The opinion of the court was delivered by: MIRIAM GOLDMAN CEDARBAUM
Plaintiff Swig Weiler and Arnow Management Co., Inc. ("Swig Weiler") sues defendants Lewis Stahl, Jeffrey Stahl, Primo Construction, Inc. ("Primo") and Coordinated Metals, Inc. ("Coordinated") for violations of RICO. Plaintiff also asserts various pendent state law claims. Coordinated, a construction contractor, asserts a counterclaim for money due under a contract between Coordinated and Swig Weiler, and moves for partial summary judgment on the counterclaim in the amount of $ 198,932.66. All discovery has been completed, and the case is ready for trial. Swig Weiler has asserted two affirmative defenses to Coordinated's counterclaim, illegality (bribery) and fraud. Coordinated argues that Swig Weiler cannot prove essential elements of its affirmative defenses, and therefore Coordinated is entitled to partial summary judgment. For the reasons discussed below, Coordinated's motion for partial summary judgment is granted.
On January 3, 1985 Swig Weiler, as managing agent for the owners of 111 West 40th Street, entered into a contract (the "Contract") with Coordinated to replace the facade of the building. Lewis Stahl, Swig Weiler's executive vice president, executed the Contract on behalf of Swig Weiler. Lewis Stahl was then the husband of Ruth Stahl who is the daughter of Robert Arnow, the president and owner of Swig Weiler.
The Contract provided for a base price of $ 2,231,000. Following execution of the Contract, Lewis Stahl approved extras totalling $ 396,280. Swig Weiler has challenged $ 348,180 of these extras on the ground that they represented charges for work which Coordinated did not perform for Swig Weiler, and for work which Coordinated had known was required but purposely did not include in its estimate prior to execution of the contract. Swig Weiler withheld from Coordinated $ 348,180, the amount of disputed extras, as well as an additional $ 198,932.66. Coordinated moves for partial summary judgment in the amount of $ 198,932.66. Swig Weiler has asserted two affirmative defenses to Coordinated's counterclaim, bribery and fraud. First, Swig Weiler asserts that Coordinated procured the Contract by bribing Lewis Stahl and continued to pay bribes to Stahl after it obtained the Contract. Second, Swig Weiler alleges that Coordinated committed fraud in the performance of the Contract by billing Swig Weiler for work which it did not perform for Swig Weiler.
Coordinated concedes that it installed windows valued at approximately $ 20,000 at the Stahls' personal residence prior to execution of the contract, and later billed those windows to Swig Weiler. (Tokayer Aff., Ex. 17, p. 93; 10/9/92 Tr. at 39.) Coordinated also performed work at Lewis Stahl's yeshiva which it billed to Swig Weiler. (Id., Ex. 27, p. 314.) Following execution of the Contract, Coordinated submitted a change order to Swig Weiler in the amount of $ 172,000. Coordinated admits that it had agreed with Lewis Stahl to reduce its bid on the job by $ 172,000 on the understanding that Lewis Stahl would later approve change orders in that amount. (Id., Ex. 18, pp. 202-04.) Finally, Coordinated concedes that it paid Todd Stern Communications Systems, Inc. ("TCS")
$ 150,200 pursuant to an invoice which represented that TCS had done work at Ill West 40th Street that Coordinated knew TCS had not done, and reimbursed itself by submitting a bill to Swig Weiler in that amount. (Id., Ex. 23.) Howard Isaacs, Coordinated's president, testified in his deposition that on each occasion he was following the billing instructions of Lewis Stahl. TCS paid the money it received from Coordinated to Lewis and Jeffrey Stahl. With respect to the payment to TCS, Isaacs testified that he was not aware that Coordinated was being used to funnel payments to the Stahls. He says that Lewis Stahl told him that TCS was doing work on Robert Arnow's house in the Caribbean and that Arnow wanted those bills run through 111 W. 40th Street. (Id., Ex. 22.) Arnow denies owning a house in the Caribbean or authorizing this billing arrangement. (Id., Ex. 34, p. 415.)
Swig Weiler argues that Coordinated procured the Contract through bribery, and continued to pay bribes to Lewis Stahl after it obtained the Contract. As evidence of bribes paid to procure the Contract, Swig Weiler points to the fact that prior to execution of the Contract, Coordinated supplied windows valued at approximately $ 20,000 to Lewis and Ruth Stahl's personal residence. Under New York law, a contract procured through bribery is not enforceable. McConnell v. Commonwealth Pictures Corp., 7 N.Y.2d 465, 199 N.Y.S.2d 483, 485, 166 N.E.2d 494 (1960).
Penal Law § 180.03 provides:
A person is guilty of commercial bribing in the first degree when he confers, or offers or agrees to confer, any benefit upon any employee, agent or fiduciary without the consent of the latter's employer or principal, with intent to influence his conduct in relation to his employer's or principal's affairs, and when the value of the benefit conferred or offered or agreed to be conferred exceeds one thousand dollars and causes economic harm to the employer or principal in an amount exceeding two hundred fifty dollars.
N.Y. Penal Law § 180.03, McKinneys 1988. (emphasis added).
An essential element of the statutory definition of commercial bribery and thus Swig Weiler's affirmative defense is that Coordinated supplied the windows without Swig Weiler's consent. Swig Weiler has offered no evidence to show that Robert Arnow did not consent to the furnishing of ...