Opinion
LT 83490/04.
Decided December 22, 2005.
Rosenberg Estis, P.C., New York City (Warren Estis and Norman Flitt of counsel), for petitioner.
Lowenstein Sandler PC, New York City (Robert Boneberg and Brian Ullman of counsel), for respondent.
After the Honorable Michelle D. Schreiber dismissed petitioner's first holdover proceeding on the ground that petitioner did not serve a 30-day notice terminating respondent's month-to-month tenancy, petitioner, on July 31, 2004, served respondent with a 30-day termination notice. When respondent did not vacate, petitioner commenced this holdover proceeding. The proceeding was returnable once again before Judge Schreiber, who resolved the pretrial matters. Among other things, Judge Schreiber struck respondent's warranty-of-habitability counterclaim. She then transferred this proceeding to Part X for trial assignment. The trial began after some delays that arose because of a collateral Supreme Court action and an appeal to Appellate Division, First Department.
Respondent moved in Supreme Court to transfer this proceeding and consolidate it for all purposes with a plenary action that petitioner brought against respondent and which continues to be pending in the Supreme Court. On October 4, 2004, Supreme Court denied respondent's motion, and respondent appealed to the First Department. On February 11, 2005, the First Department denied respondent's appeal. ( See Goldman v. Rosen, 15 AD3d 321 [1st Dept 2005, mem].) The First Department found that Supreme Court "properly exercised its discretion in refusing to consolidate this Supreme Court action, which [was] not yet at the discovery stage, with a pending Civil Court summary proceeding that ha[d] already been placed on the trial calendar." ( Id. at 321.)
The Civil Court trial began, and by decision and order dated July 29, 2005, this court awarded a money judgment in petitioner's favor for unpaid use and occupancy. ( See Goldman v. Rosen, 8 Misc 3d 1020[A], 2005 WL 1796479, 2005 NY Slip Op 51206[U] [Hous Part, Civ Ct, NY County, July 29, 2005]; see also Goldman v. Rosen, 9 Misc 3d 778 [Hous Part, Civ Ct, NY County 2005] [adding interest on August 29, 2005, to July 29 money judgment for use and occupancy].) Petitioner later moved for attorney fees — for this proceeding but not for the first one — and a hearing date was set to determine the amount of attorney fees recoverable according to Paragraph 27 of the parties' lease.
The hearing, which required six days of testimony, raised a series of issues. Most of them require little discussion or are not in dispute. Only one — whether petitioner may seek compensation in Civil Court for work her attorneys performed elsewhere — requires a fuller elaboration.
Respondent does not dispute that petitioner is entitled to attorney fees for petitioner's appellate work to date opposing respondent's appeal of this court's July 29 and August 29, 2005, decisions and orders. Nor, significantly, does respondent contend that any of petitioner's attorneys' per-hour fees are unreasonable or that any specific work in- or out-of-court was unreasonable or unnecessary (except for a few hours' work respondent says were "duplicative," or performed twice). Neither does respondent suggest that petitioner is entitled to interest on any attorney fees this court might award — although, as explained below, this court disagrees with petitioner about the time period from which interest may be awarded.
Instead, respondent argues that the court should reduce the amount of attorney fees requested because (1) an entity other than petitioner herself paid her attorney fees and, thus, that respondent need not reimburse anyone for those fees; (2) petitioner's counsel overstaffed the case with 16 attorneys, a paralegal, a secretary, and a messenger; (3) petitioner's counsel engaged in duplicative billing; (4) one of petitioner's attorney's billing for "factual research" inadequately conveys what work, if any, was done; and (5) petitioner's claims for disbursements are not contemplated by the parties' lease, which covers only "costs," and are supported not by receipts, checks, or invoices but only by their appearance on the petitioner's attorneys' bills.
Norman Flitt, one of petitioner's lead attorneys, credibly testified about the attorney fees and provided extensive and detailed billing records. This court uses the "lodestar" method, which takes into account the time reasonably spent by counsel and multiplies that number by the reasonable hourly rate. To determine a reasonable hourly rate, the court considers "the nature of the services rendered, the complexity and novelty of the issues, the attorney's professional reputation and experience, the level of skill involved in handling the case, the result obtained and the going rate in the community for services of this kind performed by attorneys of comparable skills." ( Solow v. Wellner, 150 Misc 2d 642, 652 [Hous Part, Civ Ct, NY County 1991], mod on other grnds 86 NY2d 582.) Under that standard, the court finds petitioner's attorney fees reasonable.
To address respondent's points seriatim, it is irrelevant who paid petitioner's attorney fees. For that reason, the court sustained petitioner's objections at the hearing when respondent tried to inquire into how and who paid petitioner's attorneys. It does not even matter that no one might have paid the fees. What counts is whether the attorney's expenditure of time and effort lead to an obligation to pay fees, and sometimes, as in the case of pro bono work on a prevailing party's behalf, a client need not incur an obligation to pay attorney fees.
The court also rejects respondent's argument that petitioner overstaffed this case. Most of the attorneys from petitioner's law firm who worked on this case spent limited periods of time on it, and when they did so, it inured to respondent's benefit because their billing rates were lower than those of petitioner's trial counsel, Mr. Flitt and Warren A. Estis, Esq. The court also notes that petitioner never had more attorneys in court in this proceeding than respondent did, and often she had fewer. At trial, respondent always had three attorneys, whereas petitioner had two At the attorney-fee hearing, both sides were represented by two attorneys, except that petitioner sometimes had only one.
Petitioner's final bill is not duplicative, meaning billing twice for work done once. During the hearing, in response to respondent's cross-examination and the court's inquiries, petitioner's attorneys amended their bill downward to a small extent when petitioner or the court noted small discrepancies and, at one point, when the court stated that it would not award fees incurred for petitioner's issuing an unreasonable subpoena and defending respondent's well-founded motion to quash it. Petitioner's attorneys' bill need not be reduced further. In particular, the time petitioner's attorneys spent preparing for this second holdover and also to draft the second holdover petition was made necessary by the dismissal of the first petition. Other time about which respondent complains is duplicative was not duplicative. The work was done but once, and it was required by respondent's theories of litigation.
Petitioner's billing records for notations like Mr. Estis's "factual research" would have been insufficiently descriptive had they stood alone, without amplification. But Mr. Flitt's testimony, and this court's own observations of the time Mr. Estis spent in court, confirms without fear of doubt that the time he documented as "factual research" represented time he legitimately expended for his client.
Respondent also argues that petitioner is not entitled to disbursements, given that Paragraph 27 of the parties' lease allows a prevailing party to recoup only "legal fees" and "costs," not disbursements or expenses. In this regard, respondent asks the court to define "costs" in the same way the CPLR does, and he notes that in contrast to the lease, RPL § 234 explicitly gives tenants a reciprocal right to secure "expenses." But "costs" and "expenses" are synonyms in plain English. They refer to the effort or loss needed to get something or to cause something to happen. In interpreting a lease, the court gives effect to plain English over how a word might be defined in a set of procedural rules or a statute of which the lease itself makes no mention. As to the disbursements, moreover, respondent did not challenge their reasonableness or veracity. Petitioner, therefore, was not obliged to come forward with proof by way of receipts and invoices that they were validly incurred and reasonable. ( See e.g. Banco Estado do Sao Paulo, S.A. v. Mendes Junior Intl. Co., 249 AD2d 137, 139 [1st Dept 1998, mem] [denying hearing when defendant raised "conclusory argument that the law firm's billings were excessive [without support] by particularized challenges to the number of hours billed, the tasks performed or the rate charged"].)
Respondent's best argument affecting attorney fees is that fees billed for the consolidation motion in Supreme Court and his unsuccessful appeal to Appellate Division should be excluded from the calculation of attorney fees connected to this court's July 29 judgment.
Paragraph 27 of the lease provides that "[t]he successful party in a legal action or proceeding between Landlord and Tenant for non-payment of rent or recovery of possession of the Apartment may recover reasonable legal fees and costs from the other party." Respondent argues that the attorney fees associated with his motion in Supreme Court and his appeal relate to procedural issues separate from the holdover proceeding to recover possession and use and occupancy. The attorney fees, including those in the Supreme Court and Appellate Division, result from petitioner's effort to regain possession and receive a money judgment for unpaid use and occupancy. This court finds that the legal, or attorney, fees here are inextricably tied to those claims regardless of the court in which the claims were argued. Attorney fees follow the issue with which they are associated and are not somehow bound to the courtroom in which the case originates or is argued.
Supreme Court and the Appellate Division heard the consolidation motion and denied it. Thus, respondent never succeeded in having this proceeding transferred to Supreme Court. For petitioner, the consolidation motion in Supreme Court meant defending the venue of the Civil Court holdover proceeding. Because this proceeding remained in Civil Court, and the motion in Supreme Court and the appeal in the Appellate Division always revolved around the holdover issues in this Civil Court proceeding, an award for attorney fees to petitioner may come from Civil Court.
Respondent contends that his Supreme Court consolidation motion and his appeal to the Appellate Division related to the Supreme Court plenary action rather than to the summary proceeding in Civil Court. But respondent's goal was to join the Civil Court summary proceeding with the Supreme Court plenary action. For each side time was at stake; plenary is slower than summary. According to the lease, the successful party, here petitioner, may receive reasonable attorney fees for a legal action or proceeding for nonpayment of rent and recovery of possession. Petitioner is therefore entitled to attorney fees in connection with maintaining in Civil Court the venue of this holdover proceeding.
Guidance for whether attorney fees associated with a consolidation motion may be included in a Civil Court money judgment is found in Vinokur v. Penny Lane Owners Corp. ( 269 AD2d 226 [1st Dept 2000, mem]) and Simithis v. 4 Keys Leasing Maintenance Co. ( 151 AD2d 339 [1st Dept 1989, mem]). When lease terms allow for attorney fees in a holdover proceeding, the terms may be applied to cover the other litigation a party brings to complete the holdover. ( See Vinokur, 269 AD2d at 226; Simithis, 151 AD2d at 341.) In Simithis, the plaintiff-tenant brought separate cases to maintain possession of leased commercial space. Initially, the tenant lost in a Civil Court holdover proceeding. The tenant then obtained a series of stays of eviction based on whether the landlord, 4 Keys, was a corporation. The stays were rejected in Civil Court, the Appellate Term, the Appellate Division, the United States District Court for the Southern District, and the United States Court of Appeals for the Second Circuit. Eventually, the tenant brought an action in State Supreme Court challenging the City Marshal's determination that 4 Keys was a corporate entity with standing.
In response, the landlord moved to dismiss all claims and also counterclaimed for abuse of process and attorney fees. The landlord argued that the tenant's continual motions and appeals were an abuse of process. Supreme Court granted the motion to dismiss the tenant's claims and denied the landlord's counterclaims. The Appellate Division upheld Supreme Court's determination that there was no abuse of process. But the Appellate Division found the landlord eligible for attorney fees, including those incurred in the federal courts, Civil Court, Supreme Court, and the State intermediate appellate courts. According to the First Department, "the lease provision . . . by its terms must be applied to cover the other litigation brought by the tenant to avoid eviction, in violation of his covenant in the lease. . . ." ( Simithis, 151 AD2d at 341).
In Vinokur, similarly, the tenant brought an action in Supreme Court to vacate a Civil Court eviction order. Supreme Court denied the tenant's motion, and the tenant appealed to the Appellate Division, which affirmed the Supreme Court's judgment and awarded attorney fees to the landlord for the Civil Court, Supreme Court, and Appellate Division proceedings. ( Vinokur, 269 AD2d at 226). As the First Department explained, "The lease provision for attorneys' fees covers this litigation brought by plaintiff to be restored to possession. . . ." ( Id. at 227).
111 on 11 Realty Corp. v. Norton ( 191 Misc 2d 483 [Civ Ct, Kings County 2002], revd on other grnds 5 Misc 3d 28[A], 2004 NY Slip Op 24283[U] [App Term, 2nd Dept, 2d 11th Jud Dists, July 21, 2004, mem]), to which respondent cites, does not require a different result. In that case, the court "exclude[d] from the calculation of the fee award the time spent by [counsel on the Supreme Court matter] and [left]it to the Supreme Court for the determination of whether fees are to be awarded in the case pending in that Court." ( Id. at 489.) But the 111 on 11 Realty court considered "pending [Supreme Court] litigation (not assigned to this Judge) involving other tenants in the building." ( Id. at 487.) The facts here are different; they involve not different parties but the same ones, not merely related litigation but Supreme Court motion practice that respondent filed to affect the litigation in Civil Court.
Paragraph 27 of the parties' lease provides that attorney fees will be awarded if a party prevails in a legal action to obtain possession and a money judgment. Petitioner's efforts to obtain possession and a money judgment flowed from one court to another, but the issues remained the same: possession and nonpayment of use and occupancy.
Petitioner is entitled to interest on attorney fees. ( E.g. Ash Miller v. Freedman, 114 AD2d 823, 823 [1st Dept 1985, mem] [awarding interest under CPLR 5001 [a] "as a matter of law" on judgment for unpaid attorney fees], citing Delulio v. 320-57 Corp., 99 AD2d 253 [1st Dept 1984, mem].) That entitlement accrues from the date petitioner prevailed in the underlying proceeding. According to the First Department, "Attorney fees . . . represent a conditional award or prerogative which does not mature until the underlying action or proceeding has been determined.'" ( Solow Mgmt. Co. v. Tanger, 19 AD3d 225, 227 [1st Dept 2005, mem], quoting 119 Fifth Ave. Corp. v. Berkhout 135 Misc 2d 773, 774 [Hous Part, Civ Ct, NY County 1987]), This court ruled in petitioner's favor on July 29, 2005. ( See Goldman, 8 Misc 3d 1020[A], 2005 NY Slip Op 51206[U].) Thus, the potential for interest on the attorney fees began on July 29, not from July 16, 2004, when petitioner began to incur attorney fees in this proceeding.
CPLR 5001 (b) provides that "[w]here such damages were incurred at various times, interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date." Petitioner seeks interest from March 15, 2005, the intermediate date from the time she incurred fees until today. But the intermediate date in the 146-day period between July 29, 2005, and today, December 22, 2005, is October 10, 2005.
This court finds that petitioner is entitled to attorney fees and disbursements and therefore awards petitioner $204,973.24, calculated as follows: $160,212.50 in attorney fees and $6640.95 in disbursements for this proceeding and $35,149.50 in attorney fees and $2970.29 in disbursements for the Civil Court-related Supreme Court action and the appeal to the Appellate Division. To that sum is added nine percent legal interest for 73 days from October 10, 2005, or $3689.52, for a total money-only final judgment of $208,662.76. Execution of this judgment is stayed until January 15, 2006, at respondent's request, to allow him to post an appellate bond.
This opinion is the court's decision and order.