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PLAINTIFFS’ MOTION TO RENEW ON THE GROUND THE DEFENDANTS’ WINNING ARGUMENT WAS RAISED FOR THE FIRST TIME IN REPLY PAPERS SHOULD HAVE BEEN GRANTED (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined plaintiffs’ motion to renew should have been granted. Defendants’ motion to dismiss was improperly granted based upon an argument first raised in reply papers:

The court granted defendants’ motion to dismiss … based on defendants’ argument raised for the first time in their reply to their motion to dismiss, that [the] operating agreement contained a provision wherein plaintiffs purportedly waived any past, present, and future conflicts of interest. Plaintiffs moved for leave to renew and reargue, claiming that the issue of the waiver provision was improperly raised for the first time in reply, and in substance was contradicted by another section of the operating agreement that provides, among other things, that no one other than the members can enforce any provision of the operating agreement against any member.

The motion to renew should have been granted. Plaintiffs’ claim that the waiver issue was improperly raised in defendants’ reply provides a reasonable justification for granting the renewal motion … . Upon renewal, defendants’ motion should be denied with respect to plaintiffs’ breach of fiduciary duty claim … . Dismissal is warranted only where documentary evidence “conclusively establishes a defense to the asserted claims as a matter of law” … . Mehra v Morrison Cohen LLP, 2022 NY Slip Op 01396, First Sept 3-3-22

 

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