In a February 8, 2011 decision by Justice Sherwood the court granted summary judgment to a foundation who sued a former employee, and his wife and father, based on the employee’s admitted theft. In opposition to the motion the employee argued that the foundation was guilty of unclean hands because it knew about his theft and did not thing to stop it.
The Court found that “unclean hands” was an equitable defense, inapplicable in an action seeking monetary damages. The Court further found that the wife and father (whose estate was substituted for him individually) were guilty of aiding and abetting the former employee’s acts. The Court reached this holding because neither the wife or father opposed the motion and because they both asserted their fifth amendment right against self incrimination in their depositions which allowed the to infer they had knowledge that the monies provided to them by the former employee were from a fraudulent scheme.
Visual Arts Foundation, Inc. v. Egnasko, Sup Ct, New York County, February 8, 2011, Sherwood, J, Index No. 603078/25008