Opinion
LT-900160/15
10-18-2018
GRAND CONCOURSE ESTATES, LLC, Petitioner(s), v. Djarga TURE and Bawaka Samura, Respondent(s).
Counsel for Petitioner: Caila & McKenzie, PC Counsel for Respondents: Momodou & Marong, PC
Counsel for Petitioner: Caila & McKenzie, PC
Counsel for Respondents: Momodou & Marong, PC
Fidel E. Gomez, J.
In this commercial nonpayment summary proceeding, petitioner seeks an order restoring this matter to the calendar and thereafter granting its application for legal fees incurred in the prosecution and defense of this proceeding. Petitioner contends that it is entitled to recover its legal fees insofar as the lease between the parties authorizes the same and because petitioner ultimately prevailed in this proceeding. Significantly, petitioner contends that it was awarded a judgment of possession for the instant premises, a warrant of eviction, and that at trial, it prevailed with respect to respondent's counterclaim for overpayment of rent. Respondents oppose the instant motion asserting, inter alia , that in failing to seek legal fees prior to the instant motion, during the pendency of the proceeding, and prior to the entry of judgment, petitioner is impermissibly splitting its cause of action for legal fees from the nonpayment proceeding.
For the reasons that follow hereinafter, petitioner's motion is hereby granted, in part.
This is a commercial nonpayment summary proceeding. The petition alleges that petitioner is the landlord of premises located in Bronx County at 1420 Sheridan Ave A/K/A 1420 Grand Concourse. Respondents are tenants in possession of the aforementioned premises, whose tenancy is governed by a written lease, which requires respondents to pay petitioner monthly rent in the amount of $1,762. The petition further alleges that respondents have failed to pay required rent owed petitioner; specifically, "5,560 in rent and additional rent." According to the petition the foregoing amount represents rent for October 2014 though January 2015. Notably, the petition is bereft of any claim for legal fees.
This proceeding has a protracted procedural history which is worth noting. After the instant petition was filed on January 30, 2015, respondent failed to appear. Thus, the Court granted petitioner's application for a default judgment (Miles, J.), issuing both a judgment of possession and a warrant of eviction. Thereafter, on April 24, 2015, respondents purportedly discovered that the instant proceeding had been commenced and not concluded but were able to prevent eviction by paying $4,000 to the superintendent employed by petitioner. Respondents then moved to vacate this Court's judgment and concomitantly sought leave to interpose an answer with a counterclaim for overpayment of rent in the amount of $4,000. On July 29, 2015, the Court (Canataro, J.) granted respondents' motion, in part, solely to the extent of restoring and severing respondents' counterclaim and scheduling a trial solely on that issue. On September 22, 2015, in lieu of a trial, respondents moved for summary judgment on their counterclaim and petitioner concomitantly moved for its dismissal. On October 28, 2015, this Court (Alpert, J.) denied respondents' motion and granted petitioner's motion, thereby dismissing the counterclaim. Respondent appealed and on February 17, 2017, the Appellate Term modified this Court's order to the extent of restoring the counterclaim and ordering a trial to resolve it ( Grand Concourse Estates LLC v. Ture , 54 Misc 3d 143(A), *1 [App Term 2017] ). On April 18, 2018, the parties once again moved for summary judgment on respondents' counterclaim and said motions were denied. On March 16, 2018 a trial ensued and on May 17, 2018, this Court (Kraus, J.) determined that respondents had not overpaid rent and that the $4,000 at issue had been properly applied to rental arrears.
Petitioner's motion seeking legal fees is granted, in part, to the extent of scheduling a hearing to determine the amount of legal fees petitioner is entitled to recover. Significantly, while petitioner's petition is bereft of any claim for legal fees and petitioner had not sought the same until it made this motion, because the lease provides for such fees, respondent had ample notice that petitioner could seek legal fees if petitioner prevailed in this proceeding.
It is well settled that generally in the absence of an agreement, contract, or statute, a party involved in litigation is responsible for all legal fees and costs incurred in the defense or prosecution of the action and cannot recover the same from an opposing party ( Chapel v. Mitchell , 84 NY2d 345, 348 [1994] ; Hooper Associates, Ltd. v. AGS Computers, Inc. , 74 NY2d 487, 491 [1989] ; A.G. Ship Maintenance Corp. v. Lezak , 69 NY2d 1, 5 [1986] ; Mighty Midgets, Inc. v. Centennial Ins. Co. , 47 NY2d 12, 21—22 [1979] ). Indeed,
[t]he 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. at 5).
When a party is entitled to such fees, the court must determine whether the same are, in fact, reasonable ( Coniglio v. Regan , 186 AD2d 708, 709 [2d Dept 1992; Natl. Bank of N. Am. v. Arthur R. Smith Mech. Corp. , 74 AD2d 600, 600 [2d Dept 1980] ). Accordingly, when the proponent of legal fees tenders proof of the reasonableness of the expenses incurred, absent a challenge regarding the reasonableness of said expenses, the moving party is entitled to the amount sought ( Gray Manufacturing Company v. Pathe Industries, Inc. , 33 AD2d 739, 739 [1st Dept 1969] ). If the reasonableness of the legal fees claimed is challenged, however, the court must conduct a hearing to determine the reasonableness of the fees to be awarded ( Tishman Construction Corp. Of New York v. American Manufacturers Insurance Company , 303 AD2d 323, 324-325 [1st Dept 2003] ).
Even when a contract entitles a party to legal fees, it is well settled, that such relief is only available to the prevailing party, who must also prevail on a central issue in the relevant action ( Nestor v. McDowell , 81 NY2d 410, 415-416 [1993] ; 490 Owners Corp. v. Israel , 189 Misc 2d 34, 35 [App Term 2001] ).
Pursuant to RPAPL § 741, every petition shall, inter alia ,
[s]tate the relief sought. The relief may include a judgment for rent due, and for a period of occupancy during which no rent is due, for the fair value of use and occupancy of the premises if the notice of petition contains a notice that a demand for such a judgment has been made
( RPAPL § 741[5] ).
Accordingly, a petition "shall comply with the requirements for a complaint in an action" ( CPLR § 402 ), which under prevailing law, requires that the complaint contain facts essential to give notice of a claim or defense ( DiMauro v. Metropolitan Suburban Bus Authority , 105 AD2d 236, 239 [2d Dept 1984] ). Vague and conclusory allegations will not suffice (id. ; Fowler v. American Lawyer Media, Inc. , 306 AD2d 113, 113 [1st Dept 2003] ; Shariff v. Murray , 33 AD3d 688 [2d Dept. 2006] ; Stoianoff v. Gahona , 248 AD2d 525, 526 [2d Dept 1998] ). Petitions, thus, are no different and "must set forth sufficient facts so that the respondent may adequately frame a defense" ( Tompkins Park—St. Marks Assoc. v. Boz Boz II Enterprises, Ltd. , 177 Misc 2d 949, 950 [App Term 1998] ; Giannini v. Stuart , 6 AD2d 418, 420 [1st Dept 1958] ["A tenant is entitled to a concise statement of the ultimate facts upon which the proceeding is predicated so that the issues, if any there be, are properly raised and can be met. The allegation in the petition is a bare conclusion and it follows that the pleading is jurisdictionally defective and must be dismissed."] ).
That said, with respect to plenary actions, given New York's liberal pleading requirements, there is no formulaic requirement for the pleading of a claim for or attorney fees, although such claim needs to be pleaded ( Burke v. Crosson , 85 NY2d 10, 17 [1995] ["Indeed, plaintiffs' request for attorneys' fees was made in the form of a demand for ‘costs,’ which was included in the boilerplate portion of the complaint seeking ‘[s]uch other, further and different relief which the Court may deem just and proper.’ As such, the request for attorneys' fees was an integral part of each of the asserted causes of action rather than a separate cause of action of its own."]; Bank of New York, Albany v. Hirschfeld , 59 AD2d 976, 976 [3d Dept 1977] ["Finally, we reject appellant's contention that respondents waived their right to recover attorneys' fees by not seeking them in their pleadings, since respondents, in their cross-claim, requested ‘costs, disbursements, and the costs of defending this action."] ).
The law is, however, different for summary proceedings, where such fees are recoverable even when not pleaded ( AD 1619 Co. v. VB Mgt., Inc. , 259 AD2d 382, 382 [1st Dept 1999] ). In AD 1619 Co. , the Appellate Division reversed the Appellate Term's decision which precluded petitioner's recovery of attorney fees. In denying legal fees, the Appellate Term held that
[a] claim for attorney's fees was interposed for the first time in landlord's postjudgment and postappeal motion approximately nine months after our order. We agree that this belated claim for fees was untimely and that Civil Court did not abuse its discretion in declining to ‘deem’ the petition ‘amended’ to include a prayer for that relief. A party against whom substantial legal costs are sought should be apprised of that claim at or near the outset of the case, so that it may effectively frame its litigation strategy. In this case, landlord delayed until the proceeding was at an end
( AD 1619 Co. v. VB Mgt., Inc. , 175 Misc 2d 1021, 1022 [App Term 1998] ). The Appellate Division, however, held to the contrary, asserting that despite the absence of any claim in the petition for legal fees, respondent was on notice of the possibility that the same would be claimed by virtue of the lease, which prescribed the right to such fees ( AD 1619 Co. v. VB Mgt., Inc. , 259 AD2d 382, 382 [1st Dept 1999] ). Specifically, the court stated that
[t]he record does not establish that petitioner landlord intentionally relinquished its claim for attorneys' fees, and respondent tenant can make no tenable claim that amendment of the first nonpayment petition to include a claim for attorneys' fees would be surprising or prejudicial, since respondent was aware of Article 19 of the lease providing for the landlord's recovery of attorneys' fees if the landlord prevailed in litigation over nonpayment of rent
( AD 1619 Co. v. VB Mgt., Inc. , 259 AD2d 382, 382 [1st Dept 1999] [internal citations omitted) ] ). Thus, if the relevant lease provides for the recovery of such fees, the prevailing party may seek them even if the same were never pleaded (id. ).
The foregoing, makes sense since the failure to plead a claim for attorneys fees is not the kind of omission which cannot be cured by amendment. To be sure, a petition in a summary proceeding can be freely amended upon leave of court if the amendment sought does not seek to correct a jurisdictional defect and no prejudice results from the amendment ( Lanz v. Lifrieri , 104 AD2d 400, 401 [2d Dept 1984] ; Jackson v. New York City Hous. Auth. , 88 Misc 2d 121, 122 [App Term 1976] ["A petition in a summary proceeding is no different than a pleading in any other type of civil case. A petition which may fail to state facts sufficient to constitute a cause of action or contains other pleading infirmities is capable of correction by amendment. Such a petition does not render the proceeding jurisdictionally defective."] ).
Notably, any disparity between the pleading requirements regarding attorney fees in plenary actions - where the complaint must contain some indicia that such claim is sought (Burke at 17; Bank of New York, Albany at 976) - and summary proceedings - where recovery for such fees is allowed even when the petition is bereft of such claim ( AD 1619 Co., 259 AD2d at 382 ) - is best explained by the nature of a summary proceeding. Indeed
RPAPL article 7, for example, represents the Legislature's attempt to balance the rights of landlords and tenants to provide for expeditious and fair procedures for the determination of disputes involving the possession of real property
( Rotunno v. Gruhill Const. Corp. , 29 AD3d 772, 773 [2d Dept 2006] ). As such, whereas waiting until after the entry of judgment in a plenary action to seek attorney fees precludes their recovery, in a summary proceeding, expeditious in nature, "a landlord's right to an award of an attorney's fee, when raised, is typically postponed until after a determination on the merits." (id. ; Dara Realty Assoc. V Schachter , 2002-839 QC, 2003 WL 21911073 [App Term July 10, 2003] ["Contrary to tenant's contention, landlord did not waive its right to attorney's fees by postponing its application therefor until after the merits determination."] ).
Here, the record demonstrates that petitioner is the prevailing party insofar as on March 30, 2015, it was awarded a judgment of possession and a warrant of eviction, the ultimate relief sought in this proceeding. Moreover, on May 17, 2018, petitioner once again prevailed in that this Court, after a trial, determined that respondents were not entitled to prevail on their counterclaim for the overpayment of rent.
In addition to the foregoing, petitioner tenders a copy of the relevant lease between the parties, which indicates that petitioner can recover legal fees as additional rent under the instant circumstances. Significantly, paragraph 19 of the lease states, in relevant part, that
[i]f tenant shall default in the observance of any term or covenant on Tenant's part to be observed or performed under, or by virtue of, any of the terms or provisions in any article of this lease ... if Owner, in connection ... with any default by Tenant in the covenant to pay rent thereunder, males any expenditures or incurs any obligations for the payment of money, including but not limited to reasonable attorney's fees, in instituting, prosecuting or defending any actions or proceeding, and prevails in any such action or proceeding, such sums so paid or obligations incurred with interests shall be deemed additional rent hereunder and shall be paid by Tenant.
Based on the foregoing, it is clear that petitioner, the prevailing party, is - pursuant to the relevant lease - entitled to reasonable attorney fees. Indeed, where a lease authorizes the recovery of attorney fees, the prevailing party is entitled to the same ( Graham Ct. Owner's Corp. v. Taylor , 115 AD3d 50, 55 [1st Dept 2014], affd , 24 NY3d 742 [2015] ; Cier Indus. Co. v. Hessen , 136 AD2d 145, 149 [1st Dept 1988] ).
Contrary to respondents' salient argument in opposition, petitioner has not impermissibly split its claims for attorney fees from its nonpayment proceeding. To be sure, it is true that a party may not seek to recover legal fees to which it is entitled in one action by commencing a separate action ( Emery Roth and Sons v. Natl. Kinney Corp. , 44 NY2d 912, 914 [1978] ; 930 Fifth Corp. v. King , 42 NY2d 886, 887 [1977] ; Landmark Properties v. Olivo , 62 AD3d 959, 961 [2d Dept 2009] ; Wavertree Corp. v. 136 Waverly Assoc. , 258 AD2d 392, 392 [1st Dept 1999] ). More specifically, in a summary proceeding, where the lease authorizes the recovery of legal fees, such fees must be sought in the summary proceeding itself and cannot be recovered in a separate plenary action (Emery Roth and Sons v. Natl. Kinney Corp. at 914 ["In its third counterclaim, defendant seeks damages for counsel fees and other expenses incurred in connection with reobtaining possession of the demised premises, putting such premises in good order and preparing them for rerental. However, by failing to assert these claims in the prior summary proceeding based on nonpayment of rent, defendant has impermissibly split a cause of action and is barred from asserting them as a counterclaim in this action."]; 930 Fifth Corp. at 887 ["The lease entails a single obligation which thus requires the plaintiff to assert its entire claim in one action. Failure to make a claim for attorney's fees in the initial summary proceeding results in the splitting of a cause of action which is prohibited."]; Landmark Properties at 960-961 ["Where a lease permits the landlord to recover an attorney's fee in the event of a tenant's default or eviction, the claim for *961 such a fee must be asserted in the summary proceeding. Further, a separate, plenary action to recover that attorney's fee constitutes the splitting of a cause of action, which is prohibited." (Internal citations omitted) ] ). It is axiomatic then, that when claim for attorney fees is brought in the same action, it is obvious that such claim is not being impermissibly split so as to bar it ( Bay Crest Ass'n v. Paar , 47 Misc 3d 9, 11 [App Term 2015] ["We further conclude that plaintiff's claim for attorney's fees was part of the same, single, cause of action as its claim for annual assessments."]; 815 Park Ave. Owners, Inc. v. Metzger , 250 AD2d 471, 471 [1st Dept 1998] ["There is no merit to defendant's argument that plaintiff improperly split its cause of action for attorneys' fees from that seeking recovery of monthly maintenance arrears, both claims having been asserted in the same action."] ).
Here, then, respondents' claim that petitioner has split its claim for attorney fees from the nonpayment claim and the summary proceeding in which it was asserted is patently without merit. First, petitioner seeks attorney fees under the same index number under which it brought the instant summary proceeding. Thus, petitioner has not and does not seek relief under a new and separate action. Second, as noted above, the instant application in this summary proceeding is being made at its customary time - after judgment was entered in petitioner's favor (Rotunno at 773; Dara Realty Assoc. at *1). To be sure, the claim for legal fees could not, as asserted by petitioner, have been made until it was clear that petitioner had prevailed on all central issues, which did not occur until May 17, 2018.
Any assertion that the failure to plead such claim same within the petition bars its recovery is without merit and in any event has never been raised by respondents. As a preliminary matter, the Court cannot make the foregoing argument for respondents as it would be impermissibly altering the course chosen by respondents ( Misicki v. Caradonna , 12 NY3d 511, 519 [2009] ["We are not in the business of blindsiding litigants, who expect us to decide their appeals on rationales advanced by the parties, not arguments their adversaries never made"] ). Any such argument would, in any event, be unavailing. As noted above pursuant to AD 1619 Co. (259 AD2d 382 ), the omissions here do not give rise to waiver of petitioner's claim for attorney fees and, thus, petitioner is entitled to pursue them ( id. at 382 ).
Notwithstanding the foregoing, although each and every other argument raised by respondents is equally without merit, the Court cannot grant petitioner's motion in toto . To be sure, as noted above, when, as here, the reasonableness of the legal fees claimed is challenged, the court must conduct a hearing to determine the reasonableness of the fees to be awarded (Tishman Construction Corp. Of New York at 324-325). Accordingly, the instant motion is granted solely to the extent of setting matter down for a hearing to determine the reasonableness of the legal fees sought by petitioner. It is hereby
ORDERED that all parties appear for hearing on November 19, 2018 at 9:30AM in Part 52, Room 529B, to determine the legal fees to which petitioner is entitled. It is further
ORDERED that petitioner serve a copy of this Order with Notice of Entry upon respondents within thirty (30) days hereof.
This constitutes this Court's decision and Order.