Decedent Eshagh Eshaghian, together with his brothers David Eshaghian (hereinafter “David”) and Jack Eshaghian (hereinafter “Jack”), maintained numerous business ventures during their lifetimes involving the purchase and management of commercial real estate, both within and outside of New York State. Mahrokh Eshaghian and Tanaz Eshaghian, decedent’s wife and daughter, the co-executors of his estate (hereinafter “co-executors”), move to amend their counterclaims filed in this SCPA 2102 proceeding. Petitioner David opposes the motion. The decedent’s estate has a long and torturous history. Ten days after decedent’s death in 2003, decedent’s wife and daughter petitioned for the admission to probate of decedent’s last will and testament and codicil. Subsequent thereto, the parties have been stuck in a quagmire, litigating and appealing a myriad of proceedings with each side retaining a seemingly endless revolving door of attorneys. On March 27, 2006, David commenced the instant proceeding (2003-1916/D hereinafter the “D” proceeding) pursuant to SCPA §2102 (1) seeking, inter alia, the co-executors to “…provide information concerning the assets and affairs of Decedent’s estate relevant to the Eshaghian partnerships, Eshaghian LLCs and Eshaghian corporations” and orders requiring the co-executors to sell, liquidate or redeem decedent’s interests in said partnerships, LLCs and corporations. In addition to the petition, David executed and filed a waiver and consent as a “managing partner” of 3111 Ocean Parkway Associates; 35th Street Associates; 1600 Ocean Parkway Associates; West Third Street Associates; Union Turnpike Associates; 124 West 31st Street Associates; 116 West 31st Street Associates; David and E. Ike Eshaghian Partnership; and Americana Group; as a “managing member” of 221 West 22nd Street LLC; 509 East 85th Street LLC and Yorktown Associates LLC; as ‘President” of Somerset Management, Ltd.; as “Secretary” of Crown Oil #1 Co., Inc. and Crown Oil #2 Co., Inc., and signed in an undisclosed title on behalf of Lendra Realty Corp. Additionally Massoud Eshaghian, Joseph Eshaghian, George Eshaghian, Helen lloulian, Victoria Elghanayan and Nelly Eshaghian all signed waivers and consents. On May 23, 2006, Mahrokh Eshaghian and Tenaz Eshaghian, in their capacity as co-executors of decedent’s estate, filed their answer which included five counterclaims. The answer and counterclaims were served upon petitioner’s counsel and in July of 2006, David, “…individually and on behalf of certain partnerships, limited liability companies and corporations,” filed a reply to the counterclaims. For the next seven years the parties set their own procedural course consisting of prolonged negotiations, mediations, and numerous adjournments. During this time period the parties also attempted to conduct discovery and obtain valuations of the entities in this and other proceedings in this estate. In late 2013 the co-executors moved for partial summary declaring that six of the business entities (West Third Street Associates, Americana Group, 205-215 Lexington Avenue Associates LLC, 43rd Street Second Avenue Corp., Somerset Management Ltd. and Lendra Realty Corp.) did not dissolve upon decedent’s death and that the proper date for valuation of the estate’s interest in these entities is not the date of decedent’s death. David cross-moved for partial summary judgment declaring that these entities should be valued as of the date of decedent’s death. By decision and order dated January 15, 2014, the co-executor’s motion for partial summary judgment was denied as the relief sought in the motion was contradictory to the relief sought in the counterclaims. Likewise, David’s cross-motion for partial summary judgment was also denied. As the relief sought in the petition, i.e. the discovery of the assets of the estate and information regarding the valuations, had already been obtained, the D proceeding was deemed concluded. The co-executors thereafter moved, inter alia, to amend their answer and counterclaims. The proposed pleading annexed to the moving papers, revealed that the co-executors were changing the nature of the pleading from counterclaims into a petition with a new caption and demanding new relief pursuant to SCPA 2103, 2104 and 2107, alleging twenty-seven purported “causes of action.” By decision and order dated July 9, 2014, the motion for leave to amend was denied. The Appellate Division, Second Department, by decision and order dated November 30, 2016, affirmed this Court’s decision and order dated January 15, 2014 denying the motion and cross-motion for partial summary judgment and dismissing the petition, but modified same by “…deleting the provision thereof, sua sponte, directing the dismissal of the (co-executors’) counterclaims.” The same date, the Appellate Division modified the decision and order dated July 9, 2014 by deleting the provision thereof denying the branch of the motion seeking leave to serve an amended pleading and substituting therefor a provision granting that branch of the motion. This proceeding then laid dormant, while the parties concentrated their attention on an SCPA 2103 discovery proceeding (hereinafter the “M” proceeding) brought by the co-executors against David in 2014. After the Court concluded the M proceeding by decision dated July 8, 2021, the co-executors filed the instant motion. The co-executor’s original answer in this proceeding, dated May 18, 2006 contained five counterclaims which were segregated by type of business entity in which the decedent owned an interest: the first addressing New York partnerships; the second concerning New York limited liability companies; the third pertaining to closely-held corporations; the fourth concerning a Texas partnership; and the fifth concerned another New York partnership that allegedly owns interests in a California entity. In support of the motion to amend the counterclaims, the co-executors allege that, at the time the original counterclaims were imposed, they did not possess copies of the operating or partnership agreements for all of the entities and, through discovery, they were able to determine that certain entities had written agreements that now require amendment of the relief sought. The co-executor’s stated purpose for amending the counterclaims is to “…allow the Court and the parties to proceed in a streamlined fashion with a clear understanding of the relief requested, and without the necessity of pursuing three separate overlapping proceedings. The proposed amended counterclaims, after a recitation of background facts and procedural history, are divided into six sections, as follows: the corporations which continue as a matter of law; non-corporate entities which continue by agreement; LLC entities with dissolution and liquidation agreements; properties held as tenants in common; partnerships which terminated at death; and partnerships which dissolved at death. The co-executors also state that relief pertaining to three entities identified in the original counterclaims, Crown Oil #1 Co., Inc., Crown Oil #2 Co., Inc. and Wilshire Rodeo Associates, has been rendered moot by agreement of the parties and therefore has been omitted in the proposed amended counterclaims. In opposition to the motion, David contends that the co-executors have failed to offer a reasonable excuse for the “inordinate delay” in seeking leave to amend the counterclaims, and that this delay will “immensely prejudice” him. David also alleges that the amended counterclaims “…seek to advance time-barred claims patently devoid of merit.” Essentially David admits to converting decedent’s interests in these entities and, to the extent the proposed amended pleadings seek to challenge such transfers on the basis of conversion and theft, David contends that the claims are time-barred and “patently devoid of merit.” David further contends that relief sought in the proposed amended counterclaims pertaining to ECEE; two other properties held by the decedent and David as tenants-in-common; and “retransfers” or “refinancings” in 2012 are all time-barred. Case law is clear that In the absence of prejudice or surprise resulting directly from the delay in seeking leave to amend pleadings, such applications are to be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit (see CPLR 3025 [b]; Marcum, LLP v. Silva, 117 AD3d 917; Bernardi v. Spyratos, 79 AD3d 684; Lucido v. Mancuso, 49 AD3d 220). Moreover, the party seeking leave to amend a pleading is not required to make an evidentiary showing of merit (Matter of Eshaghian,144 AD3d 1155). Mere lateness is not a barrier to the amendment; it must be lateness coupled with significant prejudice to the other side (Vidal v. Claremont 99 Wall. LLC, 124 AD3d 767). As David can file an amended reply to the counterclaims raising affirmative defenses, including statute of limitation claims, he is not prejudiced by the grant of this motion nor deprived of having those issues determined on the merits. Additionally, David has admittedly been the managing partner of the partnerships, the president or secretary of the corporate entities and the managing member of the LLCs and has been running the business entities since the decedent’s death and was in possession of all partnership agreements, shareholder agreements and LLC operating agreements. Thus he cannot claim surprise as to the co-executor’s need to amend the counterclaims, nor can he claim surprise as to the income generated by each entity. He was in control of all the information produced during discovery. Finally, the issues in dispute in the amended pleading are, for all intents and purposes, the same as in the original pleading, but are set forth with greater specificity and tailored to the entities involved. For all of the reasons set forth above, leave to file amended counterclaims in the form attached to the motion papers is granted. The amended counterclaims are to be served on all parties within 30 days of the date of this decision and order, and David is given leave to amend his Reply to Counterclaims within 20 days of service of the amended counterclaims upon him. The parties are directed to appear for a pre-trial conference on February 28, 2023 at 10:00 AM, Courtroom 62, 88-11 Sutphin Boulevard, Jamaica, New York. This is the decision and order of the Court. The Clerk of the Court is directed to forward a copy of this decision and order to all parties who have appeared in this proceeding. Dated: December 13, 2022
