As we have previously reported, there continues to be a disturbing resistance by our appellate courts to award legal fees to a prevailing party, even when that reimbursement is clearly authorized by the parties' lease agreement.*
Although we have already expressed our concerns about this phenomenon, we couldn't resist writing about it again, particularly after we came across the Appellate Term's decision in East Midtown Plaza Hous. Co. v. Cannings .
In that nonpayment case, after a cooperative was awarded some $4,419.00 in maintenance and additional-rent charges, it also sought to recover some $8,100 in legal fees it had incurred during the litigation's course. While the New York County Civil Court granted the landlord's request for fees, the Appellate Term, First Department, characterized the recovery as "manifestly unfair" and reversed.
In this particular case, deficiencies with the building's multiple-dwelling registration (or "MDR") triggered "substantial delay and expense," and prevented the cooperative from quickly pressing its claim to completion. That, according to the AT1, militated against the grant of fees in the landlord's favor.
A lone dissenter, Justice William P. McCooe was quite troubled by the request and a bit more vehement in his disapproval of the cooperative's conduct:
The landlord transformed what should have been a garden variety summary non-payment proceeding into one requiring motions and a cross motion because of its misstatements as to the status of the building in the petition and the motion papers which misled the motion court to render an erroneous decision and waste judicial resources. A dismissal of the proceeding at that point for failure to file a multiple dwelling registration statement would have resulted in the tenant being the prevailing party ... The claim for attorneys fees is already twice the award and in large measure was caused by the landlord's conduct. The landlord should not be rewarded for its mistakes nor should the tenant be required to pay for them ....
While we understand that the fees associated with correcting the building's MDR status should not have been chargeable to the tenant, it remains unclear why the balance of the costs incurred by the landlord was denied -- and why not even a pro-rated portion of the owner's costs was awardable in this instance.
Since the cooperative successfully recouped a money judgment against the tenant, we are of the opinion that a blanket denial of all fees and charges was far from a fair, equitable, or just result.
To download a copy of the Appellate Term's decision, please use this link: East Midtown Plaza Hous. Co. v. Cannings
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*For our other blog posts on the issue, please click on the following link: Attorneys' Fees