A Queens masonry contractor claims that a Westchester subcontractor abandoned two projects and diverted project funds.
King Contracting Group NY Inc. is demanding $3.9 million from Hi Rise E.I.F.S. & Stucco, of Buchanan, in two complaints filed recently in Westchester Supreme Court.
The lawsuits also name Hi Rise owners Nestor M. Soria, of Buchanan, Juan Fernando Enrique Mejia, of Ossining, and their North Stucco Construction Inc., of Ossining.
Hi Rise and North Stucco are one in the same, according to the complaints, using the same employees and equipment, doing the exact same work and operated by the same men.
Hi-Rise was a “mere shell,” King claims, and payments to Hi-Rise were funneled to North Stucco, which was operated “in a manner as to perpetuate fraud.”
Defense attorney Kenneth R. Rush, of Hackensack, New Jersey, said he has no comment on the allegations. He has just been retained and is in the process of examining the complaints, and the complaints have not yet been properly served to his clients.
King Contracting, of Long Island City, Queens, specializes in masonry and roofing construction, including exterior insulation finishing systems. Brett Steinberg is the president.
King hired Hi Rise in June 2020 to do exterior insulation work on the River Crossing project at the 1st Avenue Tunnel in Manhattan, for $2.83 million, and this past March to work on a Bronx project for $340,000.
On Aug. 31, Hi Rise and its owners agreed to work exclusively for King in the masonry and roofing sector, according to the complaints, and pledged not to solicit King’s customers, dissuade anyone from doing business with King or disclose any proprietary information for five years.
Hi Rise was to receive 50% of the net profits on the two projects, the agreement states.
But on Oct. 20, Hi Rise allegedly abandoned the projects and left defective and unfinished work that King then had to repair and complete at its own cost.
Hi Rise also diverted funds that were supposed to be used to pay its workers, according to the complaints, and King had to pay them.
King also claims that Hi Rise employees assigned to the two projects had been working on a different job in the Bronx and that Soria and Mejia had been diverting funds to North Stucco.
The defendants told King’s clients that King had misappropriated project funds and owed Hi Rise $783,235, one of the complaints states, when King was actually ahead of its payments to Hi Rise by $769,000.
King is demanding $3.9 million for alleged breaches of contract, defamation, conversion of funds and unjust enrichment. It is asking the court to restrain Soria, Mejia and their companies from competing with King, soliciting King’s customers, disparaging the company or using its proprietary information.
King is represented by Manhattan attorney Brian L. Gardner.
