People v. Hollowell

People v. Hollowell, 168 A.D.2d 970 (4th Dept. 1990) was a criminal case in which the defendant was charged, inter alia, with two counts of grand larceny under Lien Law 79-a in connection with funds that the defendant received to construct a deck for the complainant. On May 22, 1988, the complainant paid defendant money to construct a deck for the complainant's home before July 4. The defendant never returned to construct the desk, instead depositing the money into his business checking account and spending it for his business and personal expenses. As a result, defendant had no money with which to purchase supplies to perform the work. At the time that he spent the money, defendant owed over $18,000 and had filed for bankruptcy a month previously. The lower court dismissed the two counts of larceny under the Lien law, concluding that defendant lacked the requisite intent to commit larceny. The Second Department reversed, concluding that, under the circumstances presented, a jury could infer that defendant, when he misappropriated trust funds, intended to deprive complainant of the trust funds or appropriate them to himself. Id. at 970-971. The Court held that the other larceny count based on the Lien Law was properly dismissed because the transaction in question predated the amendment that, the Court held, extended trust claims to include claims of owners who advanced funds to contractors for the construction of home improvements. Hollowell, 168 A.D.2d at 971. The Court in Hollowell held that, as a result of the amendment of Lien Law 71(2) by the addition of paragraph (f), applicable to contracts entered into after March 1, 1988, trust claims were extended to include owners' claims to funds that the owners advanced to contractors for the construction of home improvements. The Second Department concluded that, because the complainant contracted with defendant after the effective date of the new amendment, he had a valid trust claim against the moneys he advanced for his home improvement. The Court held, further, that defendant's alleged misappropriation of the money and failure to pay the complainant's trust claim may constitute the crime of larceny under Lien Law 79-a. 168 A.D. 2d at 971. The Court in Hollowell concluded that the evidence was sufficient to establish a violation of Lien Law 79-a(1)(b) which provides: 1. Any trustee of a trust arising under this article, and any officer, director or agent of such trustee, who applies or consents to the application of trust funds received by the trustee as money or an instrument for the payment of money for any purpose other than the purposes of that trust, as defined in section seventy-one, is guilty of larceny and punishable as provided in the penal law if (b) such funds were received by the trustee as contractor or subcontractor, as such terms are used in article three-a of this chapter, and the trustee fails to pay, within thirty-one days of the time it is due, any trust claim arising at any time; provided, however, that if the trustee who received such funds as contractor or sub-contractor disputes in good faith the existence, validity or amount of a trust claim or disputes that it is due, the application of trust funds for a purpose other than a trust purpose, or the consent to such application, shall not be deemed larceny by reason of failure to pay the disputed claim within thirty-one days of the date when it is due if the trustee pays such claim within thirty-one days after the final determination of such dispute. The defendant in Hollowell never performed any of the work contracted for and essentially disappeared with the complainant's money.