This is a post-trial motion in a residential-landlord-tenant action between plaintiff-tenant, the Government of Saint Lucia, and defendant-landlord, 126 East 36th Street LLC.

The action arises from a 2017 dispute between the parties over the condition of an apartment that plaintiff leased from defendant for the use of plaintiff's ambassador to the United Nations. Several months into the lease, plaintiff, contending that an untreated vermin infestation rendered the premises unsuitable for the ambassador's use, vacated the premises early. Defendant disputed whether the premises were experiencing a vermin infestation (and whether defendant had taken reasonable steps to address plaintiff's complaints about the apartment), and did not return plaintiff's security deposit.

Plaintiff brought this action in 2018, asserting claims for breach of contract, breach of the [*2]covenant of good faith and fair dealing, and constructive eviction. Plaintiff alleged that it had suffered approximately $45,000 in damages: $13,000 for the security deposit, and approximately $32,000 for moving expenses, higher rent paid to lease replacement accommodations, and so on. Defendant counterclaimed for breach of the lease, alleging $15,500 in damages in unpaid rent and reletting costs (plus attorney fees).

The action was tried to a jury in November 2024. The jury ruled for defendant on liability as to plaintiff's claims. (See NYSCEF No. 59 at Tr. 2-3 [transcript of jury verdict].) On defendant's counterclaim, the jury found that plaintiff had breached the lease; the jury awarded defendant $4,800 damages for reduced rental income due to the breach, and declined to award the other increments of damages sought by defendant. (See id. at 3-4.)

Plaintiff now moves under CPLR 4404 to set aside the verdict. (See NYSCEF No. 54.) Defendant cross-moves to appoint a referee to hear and determine the amount of attorney fees that defendant should (assertedly) be awarded as the prevailing party. (See NYSCEF No. 62.) Plaintiff's motion is granted; defendant's cross-motion is denied.^[FN1]

CPLR 4404 (a) provides that "[a]fter a trial of a cause of action or issue triable of right by a jury," a court may on motion "set aside a verdict or any judgment entered thereon" and direct entry of judgment in favor of a party as a matter of law. To do so, the court must first have concluded that "there is simply no valid line of reasoning and permissible inferences which could possibly lead rational [people] to the conclusion reached by the jury on the basis of the evidence presented at trial," such that it would be "utterly irrational for a jury to reach the result it has determined upon." (Cohen v. Hallmark Cards, Inc., 45 NY2d 493, 499 [1978].)

The scope of plaintiff's CPLR 4404 motion is limited. That is, the jury found that plaintiff had not proven by a preponderance of the evidence that the ambassador had been constructively evicted from the leased premises; and that plaintiff had not proven by a preponderance that the condition of the premises breached the warranty of habitability. (See NYSCEF No. 59 at Tr. 2-3.) Plaintiff does not challenge either of these findings. Instead, plaintiff argues only that no valid line of reasoning supports the jury's failure to award plaintiff the amount of its security deposit ($13,000), as reduced by the $4,800 in unpaid rent to which the jury found defendant entitled. This court agrees.

It is undisputed, both at trial and on this motion, that defendant did not return plaintiff's security deposit. (See NYSCEF No. 63 at ¶ 14 [defendant's aff. in opposition].) It is also undisputed that the lease provides that defendant is entitled to withhold the security deposit, [*3]following the expiration or termination of the lease, only to the extent necessary to offset unpaid rent and the like. (See id. at ¶ 21, citing NYSCEF No. 65 at 1 ¶ 4 [lease].) And the jury found that defendant had proven that plaintiff's breach of the lease caused defendant to suffer $4,800 in rent-related damages. Plaintiff is thus correct that the only valid line of reasoning, on the evidence at trial and on the jury's other factual findings, is that plaintiff is entitled to damages in the amount of $8,200.

In opposing plaintiff's motion, defendant does not contest plaintiff's argument that it is contractually entitled to the return of its security deposit, at least to the extent that the amount of the deposit exceeds any unpaid rent owed by plaintiff to defendant. Defendant does not challenge the jury's finding that the amount of unpaid rent/charges owed was $4,800.^[FN2] And defendant does not explain why the jury could nonetheless validly decline to award plaintiff anything in damages.

At most, defendant emphasizes that the jury's unanimous verdict was "reflective of careful consideration" of the evidence at trial. (NYSCEF No. 63 at ¶ 33.) But plaintiff is not disputing how the jury considered the evidence, nor indeed the jury's factual findings based on that evidence—only whether the jury erred in determining the amount of damages to which each side is entitled in light of those factual findings. On that limited question, plaintiff has shown that the jury did err; and that plaintiff is entitled as a matter of law to a judgment in its favor of $8,200, rather than owing defendant a judgment of $4,800.^[FN3]

Defendant's cross-motion argues that the lease "obligates Plaintiff to reimburse Defendant for legal fees associated with enforcing the lease or defending against meritless claims"; and that "[g]iven Defendant's success in both defending against Plaintiff's claims and prevailing on its counterclaim," defendant is entitled to attorney fees as the prevailing party. (NYSCEF No. 63 at ¶¶ 40-41.) This court disagrees with defendant on both points.

First, the scope of defendant's right under the lease to recover fees, should it prevail in litigation, is narrower than defendant would have it. The lease provides that plaintiff must [*4]reimburse defendant for fees incurred in two circumstances: (i) in "legal actions or proceedings brought by [defendant] against [plaintiff] because of a Lease default by [plaintiff]; (ii) in "defending lawsuits brought against [defendant] because of [plaintiff's] actions." (NYSCEF No. 65 at 4 ¶ 19 [a] [5].)

Defendant asserts that this provision requires reimbursement of fees "incurred in enforcing the lease or defending against Plaintiff's claims." (NYSCEF No. 63 at ¶ 39.) The language at issue does not apply to litigation of claims brought by plaintiff against defendant. (See NYSCEF No. 70 at ¶¶ 19-22 [plaintiff's reply aff.].) Rather, the Appellate Division has held, interpreting an identical lease provision, that this language "grants the landlord the right to seek legal fees where it has been obliged to defend against lawsuits brought by third parties against the landlord as a result of the tenant's acts." (Flynn v Red Apple 670 Pac. St., 209 AD3d 580, 581 [1st Dept 2022] [emphasis added]; see also Kattan v 119 Christopher LLC, 2020 NY Slip Op 51469[U], at *2-3 & n 2 [Sup Ct, NY County 2020] [same].)

Defendant is thus not entitled under the lease to recover attorney fees incurred in defending plaintiff's claims against it. That leaves, at most, the fees incurred in litigating defendant's counterclaim against plaintiff for unpaid rent.^[FN4] To be entitled to those fees, defendant must show that it has prevailed "on the central claims advanced" and "receive[d] substantial relief in consequence thereof." (Board of Mgrs. of 55 Walker St. Condominium v Walker St., 6 AD3d 279, 280 [1st Dept 2004].) Defendant has not satisfied these requirements here.

As tried to the jury, defendant claimed that plaintiff's breach of the lease caused defendant four different categories of damages: unpaid rent for the month that tenant vacated the premises; reduced rental income for the remainder of the lease term due to having to relet the premises; broker fees paid in connection with the reletting; and cleaning/repair cost. (See NYSCEF No. 59 at Tr. 3-4.) The jury found that defendant had proven damages only with respect to one of those four categories. (See id.) And the jury awarded only $4,800 in damages—less than a quarter of the total damages that defendant has asserted on this cross-motion that it suffered. (Compare NYSCEF No. 59 at Tr. 4, with NYSCEF No. 63 at ¶ 14 [aff. in support of cross-motion]. Thus, unlike in 55 Walker Street Condominium, relied on here by defendant (see NYSCEF No. 63 at ¶ 43), the jury rejected, rather than "validated[,] the theory of recovery in several categories," and granted defendant only a small fraction of the relief requested, rather than "a substantial part." (6 AD3d at 280.) Given this outcome, defendant is not a prevailing party for attorney-fee purposes.

Accordingly, it is

ORDERED that plaintiff's motion under CPLR 4404 to set aside the jury verdict and for judgment in its favor as a matter of law is granted; and it is further

ORDERED that defendant's cross-motion for an appointment of a referee to hear and determine the amount of an attorney-fee award to defendant is denied; and it is further

ORDERED that plaintiff is awarded a judgment against defendant for $8,200, plus costs and disbursements as taxed by the Clerk upon the submission of an appropriate bill of costs; and [*5]it is further

ORDERED that plaintiff serve a copy of this order with notice of its entry on defendant; and on the office of the County Clerk (using the NYSCEF filing event "Notice to the County Clerk - CPLR § 8019 (c)"), which shall enter judgment accordingly.