G Bldrs. IV LLC v Madison Park Owner, LLC
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on December 4, 2012
Saxe, J.P., Friedman, Acosta, Renwick, Freedman, JJ.
Order, Supreme Court, New York County (Alice Schlesinger, J.), entered November 30, 2011, which, inter alia, granted the motion of defendants Madison Park Owner, LLC and Platte River Insurance Company to dismiss the complaint of plaintiff G Builders IV LLC and vacated plaintiff's mechanic's lien, unanimously affirmed, with costs.
After a dispute arose between plaintiff and defendants regarding a construction management contract for work to be performed by plaintiff in connection with the conversion of a 20-story office building into luxury condominiums, plaintiff commenced this lien foreclosure action against defendants. While this action was pending, non-party GJF d/b/a Builders Group and non-party George Figliolia, plaintiff's president and chief executive officer of GJF as well as sole shareholder of Builders Group, and plaintiff's two other employees who were also employees of GJF/Builders Group, pleaded guilty to grand larceny in connection with a scheme to bilk defendants out of millions of dollars by way of a complex kick-back scheme involving the over-billing of project subcontractors. Notably, the construction management contract was signed by Figliolia on behalf of both plaintiff, as construction manager, and GJF, as guarantor.
The gravamen of plaintiff's argument is that the guilty pleas of GJF/Builders Group, as well as plaintiff's president, secretary and employee --- the only people employed by plaintiff --- cannot be imputed to plaintiff merely because plaintiff did not confess to any wrongdoing, and because the three employees did not confess to wrongdoing specifically related to defendants' project. As the motion court found, where, as here, the evidence in the record overwhelmingly supports the conclusion that the actions taken by plaintiff's employees and by GJF/Builders Group, were taken on behalf of plaintiff, plaintiff is not entitled to collect on the lien (see McConnell v Commonwealth Pictures Corp., 7 NY2d 465, 469  ["Proper and consistent application and long-settled public policy closes the doors of our courts to those who sue to collect the rewards of corruption"]). Try though it might, plaintiff simply cannot distance itself from these crimes, committed by its own employees utilizing a contract that it signed and for which it was responsible.
We have considered plaintiff's remaining arguments and find them unavailing.
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: DECEMBER 4, 2012
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