You are here: / / IN THIS LIEN LAW DISPUTE OVER PAYMENT PURSUANT TO CONSTRUCTION CONTRACTS,...

IN THIS LIEN LAW DISPUTE OVER PAYMENT PURSUANT TO CONSTRUCTION CONTRACTS, DEFENDANTS DID NOT DEMONSTRATE AS A MATTER OF LAW THAT THE RESTORATION OF IMPROPERLY DIVERTED TRUST ASSETS WITH NON-TRUST ASSETS LIMITED DEFENDANTS’ DAMAGES (FOURTH DEPT).

The Fourth Department, reversing (modifying) Supreme Court in this Lien-Law construction-contract action, over a dissent, determined defendants did not demonstrate as a matter of law that the improper diversion of trust assets was cured by the restoration of trust assets with non-trust assets:

“[T]he primary purpose of [Lien Law] article 3-A and its predecessors . . . [is] to ensure that those who have directly expended labor and materials to improve real property [or a public improvement] at the direction of the owner or a general contractor receive payment for the work actually performed” … . “Use of trust assets for any purpose other than the expenditures authorized in Lien Law § 71 before all trust claims have been paid or discharged constitutes an improper diversion of trust assets, regardless of the propriety of the trustee’s intentions” … . Under Lien Law article 3-A, a trust beneficiary may maintain an action “to recover trust assets from anyone to whom they have been diverted with notice of their trust status” … . * * *

… [T]he court erred in granting defendants’ motion in part by limiting the potential damages in the diversion causes of action to a maximum of $104,205.99 based on Top Capital’s [defendant’s] alleged restoration of trust assets through payments made with non-trust assets … . Plaintiffs allege that approximately $1.4 million in trust assets was improperly diverted by defendants. The court, in limiting the potential recovery on the diversion causes of action, credited not just Top Capital but all defendants for the approximately $1.3 million Top Capital paid DiMarco [plaintiff] from non-trust assets after the trust fund was depleted. That was error because defendants failed to establish their entitlement to a restoration defense as a matter of law. Contrary to defendants’ assertion, the Court of Appeals has rejected the argument that a defendant can cure an improper diversion of trust assets, and therefore avoid liability for that diversion, by a subsequent payment from non-trust assets … . DiMarco Constructors, LLC v Top Capital of N.Y. Brockport, LLC, 2021 NY Slip Op 02680, Fourth Dept 4-30-21

 

You might also like
RESTITUTION SHOULD NOT HAVE BEEN ORDERED BECAUSE IT WAS NOT PART OF THE PLEA AGREEMENT, THE ARGUMENT SURVIVES THE GUILTY PLEA AND THE WAIVER OF APPEAL; DEFENDANT’S CONTENTION HE WAS DEPRIVED OF HIS RIGHT TO COUNSEL DID NOT SURVIVE THE WAIVER OF APPEAL BECAUSE DEFENDANT DID NOT ASSERT THE DEPRIVATION INFECTED THE PLEA AGREEMENT OR THE VOLUNTARINESS OF THE PLEA (FOURTH DEPT).
DEFENSE COUNSEL MISTAKENLY FAILED TO NOTIFY THE PROSECUTION OF AN ALIBI WITNESS; DEFENSE COUNSEL ADMITTED HE HAD NO EXCUSE FOR HIS MISTAKE; BECAUSE THE FAILURE WAS NOT DELIBERATE AND WAS NOT AN ATTEMPT TO GAIN A TACTICAL ADVANTAGE, THE DEFENSE MOTION FOR PERMISSION TO SERVE A LATE NOTICE OF ALIBI SHOULD HAVE BEEN GRANTED (FOURTH DEPT),
VICTIM’S DEATH FIVE MONTHS AFTER THE ASSAULT WAS SUFFICIENTLY LINKED TO DEFENDANT’S ACTIONS.
IT MAY HAVE BEEN ERROR TO ALLOW THE VICTIM TO TESTIFY ACCOMPANIED BY A DOG, BUT THE ISSUE WAS NOT PRESERVED; ALTHOUGH THE PROSECUTOR MADE AN IMPROPER COMMENT IT DID NOT REQUIRE REVERSAL; PROSECUTORS ADMONISHED THAT THEIR ROLE IS TO ENSURE JUSTICE IS DONE, NOT SIMPLY SEEK CONVICTIONS (FOURTH DEPT).
An Action by a Judgment Creditor Pursuant to CPLR 5225 and 5227 Seeks both Legal and Equitable Relief—a Jury Trial Is Therefore Not Available
Summary Judgment Properly Granted in Favor of Defendant Who Had the Right of Way When Plaintiff Pulled Into Defendant’s Path from a Stop, Even Though there Was Evidence Defendant Was Travelling Slightly Over the Speed Limit/No Evidence Accident Would Have Been Avoided Had the Defendant Been Traveling at the Speed Limit
DEFENDANT’S GUILTY PLEA WAS COERCED BY THE JUDGE’S THREAT TO IMPOSE A HEAVIER SENTENCE IF CONVICTED AFTER TRIAL; ALTHOUGH THE ISSUE WAS NOT PRESERVED, IT WAS CONSIDERED ON APPEAL IN THE INTEREST OF JUSTICE (FOURTH DEPT).
Stipulation to a Reduced Tax Assessment Freezes the Assessment at the Reduced Level for Three Years by Operation of Statute

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

THE JUDGE’S MAINTENANCE AWARD MAY NOT HAVE BEEN PROPERLY BASED UPON THE... NON-OWNER DID NOT HAVE STANDING TO MOVE TO VACATE AN ERIE COUNTY TAX FORECLOSURE...