May 26, 2022

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Mount Vernon contractor on 8-year quest for payment on Yonkers project

2 min read

A Mount Vernon contractor that has been trying to collect a debt for eight years is trying again.

Westchester Stucco Inc. sued Sam Borrelli Jr., of Yonkers, for $60,059, March 22 in U.S. Bankruptcy Court, White Plains, where Borrelli had filed for Chapter 13 bankruptcy protection.

Westchester Stucco argues that Borrelli, as head of the now defunct S.V.B. Contracting Inc., should not be allowed to use bankruptcy to cancel debts because he “made unauthorized, illegal, unjustified payments … and applied them for purposes other than paying the claims of subcontractors.”

Borrelli’s bankruptcy attorney, Todd Cushner, did not respond to an email asking for his client’s side of the story.

The dispute dates back to 2014, when an affiliate of Westhab Inc., a Yonkers nonprofit organization that develops housing for low-income families, hired S.V.B. to renovate an apartment building on Elliot Avenue, Yonkers.

Westhab apartments, Elliot Avenue, Yonkers

S.V.B. hired Westchester Stucco to do stucco work for $121,458. Borrelli, according to the complaint, made an initial payment of $20,000 and thereafter refused to pay anything.

Westchester Stucco stopped working and dealt directly with Westhab, and in 2015 it agreed to complete the job for $68,000.

That left $33,458 on the original contract.

Westchester Stucco finished the work in April 2015. Four months later company president John Pilenza sued S.V.B. and Borrelli in Westchester Supreme Court for breach of contract and trust fund violations.

Under New York law, the funds S.V.B. received had to be held in trust, the complaint states, and used only to pay for labor and materials for the project.

In 2016, S.V.B. was dissolved, according to a state corporation record.

In 2017, a Westchester judge entered a default judgment against Borrelli and S.V.B.

In 2019, Borrelli petitioned for Chapter 13 bankruptcy protection, declaring $254,550 in assets and $331,276 in liabilities.

Two months later and after two inquests, a judge in the Westchester case entered a $45,973 judgment against Borrelli and S.V.B.

In late 2018, Westchester Stucco sued Borrelli in bankruptcy court, to collect the debt.

In early 2020, the bankruptcy judge dismissed Borrelli’s Chapter 13 case for failures to submit documents and for proposing a plan that was “not feasible as it is not adequately funded to provide for full repayment to all priority claims.”

On Feb. 15, Borrelli petitioned bankruptcy court again for Chapter 13 protection, declaring $969,250 in assets and $502,199 in liabilities. Westchester Stucco, again, filed an adversary proceeding seeking to block Borrelli from cancelling the debt.

The Mount Vernon contractor argues that Borrelli’s debts may not be discharged because he is guilty of larceny for, allegedly, diverting trust funds in violation of the New York Lien Law; he engaged in defalcation or fraud while acting as a trust fund fiduciary; and there is a pending default judgment against him in the Westchester case.

Westchester Stucco’s attorney, Carlos J. Cuevas, of Yonkers, is asking the court to declare that his client’s claim of $61,059 is non-dischargeable.

Mount Vernon contractor on 8-year quest for payment on Yonkers project

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