforementioned mortgage. When Madey failed to repay the loan on the due date, Carman commenced this action to foreclose.

At some point, Carman served an amended complaint in Action No. 2 which Madey answered.

Thereafter, Madey moved for summary judgment dismissing Action No. 2 or, alternatively, for leave to have her answer deemed amended to assert that the underlying loan [*3]from Carman is usurious. By order dated July 23, 2007, Madey's motion for summary judgment dismissing the Amended Complaint in Action No.2 and for leave to have her answer deemed amended to assert the affirmative defense of usury was denied.

Madey now moves for leave to serve a second amended answer.

Madey's answer to the amended complaint alleges two affirmative defenses and five counterclaims. The five counterclaims are also designated as Madey's third, fourth, fifth, sixth and seventh affirmative defenses.

The proposed second amended answer contains four affirmative defenses and seven counterclaims. The seven counterclaims are also designated as Madey's fifth, sixth, seventh, eighth, ninth, tenth and eleventh affirmative defenses.

Madey seeks to add two affirmative defenses denominated as the third and fourth affirmative defenses and two affirmative defenses/counterclaims designated as the fifth affirmative defense/first counterclaim and eleventh affirmative defense/seventh counterclaim in the proposed second amended answer.

A.Amended Pleadings - Standard

"Leave to serve amended pleadings shall be freely given' absent prejudice and surprise resulting from the delay (CPLR 3025[b]; see Fahey v. County of Ontario, 44 NY2d 934; Faracy v. McGraw Edison Corp., 229 AD2d 463)". Northbay Construction Co., Inc. v. Bauco Construction Corp., 275 AD2d 310, 311 (2nd Dept. 2000). See also, Nikac v. Rujak, 276 AD2d 443 (2nd Dept. 2000); and Goldstein v. St. John's Episcopal Hosp., 267 AD2d 426 (2nd Dept. 1999).

The determination of whether to deny or permit an amendment is entrusted to the sound discretion of the court. See, Liendo v. Long Island Jewish Med. Ctr., 273 AD2d 445 (2nd Dept. 2000); and Henderson v. Gulati, 270 AD2d 308 (2nd Dept. 2000)

The party seeking leave to serve an amended pleading must make an evidentiary showing that the proposed amendment has merit. Ruffing v. Union Carbide Corp., 308 AD2d 526 (2nd Dept. 2003); Mohan v. Hollander, 303 AD2d 473 (2nd Dept. 2003); and Curran v. Auto Lab Service Center, Inc., 280 AD2d 636 (2nd Dept. 2001).

Mere lateness of the proposed amendment is not a barrier to the service of an amended pleading. The party opposing the proposed amendment must demonstrate that significant prejudice will result if the party is permitted to serve an amended pleading. Edenwald Contracting Co., Inc v. City of New York, 60 NY2d 957 (1983); and O'Neal v. Cohen, 186 AD2d 639 (2nd Dept. 1992). Prejudice occurs when the party opposing the amendment has been "...hindered in the preparation of their case or prevented from demonstrating the merits of their position." First National Bank of Hudson Valley v. Schantz, 253 AD2d 735, 736 (2nd Dept. 1998).

To defeat a motion for leave to serve an amended pleading, the party opposing the amendment must demonstrate... "some special right lost in the interim, some change of position or some significant trouble or expense that could have been avoided had the original pleading contained what the amended one now wants to add." Siegel, New York Practice 4th § 237. See also, Fulford v. Baker Perkins, Inc., 100 AD2d 861 (2nd Dept. 1984); and Wyso v. City of New York, 91 AD2d 661 (2nd Dept. 1982).The [*4]proposed amended answer apparently seeks to permit Madey:

1. To raise the defense of usury;

2. To raise as an affirmative defense andcounterclaim of prima facie tort or interferencewith prospective business advantage;

3. To expand upon and clarify Madey's' claim thatCarman is foreclosing on the wrong mortgage andnote; and

4. To limit her liability to Carman, if any, inaccordance with the 2001 Agreement.

B.Affirmative Defenses

Madey's third proposed affirmative defense is premised on the interplay between the 2001 Agreement and the mortgage which Carman is foreclosing. Madey seeks to allege that her liability to Carman, if any, is limited by the 2001 Agreement to $80,000 and not the $125,000 as stated in the mortgage or alleged in the complaint.

Madey's fourth proposed affirmative defense is also premised upon the 2001 Agreement. Madey alleges that the 2001 Agreement not only limits her liability to Carman to $80,000 but also permits her to pay that amount out over a period of 10 years with interest at the rate of eight (8%) percent per annum. The mortgage which Carman is foreclosing is not in accordance with the 2001 Agreement.

Carman concedes that Madey has raised these issues before and essentially consents to these amendments. Therefore, Madey shall be permitted to amend her answer to add the third and fourth affirmative defenses.

C.Fifth Affirmative Defense - First Counterclaim : Tortious Interference with Prospective Business Advantage and Prima Facie Tort

In what is designated as Madey's fifth affirmative defense and first counterclaim, Madey makes allegations which could support causes of action for either tortious interference with prospective business advantage and/or prima facie tort. It is not clear from her papers which theory she is advancing.

Pursuant to the terms of the 2001 Agreement, Madey received the parcel designated as 10 Marie Thomas Court to develop.

Madey alleges that she had obtained purchasers for that premises. Her attorney prepared a contract in accordance with the agreed upon terms of sale. The proposed contract was sent to the attorney for the purchasers. Upon receipt, the attorney for the prospective purchasers requested modifications to the contract that the prospective purchasers and/or their attorney knew or had reason to believe would be unacceptable

to Madey. As a result of these requested modifications, Madey never entered into the contract to sell the property.

Madey alleges that Carman undermined the deal. Carman is alleged to have recommended the attorney for the prospective purchasers. Madey asserts Carman advised that attorney or the prospective purchasers or both to request the modifications to the contract that Madey would find unacceptable to subvert the deal. [*5]

Madey further alleges Carman advised the prospective purchasers and/or their attorney that Madey was in default on the mortgage. Madey claims Carman advised the prospective purchasers or their attorneys that if they waited until the foreclosure action had been commenced, Madey would have no choice but to accede to these terms or reduce the price.

Prima facie tort is the label given to an action arising out of the intentional infliction of economic harm without justification. Board of Education v. Farmingdale Classroom Teachers Assoc., Inc., 38 NY2d 397 (1975).

The elements of a cause of action for prima facie tort are "...(1) the intentional infliction of harm, (2) which results in special damages, (3) without any excuse or justification, (4) by an act or series of acts which would otherwise be lawful (citations omitted)." Freihofer, v. Hearst Corp., 65 NY2d 135, 142-143 (1985). See also, Cardo v. Board of Managers, Jefferson Village Condo 3, 29 AD3d 930 (2nd Dept. 2006); and Del Vecchio v. Nelson, 300 AD2d 277 (2nd Dept. 2002).

Recovery cannot be had in an action for prima facie tort "...unless malevolence is the sole motive for the defendant's otherwise lawful act." Burns Jackson Miller Summit & Spitzer v. Lindner, 59 NY2d 314, 333 (1983). See also, Beardsley v. Kilmer, 236 NY 80 (1923); and Lynch v. McQueen, 309 AD2d 790 (2nd Dept. 2003). The party asserting such a claim must plead and prove the existence of malice and ill will. Id.; and Smith v. County of Livingston, 69 NY2d 993 (4th Dept. 1979).

The same allegations could be read to plead a cause of action for intentional interference with prospective business advantage. The elements of such a cause of action are that (1) the defendant knew of the proposed contract between the plaintiff and a third party, (2) the defendant intentionally interfered with the proposed contract, (3) the proposed contract would have been entered into except for the defendant's interference, (4) the defendant's interference was done in a wrongful manner and (5) the plaintiff suffered damage. NBT Bancorp v. Fleet/Norstar Financial Group. Inc., 87 NY2d 614 (1996) and Guard-Life Corp. v. S. Parker Hardware Mfg. Corp., 50 NY2d 183 (1980).

To establish a claim for intentional interference with prospective business advantage, the defendant's conduct must be wrongful, meaning that the interference was caused by physical violence, fraud or misrepresentation, civil suits or criminal prosecution. Guard-Life Corp. v. S. Parker Hardware Manufacturing Corp., supra. See also, BGW Development Corp. v. Mount Kisco Lodge No. 1552 of the Benevolent and

Protective Order of Elks of the United States of America, Inc., 247 AD2d 565 (2nd Dept. 1998).

Madey alleges that the statements made by Carmen to the prospective purchasers and/or their attorneys regarding the transaction were false and that Carman knew they were false when made. She further alleges Carman made these representations solely to undermine the agreement she had reached with the prospective purchasers regarding 10 Marie Thomas Court. She further alleges special damage resulted therefrom.

Read broadly, the allegations contained in the proposed pleading support these two possible causes of action Therefore, Madey is granted leave to amend her answer to [*6]assert the fifth affirmative defense - first counterclaim.

D.Eleventh Affirmative Defenses - Seventh Counterclaim : Usury

Contrary to Madey's argument, she has previously sought and been denied leave to assert usury as an affirmative defense. Madey has previously moved, inter alia, for summary judgment dismissing Action No. 2. Madey submitted an affidavit duly sworn to on April 24, 2007 in support of that motion. In the second paragraph 1(b) of that affidavit Madey specifically states that she is seeking, as alternative relief "Deeming the answer amended to raise the defense of usury." In support of this relief, Madey argues that Carman's interpretation of the mortgage provisions which provide for a late fee of two (2%) percent rendered the mortgage usurious. (See, Paragraph 10 of the Madey's' April 24, 2007 affidavit.)

Madey cannot simply ignore this Court's July 23, 2007 order which denied Madey leave to have her answer deemed amended to assert the defense of usury. That decision is law of the case. Siegel, New York Practice 4th §443.

If Madey believed the Court misapprehended the law or the facts or otherwise incorrectly decided the issue of whether Madey should be permitted to assert the defense of usury, she should have moved to reargue. Hoey-Kennedy v. Kennedy, 294 AD2d 573 (2nd Dept. 2002); Long v. Long, 251 AD2d 631 (2nd Dept. 1998); and CPLR 2221(d).

If Madey has new facts that were not presented to the Court when she previously moved to deem her answer amended to assert the defense of usury, then she should move to renew. Kaufman v. Kunis, 14 AD3d 542 (2nd Dept. 2005); and Yarde v. New York City Transit Auth., 4 AD3d 352 (2nd Dept. 2004); and CPLR 2221(e).

Madey has done neither.

Even if the Court were to consider this Madey's first application for leave to serve an amended answer asserting the defense of usury, the motion would have to be denied because she fails to make an evidentiary showing necessary to support this amendment. Madey's assertion regarding the note as being usurious is premised upon Carman's interpretation of the late fee clause in the note and/or mortgage. Carman asserts he is entitled to a late fee of two (2%) percent per month for each month the payment is late. Madey asserts such an interpretation would provide for an interest rate of 24% per annum which is in excess of the legally permitted rate of 16% per annum. Banking Law §14-a. However, Madey fails to provide the Court with a copy of the note or mortgage upon which her claim of usury is based.

The Court by Order dated July 23, 2007, denied Madey's application to have her answer deemed amended to assert the defense of usury because Madey had failed to make an evidentiary showing to entitlement to such relief (Joyce v. McKenna Assoc., Inc., 2 AD3d 592 [2nd Dept. 2003]) and because she failed to attach a copy of the proposed pleading asserting the defense to her motion papers. Ferdinand v. Crecca & Blair, 5 AD3d 538 (2nd Dept. 2004).

While Madey has attached a copy of her proposed answer to the motion papers herein, she still has not provided the Court with a copy of the note which contains the allegedly usurious interest provisions.

The party seeking leave to serve an amended pleading must make an evidentiary showing establishing merit to the proposed amendment. Joyce v. McKenna Assoc., Inc., 2 AD3d 592 (2nd Dept. 2003); and Morgan v. Prospect Park Associates Holdings, L.P., 251 AD2d 306 (2nd Dept. 1998). Without having the note, the court cannot determine whether the proposed defense of usury has merit.

Therefore, to the extent Madey moves to amend her answer to assert the affirmative [*7]defense of usury, the motion must be denied.

Accordingly, it is,

ORDERED, that Madey's motion for leave to serve an amended answer is granted to the extent of permitting her to assert the third and fourth affirmative defenses and the fifth affirmative defense/first counterclaim contained in the proposed second amended answer together with those affirmative defenses and counterclaims alleged in the prior answer and is all other respects denied; and it is further,

ORDERED, that Madey shall serve an amended answer in conformity with this order within 30 days of the date hereof; and it is further,

ORDERED, that counsel for the parties shall appear for a conference on February 5, 2008 at 9:30 a.m. to fix a date for the trial of Action No. 2.

This constitutes the decision and Order of the Court.

Dated: Mineola, NY_____________________________

December 13, 2007Hon. Leonard B. Austin, J.S.C.