Mary and Richard Morrison show off their new Infinity sedan,...

Mary and Richard Morrison show off their new Infinity sedan, one of the six new cars they have purchased since they won the $165 million Mega-Million lottery four months ago. (April 8, 2010) Credit: Newsday / John Paraskevas

A State Supreme Court justice Monday denied Suffolk County's bid for a preliminary injunction to stop Mega Millions winners Richard and Mary Morrison from spending a $66-million jackpot until the former homeless shelter operators pay nearly $1 million owed the county.

But Justice Thomas F. Whelan said the county "is not without remedies" and could go back into court to seek an "order of attachment" while it is determined whether the couple is liable for overpayments to their former nonprofit corporation, Love'M Sheltering Inc., which were uncovered in a 2004 audit.

Whelan continued the county's temporary restraining order for 15 days to give the county time to file further legal papers and set May 18 for a conference to begin discovery in the case, which is now likely to go to trial.

"The county moved on the day before my clients were going to collect their lottery award and destroyed their day," said Michael Solomon, the Morrisons' attorney. "The county's claim that they had had the right to tie up my clients' money has been denied by the court and found to be improper."

County Attorney Christine Malafi downplayed the significance of the ruling and said the county will review Whelan's suggestion to seek an order of attachment to protect the $950,000 until the dispute is resolved.

Malafi said the county intends to pursue the suit to "pierce the corporate veil" to show that the couple owe the money. According to the ruling, the county intends to show that the Morrisons, individually and through Love'M Inc., a real estate holding company, "dominated and controlled" Love'M Sheltering "to such an extent that it was the mere alter ego" of the Morrisons and was used in aid of their personal interests. Malafi said Love'M Sheltering charged the county for pensions that were never funded and equipment it never proved it had.

Solomon, however, said it was the county, by its audits, that "put Love'M out of business. They knew very well at the time there was no money to pay them. That was their decision that they made at that point in time."

He added that the county has no claim on the couple's lottery winnings. "They think they won the lottery, but they didn't," he said.

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