Lease Provision: Attorney’s Fee

In an action for breach of the implied covenant of good faith and fair dealing, the defendants appealed from Justice Martin Schneier’s order denying their motion for an order fixing costs, expenses, and an attorney’s fee.

The Appellate Division, Second Department affirmed. On June 2, 1998, the plaintiff signed a three-year commercial lease in a building owned by the defendants Washington Group, LLC, and 30 Main, LLC, and managed by the defendant Two Trees Management Co., LLC.

The lease was extended several times, with the last extension ending on Dec. 15, 2004. The tenant failed to leave and sued the landlord, claiming it breached an oral promise to extend the lease. The landlord moved for summary judgment dismissing the complaint, which was granted. The landlord then moved for an order fixing costs, expenses, and an attorney’s fee, on the basis that it was entitled to an attorney’s fee under Article 19 of the lease.

The trial and appellate courts both found that the lease provision did not apply. “Generally, ‘an attorney’s fee and other expenses incurred in prosecuting an action are considered an incident of litigation and, unless authorized by statute, court rule, or written agreement of the parties, are not recoverable,’” the appellate court wrote, citing and quoting Panish v. Panish. In this case, Article 19 of the lease only permitted the landlord to recover an attorney’s fee for the tenant’s default in the payment of rent or in its obligations under the lease. Appellate Justice Mastro presided in the case, with Justices Florio, Miller and Dickerson, concurring.

H. Richard Penn of Greenberg Traurig, LLP, represented the appellants. Thomas Freedman and Eric S. Crusius of Oved & Oved, LLP, represented the respondent. Adam D. Adams, respondent, v. Washington Group, LLC, et al., appellants. 2008 NY Slip Op 02774.

Commercial Lease: Attorney’s Fee

In an action to recover damages for breach of a commercial lease, the plaintiffs appealed from Justice Martin Schneier’s order denying their motion for an award of an attorney’s fee. The Appellate Division, Second Department affirmed, with a one sentence decision.

“The Supreme Court properly, in effect, denied that branch of the plaintiffs’ motion which was for an award of an attorney’s fee.” Appellate Justice Mastro presided in the case, with Justices Florio, Miller and Dickerson, concurring.

H. Richard Penn of Greenberg Traurig, LLP, represented the appellants. Thomas Freedman and Eric S. Crusius of Oved & Oved, LLP, represented the respondent. Adam D. Adams, respondent, v. Washington Group, LLC, et al., appellants. 2008 NY Slip Op 02774.

Contract Provision: Arbitration of Attorneys’ Fees

In a personal injury action and a related Article 75 proceeding to permanently stay arbitration, the petitioners Gerald Platt and Kelner & Kelner, Esqs., and Vicki-Jo Platovsky, a nonparty, appealed from Justice Herbert Kramer’s order denying the petitioners’ motion for summary judgment declaring that Robert Herbst, Esq., and Beldock Levine & Hoffman, LLP, are not entitled to an attorney’s fee in connection with the action, and directing the parties to proceed to arbitration. The Appellate Division, Second Department affirmed.

“When determining whether a particular dispute is arbitrable, a court must determine whether the dispute ‘falls within the scope of the arbitration agreement,’ (Maross Constr. v Central N.Y. Regional Transp. Auth., 66 NY2d 341, 345), and whether the dispute ‘is one that may be submitted to arbitration without violation of any law or public policy,’ the appellate court wrote.

Since a dispute over the respondents’ attorney’s fee in the underlying lawsuit falls within the scope of the contract’s arbitration clause, and no law or public policy precludes arbitration, the dispute was arbitrable. Appellate Justice Mastro presided in the case, with Justices Covello, Eng and Belen, concurring.

Gerard K. Ryan, Jr., Ronald C. Burke, and Joshua D. Kelner of Kelner and Kelner, appellant pro se and for remaining appellants. Denise A. Rubin of Napoli Bern Ripka, LLP, represented the respondents Lawfinance Group, Inc., and Law Investment Company, LLC. Beldock, Levine & Hoffman, LLP, (Robert L. Herbst, respondent pro se, Myron Beldock, Rachel M. Kleinman, and Longo & D’Apice [Mark Longo] of counsel), respondent pro se.

Gerald Platovsky, et al., plaintiffs, v. City of New York, et al., defendants. (Matter No. 1); In the Matter of Gerald Platt, et al., petitioners-appellants, v. Lawfinance Group, Inc., et al., respondents; Vicki-Jo Platovsky, nonparty-appellant. (Matter No. 2), 2008 NY Slip Op 02812.

Contract Provision: Interest Rates

In a mortgage foreclosure action, the defendant Pacst Realty, LLC, appealed from Justice Howard Ruditzky’s order adhering to a prior determination confirming a referee’s report that the total sum due on a mortgage, as of March 17, 2005, was $660,400. The Appellate Division, Second Department, affirmed.

“Although the Supreme Court stated that the appellant’s motion for leave to reargue was denied, the court, in fact, considered the merits of the underlying motion and cross motion and adhered to its original determination. Thus, contrary to the contention of the plaintiffs and the defendants-respondents, the order dated January 5, 2007, is appealable,” the appellate court noted, citing case law.

Where there is “a clear, unambiguous, and unequivocal expression to pay an interest rate higher than the statutory interest rate … the contractual interest rate is the proper rate to be applied,” the appellate court wrote, citing several cases. In this case the mortgage note and agreement expressed that, in the event of default, the agreed-upon rate of interest was 24 percent, from the entry of judgment up until actual satisfaction.

The appellate court found no evidence of “inequitable or dilatory conduct” that might preclude the plaintiffs from collecting the interest. Appellate Justice Mastro, presiding, with Justices Covello, Eng and Belen, concurring.

Jason Chang represented the plaintiffs-respondents, and John G. Lipsett, of Vittoria & Purdy, represented the defendants-respondents.

Retirement Accounts, Inc., etc., et al., plaintiffs- respondents, v. Pacst Realty, LLC, appellant, Edward F. Myers, etc., et al., defendants-respondents, et al., defendants. Jay S. Markowitz, P.C., Kew Gardens, N.Y., for appellant. 2008 NY Slip Op 02815.