Lipco Elec. Corp. v. Asg Consulting Corp.

• Court: New York Supreme Court — Appellate Division
• Writing for the Court: MARK C. DILLON
• Citation: Lipco Elec. Corp. v. Asg Consulting Corp., 2014 NY Slip Op 3236, 117 A.D.3d 687, 985 N.Y.S.2d 594 (N.Y. App. Div. 2014)
• Decision Date: 07 May 2014
• Parties: LIPCO ELECTRICAL CORP., et al., appellants, v. ASG CONSULTING CORPORATION, et al., respondents. (Action No. 1) ASG Consulting Corp., et al., respondents, v. Action Electrical Cont. Co., Inc., etc., et al., appellants. (Action No. 2).

117 A.D.3d 687

985 N.Y.S.2d 594

2014 N.Y. Slip Op. 03236

LIPCO ELECTRICAL CORP., et al., appellants,

v.ASG CONSULTING CORPORATION, et al., respondents. (Action No. 1)

ASG Consulting Corp., et al., respondents,

v.Action Electrical Cont. Co., Inc., etc., et al., appellants. (Action No. 2).

Supreme Court, Appellate Division, Second Department, New York.

May 7, 2014.

Levy, Tolman & Costello, LLP, New York, N.Y. (Robert J. Costello of counsel), for appellants.

Robinson Brog Leinwand Greene Genovese & Gluck, P.C., New York, N.Y. (Felicia S. Ennis and Alan M. Pollack of counsel), for respondents.

MARK C. DILLON, J.P., L. PRISCILLA HALL, JEFFREY A. COHEN, and SYLVIA O. HINDS–RADIX, JJ.

In two related actions, inter alia, to recover damages for breach of contract, the plaintiffs in Action No. 1 and the defendants in Action No. 2 appeal from an order of the Supreme Court, Nassau County (Driscoll, J.), entered February 2, 2012, which denied their motion for summary judgment dismissing the complaint in Action No. 2, pursuant to CPLR 3126 to strike the defendants' answer in Action No. 1, and for an award of sanctions based on the spoliation of evidence.

ORDERED that the order is affirmed, with costs.

“[A] contract entered into in violation of a statute is an unlawful undertaking and such an illegal contract cannot give rise to a viable cause of action” ( Scotto v. Mei, 219 A.D.2d 181, 183, 642 N.Y.S.2d 863;see Carmine v. Murphy, 285 N.Y. 413, 416, 35 N.E.2d 19;Parpal Rest. Inc. v. Martin Co., 258 A.D.2d 572, 573, 685 N.Y.S.2d 481). On that branch of the appellants' motion which was for summary judgment dismissing the complaint in Action No. 2, the appellants failed to demonstrate their prima facie entitlement to judgment as a matter of law since their evidentiary submissions did not establish that the contracts from which the causes of action in Action No. 2 arise are illegal. The appellants assert that the subject contracts are illegal because ASG Consulting Corp. (hereinafter ASG), a plaintiff in Action No. 2, is a successor to TAP Electrical Consulting Service, Inc. (hereinafter TAP), also a plaintiff in Action No. 2, and that at the time the subject contracts were formed, TAP and its successors were rendered ineligible to bid on or be awarded any public works contracts pursuant to Labor Law former § 220–b(3)(b). There remains a triable issue of fact as to whether ASG is a “successor” to TAP within the meaning of Labor Law former § 220–b(3)(b), thereby rendering illegal the contracts upon which Action No. 2 is based ( see generally Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 508 N.Y.S.2d 923, 501 N.E.2d 572). Accordingly, the Supreme Court properly denied that branch of the...