[*1]
2566 Bainbridge Assoc. LLC v Harvey
2014 NY Slip Op 50942(U) [44 Misc 3d 1201(A)]
Decided on June 16, 2014
Civil Court Of The City Of New York, Bronx County
Lehrer, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on June 16, 2014
Civil Court of the City of New York, Bronx County


2566 Bainbridge Associates LLC, I, Petitioner,

against

David Harvey, SUE GAETA SINGH, Respondents.




34396/12
Andrew Lehrer, J.

Petitioner 2566 Bainbridge Associates LLC commenced this nonpayment proceeding against respondents David Harvey and Sue Gaeta Singh in June 2012. The petition alleges, among other things, that the subject apartment (the "Apartment") is Rent Stabilized; that respondents are tenants in possession thereof pursuant to a written lease agreement in which they promised to pay petitioner rent in the amount of $919.96 per month; and that as of June 14, 2012 they owed petitioner rent totaling $7,945.18, late fees totaling $200.00, and legal fees totaling $500.00.

In his answer, David Harvey, who, at the time, was not represented by counsel, asserts that he did not receive a copy of the notice of petition and petition; that the rent, or a portion of the rent, has already been paid; and harassment. Subsequently, respondents retained counsel and, by order dated November 25, 2013, the Court granted their motion for an order granting them leave to file an amended answer. In that answer, respondents deny every allegation in the petition other than the allegation that they reside in the premises, and assert a counterclaim for attorneys fees.

On April 19, 2013, more than 10 months after this case was filed, the attorneys for the parties signed a stipulation allowing petitioner to discontinue the case "without prejudice" and providing that if they could not resolve their dispute within 30 days, petitioner could move to restore the case for trial. The stipulation further provided that it was without prejudice to the pending holdover proceeding between the parties.

Although it appears that the holdover proceeding was resolved in May 2013, the dispute regarding petitioner's claim for rent was not. Consequently, by notice of motion dated June 26, 2013 petitioner moved to restore this case to the calendar for trial. On July 15, 2013 that motion was granted on default to the extent of restoring the case to the calendar for trial on August 19th.

By the time the case was transferred to Part T on October 8, 2013, petitioner apparently [*2]had changed its mind about trying the case and made an oral application to discontinue. When respondents objected to petitioner's request unless the Court awarded attorneys fees, the case was adjourned to November 25th for trial.

After petitioner rejected respondents' amended answer, respondents moved for an order



compelling petitioner to accept it or, in the alternative, granting leave to serve and file it. By order dated November 25, 2013 (the "November 25th order"), the Court granted respondents' motion to the extent of deeming the amended answer annexed to their motion papers as having been served and filed. That order also granted petitioner's new oral application to discontinue the case without prejudice. However, pursuant to Section 3217(b) of the CPLR, the discontinuance was made subject to the following terms and conditions:

If petitioner failed to commence a new nonpayment proceeding by



January 24, 2014 for some or all of the rent due through June 30,



2013, the month that it moved to restore the case to the calendar,



respondents could move in this proceeding for an order awarding



them attorneys fees.



If petitioner did file a new nonpayment proceeding by January 24,



2014 seeking some or all of the rent due through June 30, 2013 and



respondents prevailed, they could move for an order awarding them



attorneys fees for that case and for this case as well.By notice of motion dated February 24, 2014 (sequence no. 003), respondents now move for an order awarding them attorneys fees. In their motion papers they argue that evidence in records subpoenaed from the New York State Division of Housing and Community Renewal ("DHCR") show that petitioner is not entitled to the more than $900.00 per month that it sought to collect in this proceeding and that their original lease entitles them, as prevailing parties, to legal fees.

By notice of cross-motion dated April 10, 2014 (sequence no. 004), petitioner opposes respondents' motion and cross-moves for an order awarding it attorneys fees. In opposition to respondents' motion it argues that it commenced this proceeding after DHCR granted its application to restore respondents' rent, which previously had been reduced to $508.90 per month due to decreased services; that pursuant to DHCR's order, respondents' rent was restored to $556.79 per month; that respondents continued to pay only $508.90 per month for 15 months; that at the time it commenced this proceeding, it believed respondents' rent should have been $919.06 per month, based on guidelines increases for Rent Stabilized apartments since their rent was initially reduced in 1995;[FN1] that at some point during the pendency of this case, when it was only able prove service of one of the lease renewals since 1995, it "conceded that the monthly rent be that of the rental amount at the time of the Reduction Order, which is $556.79;" and that in both October and November 2013, it asked the Court to allow it to discontinue the case without prejudice as it "realized certain errors made in the Petition, and because the Petition was defective and satisfied." In support of its cross-motion for attorneys fees, it argues that although [*3]the amount sought in the petition may have been incorrect, respondents still owed rent at the time the case was commenced; that respondents paid the rent due and satisfied the petition during the course of the proceeding; and that accordingly, it, and not respondents, is the prevailing party.

Both respondents' motion and petitioner's cross-motion are consolidated for decision.

Discussion

Attorneys fees may be awarded where "authorized by agreement between the parties or by statute or court rule" (Matter of A.G. Ship Maintenance Corp. v. Lezak, 69 NY2d 1, 5 [1986]); the party seeking fees has "prevailed with respect to the central relief sought" (Nestor v. McDowell, 81 NY2d 410, 415-416 [1993]); and the controversy has reached an "ultimate outcome." (Elkins v. Cinera Realty, 61 AD2d 828 [2d Dept 1978]).



Whether Respondents' Initial Lease Authorizes an Award of Attorneys Fees in This Case?

In its November 25th order, the Court granted petitioner's oral application to discontinue



the case but, pursuant to Section 3217(b) of the CPLR, authorized respondents to move for attorneys fees if, by January 24, 2014, petitioner failed to commence a new proceeding for some or all of the rent due through June 30, 2013, the month it moved to restore this case to the calendar for trial. Although the Court could have awarded respondents attorneys fees at the time it granted petitioner's application (see New York Downtown Hosp. v. Terry, 80 AD3d 493 [1st Dept 2011]; Beigel v. Cohen, 158 AD2d 339 [1st Dept 1990]), it elected not to do so. Consequently, respondents must show that their lease authorizes an award of attorneys fees in this case. If, for example, it provides that petitioner would be entitled to attorneys fees if it commences a nonpayment proceeding against them, respondents, and not petitioner, would be entitled to such fees if they established a successful defense. (See Real Property Law § 234).

Although the Court is unable to determine whether respondents' lease authorizes an award of attorneys fees because the copy of the lease annexed to their motion papers contains only the first line of the relevant provision (paragraph 14, entitled "LEGAL EXPENSES"), petitioner, which also seeks an award of attorneys fees, does not dispute respondents' claim that it does.



Whether Respondents Prevailed With Respect to the Central Relief Sought?



To determine whether a party has "prevailed" for the purposeof awarding attorneys' fees, the court must consider the "true



scope" of the dispute litigated and what was achieved within



that scope . . . To be considered a "prevailing party," one must



simply prevail on the central claims advanced, and receive



substantial relief in consequence thereof . . .



(Sykes v. RFD Third Ave. I Assoc., LLC, 39 AD3d 279 [1st Dept 2007]). In its petition, petitioner sought a final judgment awarding it possession of the Apartment and rent arrears of nearly $8,000.00 due through June 2012, based on an alleged rent of $919.96 per month. In its motion papers, petitioner "concedes" that respondents' rent was $556.79 per month ($363.17 per month less than the rent sought in the petition), and, in its rent breakdown, states that through June 30, 2012, they owed only $2,580.28 (nearly $5,400.00 less than the amount sought in the petition). Moreover, in the same rent breakdown, petitioner states that as of June 4, 2013, three weeks before it moved to restore the case to the calendar for trial, respondents had a credit of $857.60.Given those facts, respondents are clearly the prevailing party in this case.



[*4]Whether the Controversy Has Reached an Ultimate Outcome?

In an appropriate case, attorneys fees may be awarded when a controversy has reached its ultimate outcome, whether or not such outcome is on the merits. (See Elkins v. Cinera Realty, Inc., supra, 61 AD2d 828). "A controversy reaches an ultimate outcome' when a court disposes of the action on the merits, or when it becomes clear that the action, although not disposed of on the merits, cannot or will not be commenced again on the same grounds." (Roxborough Apt. Corp. v. Becker, 177 Misc 2d 408, 410 [Civ Ct, Kings County 1998]). Thus, for example, a case may be said to have reached its ultimate outcome when it is dismissed or discontinued and is not recommenced within a reasonable time, since a "landlord should not be permitted to postpone indefinitely the ultimate outcome' of the lawsuit, effectively denying [a] tenant statutory attorneys' fees [pursuant to Section 234 of the Real Property Law] in the situation where the petition is dismissed on motion and the merits are not addressed." (Park S. Assoc. v. Essebag, 126 Misc 2d 994, 995 [App Term, 1st Dept 1984]); accord Katz v. Denniger, NYLJ, Mar. 20, 1996, at 25, col 1 [App Term, 1st Dept].

Here, petitioner failed to commence a new proceeding against respondents for rent due through June 30, 2013 by January 24, 2014, the deadline for doing so set forth in the November 25th order. Given that it now admits that respondents actually had a credit of more than $800.00 through June 30th, that is not surprising. Consequently, the Court finds that petitioner's claim for rent due through June 30, 2013, the month it moved to restore this case to the calendar for trial, has reached its ultimate outcome, and that the outcome is in respondents' favor.



Amount of Attorneys Fees to Be Awarded

In their April 19, 2013 stipulation, respondents agreed to allow petitioner to discontinue this case without prejudice, and neither party reserved its claim for attorneys fees. Given respondents' failure to reserve its claim, the Court will not award them attorneys fees through the date of that stipulation. (See Sacchetti v. Rogers, 2003 NY Slip Op 51259[U][App Term, 1st Dept 2003]). They are entitled to such fees, however, for legal services rendered after April 19, 2013. Because details regarding those services are not set forth in respondents' motion papers, this case is restored to the calendar on July 10, 2014 at 2:15 p.m. for an attorneys fees hearing.

Because petitioner is not a prevailing party, its cross-motion is denied.



This constitutes the decision and order of the Court.



Dated: June 16, 2014

Bronx, New York



________________________________________

Hon. Andrew Lehrer

Footnotes


Footnote 1:According to DHCR, respondents' rent was initially reduced in 1993, not 1995.