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VINLIS CONSTRUCTION CO. v. JOHN J. RORECK (06/03/68)

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT


June 3, 1968

VINLIS CONSTRUCTION CO., INC., ET AL., RESPONDENTS,
v.
JOHN J. RORECK, APPELLANT

Brennan, Acting P. J., Rabin, Benjamin, Munder and Martuscello, JJ., concur.

The finding of the trial court that plaintiffs sustained compensatory damages in the sum of $117,896 in addition to the $50,000 found by the jury is modified to substitute the figure of $65,896 therefor. Other findings not inconsistent therewith are affirmed. The general rule is that, on an accounting by a fiduciary, the burden of proof in justifying the charges and showing that he has derived no unfair advantage from his fiduciary relation is on the accounting party (Vernon Metal & Prod&ce Co. v. Joseph Joseph & Bros. Co., 241 N. Y. 544; Fisher v. Bishop, 108 N. Y. 25, 29). Here, defendant deliberately concealed and destroyed or ordered concealed and destroyed records of the trust estate. The destruction of the trust records was for the purpose of hiding defendant's illegal conduct and preventing the disclosure thereof and, under the circumstances, it would have been futile to direct an accounting in the usual form. Nevertheless, in our opinion, under the circumstances herein, it may not be held that the judgment may not be sustained, with the exception of the award of $3,000 as the average profit on each of 52 houses. We think that the maximum that could have been awarded on the proof herein was $2,000 as the average profit on each of the 52 houses. Defendant was in a position to refute plaintiffs' claim as to the amount of profit derived from each house, but offered no proof relative thereto. In our opinion, the provision permitting the granting of an order of arrest was improper (Lisbin v. Cohen, 1 A.D.2d 697, affd. 3 N.Y.2d 817; CPLR 6101, 6111; 7 Weinstein-Korn-Miller, N. Y. Civ. Prac., pars. 6101.04, 6111.03; McKinney's Cons. Laws of N. Y., Book 7B, Supplementary Practice Commentary under CPLR 6111 in the 1967 Pocket Part). No issues have been raised as to whether, in the causes of action based on conversion and fraud, the jury could properly award punitive damages and as to whether the award thereof was excessive.

Disposition

As so modified, judgment affirmed, with costs to defendant, and case remitted to the court below for entry of an amended judgment in accordance herewith.

19680603

© 1998 VersusLaw Inc.



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