| Saul v Cahan |
| 2017 NY Slip Op 06391 [153 AD3d 951] |
| August 30, 2017 |
| Appellate Division, Second Department |
[*1]
| Lewis Saul, Appellant, v Eric Cahan,Respondent. |
Judd Burstein, P.C., New York, NY, for appellant.
Lepore & Associates, P.C., New York, NY (Lauren B. Lepore, Greg B. Lichtenstein,Christopher B. Spuches, and Jason A. Martorella of counsel), for respondent.
Appeals from (1) an order of the Supreme Court, Kings County (Carolyn E. Demarest, J.),dated March 9, 2016, and (2) a money judgment of that court dated March 28, 2016. The ordergranted the defendant's motion for attorney's fees and costs. The money judgment, upon theorder, is in favor of the defendant and against the plaintiff in the total sum of $16,697.14.
Ordered that the appeal from the order is dismissed; and it is further,
Ordered that the money judgment is reversed, on the law, the order is vacated, and thedefendant's motion for attorney's fees and costs is denied; and it is further,
Ordered that one bill of costs is awarded to the plaintiff.
The appeal from the order must be dismissed, as the order was superseded by the moneyjudgment.
In 2013, the plaintiff allegedly entered into an oral agreement with the defendant Eric Cahanpursuant to which Cahan agreed to act as the plaintiff's art advisor regarding the acquisition ofcontemporary artworks in exchange for a consulting fee in the amount of 10% of the cost of theartworks purchased. Additionally, the alleged oral agreement required Cahan to give the plaintiffthe right of first opportunity to purchase all artworks offered to Cahan by art galleries or dealersbefore Cahan could purchase them for himself or offer them to a third party.
After terminating the alleged agreement, the plaintiff commenced this action, alleging, interalia, that Cahan fraudulently induced him to enter into the alleged oral agreement, and that Cahanbreached his contractual and fiduciary duties. The plaintiff asserted causes of action allegingbreach of fiduciary duty, breach of contract, and fraud, among others. In May 2014, Cahanmoved, inter alia, pursuant to CPLR 3211 (a) (7) to dismiss the amended complaint insofar asasserted against him. Shortly thereafter, on June 20, 2014, Cahan served an offer to liquidatedamages pursuant to CPLR 3220. The plaintiff did not accept the offer. By order datedNovember 7, 2014, the Supreme Court granted Cahan's motion to dismiss the amendedcomplaint insofar as asserted against him. Cahan then moved for an award of attorney's fees andcosts pursuant to CPLR 3220. By order dated March 9, 2016, the court granted Cahan's motion tothe extent of determining that [*2]Cahan was entitled to attorney'sfees in the sum of $15,557.37, plus interest. A money judgment dated March 28, 2016, wasentered in favor of Cahan and against Saul in the total sum of $16,697.14. The plaintiff appeals,and we reverse.
In matters of statutory interpretation, the primary consideration is to discern and give effectto the legislature's intention (see Yataurov Mangano, 17 NY3d 420, 426 [2011]; Roberts v Tishman Speyer Props., L.P., 13 NY3d 270, 285-286[2009]; Matter of DaimlerChryslerCorp. v Spitzer, 7 NY3d 653, 660 [2006]). "[T]he text of a provision 'is the clearestindicator of legislative intent and courts should construe unambiguous language to give effect toits plain meaning' " (Matter ofAlbany Law School v New York State Off. of Mental Retardation & Dev. Disabilities,19 NY3d 106, 120 [2012], quoting Matter of DaimlerChrysler Corp. v Spitzer, 7NY3d at 660; see Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 583[1998]). An examination of the legislative history is proper "where the language is ambiguous orwhere a literal construction would lead to absurd or unreasonable consequences that are contraryto the purpose of the enactment" (Matter of Auerbach v Board of Educ. of City SchoolDist. of City of N.Y., 86 NY2d 198, 204 [1995]; see New York State Psychiatric Assn., Inc. v New York State Dept. ofHealth, 19 NY3d 17, 25-26 [2012]).
Moreover, "[u]nder the American Rule as applied to statutory entitlement to attorneys' fees,the [United States] Supreme Court has held that we follow a general practice of not awardingfees to a prevailing party absent explicit statutory authority" (Baker v Health Mgt.Sys., 98 NY2d 80, 88 [2002] [internal quotation marks omitted]; see 214 Wall St. Assoc., LLC v MedicalArts-Huntington Realty, 99 AD3d 988, 990 [2012]). " 'New York public policydisfavors any award of attorneys' fees to the prevailing party in a litigation' " (Pickett v 992 Gates Ave. Corp., 114AD3d 740, 741 [2014], quoting Horwitz v 1025 Fifth Ave., Inc., 34 AD3d 248, 249 [2006])." 'Statutes authorizing an award of costs and sanctions are in derogation of common lawand, therefore must be strictly construed' " (State Farm Fire & Cas. v Parking Sys. Valet Serv., 85 AD3d761, 764 [2011], quoting Saastomoinen v Pagano, 278 AD2d 218, 218 [2000]).
CPLR 3220 states: "At any time not later than ten days before trial, any party against whom acause of action based upon contract, express or implied, is asserted may serve upon the claimanta written offer to allow judgment to be taken against him for a sum therein specified, with coststhen accrued, if the party against whom the claim is asserted fails in his defense. If within tendays thereafter the claimant serves a written notice that he accepts the offer, and damages areawarded to him on the trial, they shall be assessed in the sum specified in the offer. If the offer isnot so accepted and the claimant fails to obtain a more favorable judgment, he shall pay theexpenses necessarily incurred by the party against whom the claim is asserted, for trying the issueof damages from the time of the offer. The expenses shall be ascertained by the judge or refereebefore whom the case is tried. An offer under this rule shall not be made known to the jury."
The relevant phrase of CPLR 3220 stating that the claimant "shall pay the expensesnecessarily incurred by the party against whom the claim is asserted, for trying the issue ofdamages from the time of the offer" demonstrates the legislature's intent that, where the claimanthas not accepted the offer, the commencement of a trial is a condition precedent to imposingliability upon the claimant for the opposing party's expenses. This phrase also defines therecoverable expenses as those "necessarily" expended "for trying the issue of damages." CPLR3220 further provides that those expenses should be determined by the judge "before whom thecase is tried." Accordingly, the plain language of CPLR 3220 does not explicitly authorize anaward of attorney's fees and costs to a party, such as Cahan, who merely prevailed in seekingdismissal of a cause of action alleging breach of contract. Even if CPLR 3220 could arguablysupport an implied right to the attorney's fees and costs sought by Cahan, the public policy of theAmerican Rule militates against adoption of that interpretation (see Baker v Health Mgt.Sys., 98 NY2d at 88; 214 Wall St. Assoc., LLC v Medical Arts-Huntington Realty,99 AD3d at 990).
The plaintiff's remaining contentions either are without merit or need not be reached [*3]in light of our determination. Rivera, J.P., Balkin, Chambers andCohen, JJ., concur. [Prior Case History: 50 Misc 3d 1228(A), 2016 NY Slip Op50295(U).]