Plaintiff initiated this breach of contract action to recover from defendant unpaid tuition. Included in the complaint is a cause of action to collect attorney's fees equal to 25% of the unpaid balance due. The summons and complaint were served on October 20, 2003, but defendant has failed to interpose an answer.

To date, plaintiff has neither requested nor obtained a judgment in this action. Instead, plaintiff moves solely to sever its claim for attorney's fees from the rest of the action, and seeks permission to apply for attorney's fees "at a later date." Plaintiff's Attorney's Affirmation, ¶9. For the following reasons, plaintiff's motion is denied.

Under the "American rule" of attorney's fees, which applies to civil litigation throughout the country and New York State, attorney's fees are merely "incidents of litigation" that are recoverable only by a prevailing party in an underlying action, and only where an award "is authorized by agreement between the parties, statute or court rule." Chapel v. Mitchell, 84 N.Y.2d 345, 349 (1994). See Hooper Assocs. v. AGS Computers, 74 N.Y.2d 487, 491 (1989). As an "incident of litigation," attorney's fees are generally not recoverable in an action that is separate and distinct from the action on the underlying substantive claims. See Burke v. Crosson, 85 N.Y.2d 10, 17-18 and n.5 (1995).^[FN1]

In its complaint, plaintiff claims that is entitled to attorney's fees because its retail installment contract for tuition payments with defendant provides for the recovery of attorney's fees upon defendant's breach of his contractual obligations. Thus, upon prevailing on its breach of contract claim, plaintiff would be entitled to obtain an attorney's fees award.

It is indisputable, however, that plaintiff has not yet prevailed on its breach of contract claim, nor does plaintiff seek entry of a judgment on its behalf. Rather, plaintiff seeks solely to [*2]sever its attorney's fees claim from its underlying breach of contract claim.

A trial court has the discretion to sever claims in a civil action pursuant to CPLR §603. See County of Chenango Industrial Development Agency v. Lockwood Greene Engineers, Inc., 111 A.D.2d 508, 509 (3rd Dep't 1985). Pursuant to CPLR §603, a court may sever a party's claim "[i]n furtherance of convenience or to avoid prejudice." When severance is granted, "one action is split into two distinct actions which are then almost invariably tried separately and result in two final judgments." McLaughlin, Practice Commentaries, McKinney's Consol. Laws of NY, Book 7B, CPLR §603.

Plaintiff does not explain why it wishes to sever its attorney's fees claim from its main breach of contract action, or why severance of that claim would "further convenience" or "avoid prejudice." Presumably, however, plaintiff, wants to be able to bring a separate action against defendant for attorney's fees at a later date. As noted by Professor David Siegel, "The severance is the ubiquitous device for lopping off claims and making separate actions of them." Siegel, New York Practice [3d ed.], §129 at p. 214.

Notwithstanding plaintiff's request, there is no apparent legitimate reason to permit plaintiff to "lop off" its attorney's fees claim from its underlying breach of contract claim. Conversely, there are important considerations of policy and pragmatism to retain plaintiff's claims within one action.

As discussed above, attorney's fees are simply "incidents of litigation" that are available to a prevailing party in the context of litigation. Plaintiff, therefore, has no valid claim for attorney's fees separate and apart from his underlying breach of contract claim. Indeed, plaintiff is not be entitled to an attorney's fees award unless it prevails on its breach of contract claim. Given that plaintiff's attorney's fees claim is closely connected with — indeed, contingent upon — its breach of contract claim, it makes little sense to allow plaintiff to pursue its attorney's fees claim in a separate action.

On the other hand, permitting plaintiff to pursue its attorney's fees claim against defendant in a separate action would result in a needless expenditure of judicial resources. To do so would require the Court to maintain and process two separate files that could easily have been maintained and processed as one file. Moreover, if plaintiff's two claims are maintained independently, confusion could result if plaintiff pursues its attorney's fees claim in a separate action before plaintiff obtains a judgment on its underlying breach of contract claim. Simply put, there is no indication that severance of plaintiff's claims will facilitate the speedy and unprejudiced disposition of this action. See Cross v. Cross, 112 A.D.2d 62 (1st Dep't 1985).

For the foregoing reasons, the Court declines to exercise its discretion to sever plaintiff's attorney's fees claim from its breach of contract action. Accordingly, plaintiff's motion to sever its attorney's fees claim is denied.^[FN2] [*3]

As a related matter, it is necessary to mention one other issue that may prove to be problematic for plaintiff when it moves for attorney's fees. In reviewing the documentation submitted in support of this motion, the Court has noticed a discrepancy between the attorney's fee provision in the contract, and the representation of the attorney's fee provision in the complaint and in this motion. While the contract provides that plaintiff is entitled to the recovery of attorney's fees, it does not specify that the amount may be 25% of the unpaid balance due, as alleged in plaintiff's complaint. In fact, no percentage is mentioned in the contract. This discrepancy must be resolved before attorney's fees can be awarded.

Further requests for relief from this Court related to this matter must include this Order as an attachment.

SO ORDERED.

Dated: March 26, 2004

Hon. Ellen M. Yacknin

Rochester Court Judge

Decision Date: March 26, 2004