The following papers and the attachments and exhibits thereto have been read on this motion:

Order to Show Cause1

Affirmation in Support2

Memorandum of Law in Support3

Affirmation in Partial Opposition4

Memorandum of Law in Opposition5

Affidavit in Opposition (Yatvin)6

Affidavit in Opposition (Galata)7

Letter dated March 20, 20158

Letter dated March 20, 2015 (including Ex. "A" March 18, 2015 letter)9

Luxury Autos of Huntington, Inc. d/b/a Audi of Huntington ("Huntington") moves for an order pursuant to: CPLR 6301 granting a preliminary injunction requiring Volkswagen Group of America, Inc. d/b/a Audi of America, Inc. ("Audi") pay Huntington the "Exclusive Standards Bonus payments under Audi's Margin and Bonus Program ("Standards Bonus") on all new Audi vehicles reported sold by Huntington on or after January 1, 2015"; and CPLR 3025(b) granting it leave to file and serve a supplemental complaint.

On February 7, 2013, Audi and Huntington entered into an Audi Exclusive Facility Construction Agreement ("Facility Construction Agreement") pursuant to which Huntington agreed to "construct and/or substantially renovate an Exclusive Audi facility" in exchange for Huntington's receipt of "Exclusive Standards Bonus Payments".^[FN1] The Facility Construction Agreement set forth milestones that Huntington was expected to meet in order to receive the Standards Bonus payments. Specifically, Huntington agreed that by December 31, 2013, it will have obtained all of the necessary approvals and building permits to begin construction of the [*2]facility. Huntington also agreed that the completion date of the facility would be no later than December 31, 2014 (Facility Construction Agreement at ¶¶ 1.b, 1.c). The Facility Construction Agreement provided additional terms as follows:

2. Standards Bonus Eligibility - Design. As of the date of this Agreement, [Huntington] is eligible for Exclusive Standards Bonus Payments in connection with [Audi's] Margin and Bonus Program. [Huntington] shall continue to be eligible for the Exclusive Standards Bonus until its satisfaction of its obligations outlined in paragraph 1(b), or December 31, 2013, whichever is sooner. . . . If [Huntington] has not satisfied its obligations outlined in paragraph 1(b) by December 31, 2013,^[FN2] (unless such failure is due to reasons outside of [Huntington's] reasonable control, including delays contemplated in Paragraph 5i and 5j), [Huntington] will no longer be eligible for Standards Bonus until such time as [Huntington] has achieved all obligations of paragraph 1(b).

3. Standards Bonus Eligibility - Construction . . . . If [Huntington's] obligation specified in paragraph 1(c) is not satisfied by the Completion Date,^[FN3] (unless such failure is due to reasons outside of [Huntington's] reasonable control, including delays contemplated in Paragraph 5i and 5j), [Huntington] shall immediately forfeit any Exclusive Standards Bonus eligibility until such time as it has completed the Facility at the Dealership Premises or otherwise fully complied with the requirements of the Exclusive Standards Bonus.^[FN4]

In a letter dated December 19, 2013, Audi advised Huntington that Biener Auto Group, Inc. ("Biener"), an Audi franchise in Great Neck, New York, with the approval of Audi, intends to establish a new Audi dealership at 1038 Brush Hollow Road in Westbury, New York (the "Westbury site"). The Westbury site is approximately ten miles from Huntington's dealership.

On July 1, 2014, Huntington commenced an action against Audi and Biener based upon the opening of the Westbury dealership. An amended complaint was served and filed on October 17, 2014 and asserted the following five causes of action, respectively: breach of contract (the Dealer Agreement); breach of the implied covenant of good faith and fair dealing; tortious interference with contract; violation of Vehicle and Traffic Law ("VTL") § 463(2)(ff)(3); and breach of contract and violation of the VTL 463(2)(jj).^[FN5]

By letter dated January 30, 2015 addressed to Huntington's President, John Burns, Audi suspended Huntington's Standards Bonus payments. Specifically, Audi wrote:

In your letter of October 28, 2014, you requested an extension of the construction completion date pursuant to the Audi Exclusive Facility Construction Agreement (Facility Agreement) executed on February 12, 2013, from December 31, 2014 to the end of September 2015. As you are aware, this represents an extension of nine months in which you request exclusive standards payments to remain uninterrupted, beyond the terms of the Facility Agreement.

* * *

I regret to advise you that we are not able to grant your request for any further extension to your facility completion date. Since the facility construction completion milestone date of December 31, 2014 has not been met, your Audi standards bonus payments will cease beginning with January payments. You will become eligible to earn the Audi Standards Bonus again, once your new Audi Facility project has been completed and approved (Ex. "I" to Motion).

On March 5, 2015, Huntington moved for a "preliminary injunction" requiring Audi to pay Huntington the Standards Bonus on all new Audi vehicles sold by Huntington on or after January 1, 2015.

By letter dated March 18, 2015, Huntington was informed that Audi was "prepared to meet to discuss Huntington's request for an extension of time (beyond the December 31, 2014 deadline) to complete its facility renovations" and, further, that Audi was reinstating the Standard Bonus payments, retroactive to January 1, 2015. However, Audi resumed such payments "without waiver, and will full reservation of its rights relating to those bonus payments, including any rights it may have to recover all bonuses paid which are subject to repayment under the terms of the February 7, 2013 Facility Construction Agreement" (Letter dated March 18, 2015 from [*3]James Vogler to Russell McRory).^[FN6]

Given the reinstatement of Huntington's Standards Bonus payments, the branch of the motion seeking a preliminary injunction was withdrawn (Letter dated March 20, 2015 from Russell McRory).

Huntington also seeks leave to file a supplemental complaint. The proposed supplemental complaint asserts the following three causes of action against Audi: price discrimination in violation of VTL 463(2)(g); breach of contract and breach of the implied covenant of good faith and fair dealing; and declaratory judgment and injunctive relief.

In the first cause of action, Huntington alleges that Audi violated VTL 463(2)(g) which makes it unlawful for a franchisor to "sell or offer to sell any new motor vehicle to any franchised motor vehicle dealer at a lower actual price therefor than the actual price offered to any other franchised motor vehicle dealer for the same model vehicle similarly equipped or to utilize any device including, but not limited to, sales promotion plans or programs which result in such lesser actual price . . . ."^[FN7]

Under Audi's Margin and Bonus Program, dealers eligible for the Exclusive Standards Bonus receive 3.75% of the MSRP on every new Audi vehicle sold in a given month. As such, receipt of the Exclusive Standards Bonus affects the price dealers like Huntington pay for [*4]vehicles purchased from Audi. According to Huntington, Audi's wrongful withholding of Exclusive Standards Bonus payments results in unlawful price discrimination, as other Audi dealers receive such bonus payments and, therefore, receive more favorable pricing than Huntington. Receipt of the bonus payments has the effect of reducing the price per new vehicle sold by Audi to Audi dealers and allows those dealers to remain competitive. Huntington argues that, the withholding of bonus payments puts it at a severe competitive disadvantage. By unilaterally, summarily and wrongfully suspending Huntington's Exclusive Standards Bonus, these price discounts are not reasonably available to Huntington on a proportionately equal basis with all other Audi dealers. Thus, Huntington argues that it will likely succeed on the merits of its claim under VTL 463(2)(g) (Proposed Supplemental Complaint at ¶¶ 56-61).

Huntington also claims that Audi breached the expressed terms of the Facility Construction Agreement or, alternatively, the implied covenant of good faith and fair dealing in the Facility Construction Agreement when, "[d]espite repeated invocations of the Extension Provisions, Audi refused to meet in good faith to discuss reasonable extensions to the timetables in the Facility Agreement and continued payment of the Standards Bonus, as required by ¶ 5(j) of the Facility Agreement" (Proposed Supplemental Complaint at ¶ 75). Pursuant to paragraph 5(j), "if [Huntington] shall be unable to adhere to any timetable or meet any deadline due to delays out of [Huntington's] control . . . then [Huntington] will notify [Audi] and the Parties will meet, in good faith, to discuss reasonable extensions to the timetables and continued payment of the Standards Bonus as set forth in this Agreement".

In the third cause of action in the proposed supplemental complaint, Huntington alleges that: "Audi's failure to hold a meeting and discuss an extension in good faith is a breach of the Facility Agreement"; "Audi's suspension of the Exclusive Standards Bonus effective 2015 is a breach of the Facility Agreement"; and that there "exists an actual and justiciable controversy between Huntington and Audi concerning its rights and obligations under the Facility Agreement". Therefore, Huntington "seeks a judgment declaring that Huntington has not breached the Facility Agreement and that the delays in the renovations were caused by circumstances outside of Huntington's control within the meaning of the Facility Agreement and that Audi has materially breached the Facility Agreement by failing to meet with Huntington in good faith to discuss its requests for an extension of the deadline for the renovations therein, by failing to grant the requested extension when the same resulted from circumstances outside of Huntington's control, and by withholding Exclusive Standards Bonus payments from Huntington" (Proposed Supplemental Complaint at ¶¶ 88-91]).

For the reasons that follow, the branch of the motion seeking leave to file a supplemental complaint asserting the above three causes of action is denied.

A supplemental pleading is generally used to set forth transactions or occurrences which take place subsequent to the service of the original pleading. "A supplemental complaint is [*5]limited to setting forth facts occurring subsequent to the commencement of the action and in aid of the original cause of action. It cannot be made the means of setting forth facts constituting an entirely new and independent cause of action" (Rummell v Blanchard, 173 AD 695 [1st Dept 1916]).

Leave to serve a supplemental pleading must be freely given upon such terms as may be just (CPLR 3025[b]) unless the supplemental pleading sought is palpably improper or insufficient as a matter of law or unless prejudice and surprise directly result from the delay in seeking the amendment. The court must consider all the circumstances and grant or refuse leave as may be just and proper in the particular case. The determination to permit or deny leave to amend or supplement a pleading is committed to the sound discretion of the trial court (HSBC Bank v Picarelli, 110 AD3d 1031 [2d Dept 2013]; Aurora Loan Sers. v Dimura, 104 AD3d 796 [2d Dept 2013]; Lucido v Mancuso, 49 AD3d 220, 229 [2d Dept 2008]). In determining whether to grant leave, the court's scope of inquiry is ordinarily restricted to the propriety of allowing a supplemental pleading in the circumstances of the case before it, without reaching the merits of the case or the possibility of ultimate success in the litigation (84 NYJur 2d Pleading § 208).

In support of that branch of the motion seeking leave to supplement the amended complaint, Huntington argues that the claims in the proposed supplemental complaint are neither palpably improper nor insufficient as matter of law inasmuch as "it is extremely likely that Huntington will succeed on the merits of each of its supplemental claims". Huntington additionally argues that because discovery in the instant matter is ongoing, and no preliminary conference has yet occurred, Defendant cannot claim prejudice as "additional issues at this juncture would not derail or unduly delay" the matter (Memorandum of Law in Opposition at pp 16-17).

Audi opposes the proposed supplemental pleading as the claims therein are "meritless because Audi does not engage in price discrimination by refusing to extend preferential treatment to Huntington, and Huntington's delays in completing its facility were not due to circumstances beyond its control" (Audi Memorandum of Law in Opposition at pp 7-8).

Biener also opposes the motion on the ground that the new claims in the proposed supplemental complaint "bear no relation to the crux' of the pending claims" and will prejudice Biener by delaying the case. In this regard, Biener points out that the parties are "nearing the end of discovery". Any delay in the "final resolution of the pending claims relating to the Westbury Dealership by requiring additional document discovery and depositions" and "prolonging the proceedings" will delay the construction and opening of the Westbury dealership and cause Biener to "suffer millions of dollars in damages in the form of increased financing costs, increased construction costs, additional carrying costs, and lost profits" (Biener Affirmation in Opposition at ¶¶ 26, 30, 31).

The causes of action set forth in the supplemental complaint are not "in aid of the cause[s] of action set out in the [amended] complaint. The facts set forth in the supplemental [*6]complaint . . . are independent of and in no way connected with" the causes of action upon which recovery is sought in the amended complaint (see Rummell v Blanchard, 173 AD 695 [1st Dept 1916]). In this regard, the court notes that the theory underlying the amended complaint concerns Audi's intention to establish the Westbury dealership within Huntington's market territory and Huntington's damages arising therefrom. The supplemental complaint, however, does not concern the proposed Westbury dealership but, rather, Audi's cessation of Standard Bonus payments due to Huntington's failure to complete the construction of its new facility in accordance with the terms of the Facility Construction Agreement.

In any event, the causes of action are patently devoid of merit as each of the causes of action must fail given Audi's reinstatement of Huntington's Standards Bonus payments (see Darby Group Companies, Inc. v Wulforst Acquisition, LLC, 130 AD3d 866 [2d Dept 2015]).

In particular, there is no merit to Huntington's claim that Audi engaged in price discrimination in violation of VTL 463(2)(g) because the cessation of the Standards Bonus payments - which was the basis for the violation - was reinstated retroactively.

Similarly, the second cause of action, based upon Audi's alleged breach of the Facility Construction Agreement in failing to meet and discuss an extension in good faith, and suspending Huntington's Standards Bonus payments, is devoid of merit given Audi's letter dated March 18, 2015 wherein it agreed to meet to discuss Huntington's request for an extension of time to complete its facility renovations and reinstated the Standards Bonus payments, retroactive to January 1, 2015.^[FN8]

Last, Huntington's cause of action seeking a declaratory judgment is devoid of merit inasmuch as there is no justiciable controversy (see Enlarged City School District of Middletown v City of Middletown, 96 AD3d 840 [2d Dept 2012] [a declaratory judgment requires the existence of an actual controversy, a controversy that is justiciable, and a controversy where a legally protectible interest is determined to be present and where such interest is directly in issue]). Pursuant to CPLR 3001, the "supreme court may render a declaratory judgment having the effect of a final judgment as to the rights and other legal relations of the parties to a justiciable controversy, whether or not further relief is or could be maintained . . . ." A justiciable controversy exists only when there is an actual controversy affecting the parties' rights (United Water New Rochelle, Inc. v City of Ne York, 275 AD2d 464 [2d Dept 2000] [cause of [*7]action for declaratory relief must present a concrete, actual controversy for adjudication]). There must be a "real dispute between adverse parties, involving substantial legal interests, for which a declaration of rights will have some practical effect". The dispute must have a direct and immediate effect upon the rights of the parties and must be real, definite, substantial and sufficiently matured; it cannot be hypothetical, contingent or advisory in nature (Ashley Builders Corp. v Town of Brookhaven, 39 AD3d 442 [2d Dept 2007]; Downe v Rothman, 215 AD2d 716, 717 [2d Dept 1995]).

This court will not entertain a declaratory judgment action where any decree the court may issue will become effective only upon the occurrence of a future event that may or may not happen (see New York Public Interest Research Group v Carey, 42 NY2d 527, 531 [1977]). Inasmuch as Audi has resumed Huntington's Standards Bonus payments in an effort to resolve the issue through settlement, declaratory relief at this juncture is premature.^[FN9]

Based on the foregoing, it is hereby

Ordered that the motion of the Plaintiff, to the extent not withdrawn, is denied.