Opinion
No. 59491/14.
09-29-2014
68 S.P. REALTY LLC, Petitioner–Landlord, v. Delores LAWTON, Respondent–Tenant.
Scott D. Gross, Esq., Law Offices of Scott D. Gross, Mineola, for Petitioner. Ivy B. Alexander, Esq., Goldberg, Scuderi & Lindenberg, P.C., New York, for Respondent.
Scott D. Gross, Esq., Law Offices of Scott D. Gross, Mineola, for Petitioner.
Ivy B. Alexander, Esq., Goldberg, Scuderi & Lindenberg, P.C., New York, for Respondent.
Opinion
LAURIE LAU, J.
Recitation as required by CPLR § 2219(a) of the papers considered in the review of respondent's motion for attorney's fees, submitted the 16th day of September 2014:
Papers Numbered
Notice of Motion, Affirmations & Exhibits Annexed 1
Notice of Cross Motion, Affidavits & Exhibits Annexed
Answering Affirmation 2
Replying Affirmation
Exhibits:
Other:
Upon the foregoing cited papers, the decision and order on this motion is as follows:
Petitioner has prevailed in this nonpayment proceeding after a trial before this court in which respondent received no abatement in rent. Petitioner now moves for attorney's fees. In its supporting brief petitioner submits a copy of the lease between the parties, dated November 1, 1982 (the “Lease”) and states that Paragraph 16 of the Lease permits the petitioner as landlord to recover its attorney's fees.
Paragraph 16 provides as follows:
16. Tenant's default.
A. Landlord must give Tenant written notice of default stating the type of default.
...
If Tenant fails to cure the default in the time stated, Landlord may cancel the Lease by giving Tenant a cancellation notice.... Tenant continues to be responsible as stated in this Lease.
...
D. If this Lease is cancelled, or Landlord takes back the Apartment, the following takes place:
(1) Rent and added rent for the unexpired Term becomes due and payable.
(2) Landlord may relet the Apartment and anything in it.... Tenant stays liable and is not released except as provided by law.
(3) Any rent received by Landlord for the re-renting shall be used first to pay Landlord's expenses and second to pay any amounts Tenant owes under this Lease. Landlord's expenses include the costs of getting possession and re-renting the Apartment, including, but not only[,] reasonable legal fees, brokers fees, cleaning and repairing costs, decorating costs and advertising costs.
....
In awarding a judgment of possession to petitioner, the court stayed issuance of the warrant of eviction for five days during which time respondent could satisfy the judgment by paying the rent owing of $5,594.33. Respondent did satisfy the judgment in a timely manner and continues in possession of her apartment.
Respondent opposes this motion for attorney's fees. Respondent does not deny that petitioner is the prevailing party. Rather, her argument is that Paragraph 16 permits the landlord to recover its attorney's fees only if it cancels the Lease or takes back the apartment, and the landlord has done neither. Respondent observes that the court in Matter of Casamento v. Juaregui, 88 A.D.3d 345, 929 N.Y.S.2d 286 [2nd Dept 2011], a holdover proceeding, awarded the prevailing tenant attorney's fees under RPL section 234 because the landlord could have recovered its attorney's fees, had it prevailed, under the same lease provision as here. But, respondent argues, Casamento does not support petitioner's claim for attorney's fees in a nonpayment proceeding, such as here, where landlord neither cancels the lease nor takes back the premises. (In a holdover proceeding, the landlord declares the lease terminated (cancelled) on the basis of the tenant's alleged breach and sues because the tenant has not surrendered the premises. See, e.g., Graham Court, infra. ) Respondent argues that in this case Casamento requires the landlord to cancel the Lease or take back the premises in order to recover its attorney's fees under Paragraph 16.
Casamento interpreted a lease with a provision identical to Paragraph 16 “to permit the landlord to recoup any attorney's fee he incurs in an eviction proceeding against a defaulting tenant under the circumstances in which the premises are relet prior to the defaulting tenant's satisfaction of outstanding rent and added rent.” Here the premises were not relet. Thus, respondent urges, petitioner cannot recover its attorney's fees.
Discussion of Law
The Appellate Divisions have issued three important decisions in which a lease provision apparently identical to Paragraph 16 was under consideration. In Bunny Realty v. Miller, 180 A.D.2d 460, 579 N.Y.S.2d 952 [1st Dept 1992] ; Matter of Casamento v. Juaregui, 88 A.D.3d 345, 929 N.Y.S.2d 286 [2nd Dept 2011] ; and Graham Court Owners Corp. v. Taylor, 115 A.D.3d 50, 978 N.Y.S.2d 213 [1st Dept 2014], the courts held that this lease provision triggers RPL section 234. Also, the courts admonished that the provision permits a prevailing landlord to recover its attorney's fees only if it takes possession and relets the premises. The question now is whether these two propositions are compatible.
In March 2014 the Appellate Division granted leave to appeal to the Court of Appeals in Graham Court on the question whether RPL § 234 is triggered in this case (N.Y.LJ, March 13, 2014, p. 25 col. 6 [App.Div. 1st Dept] ). This appeal may yield clarification regarding Real Property Law § 234.
In Matter of Duell v. Condon, 84 N.Y.2d 773 [1995], the Court of Appeals addressed RPL section 234 :
The overriding purpose of Real Property Law § 234 was to level the playing field between landlords and residential tenants, creating a mutual obligation that provides an incentive to resolve disputes quickly and without undue expense. The statute thus grants to the tenant the same benefit the lease imposes in favor of the landlord. An additional purpose, particularly relevant in cases in which the tenancy is governed by the emergency rent laws, is to discourage landlords from engaging in frivolous litigation in an effort to harass tenants, particularly tenants without the resources to resist legal action, into terminating legal occupancy.
Section 234 is reciprocal; it creates a mutual obligation. It gives a tenant the same benefit the lease provision imposes in favor of the landlord. It creates a level playing field. In light of Matter of Duell v. Condon, can we say that under section 234 a tenant may obtain attorney's fees in circumstances where the landlord cannot? This court concludes that we cannot.
The words of section 234 are helpful:
Whenever a lease of residential property shall provide that in any action or summary proceeding the landlord may recover attorneys' fees and/or expenses incurred as the result of the failure of the tenant to perform any covenant or agreement contained in such lease, or that amounts paid by the landlord therefor shall be paid by the tenant as additional rent, there shall be implied in such lease a covenant by the landlord to pay to the tenant the reasonable attorneys' fees and/or expenses incurred by the tenant as the result of the failure of the landlord to perform any covenant or agreement on its part to be performed under the lease or in the successful defense of any action or summary proceeding commenced by the landlord against the tenant arising out of the lease, and an agreement that such fees and expenses may be recovered as provided by law in an action commenced against the landlord or by way of counterclaim in any action or summary proceeding commenced by the landlord against the tenant. Any waiver of this section shall be void as against public policy.
When section 234 is triggered, it is because the lease provides “that in any action or summary proceeding the landlord may recover attorneys' fees ... incurred as the result of the failure of the tenant to perform any covenant or agreement contained in such lease, or that amounts paid by the landlord therefor shall be paid by the tenant as additional rent....” When we begin with the proposition that section 234 applies to a lease, we must draw the conclusion that under that lease the landlord, if it prevails, can recover its attorney's fees from the tenant. Not, if the landlord takes possession and relets—simply, if the landlord prevails—it can recover its attorney's fees.
Finally, we note 490 Owners Corp. v. Israel, 189 Misc.2d 34, 729 N.Y.S.2d 819 [App Term 2nd & 11th Jud Dists 2001]. Once more, the lease provision under consideration was the same as the lease provision in Bunny Realty, Casamento and Graham Court and the same as the provision in this case. As in this case, the landlord obtained a possessory judgment and the tenant apparently cured the breach during the statutory stay period. Reversing the denial of attorney's fees to the landlord below, the Appellate Term held that the landlord was entitled to its attorney's fees under a lease provision identical to Paragraph 16 here.
The court concludes that Paragraph 16 of the Lease permits petitioner to recover its attorney's fees.
Decision
Petitioner's motion is granted. A hearing to determine the reasonable attorney's fees to which petitioner is entitled is scheduled for October 28, 2014, at 2:00 P.M.
The court will send copies of this decision and order to the parties' attorneys in the self-addressed envelopes provided by them.
This is the decision and order of the court.