| 214 Wall St. Assoc., LLC v Medical Arts-Huntington Realty |
| 2012 NY Slip Op 07103 [99 AD3d 988] |
| October 24, 2012 |
| Appellate Division, Second Department |
| 214 Wall Street Associates, LLC, Respondent, v MedicalArts-Huntington Realty, Appellant. |
—[*1] Lewis S. Meltzer, Mineola, N.Y., for respondent.
In an action, inter alia, to recover damages for breach of contract, the defendant appeals froman order of the Supreme Court, Suffolk County (Pines, J.), dated September 22, 2011, whichdenied its motion for an award of costs and an attorney's fee.
Ordered that the order is affirmed, with costs.
The plaintiff, 214 Wall Street Associates (hereinafter 214 Wall), and the defendant, MedicalArts-Huntington Realty (hereinafter Medical Arts), entered into an agreement wherein MedicalArts agreed to purchase a parcel of real estate owned by 214 Wall, after 214 Wall developed theparcel for Medical Arts's use. Disputes arose between the parties during the development of theparcel. In order to facilitate the closing of title, and preserve their respective rights and disputedclaims, the parties entered into a "Survival Agreement." The Survival Agreement identified andpreserved the claims of the parties and, as relevant to this appeal, provided that the prevailingparty in any litigation "arising under or in connection with" the Survival Agreement would beentitled to "recover from the other party the expenses of litigation (including reasonableattorneys' fees, expenses and disbursements) incurred by the prevailing party."
Subsequently, 214 Wall commenced this action, inter alia, to recover damages based on itsclaims in the Survival Agreement, and Medical Arts counterclaimed. A jury trial was held and averdict was returned, wherein 214 Wall was awarded the sum of $39,317.58 on its claims andMedical Arts was awarded the sum of $133,904.00, resulting in a net award to Medical Arts inthe sum of $94,586.42.
In October 2010, Medical Arts, as the prevailing party, moved for an award of its expenses oflitigation, including an attorney's fee in the sum of $391,468.57, related expenses in the sum of$19,194.67, and expert witness costs in the sum of $36,952.12 (hereinafter the first fee motion).In an order dated April 18, 2011, the Supreme Court awarded Medical Arts expert fees andrelated expenses in the sum of $56,146.79 and an attorney's fee in the sum of $123,104.63.[*2]
Medical Arts thereafter made a second motion for anaward of costs and an attorney's fee, seeking recompense for the attorney's fee and costs incurredafter the verdict was rendered, including, inter alia, sums incurred in correcting an error in thetrial abstract, in entering its judgment, in seeking to enforce the judgment, and in making the firstfee motion (hereinafter the second fee motion).
The Supreme Court denied the second fee motion in its entirety. The defendant appeals andwe affirm.
The "American Rule," which is followed in New York, is that "[a]n attorney's fee is merelyan incident of litigation and is not recoverable absent a specific contractual provision or statutoryauthority" (Levine v Infidelity, Inc.,2 AD3d 691, 692 [2003]; see Matter of A.G. Ship Maintenance Corp. v Lezak, 69NY2d 1, 5 [1986]; Gorman vFowkes, 97 AD3d 726 [2012]). Accordingly, a contractual provision permitting theprevailing party to recover fees that are " 'incidents of litigation' should be construed strictly"(Gottlieb v Such, 293 AD2d 267, 268 [2002], quoting Matter of A.G. ShipMaintenance Corp. v Lezak, 69 NY2d 1, 5 [1986]; see also Hooper Assoc. v AGSComputers, 74 NY2d 487 [1989]). A promise assuming the obligation to pay the attorney'sfee of another "should not be found unless it can be clearly implied from the language andpurpose of the entire agreement and the surrounding facts and circumstances" (Hooper Assoc.v AGS Computers, 74 NY2d at 491-492).
The pertinent clause in the Survival Agreement does not contain language clearly permittingMedical Arts to recover from 214 Wall the costs and the attorney's fee sought in the second feemotion. The possible recovery of such posttrial costs and counsel fees is not addressed by theSurvival Agreement in a clear and decided fashion. Even if the Survival Agreement could"arguably support an implied right" to those costs and fees, the public policy of the AmericanRule "militate[s] against adoption of that interpretation" (Baker v Health Mgt. Sys., 98NY2d 80, 88 [2002]; see Doyle v Allstate Ins. Co., 1 NY2d 439 [1956]; 546-552 W.146th Street LLC v Arfa, 99 AD3d 117 [1st Dept 2012]; Swiss Credit Bank vInternational Bank, 23 Misc 2d 572 [1960]).
The remaining contention of Medical Arts is without merit.
Accordingly, the Supreme Court properly denied the second fee motion. Skelos, J.P., Balkin,Cohen and Miller, JJ., concur.