Opinion
February 19, 1991
Appeal from the Supreme Court, New York County (Jawn Sandifer, J.).
In this proceeding to foreclose a mortgage, a temporary receiver was appointed with the authority to collect rents and otherwise manage the property. The original receiver died, and was replaced with the present respondent. Thereafter, the parties executed a quitclaim deed dated May 2, 1989, and on the basis of the delivery of such deed, plaintiff moved to remove respondent as receiver, and for an accounting and related relief. Respondent-receiver cross-moved for an order judicially settling the account of the receiver, fixing his commissions, ordering the payment of debts, and discharging the receiver and the surety on its undertaking. Upon the orders granting respondent's cross-motion and denying plaintiff's motion, judgment was entered settling the receiver's account and discharging the receiver and the surety on its bond. An additional order was entered ratifying the receiver's actions in hiring attorneys during the receivership. Plaintiff appealed, and another order was entered authorizing respondent to hire appellate counsel and ordering plaintiff to pay any fees arising therefrom.
With respect to plaintiff's claim that the receiver was not entitled to commissions, and should be charged with expenses incurred beyond the passage of title on or about May 2, 1989, assuming arguendo that the action was terminated for all intents and purposes when the parties delivered a deed in lieu of foreclosure, the appointing instrument in this case specifically contemplates that the receiver's duties would continue beyond the date of any judgment, and the passage of title in such event would not, in and of itself, foreclose the receiver's authority to act.
Plaintiff's allegations of error with respect to the excessiveness of fees paid to managing agents and supervisors are unsupported and the IAS court was well within its authority to ratify the hiring of attorneys by the receiver in circumstances which the IAS court determined were "pregnant" with unusual circumstances. (See, Emigrant Sav. Bank v Elan Mgt. Corp., 114 Misc.2d 472, 474; Sunrise Fed. Sav. Loan Assn. v West Park Ave. Corp., 47 Misc.2d 940.)
There is merit, however, to plaintiff's contention that the IAS court abused its discretion in settling the receiver's account and in ordering plaintiff to pay attorney's fees for this appeal, without first determining the necessity and reasonableness of such fees. (See, Long Is. City Sav. Loan Assn. v Bertsman Bldg. Corp., 123 A.D.2d 840, 842; Matter of Ronan Paint Corp., 98 A.D.2d 413, 419; Harlem Sav. Bank v Melzer, 95 Misc.2d 142.) Accordingly, the matter is remanded for a hearing with respect to such issues.
Concur — Carro, J.P., Ellerin, Wallach, Kupferman and Rubin, JJ.