JOSEPH DAVIS INDUSTRIAL SERVICES v. SICOLI MASSARO INC (2001)

Defendant Innovative Building Systems, a division of defendant Sicoli & Massaro, Inc. (Sicoli & Massaro), contracted with the State University Construction Fund to expand the seating in the football stadium at the State University of New York at Buffalo.   Innovative Building Systems in turn contracted with 15 subcontractors or materials providers, one of which is plaintiff.   Plaintiff subsequently commenced this action, seeking, among other relief, a trust fund accounting pursuant to article 3–A of the Lien Law (first cause of action) and compensatory and punitive damages for diversion of trust fund assets (second cause of action).   Defendants appeal from an order granting plaintiff's motion for partial summary judgment on the first and second causes of action, thereby determining that Sicoli & Massaro had diverted trust fund assets, requiring Sicoli & Massaro to “provide a legally adequate trust fund accounting to” plaintiff, and freezing all trust assets received by Sicoli & Massaro in connection with the project.

 Defendants' contention that Supreme Court erred in granting class action certification is not properly before us.   The court granted that relief in a prior intermediate order, and the appeal herein from a subsequent nonfinal order does not bring up for review that prior nonfinal order (see, CPLR 5501 [a];  Baker v. Shepard, 276 A.D.2d 873, 874, 715 N.Y.S.2d 83;  Town of Coeymans v. Malphrus, 252 A.D.2d 874, 875, 676 N.Y.S.2d 347;  see also, Fleiss v. South Buffalo Ry. Co., 280 A.D.2d 1004, 1005, 720 N.Y.S.2d 703).

 We reject defendants' contention that the court erred in determining that Sicoli & Massaro had not rendered an adequate trust fund accounting and had diverted trust funds.   Upon our review of the record, we conclude that the court properly determined that Sicoli & Massaro had diverted trust funds created for the purpose of assuring payment of subcontractors (see generally, Lien Law § 70[1], [2], [6];  § 71[2];  § 72[1];  Canron Corp. v. City of New York, 89 N.Y.2d 147, 154, 652 N.Y.S.2d 211, 674 N.E.2d 1117;  Caristo Constr. Corp. v. Diners Fin. Corp., 21 N.Y.2d 507, 512, 289 N.Y.S.2d 175, 236 N.E.2d 461).   Thus, the court properly froze the remaining trust funds under Sicoli & Massaro's control and properly directed Sicoli & Massaro to provide a full accounting of its disbursement of the trust funds (see, South Carolina Steel Corp. v. Miller, 170 A.D.2d 592, 595, 566 N.Y.S.2d 368;  Glens Falls Ins. Co. v. Schwab Bros. Trucking, 53 Misc.2d 230, 233–234, 277 N.Y.S.2d 1004, affd. 27 A.D.2d 802, lv. dismissed 19 N.Y.2d 940, 281 N.Y.S.2d 345, 228 N.E.2d 401;  cf., Atlas Bldg. Sys. v. Rende, 236 A.D.2d 494, 496, 653 N.Y.S.2d 694).

Order unanimously affirmed with costs.

MEMORANDUM: