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Benjamin Fox Tracy Obtains Six-Figure Judgment Against Contractor For Diverting Homeowners’ Deposit Funds

The homeowners brought an arbitration proceeding against a general contracting company and its president, in his personal capacity, for breach of contract.  The homeowners alleged that the president diverted contract deposit funds away from the homeowners’ apartment renovation project.  Instead, the homeowners alleged that the president applied the deposit funds to other unrelated projects and to pay personal debts, such as a home mortgage payment.  After a hearing, the arbitrator found that the contracting company failed to apply the homeowners’ deposit funds towards paying workers and suppliers as required under the contract.  The arbitrator further found that the president commingled the deposit funds with personal funds and observed none of the statutorily-required corporate formalities when managing those funds.  Therefore, the arbitrator issued an award, holding that the contracting company and its president, in his personal capacity, were liable jointly and severally to the homeowners for $100,441.  To view a copy of the arbitration award, click here.  On March 5, 2021, the Supreme Court of the State of New York, New York County, confirmed the arbitrator’s award.  To view a copy of that decision, click here.