The Georgetown Company Secures Unanimous Appellate Victory Affirming That Construction Firm J.T. Magen Engaged In Fraud and Other Misconduct

Kasowitz, on behalf of an affiliate of The Georgetown Company, a diversified real estate company, secured an affirmance by the New York Appellate Division, First Department, of the trial court’s decision that construction firm J.T. Magen defrauded Georgetown in connection with a construction project at 787 Eleventh Avenue, a commercial property owned by Georgetown.

In the trial court’s December 8, 2022 decision, Justice Joel M. Cohen of the New York Supreme Court, Commercial Division, granted Georgetown summary judgment, holding that during the renovation of automobile showrooms at the property, J.T. Magen falsified documents and orchestrated “an undisclosed side-deal scheme,” directed by its founder and President, Maurice Regan, to defraud Georgetown into making more than $6.5 million in tenant improvement payments and then improperly placed an $11 million mechanic’s lien on the property.  Kasowitz secured this victory even though it is rare for a court to grant summary judgment finding liability on typically fact-intensive fraud claims.  In his ruling, Justice Cohen stated that “the summary judgment record presents as clear a case for application of the unclean hands, equitable estoppel, and willful exaggeration defenses as can be imagined.” 

In its January 18, 2024 decision, the Appellate Division unanimously ruled that the evidence amply supported the Supreme Court’s finding.

The case will now proceed to trial to determine the damages to be awarded to Georgetown.  Georgetown seeks millions of dollars in damages, including the $6.5 million in tenant improvement payments that J.T. Magen fraudulently obtained, prejudgment interest and punitive damages.

The Kasowitz Benson Torres team representing Georgetown Eleventh Avenue Owners, LLC is led by partners Mark P. Ressler and Joshua E. Hollander.