X.L.O. Concrete Corp. v. Rivergate Corp. N.Y. App. Ct.,

83 N.Y.2d 513, 634 N.E.2d 158 (1994).

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Nature of the Case

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Facts

P and D entered into a written contract on May 12, 1983, for construction of the concrete superstructure and fills of a project located in Manhattan. P fully performed its obligations under the contract and sought payment of $844,125.07, the balance due and owing. D refused to pay on the ground that the contract was an integral feature of an extortion and labor bribery operation known as the 'Club.' The 'Club' was a ruling body comprised of four of the five New York City organized crime family bosses, and concrete construction companies, and labor unions. The Commission decided which concrete companies would be permitted to undertake construction jobs in New York City worth more than 2 million dollars. The Club charged 2% of the contract price for guaranteed 'labor peace' for amounts over $2 million. The Commission rigged the bidding to ensure that the designated company would submit the lowest bid. The Rivergate project was allocated to P on the assumption that it would not exceed $15 million. P paid the 2% 'labor peace' fee. P then negotiated the terms of the contract with D. They agreed on a figure of $16,300,000 (later adjusted to $16,544,125.07). This price exceeded the amount approved by the Commission. P refused to abandon the project and gave a $50,000 'gift' for speaking favorably on P's behalf to the Commission. D negotiated the contract with full knowledge of the Club and its rules. D negotiated the contract in full awareness of the involvement of the Mafia. P performed the contract and D refused to pay the outstanding balance. P sued for breach of contract. D contends that the contract was an integral element of an antitrust conspiracy in violation of the Donnelly Act. D also counterclaimed seeking recovery of monetary damages for injuries sustained allegedly as the result of P's violations of the Sherman Antitrust Act (15 USC § 1). P moved for summary judgment and D cross-moved for partial summary judgment dismissing the complaint. Ds motion for summary judgment was granted, and D's first two counterclaims were dismissed as time-barred and the third counterclaim on the ground that the contract was void. The Appellate Division modified the order and judgment reinstating P's complaint. The Appellate Division also reinstated D's counterclaims 'to the extent of the demand in the complaint,' and as so modified, affirmed. This appeal resulted.