Opinion
No. 520031/2020
05-15-2023
West End Ave Development LLC, Petitioner, v. Somchai Ngamwajasat and Ladda Ngamwajasat, Respondents.
Unpublished Opinion
Francois A. Rivera, J.
Recitation in accordance with CPLR 2219 (a) of the papers considered on the motion of respondents Somchai Ngamwajasat (hereinafter Somchai N.) and Ladda Ngamwajasat (Ladda N.) filed on May 13, 2022, under motion sequence five, for an order pursuant to CPLR 3212, granting the respondents summary judgment on the issue of the respondents' counterclaim against petitioner West End Ave Development LLC (hereinafter West End or petitioner) for reimbursement of professional fees respondents incurred relating to (i) the negotiations with petitioner for a license agreement for temporary access to respondents' home located 71 West End Avenue, Brooklyn, New York, and (ii) their opposition to petitioner's action under RPAPL 881.
-Notice of Motion
-Affirmation in Support
-Affidavit of Don Erwin
-Affidavit of Somchai N.
-Statement of Material Facts
-Memorandum of Law
-Exhibits A to N
-Attorney Affidavit in Opposition
-Affidavit in Opposition by Vahe Sahakyan
-Affidavit in Opposition by Peter Stroh
-Exhibits A to G
-Response to Statement of Material Facts
-Reply Affirmation
BACKGROUND
On October 16, 2020, petitioner West End Ave Development LLC (hereinafter West End or petitioner) commenced the instant proceeding against respondents Somchai N. and Ladda N. (hereinafter collectively as respondents) by electronically filing an order to show cause, verified petition, and supporting documents with the Kings County Clerk's Office (KCCO).
On October 19, 2020, the order to show cause was signed and made returnable to this Court on November 19, 2020.
On November 11, 2020, Adam Leitman, P.C. filed a notice of appearance on behalf of the respondents.
On November 18, 2020, a stipulation of adjournment, executed by counsel for the petitioner and the respondents, was filed adjourning the order to show cause to January 14, 2021, and set forth schedule for the respondent's opposition papers.
On January 12, 2021, a stipulation of adjournment was filed which adjourned oral argument on the order to show cause to March 4, 2021, and extended the respondents time to file opposition.
On January 22, 2021, Ted Kalavesios, the petitioner's counsel, sent an e-mail to Joanna C. Peck, of the law firm of Adam Leitman Bailey, P.C., the respondents' counsel, advising of his intention to withdraw the petition for the RPAPL 881 license. The exact message was as follows:
"As you probably know, the huge hit on the financial market due the Coronavirus impact and the worsening economic conditions in the construction industry have caused an unprecedented financial crisis. My client, trying to adopt this new economic landscape, has decided to pull back the permit for the demolition of its property, withdraw its plans for a new construction and instead proceed with limited renovations and repair (floors, painting etc.) to turn the existing structure into a rental income producing property. To that effect, I will also notify the Court and seek to discontinue the S881 proceeding. We are actually hoping that whatever friction may have existed between our respective clients will dissipate in time and that they would be able to interact with each other with neighborly civility and mutual respect.
Regards,
Ted"
On January 25, 2021, Joanna C. Peck's responded to the e-mail as follows:
"Dear Ted,
I hope you are feeling better. I will draft the stipulation of discontinuance and send to you. I understand that you may still be ill, and therefore are unable to respond immediately."
On February 16, 2021, the respondents interposed a verified answer with seven affirmative defenses and a counterclaim for professional fees and expenses.
On March 24, 2021, the respondents filed a motion, under motion sequence two, which sought an order pursuant to CPLR 3212, granting the respondents' summary judgment on the issue of their counterclaim for the reimbursement of professional fees that the respondents incurred relating to the negotiations with the petitioner for a license agreement for temporary access to respondents' home and their opposition to the petitioner's action under RPAPL 881.
On May 14, 2021, the petitioner filed a notice of cross of motion, under motion sequence three, for an order pursuant to CPLR 3217 (b), directing the voluntary discontinuance of the proceeding without prejudice and pursuant to 22 NYCRR 130-1.1 granting the petitioner an award of reasonable costs, disbursements, and attorneys' fees on its opposition and the respondents' bad faith delay and refusal to promptly discontinue this action by stipulation.
By order dated May 21, 2021, this Court granted the petitioner's cross motion, under motion sequence three, to voluntarily discontinue the instant action pursuant to CPLR 3217 (b), but declined to award costs, disbursements, and attorney's fees to either the petitioner or the respondents. The respondents' motion seeking summary judgment on their counterclaim, under motion sequence two, was denied without prejudice as premature because the petitioner had not yet interposed a reply to the respondents' counterclaim.
On May 28, 2021, the petitioner interposed a reply to the respondents' counterclaim, which included six affirmative defenses.
The Petition
West End's verified petition alleged the following salient facts. The petitioner is the owner of a property located at 73 West End Avenue in Brooklyn, New York (hereinafter the subject premises). The respondents are the fee owners of a property located at 71 West End Avenue in Brooklyn, New York (hereinafter the adjacent premises).
The petitioner filed plans with the New York City Department of Buildings (hereinafter the DOB) intending to demolish a three-family residence and construct a six-story mixed-use building in its place at the subject premise. On the respondents' adjacent premises was a two-family residential house. The petitioner sought access to the adjacent premises, pursuant to RPAPL 881, for among other things, to perform pre-construction surveys, and to install and erect overhead protections on the front and rear side of the house located at the adjacent property. The petitioner estimated that the work described would be completed in twenty-four months. The petitioner alleged that it had requested access from the respondents to no avail.
The Answer With Counterclaim
The respondents' verified answer with counterclaim contains thirty-eight allegations of fact in support of one counterclaim for professional fees and expenses. The verified answer with a counterclaim alleged the following salient facts. The respondents are the owners of the adjacent premises).
In the late Spring or early Summer of 2020, an unmasked representative of the petitioner approached their home. The threats of the COVID-19 and the fact that the respondents are septuagenarians, made them wary of discussing anything with this individual. The respondents allege that the petitioner was aggressive in their pursuit of a license agreement including calling them at unfavorable hours. The respondents had not received any plans for the petitioner's project. The petitioner continued to demand the respondents' cooperation, with a project that had not received the requisite permits from the DOB. On October 16, 2020, the petitioner filed an action pursuant to RPAPL 881 seeking access to the adjacent premises. On November 15, 2020, the respondents were served with the commencement papers for the RPAPL 881 action.
In November 2020, the respondents engaged counsel to represent them. On November 11, 2020, the respondents' attorney contacted the petitioner's counsel to negotiate a license agreement. At or around the same time, the respondents engaged the services of Don Erwin of Erwin & Bieinski PLLC, an architect, to review the site safety plans and other plans to determine what protections were necessary for the respondents' home.
Based upon ongoing negotiations the parties executed a stipulation to adjourn the matter which was returnable January 14, 2021. Between November and December 2020, the respondents worked in good faith to negotiate a license agreement with the petitioner. However, the parties were unable to reach an agreement.
Since an agreement could not be reached. The respondents by their counsel, worked on opposing the RPAPL 881 action. The respondents allege that they have incurred professional fees and expenses relating to the engagement of an architect to review the plans for demolition phase of the project and proposed site safety plans for the respondents' home. This is in addition to the legal fees and expenses incurred in opposing the RPAPL 881 proceeding. The respondents seek a judgment in their favor for at least $30,000.00 plus cost and disbursements.
LAW AND APPLICATION
The respondents have moved pursuant to CPLR 3212 for an order granting summary judgment on the counterclaim. The counterclaim seeks reimbursement of professional fees and expenses incurred by them in: (1) the negotiation of a license agreement, which includes the review of the plans and the drawings and the performance of site inspections and (2) for preparing and submitting opposition to the RPAPL 881 action.
It is well established that summary judgment may be granted only when it is clear that no triable issue of fact exists (Alvarez v Prospect Hospital, 68 N.Y.2d 320 [1986]). The burden is upon the moving party to make a prima facie showing that he or she is entitled to summary judgment as a matter of law by presenting evidence in admissible form demonstrating the absence of material facts (Guiffirda v Citibank, 100 N.Y.2d 72 [2003]).
A failure to make that showing requires the denial of the summary judgment motion, regardless of the adequacy of the opposing papers (Ayotte v Gervasio, 81 N.Y.2d 1062 [1993]). If a prima facie showing has been made, the burden shifts to the opposing party to produce evidentiary proof sufficient to establish the existence of material issues of fact (Alvarez, 68 N.Y.2d at 324).
Pursuant to CPLR 3212 (b) a court will grant a motion for summary judgment upon a determination that the movant's papers justify holding, as a matter of law, that there is no defense to the cause of action or that the cause of action or defense has no merit (People ex rel. Spitzer v Grasso, 50 A.D.3d 535, 544 [1st Dept 2008]). Further, all the evidence must be viewed in the light most favorable to the opponent of the motion (Id. citing Marine Midland Bank v Dino & Artie's Automatic Transmission Co., 168 A.D.2d 610 [2nd Dept 1990]).
It is well settled in New York that a prevailing party may not recover attorneys' fees from the losing party except where authorized by statute, agreement, or court rule (RMP Cap. Corp. v Victory Jet, LLC, 139 A.D.3d 836, 839 [2d Dept 2016]; Great Neck Terrace Owners Corp. v McCabe, 101 A.D.3d 944, 946, 957 [2d Dept 2012]). This rule is based upon the high priority accorded free access to the courts and a desire to avoid placing barriers in the way of those desiring judicial redress of wrongs (A.G. Ship Maintenance Corp. v Lezak, 69 N.Y.2d 1 [1986]).
The respondents are not claiming entitlement to attorneys' fees based on a court rule or on an agreement between the parties. Rather, they contend that RPAPL 881 provides the statutory authority for the court to award professional fees, including attorney's fees under the circumstances encountered by the respondents. RPAPL 881 does indeed give the court discretionary authority to award such fees under appropriate circumstances.
In opposition, the petitioner's counsel contends that the respondents are not entitled to any fees because no license was granted pursuant to RPAPL 881. In the alternative, petitioner's counsel contends that any award should be limited to actual fees incurred up to and until January 22, 2021. As articulated in the petitioner's memorandum of law, the respondents should receive no fees for any work done after being informed that the petitioner intended to discontinue the petition.
RPAPL 881 pertains to gaining access to adjoining property to make improvements or repairs and provides in pertinent part as follows:
"When an owner or lessee seeks to make improvements or repairs to real property so situated that such improvements or repairs cannot be made by the owner or lessee without entering the premises of an adjoining owner or his lessee, and permission so to enter has been refused, the owner or lessee seeking to make such improvements or repairs may commence a special proceeding for a license so to enter pursuant to article four of the civil practice law and rules. The petition and affidavits, if any, shall state the facts making such entry necessary and the date or dates on which entry is sought."
A license to enter the adjoining property shall be granted by the court in an appropriate case upon such terms as justice requires (Stuck v Hickmott, 158 A.D.3d 1331, 1332 [4th Dept 2018] and, in determining whether or not to grant a license pursuant to the statute, the courts generally apply a standard of reasonableness (Matter of Board of Mgrs. of Artisan Lofts Condominium v Moskowitz, 114 A.D.3d 491, 492 [1st Dept 2014]). Such terms as justice requires extends to the nature and extent of access that is necessary, the duration such access may be necessary, as well as what protections may be necessary to safeguard the adjoining owner's property (N. 7-8 Invs., LLC v Newgarden, 43 Misc.3d 623, 627, [Sup Ct, Kings County 2014]).
In this regard, it must be remembered that Section 881 compels a property owner to grant access for the benefit of another. The respondent to an 881 petition has not sought out the intrusion and does not derive any benefit from it. The court must be mindful of the fact that it is called upon to grant access after the parties have failed to reach an agreement and must not allow either party to overreach and use the court to avoid negotiating in good faith (id.).
RPAPL 881 authorizes the court to grant the license on such terms as justice requires. This language is broad and allows for the flexibility and full scope upon which equity depends. It is sufficient statutory authority to award reasonable attorneys' fees as well architectural fees as a condition of a license, where the circumstances warrant it (id.).
In deciding whether justice requires attorneys' fees, either for negotiating an agreement or in opposing a petition pursuant to RPAPL 881, the court must balance the equities. The court should consider the extent to which the access sought interferes with the owner's use and enjoyment of the property, the risks it poses to the property, as well as the complexities which the access sought presents in drafting a license agreement. Also, any attorneys' fees included as a condition of a license should be proportional to the size and scope of the project (id.).
In the case at bar, respondents contend, among other things, that they engaged the service of an architect to assess the petitioner's plans and that they engaged the services of counsel to help them assess and negotiate a reasonable license agreement.
Assuming, the respondents make a prima facie showing of these claims, those costs would be properly compensable limited only by their reasonableness. This would be so regardless of the fact the petitioner voluntarily withdrew the petition for an RPAPL 881 license. Once the petitioner asked the respondents for a license and then commenced a special proceeding to obtain same by a court order, it was to be expected that the respondents would engage an architect to review, assess and inform them of the petitioner's plan and the respondents' potential options. It was also perfectly reasonably for the respondents to engage counsel to help them navigate and negotiate a reasonable license agreement.
The fees incurred by the respondents on or after January 25, 2021, are a different matter entirely. Based on the email exchange between the petitioner and respondents' counsel, the respondents' counsel agreed to draft a stipulation of discontinuance. On February 16, 2021, instead of drafting and forwarding a stipulation of discontinuance to petitioner's counsel, the respondent filed an answer with a counterclaim for professional fees.
Pursuant to CPLR 3217(a)(1), a plaintiff may voluntarily discontinue an action without a court order by serving the parties with a notice of discontinuance at any time before a responsive pleading is served or, if no responsive pleading is required, within 20 days after service of the pleading asserting the claim and filing the notice with proof of service with the clerk of the court (U.S. Bank Nat. Ass'n v Cockfield, 143 A.D.3d 889, 890 [2d Dept 2016]). On January 22, 2021, when petitioner's counsel sent the email to respondents' counsel, the petitioner was free to discontinue the petition without leave of the Court and without the consent of the respondents because the respondents had not yet interposed an answer. At that time the right to discontinue was absolute and unconditional. Where no pleadings have been served... the plaintiff has the 'absolute and unconditional right' to discontinue the action by serving a notice of discontinuance upon the defendant without seeking judicial permission (A.K. v. T. K., 150 A.D.3d 1091, 1092 [2d Dept 2017]).
Three weeks after the e-mail in in which the respondents' counsel offered to draft the notice of discontinuance, the respondents interposed an answer with counterclaim. With the filing of the answer, the petitioner lost the ability to unilaterally discontinue the action without leave of the Court. Now, petitioner could only withdraw the petition without leave of the Court by stipulation of the parties pursuant to CPLR 3217(a)(2) or by seeking leave of the Court pursuant to CPLR 3217(b).
The e-mail response by the respondent reasonably expressed to the petitioner the respondent's consent to the discontinuance. The repudiation of that consent by the filing of an answer with counterclaim was a breach of the agreement to consent to the discontinuance. Petitioner, thereafter, moved for an order permitting discontinuance of the action. The respondents opposed the motion, and the court granted it.
The respondent interposed an answer with counterclaims before the petitioner filed a notice of discontinuance of the petition. The respondents seek reimbursement for expenses incurred in retaining an architect to review the petitioner's plans, and in retaining an attorney to negotiate and draft a license agreement. The respondents also seek reimbursement for attorney's fees incurred in opposing the instant petition and in prosecuting the counterclaim.
However, as of January 25, 2021, the respondents had reneged on an agreement to draft a stipulation of discontinuance. As of that date, any attorney fees incurred by the respondents were generated to oppose an RPAPL 881 petition that they knew was being withdrawn. The respondents also knew that the negotiation for the RPAPL 881 license had in effect ended. Therefore, in determining the reasonableness of the attorney's fees generated in negotiating the RPAPL 881 license, no attorney's fees are compensable on or after January 25, 2021; regardless of whether they were incurred in opposing the petition or in prosecuting the counterclaim.
The Court notes that the email exchange between petitioner and respondents' counsel during January 21st and 25th of 2021, not only demonstrated that respondents tacitly consented to the petitioner's intention to discontinue the petition, but also, that the respondents agreed to draft the stipulation of discontinuance for the petitioner's counsel since he was still recuperating from a recent hospitalization due to COVID -19. Moreover, it provided a reasonable basis for the petitioner's counsel's reliance on the respondents and his delay in drafting the notice of discontinuance himself while he was waiting for the respondents' counsel to follow through on its offer.
The petitioner contends that the respondents' conduct in filing of an answer and a counterclaim for attorney and architect fees, after tacitly agreeing to draft the order of discontinuance, was an improper attempt to generate unwarranted additional attorney's fees. The petitioner's contention is valid and meritorious. The respondents are not entitled to attorney's fees generated after January 25, 2021, for either opposing the petition of prosecuting the counter claim.
Regarding the attorney's fees incurred prior to the commencement of the petition and to the fees incurred after the commencement but prior to January 25, 2021, those fees would be compensable to the extent the attorney was trying to negotiate a reasonable license agreement. Similarly, the architectural fees generated during this period would be compensable.
As explained in the affirmation of their counsel, Joanna C. Peck, respondents originally sought a total of $32,805.00 in professional fees, including $11,397.50 in attorney's fees and $5,400 in architectural fees relating to the negotiation of the license agreement, and $16,007.50 additional attorney's fees relating to the opposition of the RPAPL 881 petition.
The attorney's fees in the amount of $11,397.50 were relating to the negotiation of the license agreement. The figure was supported by, among other things, a copy of invoices from respondents' counsel for the period from November 9, 2020, through and including December 23, 2020, at a rate of $525.00 annexed Exhibit E to the motion. Respondents' counsel also submitted an affirmation in support explaining that the work was related to assessing and negotiating a license agreement.
The architectural fees in the amount of $5,400.00 were relating to reviewing the petitioner's plans as part of the negotiation of the license agreement. The figure was supported by invoices from the respondents' architectural firm for the period from November 12, 2020, through and including February 9, 2021, at a rate of $300.00 annexed as Exhibit F to the motion. Don Erwin, respondents' architect, also submitted an affidavit explaining the work that had been done.
The attorney's fees in the amount of $16,007.50 was related to opposing the RPAPL 881 petition. The annexed invoices from respondents' counsel demonstrated that they were for the period from January 4, 2021, through and including February 26, 2021, at a rate of $525.00 per hour annexed as Exhibit G to the motion. An analysis of the invoice reflects that the respondents' attorney billed for 3.1 hours of work conducted during January 12, 2021, through January 22, 2021, at $525.00 per hour for a total of $1627.50. This amount is properly compensable. All attorney's fees incurred after that date are not.
In opposition to the respondent's motion for an order pursuant to CPLR 3212 granting them professional fees, the petitioner did not raise a triable issue of fact. The amount of those professional fees, however, is limited as set forth herein pursuant to the court's discretionary authority. Accordingly, the Court grants the respondents summary judgment on their request for professional fees to the following extent. Petitioner is liable for the respondents' attorney's fees in the amount of $13,025.00. Petitioner is also liable for the respondents' architectural fees in the amount of $5,400.00. Petitioner is not liable for any professional fees incurred on or after January 25, 2021.
CONCLUSION
The motion by respondents Somchai Ngamwajasat and Ladda Ngamwajasat, for an order pursuant to CPLR 3212, granting the respondents summary judgment on the issue of their counterclaim for professional fees pursuant to RPAPL 881 is granted in part and denied in part.
It is granted to the extent that the petitioner West End Ave Development LLC is liable for the attorney's fees of the respondents Somchai Ngamwajasat and Ladda Ngamwajasat in the amount of $13,025.00.
It is granted to the extent that the petitioner West End Ave Development LLC is liable for the architectural fees, of the respondents Somchai Ngamwajasat and Ladda Ngamwajasat, in the amount of $5,400.00.
It is denied to the extent that the petitioner West End Ave Development LLC is not liable for any professional fees incurred after January 25, 2021.
The foregoing constitutes the decision and order of this Court.