The Real Deal New York

Judge denies developer’s bid to toss Azure crane collapse suit

Mattone Group claimed no involvement in project, where two construction workers died in 2008

April 17, 2013 04:30PM
By Hiten Samtani

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Joseph Mattone and the Azure

A New York State Supreme Court judge has denied the Mattone Group’s motion to dismiss a wrongful death suit filed by the father of a construction worker killed in the 2008 crane collapse at the Azure condominium tower. 

The accident at 333 East 91st Street on First Avenue killed two workers: crane operator Donald Christoper Leo and Ramadan Kurtaj. In December 2008, Leo’s father, Donald, sued the Mattone Group, co-developer the DeMatteis Organization, crane operator New York Crane & Equipment and its owner James Lomma, as well as various city agencies such as the Department of Buildings and the New York City Educational Construction Fund.

The Mattone Group had argued that it was not involved with and had no ownership interest in the Azure project, and hence could not be held liable for any incidents at the site. The Queens-based developer asked the court to dismiss the case in December 2012.

Yet Judge Manuel Mendez, in a ruling Friday, found that “at the very least, Mattone is holding itself out to the public as somehow involved in the Azure project.”

Accordingly, the question of whether the company is liable for the death is still up in the air, the judge said.

The elder Leo welcomed the ruling, telling The Real Deal in a statement that it “called out the Mattones and told them they can’t hold out their hands to collect tens of millions of dollars from the Azure and then run away and hide behind a bunch of phony corporations when my son was killed.”

Roy Breitenbach, a partner at law firm Garfunkel Wild who represented the Mattone Group, said that they were considering an appeal.

“We have read the decision, and we’re in the process of analyzing and talking about what our next steps are,” he said.

Breitenbach added that since the Mattone Group had set up “structures and entities” to handle the Azure project, they should not be liable for any activity at the site.

“You’re supposed to sue the right parties,” he said.

Sales at the 34-story, 128-unit tower launched in 2007, with the building aimed at Manhattan’s growing population of families, as The Real Deal reported.

Although Joseph Mattone, the CEO of the eponymous firm, denied that the company was a developer of the Azure, several factors point to its involvement in the project.

Photos of the development feature prominently on the Mattone Group’s website, and Donald Leo showed the court a published advertisement for the Azure that showcases the developer’s logo.

Additionally, the Mattone Group and the DeMatteis Organization submitted a joint bid for the site in response to a request for proposals prepared by CBRE, according to a letter Leo produced to the court.

An attorney for Leo, Bernadette Panzella, noted that the decision highlights a common industry practice where developers create LLCs to stand in as the entities behind projects.

Panzella singled out a confidentiality clause in the developers’ operating agreement as a sign that they wished to shy away from any consequences of the project while simultaneously reaping the benefits.

“Here the actions of Mattone and DeMatteis were particularly egregious,” she said, “because in their operating agreement they very specifically agreed to conceal their identities and involvement with the Azure, while at the same time, prominently branding the Azure with their logos.”

In personal injury cases such as Leo’s, it is “fairly easy to pierce the corporate veil,” said real estate lawyer Adam Leitman Bailey, referring to the legal theory that one can go beyond the protections afforded to corporations in matters of fraud or injustice or commingling funds or acting recklessly without regard to the corporate entity’s status.

“The judge made the correct and fairly easy decision to keep the parties in the case,” Leitman Bailey said.

Lomma was acquitted in April 2012 of all criminal charges against him related to the incident.

The Mattone Group owns the Jamaica Center in Queens, as well as several office buildings in Brooklyn.

The Elmont, Long Island-based DeMatteis Organization is owned and operated by Richard and Scott DeMatteis. The company owns several outer-borough properties, including Linden Plaza, a 1,527-apatment Mitchell-Lama affordable housing complex in East New York, Brooklyn.

Additional reporting by Guelda Voien

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