Opinion
23391/01
08-07-2014
Edward F. Campbell and Lucy A. Campbell, Plaintiffs, v. Edward F. Campbell, Jr. and Carol A. Campbell, Defendants.
PLAINTIFFS' ATTORNEY: JAMES D. REDDY, P.C. 59 East Shore Road Huntington, New York 11743 DEFENDANTS' ATTORNEY: EDWARD J. WALSH, JR., ESQ. 100 N. Village Avenue, Suite 35 Rockville Centre, New York 11570
PLAINTIFFS' ATTORNEY:
JAMES D. REDDY, P.C.
59 East Shore Road
Huntington, New York 11743
DEFENDANTS' ATTORNEY:
EDWARD J. WALSH, JR., ESQ.
100 N. Village Avenue, Suite 35
Rockville Centre, New York 11570
Paul J. Baisley, J.
This contempt hearing arose in the context of an intra-family, inter-generational dispute between elderly parents and an adult child and spouse regarding title to the ancestral home at 25 Fiddlers Green, Lloyd Harbor, Huntington, NY. The matter has been bitterly litigated for more than a decade, and since this Court set aside the deed whereby the parents transferred the property to their eldest son Edward, Jr. and his wife, the parties have engaged in extensive motion practice and filed numerous appeals. Although one of the plaintiffs has since died and the surviving plaintiff is in her 90s and in failing health, the contentiousness of the litigation has not abated, as the record of this contempt hearing illustrates.
Pursuant to the order of this Court (BAISLEY, J.) dated November 17, 2011, defendants Edward F. Campbell, Jr. and Carol A. Campbell were held in criminal and civil contempt for violating the Court's judgment dated April 20, 2006 (the "2006 Judgment") and order dated July 17, 2009 (the "2009 Order") directing defendants to pay the mortgages, taxes, utilities and other expenses of maintaining the subject property. A fine in the amount of $1,000.00 was imposed for the criminal contempt, and the order directed a hearing to determine the fine to be imposed for the civil contempt pursuant to Judiciary Law §773. The hearing was held before the undersigned on April 3rd, 4th, 5th, 12th, and 30th of 2012, and the matter was finally submitted in May 2013 upon the receipt by the Court of the transcripts of the hearing.
The Court notes that on June 26, 2013, the Appellate Division, Second Department, affirmed so much of the order as held defendants in civil contempt, holding that "the record demonstrates by clear and convincing evidence that the defendants failed to pay the mortgage on the premises, in violation of both a judgment of the Supreme Court dated April 20, 2006, and an order of that court dated July 17, 2009. The defendants' violation of known and unequivocal court mandates impeded, impaired, and prejudiced the rights of the plaintiff Lucy A. Campbell, warranting a finding of civil contempt under CPLR 5104....The record contains no enforceable order relieving the defendants of those obligations" (Campbell v Campbell, 107 AD3d 927 [2d Dept 2013]). The Appellate Division modified so much of the November 17, 2011 order as found defendants in criminal contempt, however, finding that the element of willfulness was not established beyond a reasonable doubt (id.).
At the hearing, Mary Alice Ruppert testified on behalf of plaintiff Lucy A. Campbell. Ms. Ruppert is a daughter of plaintiffs Edward F. Campbell (now deceased) and Lucy A. Campbell, and is a sister of defendant Edward F. Campbell, Jr. and sister-in-law of defendant Carol A. Campbell. Lucy Campbell did not testify and was not present at the hearing. Olga Harrison, a representative of non-party New York Community Bank, also testified on behalf of plaintiff regarding the mortgage foreclosure action commenced by New York Community Bank against, inter alia, defendants Edward F. Campbell, Jr. and Carol A. Campbell and plaintiffs Edward F. Campbell and Lucy A. Campbell (New York Community Bank v. Edward F. Campbell, Jr., et al., Index No. 11291/2007). Nineteen exhibits were admitted into evidence on behalf of plaintiff.
A second mortgage foreclosure action was commenced against the same defendants by E*Trade Bank (Index No. 11893/2007), but plaintiff's attorney indicated that E*Trade failed to respond to a subpoena and no testimony was presented with respect to the second mortgage. The Court's records reflect that a stipulation of discontinuance of the E*Trade action was filed with the Suffolk County Clerk on December 27, 2007.
Defendant Edward F. Campbell, Jr. and defendants' former attorney in this action, Mark A. Peterson, Esq., testified on behalf of defendants. Defendant Carol A. Campbell did not testify. Thirteen documents were admitted into evidence on behalf of defendants. Plaintiff's Case
Ms. Ruppert testified that Lucy Campbell could not afford to maintain the property by herself after her husband died (4/3/12 Tr p 23, l 21-24) and that accordingly she was forced to vacate the premises sometime after defendants did. Ms. Ruppert, a licensed real estate broker, listed the property for sale, and a contract of sale was thereafter entered into with prospective purchasers that provided for a closing date on or about October 31, 2006. That deal fell through (and ultimately, after the matter was litigated, plaintiff was permitted to retain the purchasers' $50,000 down payment ). A second contract of sale was entered into in November 2006 and the would-be purchasers then commenced occupying the premises and paying rent to plaintiff, but that sale also ultimately fell through. The property was then rented to a series of successive tenants. Ms. Ruppert testified that, using a power of attorney given to her by her mother (Pl's Exhibit 9), she executed three leases as attorney in fact, for each of which she was also paid a broker's commission. She testified that since early 2008 she managed the property for her mother and paid all of the expenses for which Lucy Campbell as landlord was responsible. She testified that the tenants were responsible for paying for electricity and fuel oil and that her mother as landlord was responsible for water service and supply, landscaping maintenance, homeowners' association dues, termite contract, and home appliance warranty coverage.
Leitman v Campbell, Index No. 33779/06.
Ms. Ruppert's testimony sought to establish the amount allegedly owed to plaintiff by defendants for maintenance of the property from the time defendants vacated the premises through the date of the contempt application. Ms. Ruppert's testimony, and the on-the-record colloquy of plaintiff's attorney, reflected plaintiff's position that defendants are liable for all expenses associated with the property, regardless of whether they were paid out of pocket by plaintiff or were paid by plaintiff's tenants, and regardless of whether they were paid before or after plaintiff herself was no longer living there. Plaintiff's argument is that the Court's judgment and order entitled plaintiff to have all those expenses paid by defendants, and that accordingly plaintiff is injured by defendants' noncompliance because she has less money than she would have if defendants had made the payments as required by the 2006 Judgment and 2009 Order. According to plaintiff's counsel, it is irrelevant that the facts and circumstances underlying the judgment have changed, that neither plaintiff nor the defendants are occupying the property, that the premises are being rented to third parties, and that some or all of the expenses have been paid by third parties, as defendants never sought to modify the order and judgment, and "the judgment remained in full force and effect." Accordingly, Ms. Ruppert testified at length regarding the expenses for homeowners' insurance, heating oil, electricity, water, landscaping/gardening services, homeowners' association dues, termite and pest control, homeowner's insurance, repairs, cleaning and maintenance, a home appliance warranty, and "supplies."
Ms. Ruppert testified, however, that she never made any demand that her brother Edward pay the expenses associated with the property and that she never sent him any bills with respect to those expenses, ostensibly because she "didn't have his address" (4/12/12 Tr, p 14, l 20), although she knew the name of the New York City law firm where he worked.
Ms. Ruppert also testified that Plaintiff's Exhibit 5, which includes the affidavit of plaintiff's attorney James D. Reddy, Esq. dated April 2, 2012, represents the legal representation fees incurred by plaintiff in connection with the two foreclosure actions and the contempt motion. That document details attorney's fees of $11,400.00 for defending the two foreclosure actions and $15,939.00 for the contempt motion, for a total of $27,339.00 for which plaintiff seeks indemnification.
Olga Harrison testified as a representative of New York Community Bank, which holds a mortgage encumbering the subject property given to its predecessor in interest by defendants while they were in title to the property. Ms. Harrison testified that the loan has been in default since June 1, 2006. She testified that the total amount due as of March 31, 2012 is $407,561.87, comprising escrow advances of $115,167.96 for real estate taxes and insurance, interest of $106,754.55 calculated at a default rate of $11.875%, and fees totaling $33,823.37. Plaintiff's Exhibit 6, introduced into evidence through Ms. Harrison's testimony, reflects that the principal amount of the New York Community Bank mortgage is $151,771.40. (That document also reflects late fees of $44.59.) Ms. Harrison testified that the bank has been paying the real estate taxes and insurance, and that no payments have been made by defendants since June 1, 2006. Ms. Harrison also testified that Lucy Campbell has not made any payments in connection with the mortgage, taxes or insurance. Ms. Harrison testified that a payoff letter issued by the bank on January 19, 2012 reflected that the amount of interest due is $59,984.94, which is calculated at the contract rate, not the default rate.
The post-hearing submissions of plaintiff's counsel, summarizing plaintiff's witnesses' testimony and exhibits, reflect that plaintiff claims entitlement to a money judgment against defendants in the amount of $407,561.87 for the New York Community Bank mortgage, taxes and insurance; $118,712.57 for the E*Trade mortgage as of April 3, 2012; $37,938.18 for utilities ($16,438.03 electric, $16,684.23 oil, and $4,815.92 water); and $67,669.00 for "the usual expenses of maintaining the property" (Pl's post-hearing submission [erroneously dated July 27, 2011 rather than 2012]). The Court notes that although counsel withdrew plaintiff's demand for mortgage payments on the record since such claims were "not ripe" (4/4/12 Tr, p 38), the post-trial submissions renewed plaintiff's claim for a judgment in the amount of the outstanding first mortgage, together with the E*Trade Bank second mortgage, although no admissible proof was presented as to the outstanding amount of the latter. Plaintiff's counsel had also stated on the record that he was "limiting [our] request for costs as to costs that the plaintiff had to pay out of pocket for which she was damaged because the defendants refused to pay" (4/4/12 Tr, p 11, l 20-25) and "limiting our evidentiary presentation as to what the plaintiff paid out of pocket without reimbursement" (4/4/12 Tr, p 37, l 2-5), but in his post-trial submission renews his demand for recoupment of all costs associated with the property, including those paid by plaintiff, those paid by the tenants, as well as those paid by the foreclosing bank.
Plaintiff's counsel also supplemented his prior submission as to attorney's fees and now seeks an additional $6,150.00 for defending the New York Community Bank foreclosure action and an additional $15,690.00 for the costs of attending the contempt hearing and preparing the post-hearing submission, together with $1,340.00 in expenses. Plaintiff thus now seeks indemnification by defendants for attorney's fees totaling $50,519.00. Defendants' Case
Defendant Edward Campbell testified that after his father died in May 2006, at the outset of the hearing to establish the parties' financial rights and obligations with respect to the premises, the parties entered into an oral agreement whereby defendants would vacate the premises and thereafter their financial obligations with respect to the premises would cease. He testified that the parties contemplated that the premises would be sold and that the mortgages would be satisfied from the proceeds of the sale, subject to the Court's determination of the parties' respective financial responsibility. He testified that he and his wife never made any mortgage or other payments after May 2006, and that for five years thereafter, plaintiffs never sent him any bills or made any demands for payments. He further testified that he never sought to modify the 2006 Judgment because of the parties' oral agreement and because, consistent with that agreement, plaintiff never made any demand for him to pay anything after defendants vacated the premises (4/30/12 Tr p 54).
The testimony of defendants' former attorney Mark Peterson, Esq. corroborated defendant's testimony that there was an oral agreement that defendants would vacate the premises in June 2006 and be relieved of their financial obligations under the 2006 Judgment. He testified that the parties understood that the premises would be sold and the mortgages satisfied from the sale proceeds.
Defendants' post-hearing memorandum reflects defendants' position that plaintiff herself consistently violated the 2006 Judgment by entering into multiple contracts of sale and leases without obtaining leave of the Court and, by reason of her "unclean hands," should not be permitted to invoke the equitable powers of the Court to enforce selected provisions of the 2006 Judgment against defendants. Defendants also argue that their failure to comply with the 2006 Judgment was not willful because of their financial inability to pay the expenses, and that in light of the changed circumstances, it is inequitable that defendants should be required to subsidize plaintiff's operation of a rental business in perpetuity. Finally, defendants argue that plaintiff did not suffer injury or loss because of their failure to make the payments required by the 2006 Judgment because those payments were made by third parties and because plaintiff's operation of a non-Court-sanctioned rental business at the property resulted in a substantial profit and accordingly she did not suffer any loss.
Discussion and Applicable Law
The 2006 Judgment on which the civil contempt finding was predicated provided, in substantial part, as follows: ORDERED, ADJUDGED AND DECREED that, pending the Court's further hearing and determination of the parties' respective rights and obligations, as aforesaid, plaintiffs are stayed from commencing any proceedings to enforce this order and from selling, assigning, transferring or encumbering, or entering into any contracts or agreements to sell, assign, transfer or encumber, the Premises; and it is further ORDERED, ADJUDGED AND DECREED that, pending the Court's further hearing and determination of the parties' respective rights and obligations, as aforesaid, the parties are further directed to continue the status quo ante with regard to all financial matters, including but not limited to the payment of any mortgages, taxes, utilities and usual expenses of maintaining the Premises, as well as the monthly payments currently being made by defendants to plaintiffs, and with regard to the parties' occupancy of the Premises; and it is further ORDERED, ADJUDGED AND DECREED that, notwithstanding the foregoing stay and direction to continue the status quo ante, plaintiffs may list and show the Premises for sale with a duly licensed broker; and it is further ORDERED that the defendants provide plaintiffs with a key to every door in the premises. The 2006 Judgment expressly contemplated that notwithstanding the Court's annulment of the conveyance to defendants and the vacatur of the deed, the parties would continue their joint residence in the premises pending further proceedings, with an eye toward an anticipated imminent sale of the premises and the Court's determination of the parties' respective financial rights and obligations with respect thereto. It was implicit that the purpose of maintaining the status quo ante was for the benefit of the plaintiffs, who were elderly, in diminished health, and in financial straits. Accordingly, defendants were directed to continue paying the carrying charges and all of the usual expenses of maintaining the premises pending the further order of the Court. The record reflects that after plaintiff Edward Campbell, Sr. died in May 2006, however, both Lucy Campbell as surviving plaintiff and defendants Edward Campbell, Jr. and Carol Campbell undertook actions that substantially modified the status quo ante, without, however, either party seeking to modify the Court's 2006 Judgment.
The record reflects that in June 2006, defendants voluntarily vacated the premises, purportedly in accordance with the parties' oral agreement which, however, was never reduced to a writing and has repeatedly been held by this Court to be unenforceable. Defendants admittedly ceased paying the mortgages and taxes and other expenses after they left the house. Thereafter, although the 2006 Judgment stayed plaintiffs from "selling, assigning, transferring or encumbering, or entering into any contracts or agreements to sell, assign, transfer or encumber, the Premises," the record reflects that while the stay was in effect, the surviving plaintiff Lucy Campbell entered into a contract to sell the property and then, after the first sale fell through, entered into a second contract of sale. Plaintiff herself also vacated the premises around that time, although the 2006 Judgment specifically directed the parties to "continue the status quo ante...with regard to the parties' occupancy of the Premises" as well as their financial arrangements (Ms. Ruppert's testimony as to when her mother moved out of the house is vague, and the record does not otherwise reflect the exact date of her departure from the premises). level="1">
The Court notes that plaintiff's attorney, James D. Reddy, Esq., had previously affirmed that the house was being marketed by Ms. Ruppert during the summer of 2006 (Pl's Exhibit 8, p 30, ¶7), and that by the time the first deal fell through in October 2006, plaintiff "had already arranged to move out of the Premises" (id., p 41, ¶63).
The record further reflects that plaintiff thereafter obtained an order to show cause from this Court (BAISLEY, J.) dated December 4, 2006 that in effect retroactively ratified the second contract and authorized the sale of the premises, directing that "the net proceeds of the sale of such premises after payment of outstanding mortgages, liens and closing costs shall be paid into Court to the credit of this action pending further direction of the Court."
The prospective purchasers commenced occupying the premises and continued to do so while paying rent under a modified agreement until sometime in 2008 when that contract of sale also fell through, allegedly because of title problems arising from the instant litigation. The prospective purchasers vacated the premises and thereafter plaintiff — by Ms. Ruppert as her attorney in fact — leased the property to a succession of tenants between 2008 and 2012. Although the 2006 Judgment expressly prohibited plaintiff from "entering into any contracts or agreements to sell, assign, transfer or encumber[] the Premises," plaintiff did not seek relief from the stay. Accordingly, plaintiff's ongoing leasing arrangements violated the express terms of the 2006 Judgment. It is well established that a lease is an "encumbrance" which renders title unmarketable (Segal v Kulch, 13 AD2d 1011, 216 NYS2d 538 [2d Dept 1961], affd, 11 NY2d 834, 227 NYS2d 446 [1962]).
On July 17, 2009, this Court (BAISLEY, J.) rendered an order and decision after hearing (the 2009 Order) that allocated the various expenses and costs of improvements to the property during the approximately ten years that the parties had lived in the residence together. Some expenses/improvements were allocated exclusively to defendants and others to plaintiff, and the remainder were apportioned between plaintiff and defendants in a 25%/75% ratio. With respect to the mortgage obligations incurred by defendants, the Court found that "the defendants are solely responsible for the payment of" the mortgages encumbering the property, and that "the [2006 Judgment] remained in full force and effect." The Court specifically found that, with respect to both mortgages, "defendants were responsible for the monthly payments and remain so." The Court made no specific findings regarding the prospective payment of the utilities and ancillary maintenance expenses associated with the premises.
By the time the Court's 2009 Order was rendered, both plaintiff and defendants had been out of the premises for approximately three years, during which time defendants concededly made no mortgage, tax or other payments with respect to the premises. Plaintiff was by then a defendant in two mortgage foreclosure actions and thus had actual knowledge that the mortgages and taxes were not being paid by defendants. Significantly, however, even after the 2009 Order was rendered, plaintiff took no action to compel defendants to make any payments, or to hold defendants in contempt for failing to do so, until nearly two years thereafter when, on February 28, 2011, plaintiff brought on the order to show cause to hold defendants in contempt which resulted in the instant hearing to determine plaintiff's damages.
Judiciary Law §773 provides that: If an actual loss or injury has been caused to a party to an action or special proceeding, by reason of the misconduct proved against the offender, ... a fine, sufficient to indemnify the aggrieved party, must be imposed upon the offender, and collected, and paid over to the aggrieved party, under the direction of the court....Where it is not shown that such an actual loss or injury has been caused, a fine may be imposed, not exceeding the amount of the complainant's costs and expenses, and two hundred and fifty dollars in addition thereto, and must be collected and paid, in like manner.
Upon a review of the record, and in light of the unique circumstances herein, the Court finds that plaintiff did not sustain "actual loss or injury" as contemplated by Judiciary Law §773 as a result of defendants' failure to pay the utilities and other expenses associated with the maintenance of the property, at least after plaintiff vacated the premises in late 2006 (and no proof was presented to establish the amount of expenses that were incurred during the time that plaintiff continued to reside at the property after defendants left). The hearing testimony and the documentary evidence reflect that plaintiff, by her attorney in fact, has been operating a profitable rental business at the property and that all of the expenses of maintaining the property for which plaintiff seeks indemnification have been paid by the tenants directly or through the payment of substantial amounts of rent to plaintiff, notwithstanding the Court's imposition of a stay prohibiting plaintiff from encumbering the property.
Ms. Ruppert testified that after their father died in May 2006, her sister Monica moved in to the premises with their mother and that Monica was paying plaintiff's expenses directly. Ms. Ruppert testified that she does not have access to that information (4/3/12 Tr p 34), and Monica did not testify at the hearing.
It is undisputed, moreover, that during the period 2006 to 2011, plaintiff never made any demand on defendants to pay any of the utilities or other expenses, and never sent them a bill or an invoice. "[B]efore a person can be punished for a contempt in disobeying an order, he must have had notice of it and an opportunity to become acquainted with its provisions, and a demand must have been made upon him to do the thing which the order required of him" [emphasis added] (Goldie v Goldie, 77 AD 12 [4th Dept 1902], quoting Bradbury v Bliss, 23 AD 606 [1st Dept 1897]). Defendant Edward Campbell Jr. testified that had he received any such bills or invoices and a demand for payment, he would immediately have come to court for redress, "because that wasn't the deal" (4/12/12 Tr p 125 l 4-12).
Moreover, the manifest intent underlying the 2006 Judgment was to maintain plaintiff's accustomed residence, lifestyle and standard of living pending the then-contemplated sale of the premises. In light of the fact that plaintiff herself voluntarily vacated the premises despite a court order directing both parties to maintain the status quo ante, and that she thereafter commenced renting the premises and continues to rent the premises at a profit, the intent of the 2006 Judgment has obviously been nullified. While that does not vitiate the 2006 Judgment, and defendants were properly determined to be in civil contempt for failing to comply with it, the Court, upon consideration of all of the evidence in the record, cannot conclude that plaintiff has sustained any actual loss or injury as a result of defendants' failure to subsidize plaintiff's unauthorized operation of a rental property — an obligation that plaintiff's counsel has argued continues in perpetuity!
While defendants inexplicably never sought to relieve themselves from any of the obligations imposed on them by the 2006 Judgment after they vacated the premises in accordance with the parties' unenforceable oral agreement, the absurdity and inequity of requiring defendants to redundantly pay expenses that are already being paid by plaintiff's tenants, to absorb the costs of the tenants' unrestricted consumption of heating oil, electricity, cooking gas and water; to pay a surcharge in excess of $8,000 for plaintiff's homeowner's insurance based on plaintiff's non-occupancy of the premises, all while plaintiff enjoys a substantial profit from her unauthorized rental business, is both patent and blatant.
Plaintiff's attorney's billing records reflect that on February 11, 2011, plaintiff's attorney and plaintiff's daughter Mary Alice Ruppert arrived at the strategic decision that it was preferable to continue renting the property rather than to sell it in order to maximize the income available to pay plaintiff's medical expenses. This decision was contrary to the letter and spirit of the December 4, 2006 order to show cause authorizing the sale and the payment of the net proceeds into court. There is no evidence that plaintiff herself participated in this (or any other) decision (indeed, the billing records do not reflect any direct contact between plaintiff and her attorney). In conjunction with that plan, Mr. Reddy suggested and Ms. Ruppert agreed to bring on a motion for contempt and attempt to obtain a money judgment against defendants for mortgage payments, etc. (The Court notes that Mr. Reddy is magnanimously not seeking to have defendants pay his fee for this advice; the billing entry is marked "no charge.")
"I advise issue of mounting interest on monies awarded to Campbell Jr., but primary concern is to keep Fiddlers Green generating income as Lucy has high out of pocket costs for breast cancer drugs that are not covered as of October of every year; Selling house and placing monies in escrow as per court would render Lucy indigent; object then is to keep house as rental; Mary Alice agreed with idea of motion for contempt and a money judgment against Ed and Carol as to monies to be paid for mortgages, etc. NO CHARGE" (Pl's Ex 5).
This record demonstrates that the rental arrangement benefited plaintiff. Plaintiff cannot simultaneously be heard to argue that it was detrimental to her simply because she was nominally entitled by the order to have those expenses paid duplicatively by her estranged son and his wife. Moreover, plaintiff, who the record shows repeatedly disregarded the order prohibiting her from encumbering the property without court approval, should not be permitted to pick and choose the provisions that she wants enforced and those that she does not. Accordingly, plaintiff is not entitled to recover as damages those sums she claims defendants should have paid for utilities and other maintenance expenses.
With respect to the mortgages given by defendants while they were in title, the Court has previously determined that the rights of plaintiff are defeated, impaired, impeded or prejudiced by defendants' failure to pay the mortgages as plaintiff's property is burdened with two mortgages to which plaintiff is not a party and plaintiff is now a defendant in two foreclosure actions commenced by the mortgagees. The Court is constrained to conclude, however, that defendants are not presently liable to plaintiff for the mortgage payments, as they are owed to the respective mortgagees, not to plaintiff. Moreover, no determination has been made in the underlying foreclosure action(s) regarding the foreclosing bank's claims against plaintiff for an equitable lien or for equitable subrogation. It is conceded that Lucy Campbell did not make any out-of-pocket mortgage payments, and she is not presently subject to liability vis-a-vis the bank. In light of the foregoing, there is no legal basis for a money judgment in favor of plaintiff against defendants for the outstanding amount(s) of the mortgage(s).
The Court finds that defendants are also not liable to plaintiff for real estate taxes, as Lucy Campbell concededly did not make any out-of-pocket payments for taxes since she was restored to her status as the record owner of the premises. The record reflects that in fact the real estate taxes have been paid by the mortgagee, New York Community Bank, which also obtained its own insurance for the property. Plaintiff has thus not incurred any direct out-of-pocket loss or injury as the result of defendants' non-payment of the real estate taxes (or, for that matter, the mortgagee's procurement of forced-place insurance). Attorney's Fees
Although the Court finds that plaintiff did not sustain any direct actual loss or injury by reason of defendants' failure to pay the expenses, plaintiff has also demanded that defendants indemnify her for attorney's fees she incurred in connection with the instant contempt application and the defense of the two foreclosure actions.
With respect to the former, it is well established that reasonable attorney's fees incurred in connection with an application to punish for contempt may be recoverable, whether such fees are attributable to proving contempt or proving damages flowing therefrom (Glanzman v Fischman, 143 AD2d 880 [2d Dept 1988]). In the circumstances of this case, and in the interests of justice, however, the Court is constrained to conclude that plaintiff is not entitled to recover attorney's fees in connection with this contempt application or hearing.
Plaintiff's failure to take any action to demand or compel payment from defendants for more than five years, her own repeated violations of the 2006 Judgment, and the strategic decision to rent the premises rather than sell them, undermine her argument that she has been injured by defendants' nonpayment. The foregoing also suggest that the underlying motive of plaintiff — or those acting on her behalf — in bringing on the recently conceived "idea of motion for contempt and a money judgment against Ed and Carol" was not the justifiable vindication of plaintiff's rights under the 2006 Judgment but merely a further salvo in this long-raging family war in which elderly parents are pitted against adult children and adult siblings are pitted against one another. The Court declines to be made an instrument of plaintiff's agents' opportunistic endeavor to subvert the contempt remedy to create an injustice and effectively reward plaintiff for her disobedience of the 2006 Judgment while punishing defendants for theirs. As the Appellate Division, Second Department, has observed, "[i]t is an old, old principle that a court, even in the absence of express statutory warrant, must not allow itself to be made the instrument of wrong" (Campbell v Thomas, 73 AD3d 103, 2nd Dept 2010]). "The courts...can, and must, prevent themselves and their processes from being affirmatively employed in the execution of a wrongful scheme" (id.). Accordingly, the Court declines to award plaintiff any attorney's fees for the instant contempt motion and hearing.
The Court does find, however, that the cost of defending the foreclosure actions is properly chargeable to defendants, whose default in the mortgage payments required by the 2006 Judgment precipitated the two foreclosure actions to which plaintiff is an unwitting party. Plaintiff has submitted the affidavit of her attorney, James D. Reddy, Esq., sworn to on April 2, 2012, together with Mr. Reddy's contemporaneous billing records, which collectively were admitted into evidence as Plaintiff's Exhibits 5 and 14. Those records reflect that plaintiff's counsel expended 36.1 hours in connection with the foreclosure action commenced by New York Community Bank, for a total of $10,830.00, together with expenses of $90.00. The records further reflect that counsel expended 2.70 hours in connection with the foreclosure action commenced by E*Trade, for a total of $675.00.
Plaintiff has submitted no substantive opposition to plaintiff's attorney's fees and accordingly plaintiff is presumptively entitled to recover the amount established by plaintiff's proof (Guiliano v Carlisle, 236 AD2d 364 [2d Dept 1997]). The Court finds, however, that plaintiff is not entitled to recover attorney's fees for the cross-motion to vacate her default in the New York Community Bank action, as the costs — and risks — of that motion (which this Court granted in the interests of justice) could have been avoided by putting in a timely answer, which plaintiff's attorney apparently opted not to do. Since the individual entries in plaintiff's counsel's billing records recite multiple activities but fail to itemize the time spent for each task, the Court cannot accurately determine how much time was spent on the cross-motion. The Court, in its discretion, finds that a $3,000.00 reduction in plaintiff's attorney's fees is appropriate. Accordingly, the Court awards plaintiff attorney's fees for the defense of the New York Community Bank foreclosure action in the amount of $7,830.00 plus expenses of $90.00; and further awards plaintiff attorney's fees for the defense of the E*Trade Bank foreclosure action in the amount of $675.00, for a total attorney's fee award of $8,595.00.
As this Court has previously noted, defendants have inexplicably failed to move for relief from the 2006 Judgment, despite numerous implicit invitations by this Court to do so. In light of the record of this contempt proceeding, however, and notwithstanding defendants' apparently stubborn refusal to act preemptively, the Court finds that the intent of the 2006 Judgment has been nullified by the parties' actions. Defendants were directed to pay the expenses of maintaining the status quo ante, not the expenses of operating plaintiff's real estate business. Accordingly, the Court, on its own motion, hereby modifies the 2006 Judgment to the extent that defendants are hereby relieved of any obligations to pay the utilities and usual expenses of maintaining the Premises at 25 Fiddlers Green and the monthly payments formerly required to be made by defendants to plaintiffs, retroactively and prospectively, from the time they vacated the premises in June 2006. Defendant is also relieved of the obligation to pay the real estate taxes for the property prospectively only, and plaintiff is hereby directed to commence paying the taxes. In light of the still-pending mortgage foreclosure action, however, and the undetermined claims of New York Community Bank against plaintiff Lucy Campbell for an equitable lien and equitable subrogration, defendants remain solely responsible for the payment of the mortgages encumbering the property subject to the further order of the Court in this or the New York Community Bank action regarding the parties' respective liability for the mortgage payments (and the past real estate taxes).
The foregoing constitutes the decision and order of this Court. Dated:August 7, 2014 __________________________________ J.S.C.