Kennedy House Owners, Inc v Crawford

Civil Court of the City of New York, Queens County

Decided on March 30, 2026

Index No. 316800-24

Shorab Ibrahim, J.

The court has reviewed the following NYSCEF documents in reaching a decision on petitioner's motion for summary judgment for an award of legal fees and Michael Crawford's motion for summary judgment dismissing the legal fees claim: Doc. Nos. 9-27; 32-34; 38-58; 61-63; 64-65.

DISCUSSION

Petitioner is the cooperative corporation, and the respondents are lessors pursuant to a proprietary lease. This is a holdover proceeding.

Petitioner was previously awarded a final judgments of possession as well as a monetary judgment for unpaid use and occupancy. (see NYSCEF Doc. 67).

Petitioner's prior motions (seq. 1 & 2) additionally sought a monetary judgment for legal fees. Respondent, Michael Crawford, cross-moved (seq. 3) for summary judgment dismissing the legal fees claim.

Petitioner is the prevailing party in this case having obtained favorable relief on its central claim for a judgment of possession. (see Amato v Dayton Beach Park No. 1 Corp., 201 AD3d 684, 685-686 [2d Dept. 2022] (landlord was prevailing party having obtained possessory and monetary judgments); YC MD, P.C. v Shusterman, 229 AD3d 708, 709 [2d Dept. 2024]). As such, it may seek legal fees, if such an award is authorized by the parties' agreement. (see Matter of Milton R., 197 AD3d 1174, 1176 [2d Dept. 2021]; Loughlin v Meghji, 240 AD3d 875, 876 [2d Dept. 2025]).

Here, the parties' proprietary lease contains a legal fees provision, which reads as follows:

If the Lessee shall at any time be in default hereunder and the Lessor shall incur any expense (whether paid or not) in performing acts which the Lessee is required to perform, or in instituting any action or proceeding based on such default, or defending, or asserting a counterclaim in, any action or proceeding brought by the Lessee, the expense thereof to the [*2]Lessor, including reasonable attorneys' fees and disbursements, shall be paid by the Lessee to the Lessor, on demand, as additional rent. (see Doc. 45, par. 28).

Michael Crawford opposes any award of legal fees, arguing that the above legal fees clause is unenforceable because it is unconscionable.

The gravamen of the argument is that the above clause is similar to the one held unenforceable in Matter of Kasowitz, Benson, Torres & Friedman, LLP v JPMorgan Chase Bank, N.A., (237 AD3d 499 [1st Dept 2025], lv denied 44 NY3d 908 [2025]). In Kasowitz, the fees provision in the parties' proprietary lease read as follows:

If the Lessee shall at any time be in default hereunder, and the Lessor shall take any action against the Lessee based upon such default, or if the Lessor shall defend any action or proceeding (or claim therein) commenced by the Lessee, the Lessee will reimburse the Lessor for all expenses (including, but not limited to attorneys' fees and disbursements) thereby incurred by the Lessor, so far as the same are reasonable in amount, and the Lessor shall have the right to collect the same as additional rent or damages.FN1

The underlying dispute leading to the legal fees litigation in Kasowitz involved a cooperator suing the corporation after it denied his application to purchase an adjacent apartment. (seeFletcher v The Dakota, 2013 WL 2408678 [Sup Ct, New York County 2013]). Ultimately, the Appellate Division in Kasowitz held the fees provision was unenforceable as unconscionable because "it provides for attorneys' fees regardless of default or merit." (237 AD3d at 500). In other words, the provision, by its plain terms, allows the corporation to recover fees even when the corporation is in default.

"To enforce such a provision would produce an unjust result because it would dissuade aggrieved parties from pursuing litigation and preclude tenant-shareholders from making meaningful decisions about how to vindicate their rights in legitimate instances of landlord default." (237 AD3d at 500, quoting Matter of Krodel v Amalgamated Dwellings Inc., 166 AD3d 412, 413-414 [1st Dept. 2018]).FN2

Petitioner does not deny the that the fees provision in the respondents' proprietary lease is sufficiently similar to the one in Kasowitz. Rather, petitioner argues that the provision remains enforceable in the Second Department. (see Doc. 65, p. 9-10).

Consequently, the only question before this court is whether the legal fees provision held unenforceable by the Appellate Division, First Department is nonetheless enforceable in the Appellate Division, Second Department.

Petitioner cites to two cases that purportedly involve similar proprietary lease fees provisions, 715 Ocean Parkway Owners Corp. v Klagsbrun, (74 AD3d 1314 [2d Dept. 2010]), and Great Neck Terrace Owners Corp. v McCabe, (101 AD3d 944 [2d Dept. 2012]).

The fees provision in Klagsbrun is as follows:

If the Lessee shall at any time be in default hereunder and the Lessor shall incur any expenses (whether paid or not) in performing acts which the Lessee is required to perform, or in instituting any action or proceeding based on such default, or defending, or asserting a counterclaim in any action or proceeding brought by the Lessee, the expense thereof to the Lessor, including reasonable attorney's fees and disbursements, shall be paid by Lessee to the Lessor, on demand, as additional rent. (see 2010 WL 9081547, 3).

The fees provision in McCabe is as follows:

If the Lessee shall at any time be in default hereunder and the Lessor shall incur any expense (whether paid or not) in performing acts which the Lessee is required to perform, or in instituting any action or proceeding based on such default, or defending, or asserting a counterclaim in, any action or proceeding brought by the Lessee, the expense thereof to the Lessor, including reasonable attorneys' fees and disbursements, shall be paid by the Lessee to the Lessor, on demand, as additional rent. (see 2012 WL 13106054, 16).

Petitioner is correct that the McCabe and Klagsbrun provisions are similar to the Kasowitz provision in that all three allow the cooperative landlord to recover fees whether the lessee is in default [triggering the cooperative suing the lessee] or whether the lessee brings their own case. Nevertheless, the provisions were enforced.FN3

This does not end the court's inquiry. Respondent correctly points out that unconscionability was not in controversy in either McCabe or Klagsbrun. In Klagsbrun, there is no indication that unconscionability was ever considered. The lower court denied fees on different grounds, (see 18 Misc 3d 1104(A), 5 [Sup Ct, Kings County 2007]), and the Appellate Division did not address the issue, having no cause to.FN4

Similarly in McCabe, there is no indication that the lower court, (see 2011 WL 3471233 [Sup Ct, Nassau County 2011]), or the Appellate Division had any reason to discuss unconscionability.

However, the Appellate Term, Second Department has reached the issue of an unconscionable fees provision in a residential lease, albeit not in a cooperative context. In Weidman v Tomaselli, the lower court held that a lease provision which renders attorneys' fees payable to the landlord, regardless of fault, was unconscionable. The court held that "the effect" of the clause [clause 32] "is to empower the petitioner, through the potential of this clause, to chill the respondents' assertion of their rights." (81 Misc 2d 328, 334 [County Court, Rockland 1975]). This specific holding was affirmed. (see 84 Misc 2d 782 [App Term, 2d Dept., 9th and 10th Jud Dists. 1975] ("Upon review of the issues presented, this court agrees with the decision of the County Court [*3]that clause 32 of the lease is unconscionable.")).FN5

This "chilling" of a tenant's ability to assert their rights is specifically cited in both Krodel and Kasowitz. (see Kasowitz, 237 AD3d at 500, quoting Krodel).FN6

Weidman is cited with approval in Krodel and appears to still be good law.

In any event, this court is bound by the First Department's holdings in Krodel and Kasowitz. (see Mountain View Coach Lines, Inc. v Storms, 102 AD2d 663, 664 [2d Dept. 1984] ("the doctrine of stare decisis requires trial courts in this department to follow precedents set by the Appellate Division of another department until the Court of Appeals or this court pronounces a contrary rule")).

In strictly construing the subject fees clause, (see Hooper Associates, Ltd. v AGS Computers, Inc., 74 NY2d 487, 491-492 [1989]; Integrity Real Estate Consultants v Re/Max of New York, Inc., 212 AD3d 815, 819 [2d Dept. 2023]; UrbanAmerica, L.P. II v Carl Williams Group, LLC, 95 AD3d 642, 643-644 [1st Dept. 2012]), as the First Department did in Kasowitz, the clause is unenforceable as unconscionable.

Consequently, petitioner's motion for summary judgment seeking an award of legal fees is denied [as sought in motion sequence 1 and 2]. Respondent's cross-motion [sequence 3] seeking dismissal of the legal fees claim is granted.

This constitutes the decision and order of the court. It will be posted on NYSCEF and a copy will be mailed to Demaris Crawford.

Dated: March 30, 2026

Queens, NY

SO ORDERED,

SHORAB IBRAHIM, JHC