| Vanderbilt Group, LLC v Dormitory Auth. of State of N.Y. |
| 2008 NY Slip Op 04391 [51 AD3d 506] |
| May 13, 2008 |
| Appellate Division, First Department |
| The Vanderbilt Group, LLC, Appellant, v DormitoryAuthority of the State of New York, Respondent. |
—[*1] Akin Gump Strauss Hauer & Feld LLP, New York City (Thomas P. McLish of counsel), forrespondent.
Order, Supreme Court, New York County (Richard B. Lowe, III, J.), entered November 30,2006, which granted defendant's motion for summary judgment dismissing the complaint,unanimously reversed, on the law, without costs, the motion denied and the complaint reinstated.
Plaintiff seeks to enforce a contract with defendant for the construction of a residence hallcomplex at the State University of New York at Old Westbury. Defendant established primafacie, based on plaintiff's criminal conviction for offering a false instrument for filing inconnection with said contract, that it was induced to enter into the contract by plaintiff's falsestatements. However, plaintiff submitted evidence that raised an inference that defendant wasaware of the false statements made by plaintiff in its response to defendant's request for proposalsand investigated them before executing the contract. Since such evidence was precluded at thetrial resulting in plaintiff's criminal conviction, the doctrine of collateral estoppel does not bar theinstant action (see Kaufman v Eli Lilly & Co., 65 NY2d 449, 455-456 [1985]). Ifdefendant was aware of and investigated plaintiff's false representations and chose neverthelessto execute the contract, it waived its defense of fraud and its contractual right to terminate thecontract on the basis of the misrepresentations (see Hadden v Consolidated Edison [*2]Co. of N.Y., 45 NY2d 466, 469-470 [1978]; Barrier Sys. vA.F.C. Enters., 264 AD2d 432, 433 [1999]; Lumber Indus. v Woodlawn FurnitureCorp., 26 AD2d 924 [1966]). Concur—Saxe, J.P., Gonzalez, Sweeny and Renwick,JJ.