A New York court has ruled against Darr Construction Equipment Corp. in its attempt to regain certification as a woman-owned business enterprise (WBE). The Appellate Division of the Supreme Court of the State of New York made this decision on August 19, 2026, affecting the company’s ability to participate in certain government contracts and programs designed to support minority and women-owned businesses.
The ruling stems from a dispute over Darr Construction's ownership structure and financial distributions. The court's decision confirms the denial of the company's recertification application, which could have significant implications for similar businesses seeking WBE status in New York.
Background
Darr Construction Equipment Corp. is a construction company that has held WBE certification since 1989. The company was founded by Maureen Cannetti, who claims to own 51% of the business, with her brother-in-law, Michael Cannetti, owning the remaining 49%. In 2015, Darr Construction applied for recertification as a WBE, which is crucial for gaining access to government contracts that aim to promote diversity in business.
However, the New York State Department of Economic Development, specifically its Division of Minority and Women's Business Development, denied the recertification application in a letter dated September 13, 2018. The denial was based on findings that the company did not meet specific regulatory requirements. Darr Construction appealed this decision, leading to a hearing with an Administrative Law Judge (ALJ) who issued a ruling on August 30, 2022. The ALJ reversed part of the initial denial but upheld most of it, prompting the company to continue its fight for recertification.
The Ruling
The Appellate Division reviewed the case and ultimately upheld the Executive Director's determination from November 7, 2022, which denied Darr Construction's application for recertification. The court confirmed that the denial was based on substantial evidence, particularly regarding the financial distributions to Maureen Cannetti.
The court stated, "The Director's determination that Maureen Cannetti's earnings were disproportional to her alleged ownership interest in the petitioner was supported by substantial evidence."
This means that the court found sufficient proof that Cannetti did not receive a fair share of the company's profits relative to her claimed ownership stake. The ruling was made by a panel of judges including Hector D. Lasalle, Cheryl E. Chambers, Paul Wooten, and Helen Voutsinas.
Impact
The court's decision has significant implications for Darr Construction and potentially for other businesses in similar situations. The ruling reinforces the importance of adhering to ownership and financial distribution regulations for companies seeking WBE certification. It sends a clear message that state agencies will scrutinize ownership claims and financial practices closely.
This case may affect how other minority and women-owned businesses approach their applications for certification or recertification in New York. Companies must ensure that their ownership structures and financial distributions align with state regulations to avoid similar denials. This ruling could also influence future cases where businesses challenge state agency decisions regarding WBE status.
What's Next
Details were not available in the court filing regarding whether Darr Construction plans to appeal the decision. There are no related cases pending that were mentioned in the opinion.