DETERMINING REASONABLE ATTORNEY FEES

In this case, a union filed an employee benefits action against defendant contending that defendant violated the parties' participation agreement, collective bargaining agreement (CBA), and 29 USC §1145 by failing to pay delinquent employee benefit contributions owed under the agreements, as well as liquidated damages and audit fees. Plaintiffs further claimed that defendant was liable for additional compensatory relief including reasonable attorneys' fees. The court granted plaintiff's motion for a default judgment.

NYS Teamsters Conference Pension & Ret. Fund v. E. Reg'l. Contracting Inc., NYLJ August 10, 2020, Date filed: 2020-07-20, Court: U.S. District Court for the Northern District of New York,      Judge: District Judge Glenn Suddaby,  Case Number: 5:19-CV-0165:

"As to attorneys’ fees, Plaintiffs request a total of $11,245.00. (Dkt. No. 14, Attach. 4.) In support of this request, Plaintiffs submitted time records related to their counsel’s work on this matter encompassing 34.60 hours for attorney Gerald J. Green, Esq., at a rate of $325 per hour. (Dkt. No. 14, Attach. 1, at 70-71.) In his declaration, Attorney Green states that he has been employed as Plaintiffs’ litigation counsel since 1986, that he practices primarily in ERISA litigation matters, and that he is admitted to practice before this Court. (Dkt. No. 14, Attach. 1, at 5 [Green Decl.].) This Court has established that $240 is the hourly rate that is prevailing in this District for similar services by lawyers of reasonably comparable skill, experience, and reputation. See UFCW Local One Health Care Fund v. JRR II, Inc., 18-CV-1200, 2019 WL 1115852, at *5 (N.D.N.Y. Mar. 11, 2019) (Sharpe, J.) (granting $240 per hour for an experienced attorney where there was no evidence offered to justify a higher rate, such as information about the novelty of the case, the ERISA related experience of the attorneys, or another case specific variable); Board of Trustees of Laborers Pension Fund of Local Union No. 186 v. Casale Construction Servs., Inc., 18-CV-0583, 2018 WL 6047825, at *3-4 (N.D.N.Y. Nov. 19, 2018) (D’Agostino, J.) (finding $240 per hour to be a reasonable rate for an experienced attorney in an ERISA case). However, Courts have occasionally found that higher fees are also reasonable, particularly where there is evidence presented of counsel’s superior experience in the particular field of law. See Easter v. Cayuga Medical Cntr. at Ithaca Prepaid Health Plan, 14-CV-1403, 2017 WL 3267922, at *3 (N.D.N.Y. July 31, 2017) (Sannes, J.) (finding that rates between $245 and $275 were reasonable based on the attorneys’ substantial and relevant experience in ERISA matters and civil litigation); Engineers Joint Welfare Fund v. C. Destro Develop. Co., Inc., 178 F. Supp. 3d 27, 35-36 (N.D.N.Y. 2016) (Kahn, J.) (noting that this court has upheld as reasonable hourly rates between $250 and $345 for partners and $165 and $200 for senior associates) (citing Pope v. Cnty. of Albany, 11-CV-0736, 2015 WL 5510944, at *9 [N.D.N.Y. Sept. 16, 2015] [Kahn, J.]).
Here, Plaintiffs have provided evidence that Attorney Green has been engaged in ERISA litigation work since 1986, more 30 years. The Court finds that counsel’s experience merits an upward departure from the most-cited rate of $240, but that a rate of $275 is the more appropriate than the requested rate of $325 (based on a careful review of all of the relevant case law and the fact that there is no indication that this matter was overly complex or required any highly specialized knowledge or experience that would merit increasing the hourly rate further). As a result, the Court finds that Plaintiffs are entitled to only $9,515.00 in attorneys’ fees."

DIVORCE - CAN MORE - MONIED SPOUSE RECOVER LEGAL FEES

As footnote 4 below states, the Second Department may have reached a different conclusion in this case.

Condo v Condo, 2020 NY Slip Op 20142, Decided on June 24, 2020, Supreme Court, New York County, Cooper, J.:

"The principle that even a successful litigant pays his or her own legal expenses, absent a contractual or statutory provision to the contrary, is so ingrained in our legal system that it is referred to as the "American Rule."[FN1] The New York State Domestic Relations Law (DRL), which governs matrimonial proceedings in this state, contains a number of provisions enabling a court to depart from the rule and shift responsibility for legal fees from one party to another. The question presented in this post-judgment matrimonial proceeding is whether any of these statutory provisions entitle the defendant ex-husband, who has been consistently successful in the litigation but in the process has amassed more than $2.5 million dollars in legal fees, to [*2]require the plaintiff ex-wife, who has been responsible for most of that litigation, to reimburse him for what he has had to expend. Complicating the question is the fact that while plaintiff is fabulously wealthy, defendant is even wealthier still. Thus, as will be discussed, defendant is in the position of seeking to recover legal fees as the "more-monied" former spouse as opposed to the more traditional "less-monied" one.

......

I. LEGAL AUTHORITY

a. DRL § 237 (c)

After first moving generally under DRL § 237 in support of his demand that plaintiff be held responsible for the legal fees he has incurred, defendant, in his reply papers and confirmed during oral argument, abandoned subsection (a) and (b)[FN3] and settled on subsection (c) of the section. The language of DRL § 237 (c) is as follows:
In any action or proceeding for failure to obey any lawful order compelling payment of support or maintenance, or distributive award the court shall, upon a finding that such failure was willful, order respondent to pay counsel fees to the attorney representing the petitioner.

Plaintiff maintains that this subsection is limited only to the willful non-payment of court-ordered money, be it in the form of support, maintenance, or distributive award. Consequently, plaintiff argues that DRL 237 (c) bars defendant from seeking counsel fees for any alleged willful failure on her part to obey orders that concern the process for distributing marital property, in this case artwork, inasmuch as those orders did not "compel payment" of any kind. The court must agree.

Throughout the DRL, the term "distributive award" is consistently used in the context of money payments and is specifically defined in § 236 B (1) (b) as follows:
The term "distributive award" shall mean payments provided for in a valid agreement between the parties or awarded by the court, in lieu of or to supplement, facilitate or effectuate the division or distribution of property where authorized in a matrimonial action, and payable either in a lump sum or over a period of time in fixed amounts. Distributive awards shall not include payments which are treated as ordinary income to the recipient under the provisions of the United States Internal Revenue Code.

Thus, with regards to § 237 (c), the court is constrained from awarding defendant counsel fees for plaintiff's failure, even if willful, to abide by court orders in relation to the process of equitable distribution, so long as there is no failure to actually make payment in the form of a distributive award (see Rao v Rao, 74 AD3d 1556 [3rd Dept 2010]). Given the clear and unequivocal language of the DRL and lack of First Department case law directly on point, the court will not delve into the specific distinguishability of each case cited by the parties.

b. DRL § 238

In relevant part DRL § 238 provides that in any action or proceeding to enforce any

provision of a judgment or order, a court: . . . may in its discretion require either party to pay counsel fees and fees and expenses of experts directly to the attorney of the other party to enable the other party to carry on or defend the action or proceeding as, in the court's discretion, justice requires having regard to the circumstances of the case and of the respective parties. There shall be a rebuttable presumption that counsel fees shall be awarded to the less monied spouse (emphasis added).

Here, plaintiff argues, and this court again agrees, that a decidedly less-monied spouse
cannot be ordered to pay counsel fees to the decidedly more-monied spouse under this section of the DRL. In Roddy v Roddy, (161 AD3d 441 [1st Dept 2018]), the First Department reiterated that the provisions of DRL § 238 are intended to ensure a just resolution of the issues by creating a more level playing field with respect to the parties' respective abilities to pay counsel and focuses primarily upon the paramount factor of financial need. Further, it instructed that where a party's inappropriate litigation conduct has adversely affected the other party but both are able to pay their own counsel fees, the appropriate remedy may be a sanction under 22 NYCRR 130-1.1, not an award of attorneys' fees (see also, Silverman v Silverman, 304 AD2d 41 [1st Dept 2003]).

Although plaintiff is far from an indigent party, and is in fact extremely wealthy, it cannot credibly be argued that (1) she is the more-monied spouse; and (2) that defendant does not have the ability to pay his own counsel fees. Therefore, counsel fees cannot be awarded to defendant under this section of the DRL.[FN4]

c. Sanctions (22 NYCRR 130-1.1)

Although sanctions may be an appropriate remedy in this matter for a variety of plaintiff's unfortunate transgressions, including one that required this court to recuse, albeit temporarily, as well as her repeated and malicious interference with the Special Master's performance of her duties, defendant only raised the issue of sanctions for the first time in his reply brief. Indeed, it would be reversable error to award sanctions under these circumstances where the non-movant was neither given adequate notice that such relief would be considered, nor was afforded a reasonable opportunity be heard (see Zappin v Comfort, 146 AD3d 575 [1st Dept 2017]; Minister, Elders & Deacons of Refm. Prots. Dutch Church v 198 Broadway, Inc., 76 NY2d 411 [1990]). Therefore, without an evidentiary hearing, which the court is not inclined to schedule at this time, it will not impose sanctions on plaintiff sua sponte as defendant urges, and the issue was not otherwise properly raised in the motion.

......

Footnote 1:Under the American Rule, "attorney's fees and disbursements are incidents of litigation and the prevailing party may not collect them from the loser unless an award is 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]).

Footnote 2:See Condo v Condo, 171 AD3d 435 (1st Dept 2019); Condo v Condo, 172 AD3d 595 (1st Dept 2019); Condo v Condo, 173 AD3d 595 (1st Dept 2019).

Footnote 3:DRL § 237 (a) permits a court to "direct either spouse to pay counsel fees directly to the attorney of the other spouse to enable the other party to carry on or defend the action or proceeding." DRL § 237 (b) permits a court to do the same "[u]pon any application to enforce, annul or modify an order or judgment for alimony, maintenance, distributive award, distribution of marital property or for custody, visitation, or maintenance of a child." Both subsections expressly provide for a rebuttable presumption that fees are to be awarded to the less monied spouse.

Footnote 4:It is acknowledged that whereas the Appellate Division, First Department, has been consistent in refusing to hold the less-monied spouse responsible for the more-monied spouse's counsel fees, irrespective of the conduct of the parties, the Second Department has been receptive to fee-shifting in the face of bad conduct on the part of the less-monied spouse (see Cravo v Diegel, 163 AD3d 920 [2d Dept 2018][court's requirement that husband pay 55% of wife's counsel fees, despite him being the less-monied spouse, affirmed as "not an improvident exercise of discretion," where husband's "obstructionist conduct unnecessarily prolonged the pretrial motion practice and the trial"])."

MORE ON COVID AND CHILD CUSTODY

In this case, the court handles a similar situation (note the case posted yesterday) in a different manner...I also note how the court approaches the issue of attorneys fees and that this litigation is about 10 years going.

Waldorf v. Waldorf, NYLJ  April 27, 2020, Date filed: 2020-04-17, Court: Supreme Court, Suffolk, Judge: Justice Cheryl Joseph, Case Number: 27361/2010:

"The parties to this action are no strangers to this Court and have been embroiled in litigation for nearly a decade. It is worth noting that this post judgment matrimonial proceeding also has an accompanying plenary action under index number 06631/2017.

The Plaintiff commenced an action for divorce on or about July 26, 2010 and the parties settled their marital difficulties by way of a Stipulation of Settlement that was placed on the record before Hon. William J. Kent, J.S.C. on June 23, 2014 (hereinafter “Stipulation”). The parties were ultimately divorced by Judgment of Divorce dated October 1, 2014 and entered October 17, 2014 (hereinafter “JOD”). Subsequent post judgment litigation ensued and apart from the current pending applications before the Court, various applications made by both parties were settled and/or withdrawn.

The instant motion sequence, number 18, was made by the Defendant on February 14, 2020 and the Court notes that it previously decided Branch 3 of Defendant’s application by way of Decision and Order dated March 9, 2020.

Branch 1.

Branch 1 of Defendant’s application seeks an Order temporarily modifying the Interim Order of Parenting Time dated September 26, 2018. Plaintiff opposes the application.

The Court is unable to issue a decision with respect to this issue on the papers alone. The Court further takes judicial notice of the national pandemic, to wit: COVID-19, and the schools are currently closed until further notice. Therefore, the Defendant’s argument that the child, Q.W., should be with her during the school weeks may soon be rendered moot and the child may recommence attendance at the boarding school in Maryland in September 2020.

Therefore, this Branch of Defendant’s application shall be held in abeyance.
……

Branch 4.
Branch 4 of Defendant’s application seeks an award of interim counsel fees in the amount of $25,000.00. The Plaintiff opposes the application.

The Court may direct a party to pay counsel fees “directly to the attorney of the other spouse to enable the other party to carry on or defend the action or proceeding as, in the court’s discretion, justice requires, having regard to the circumstances of the case and of the respective parties. There shall be a rebuttable presumption that counsel fees shall be awarded to the less monied spouse.” See Dom. Rel. Law §237(a).

It is well settled that an award of interim counsel fees is within the sound discretion of the court. The issue of counsel fees is also controlled by the equities and circumstances of each case. See Nicodemus v. Nicodemus, 98 A.D.3d 604 (2d Dept. 2012). “In addition, the court may ‘take into account whether one party has delayed the proceedings or engaged in unnecessary litigation”‘. Margolis v. Cohen, 153 A.D.3d 1390, 1393-94 (2d Dept. 2017) (internal citations omitted).
In support of her request for $25,000.00, the Defendant argues that the Plaintiff is the monied party and she claims that he earns over $500,000.00 per year. She further posits that she is unable to pay her new attorneys’ retainer fee because she has “little in her bank accounts”, used her savings to purchase a new home that she renovated costing her nearly $200,000.00. She also argues that her income is used to pay her monthly expenses. The Defendant annexed an updated Statement of Net Worth, albeit using the old form, as Exhibit H to her moving papers which the Court has reviewed. While Defendant failed to annex her 2018 tax returns and/or her 2019 W-2 statement, she lists her income at almost $152,000.00 per year¹.

In opposition to Defendant’s application, the Plaintiff argues that there is $319,278.83 being held in escrow from the sale of the parties’ Colorado property which the Defendant refuses to release. Plaintiff submits that Defendant would realize at least $92,000.00 from the Colorado proceeds. The Plaintiff also directs the Court to the fact that the Defendant has purchased 2 houses (1 in 2016 and 1 in 2017) and one of said houses in a rental property. Further, the Plaintiff argues that the Defendant may not have disclosed certain assets on her statement of net worth, for example a Merrill Lynch account that previously had a gross value of approximately $150,000.00. Finally, the Plaintiff argues that Defendant has delayed this matter and has engaged in unnecessary litigation, for example: Defendant’s refusal to respond to settlement proposals; Defendant’s refusal to participate in a settlement meeting; and Defendant’s delay in listing the marital residence for sale.

Here, the Court finds that the Defendant has engaged in delay tactics and unnecessary litigation, which include but are not limited to her bringing an application for a Writ of Habeas Corpus during the current national pandemic (Covid-19) for the alleged return of a 15-year-old child.² The Court is further troubled by the Defendant’s failure to engage in the settlement meeting held on September 6, 2019. Specifically, Defendant chose to say in her counsel’s office instead of participating with the attorneys, including the attorney for the child, and the Plaintiff in the conference room.
The Court notes that the presumption that a party is entitled to counsel fees because he or she is the “monied spouse” is a rebuttable one. See Dom. Rel. Law §237(a). Furthermore, and to quote the Court’s learned colleague, Justice Jeffrey S. Sunshine, “…the court cannot decide that just because one party ‘earns more’ than the other that he or she automatically becomes the ‘monied spouse’.” Scott M. v. Ilona M., 31 Misc.3d 353, 369 (Sup. Ct. Kings Cty. 2011). Here, while the Plaintiff may earn more than the Defendant, the Defendant is possessed of sufficient income and assets that she is able to pay her counsel fees and litigate this matter on equal footing with the Plaintiff. "

POST - DIVORCE: DEFAULT CURED ONLY AFTER MOTION MADE REQUIRED PAYMENT OF EXPENSES AS PER AGREEMENT

A contract is a contract.

Tara W. v. Yitzchok W., NYLJ February 24, 2020,  Date filed: 2020-02-18, Court: Supreme Court, Kings, Judge: Justice Delores Thomas:

"As to that branch of plaintiff’s motion which seeks an order directing defendant to pay her $2,500 which she paid to Mr. Berfas in connection with preparing the instant motion, it is well established that “[w]here the parties have agreed to provisions in a settlement agreement that govern the award of attorney’s fees, the agreement’s provisions, rather than statutory provisions, control” (Roth v. Roth, 116 AD3d 833, 834 [2d Dept 2014]; see also Fenster v. Fenster, 107 AD3d 933, 933 [2d Dept 2013]; Sweeney v. Sweeney, 71 AD3d 989, 992 [2d Dept 2010]; Rubio v. Rubio, 70 AD3d 805, 806 [2d Dept 2010]; Matter of Berns v. Halberstam, 46 AD3d 808, 809 [2d Dept 2007]; Arato v. Arato, 15 AD3d 511, 512 [2d Dept 2005]). Here, article 15 of the settlement agreement expressly obligated a party who defaulted with respect to any obligation set forth therein to pay the other party his or her reasonable attorney’s fees and related expenses and costs incurred in commencing and maintaining an action or proceeding to enforce such obligation.

It has been established that defendant defaulted with respect to: (1) his obligation under article 35 of the settlement agreement to execute the deed to the marital residence and all ancillary recording documents; (2) his obligation under article 36 of the settlement agreement to pay $3,000 to plaintiff as his share of the water bills; and (3) his obligation under article 29 of the settlement agreement to provide proof that he maintained a life insurance policy of $1,000,000 to secure his support obligations. It was only after plaintiff filed her motion that defendant agreed to cure these defaults by him. Thus, pursuant to article 15 of the settlement agreement, defendant, as the defaulting party, was contractually obligated to pay plaintiff such reasonable attorney’s fees and related expenses or costs incurred by plaintiff in bringing this motion to enforce these articles of the settlement agreement (see Fackelman v. Fackelman, 71 AD3d 724, 726 [2d Dept 2010]; Leiderman v. Leiderman, 50 AD3d 644, 644-645 [2d Dept 2008]; Sieratzki v. Sieratzki, 8 AD3d 552, 554 [2d Dept 2004]).

While plaintiff gave defendant written notice of his default by email, rather than by certified mail, return receipt requested, or by overnight delivery service to defendant, as set forth in article 15 of the settlement agreement, plaintiff’s failure to strictly comply with this notice requirement is not fatal to plaintiff’s request for attorney’s fees and related expenses or costs because defendant does not dispute that he received actual notice of his defaults, and he was not, in any way, prejudiced as a result of this minimal deviation (see Suarez v. Ingalls, 282 AD2d 599, 600 [2d Dept 2001]). Rather, defendant had actual notice of plaintiff’s numerous requests for compliance with the terms of the settlement agreement, but he refused these requests, necessitating plaintiff’s filing of this motion (see id.; Dellicarri v. Hirschfeld, 210 AD2d 584, 585 [3d Dept 1994]; Heischober v. Heischober, 53 Misc 3d 146[A], 2016 NY Slip Op 51600[U], *1-2 [App Term, 2d Dept, 9th & 10th Jud Dists 2016]).
Defendant argues that plaintiff is not entitled to attorney’s fees because she did not provide a statement of net worth or an affidavit detailing her financial ability to pay such fees. Such argument is rejected since plaintiff’s request for fees is based on article 15 of the settlement agreement, rather than Domestic Relations Law §237 (see Garcia v. Garcia, 104 AD3d 806, 807 [2d Dept 2013]; Matter of Milark v. Meigher, 56 AD3d 1018, 1021 [3d Dept 2008]). Defendant also argues that plaintiff did not provide a cancelled check or a paid receipt for funds allegedly expended. Plaintiff, however, as noted above, provided the retainer agreement and Mr. Berfas’ affirmation, showing the amount paid by her.

In addition, it is noted that plaintiff does not characterize her request as seeking attorney’s fees, and states that she retained Mr. Berfas’ law firm and its associates as “consultants” to prepare her instant order to show cause based on defendant’s failure to adhere to the settlement agreement. Plaintiff refers to Mr. Berfas’ fees as being for “legal consulting and document preparation” and as “consulting fees,” and states that she is representing herself pro se. However, article 15 of the settlement agreement broadly encompasses “reasonable attorney’s fees and related expenses or costs” in connection with enforcing the settlement agreement. The court finds that the $2,500 sought by plaintiff falls within the ambit of this article. Plaintiff incurred these fees due to defendant’s refusal to comply with the settlement agreement and the need for court intervention before obtaining his cooperation. Defendant did not agree to sign the deed or pay the $3,000 until after this motion was brought.

Defendant asserts that “one might ask how it is reasonable to expend $2500.00 [to Mr. Berfas] to recoup $3,000.” Plaintiff, however, was not merely seeking $3,000, but also for defendant to sign the deed transferring the marital residence, which defendant had refused to do for approximately one year. Defendant did not request a hearing on the issue of the reasonableness of the amount of the fees to be awarded, and did not object to the resolution of the issue based on written submissions. Thus, defendant waived the right to a hearing on this issue (see Rosner v. Rosner, 143 AD3d 884, 885 [2d Dept 2016]). Consequently, under the circumstances of this case, where plaintiff was compelled to bring a motion to enforce the terms of the settlement agreement, the court finds that pursuant to article 15 of the settlement agreement, defendant must be required to pay plaintiff the reasonable amount of $2,500 as expenses incurred by her in enforcing defendant’s obligations under the settlement agreement (see Mollah, 136 AD3d at 994; Martin v. Martin, 92 AD3d 646, 646 [2d Dept 2012])."

AWARDING ATTORNEY FEES IN A MATRIMONIAL

Litigation can be costly in a divorce when the income/asset spouse unnecessarily and aggressively prolongs the litigation.

Klein v Klein, 2019 NY Slip Op 08836, Decided on December 11, 2019, Appellate Division, Second Department:

"The decision to award an attorney's fee in a matrimonial action lies, in the first instance, in the discretion of the trial court and then in the Appellate Division whose discretionary authority is as broad as that of the trial court" (Black v Black, 140 AD3d 816, 816 [internal quotation marks omitted]; see Culen v Culen, 157 AD3d 930, 932). "In exercising that discretion, the court must consider the financial circumstances of the parties and the circumstances of the case as a whole, including the relative merits of the parties' positions" (Mueller v Mueller, 113 AD3d 660, 661; see Margolis v Cohen, 153 AD3d 1390; Matter of Weiss v Rosenthal, 135 AD3d 780, 781). Additionally, the court may also consider whether one party has engaged in conduct or taken positions resulting in a delay of the proceedings or engaged in unnecessary litigation (see Giallo-Uvino v Uvino, 165 AD3d 894, 897; Matter of Weiss v Rosenthal, 135 AD3d at 781; Prichep v Prichep, 52 AD3d 61, 64). Here, considering the disparity of income between the parties, the relative merits of the parties' positions, and the defendant's conduct that delayed the proceedings, the Supreme Court providently exercised its discretion in awarding the plaintiff attorney's fees in the sum of $40,000 and expert witness fees in the sum of $36,000, and in directing the defendant to pay $100,000 in attorney's fees directly to the plaintiff's attorney's law firm (see Romeo v Muenzler-Romeo, 169 AD3d 845, 846; Belilos v Rivera, 164 AD3d at 1415; Babinski v Babinski, 152 AD3d 477, 478; Chesner v Chesner, 95 AD3d 1252, 1253)."

DIVORCE - AWARDING INTERIM COUNSEL FEES

An interesting note to this case: the wife's lawyers withdrew as counsel after the trial court denied the application for additional interim counsel fees. It was the law firm who appealed as a "non-party appellant" and the court held that "the law firm is aggrieved by the order on appeal despite the fact that the relief the law firm sought in the alternative was granted (see RCI Plumbing Corp. v Turner Towers Tenant Corp., 152 AD3d 723, 723; Matter of Stateway Plaza Shopping Ctr. v Assessor of City of Watertown, 87 AD3d 1359, 1360; Scharlack v Richmond Mem. Hosp., 127 AD2d 580, 581; cf. Alberi v Rossi, 117 AD2d 574)."

Pezzollo v Pezzollo, 2019 NY Slip Op 04741, Decided on June 12, 2019, Appellate Division, Second Department:

"A court in a divorce action may award counsel fees to a spouse "to enable [that spouse] to carry on or defend the action or proceeding as, in the court's discretion, justice requires, having regard to the circumstances of the case and of the respective parties" (Domestic Relations Law § 237[a]). "An award of interim counsel fees is designed to redress the economic disparity between the monied spouse and the non-monied spouse, and ensures that the nonmonied spouse will be able to litigate the action, and do so on equal footing with the monied spouse" (Cohen v Cohen, 160 AD3d 804, 806 [internal citations and quotation marks omitted]; see O'Shea v O'Shea, 93 NY2d 187, 190; Shakil v Rehman, 134 AD3d 1093, 1094; Witter v Daire, 81 AD3d 719, 720; Prichep v Prichep, 52 AD3d 61, 65). There is a rebuttable presumption that interim counsel fees shall be awarded to the less monied spouse (see Domestic Relations Law § 237[a]), and courts "should normally exercise their discretion to grant such a request made by the nonmonied spouse, in the absence of good cause" to deny the request (Prichep v Prichep, 52 AD3d at 65; see Carlin v Carlin, 120 AD3d 734, 735).

Here, considering the equities of the case and the financial circumstances of the parties, the Supreme Court should have directed the defendant to pay additional interim counsel fees to the law firm. Even taking into account the pendente lite relief awarded to the plaintiff and the defendant's voluntary sale of his interest in his medical practice, the defendant remained the monied spouse, and he failed to rebut the presumption that additional interim counsel fees should be awarded to the plaintiff as the nonmonied spouse (see E.J.L. v K.L.L., 38 Misc 3d 389, 406 [Sup Ct, Monroe County]; Darby v Darby, 35 Misc 3d 1235[A], 2012 NY Slip Op 510049[U] [Sup Ct, Kings County]). Exercising this Court's discretionary authority, which is as broad as that of the Supreme Court (see Cohen v Cohen, 160 AD3d at 806), we determine that an award of 75% of the total combined sum requested, or $58,784.90, is appropriate under the circumstances (see Domestic Relations Law § 237[a]; Shakil v Rehman, 134 AD3d 1093; Prichep v Prichep, 52 AD3d at 65). We note that the requested fees were incurred following the plaintiff's prior award of interim counsel fees. Therefore, contrary to the defendant's contention, there is no duplication of fees. We further note that our analysis applied to the granting of interim counsel fees to ensure that the plaintiff "will be able to litigate this action on equal footing" with the defendant (Duvall v Duvall, 144 AD3d 739, 742-743; see Prichep v Prichep, 52 AD3d at 65). A more detailed analysis of the relative financial circumstances of the parties will be addressed after trial and any interim awards will ultimately be considered by the trial court in the context of an overall resolution of the parties' financial claims (see Duvall v Duvall, 144 AD3d at 743; see also DeCabrera v Cabrera-Rosete, 70 NY2d 879, 881; Prichep v Prichep, 52 AD3d at 66)."

ONE COURT'S PERSPECTIVE ON ATTORNEY FEE APPLICATION

This decision, in part, reminds me of the old joke of the plumber and the lawyer: "A pipe bursts in a lawyer’s house, so he calls a plumber. The plumber arrives, unpacks his tools, does mysterious plumber-type things for a while, and hands the lawyer a bill for $600. The lawyer exclaims, “This is ridiculous! I don’t even make that much as a lawyer!” The plumber replies sympathetically, “Neither did I when I was a lawyer.”"

Cruz v. SEWARD PARK HOUS. CORP., 2018 NY Slip Op 31598 - NY: Supreme Court July 6, 2018:

"That a law firm is asking for the staggering sum of $464,164 to have prevailed upon a court to dismiss as untimely a relatively straightforward CPLR Article 78 Petition commenced by several middle-class tenants responsible for attorney's fees is shocking and disturbing, highway robbery without the six-gun. Society cannot devote such huge resources to such a simple court proceeding (which, after all, accomplished nothing) and survive, much less prosper. Such an outrageous figure sounds like a typographical error or an April Fool's joke; if it is not, it merits "fee shaming," public humiliation, and possible sanctions. For such egregious overreaching, a court could, and maybe should, award nothing. After all, these days, that same $464,164 (incidentally, significantly more than twice the $208,000 annual salary of a New York State Supreme Court Justice; 223% to be exact) could buy you a one-bedroom co-op apartment on the Upper East Side of Manhattan, at First Avenue and 72nd Street, a stone's throw from the new Second Avenue Subway Line, with a 24-hour doorperson, live-in resident manager, concierge, laundry room, and on-site parking garage (a particularly nice amenity!). If you are bargain-hunting, $400,000 could buy you a one-bedroom co-op apartment in Bay Ridge, Brooklyn, near the old "R" Subway Line, with a live-in super, washer-dryer, high ceilings, and almost 1,000 square feet. If you are tired of apartment living, but still want a short commute, $450,000 could buy you, free and clear (no mortgage, same as the apartments), your very own private house in suburban Elmont, Nassau County, just over the Queens border, with more than 1,200 square feet of indoor space, four bedrooms, three baths, a finished basement, updated kitchen, and a "great" backyard (emphasis in the original). The point being that we are not talking mere Monopoly money here!"

MORTGAGE FORECLOSURE - WHO IS BEHIND THE LEGAL FEES OF THE HOMEOWNER DEFENSES?

We all know the high cost of litigation.

In a recent case, BANK OF NEW YORK MELLON, ETC., Appellant, v. ALICE J. DIEUDONNE, Respondent, ET AL., Defendants. 2017-08956, Index No. 518577/16. Appellate Division of the Supreme Court of New York, Second Department. Decided March 13, 2019, the court held that the statute of limitations barred foreclosure because, in a prior action, the mortgage was accelerated by the filing of a complaint to foreclose the mortgage with an election to accelerate, even though a provision in the mortgage preserves the borrower’s right to make installment payments rather than the full debt. 

A review on e file reveals this was litigated vigorously. After service was a motion to dismiss by homeowner, involving memorandums of laws and affidavits, opposition papers, reply papers, a motion for leave to re argue, etc. all the way up to the appeal. The debt in issue appears to have been about 250G as of 2008 so there is 11 years of interest and other fees to be added. According to Trulia, etc., the house has a value of about 500G. My compliments to the homeowner's counsel who, reviewing the papers submitted, did an excellent job.

Through my many years of experience at the mortgage foreclosure clinic at the Nassau County Bar Association, most homeowners cannot afford legal fees for defense. If you cannot pay your mortgage, usually it is because income has dropped substantially so that the home is no longer affordable. And if you cannot pay your mortgage, can you afford legal fees? Many times in reading these cases on these successful homeowner cases on middle class homes, I wonder how the homeowner can afford such a litigation if they cannot afford the mortgage.

An article came out last week, "Mortgage Acceleration and Statute of Limitations Developments in the Second Department" by Adam M. Swanson and Jessie D. Bonaros, NYLJ, March 20, 2019. And there is a statement, of which I cannot find the evidence behind it, but I note as follows:

"Courts are giving out free houses but not to homeowners—to real estate speculators who are paying pennies to the homeowner for the right to fight foreclosure....Although it appears that these decisions benefit homeowners, all the benefits are going to real estate speculators while these decisions chill mortgage lending in New York."

DISPUTE OVER ATTORNEY FEES FOR A DISCHARGED ATTORNEY IN DIVORCE

Sometimes, the attorney/client relationship breaks down just like the marital relationship.

Rhodes v Rhodes, 2019 NY Slip Op 01113, Decided on February 13, 2019, Appellate Division, Second Department:

"The plaintiff and the defendant were married in 1993 and have three children. The parties divorced in 2008. In 2013, the defendant moved to modify the parties' custody arrangement so as to award him residential custody of the children. In an order dated December 22, 2014, the Supreme Court awarded the defendant residential custody of the children and awarded the plaintiff parental access. The plaintiff appealed from that order.

In May 2015, the plaintiff moved for interim appellate attorney's fees and costs. In an order dated August 25, 2015 (hereinafter the August 2015 order), the Supreme Court, in effect, granted the plaintiff's motion, awarding her a total of $20,000 in attorney's fees and costs "for the prosecution of the appeal, with leave to apply for additional sums upon the completion of the [*2]appeal." The defendant was to pay those attorney's fees and costs to the plaintiff's then-attorney, the nonparty, Karyn A. Villar, PLLC (hereinafter the Villar firm), within 20 days of the order.

On September 23, 2015, the Villar firm moved to hold the defendant in civil contempt of the August 2015 order. The defendant cross-moved for leave to renew his opposition to the plaintiff's prior motion for interim appellate attorney's fees and costs. The defendant attached to his cross motion, inter alia, a stipulation of settlement dated September 28, 2015, wherein the plaintiff and the defendant agreed that the plaintiff would waive payment of attorney's fees and costs owed by the defendant pursuant to the August 2015 order. The plaintiff retained new counsel, and thereafter cross-moved to impose sanctions against the Villar firm, arguing that the Villar firm's contempt motion was punitive and an abuse of process.

In an order dated March 7, 2016, the Supreme Court (1) denied the Villar firm's motion to hold the defendant in civil contempt, (2) granted the defendant's cross motion for leave to renew and, upon renewal, in effect, vacated the August 2015 order granting the plaintiff's motion for interim appellate attorney's fees and costs, and thereupon denied the plaintiff's motion, and (3) granted the plaintiff's cross motion to impose sanctions against the Villar firm, and directed the Villar firm to pay the plaintiff's attorney's fees in the sum of $2,500. The Villar firm appeals.

The Supreme Court should have granted the Villar firm's motion to hold the defendant in civil contempt. To prevail on a motion to hold another party in civil contempt, the movant is "required to prove by clear and convincing evidence (1) that a lawful order of the court, clearly expressing an unequivocal mandate, was in effect, (2) that the order was disobeyed and the party disobeying the order had knowledge of its terms, and (3) that the movant was prejudiced by the offending conduct" (El-Dehdan v El-Dehdan, 114 AD3d 4, 16 [internal quotation marks omitted]; see Matter of Philie v Singer, 79 AD3d 1041, 1042). The movant in a civil contempt proceeding need not establish "that the disobedience [was] deliberate or willful" (Matter of Philie v Singer, 79 AD3d at 1042). "Once the movant establishes a knowing failure to comply with a clear and unequivocal mandate, the burden shifts to the alleged contemnor to refute the movant's showing, or to offer evidence of a defense, such as an inability to comply with the order" (El-Dehdan v El-Dehdan, 114 AD3d at 17).

Here, the defendant disputes the Villar firm's showing only as to the first and third prongs of El-Dehdan v El-Dehdan (114 AD3d at 16). As to the first prong, the Villar firm established "that a lawful order of the court, clearly expressing an unequivocal mandate, was in effect" (id. at 16), by attaching the August 25, 2015, order to the contempt motion, which order unequivocally directed the defendant to pay the Villar firm $20,000 in interim appellate attorney's fees and costs within 20 days of the order. As noted, it is undisputed that the defendant had knowledge of the terms of the August 25, 2015, order and that he did not comply with them. Finally, as to the third prong, the Villar firm demonstrated that it had begun drafting the plaintiff's appellate brief and that it was owed compensation for legal services that were performed before the Villar firm was discharged.

The defendant's proffered defenses in response to the Villar firm's showing were without merit. The plaintiff's subsequent decision to waive attorney's fees and to discharge the Villar firm did not preclude the Villar firm from collecting fees that it incurred before it was discharged, so long as it was discharged without cause (see Frankel v Frankel, 2 NY3d 601, 606-607; Matter of Gregory v Gregory, 109 AD3d 616, 617). The defendant did not contend or establish in his opposition papers that the plaintiff discharged the Villar firm for cause. Furthermore, the Villar firm was not required to exhaust other enforcement remedies before seeking to hold the defendant in civil contempt (see L 2016, ch 365, §§ 1, 2; Cassarino v Cassarino, 149 AD3d 689, 691). Under the circumstances, the Supreme Court should have granted the Villar firm's motion to hold the defendant in civil contempt (see generally El-Dehdan v El-Dehdan, 114 AD3d at 16).

Although the Supreme Court had awarded the Villar firm a total of $20,000 for the prosecution of the plaintiff's appeal, the record demonstrates that the plaintiff discharged the Villar firm before the appeal was completed. Accordingly, under the circumstances, we remit the matter [*3]to the Supreme Court, Suffolk County, to determine the amount of the attorney's fees and costs that the Villar firm is owed by the defendant, taking into consideration factors such as when the plaintiff directed the Villar firm to stop working on the appeal, when the plaintiff discharged the Villar firm, "the complexity of the issues involved, and the reasonableness of counsel's performance and the fees under the circumstances" (Matter of Gregory v Gregory, 109 AD3d at 618 [internal quotation marks omitted]).

We disagree with the Supreme Court's determination granting the defendant leave to renew his opposition to the plaintiff's prior motion for interim appellate attorney's fees and costs. Before the parties settled their underlying custody dispute and discontinued the appeal from the order dated December 22, 2014, the Villar firm performed work on, and incurred expenses arising from, the appeal from that order. As discussed above, the Villar firm was entitled to payment for its work despite the parties' settlement and attempt to waive attorney's fees and costs. Thus, the settlement and withdrawal of that appeal did not constitute new facts "that would change the prior determination," and the court should have denied the defendant's cross motion for leave to renew (CPLR 2221[e][2]).

We also disagree with the Supreme Court's determination granting the plaintiff's cross motion to impose sanctions against the Villar firm for pursuing the contempt motion. Contrary to the Villar firm's contention, the court did not violate its rights in deciding the motion without a hearing, as the plaintiff expressly requested the subject relief in her motion papers, and the Villar firm was afforded an opportunity to be heard and to oppose the motion (see Matter of Ruth S. [Sharon S.], 125 AD3d 978, 980; see e.g. Levine v Levine, 111 AD3d 898, 899). However, the Villar firm is correct that sanctions were not warranted in this case. "In addition to or in lieu of awarding costs, the court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct" (22 NYCRR 130-1.1[a]; see Weissman v Weissman, 116 AD3d 848, 849). "[C]onduct is frivolous if . . . (1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; (2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or (3) it asserts material factual statements that are false" (22 NYCRR 130-1.1[c]; see Weissman v Weissman, 116 AD3d at 849). Contrary to the Supreme Court's determination, there is no evidence in the record to support a finding that the Villar firm pursued the contempt motion to harass the parties for settling their case (see 22 NYCRR 130-1.1[c][2])."

DIVORCE - INTERIM LEGAL FEES

Skokos v Skokos, 2019 NY Slip Op 00158, Decided on January 9, 2019, Appellate Division, Second Department:

"Domestic Relations Law § 237(a) provides that in any action for a divorce, "the court may direct either spouse . . . to pay counsel fees . . . directly to the attorney of the other spouse to enable the other party to carry on or defend the action . . . as, in the court's discretion, justice requires, having regard to the circumstances of the case and of the respective parties." The statute provides that "[t]here shall be a rebuttable presumption that counsel fees shall be awarded to the less monied spouse" (Domestic Relations Law § 237[a]).

The determination of an application for interim counsel fees is committed to the sound discretion of the trial court (see Falcone v Falcone, 109 AD3d 787; Coven v Coven, 82 AD3d 1144). "An award of interim counsel fees to the nonmonied spouse will generally be warranted where there is a significant disparity in the financial circumstances of the parties" (Falcone v Falcone, 109 AD3d at 788). Such an award is intended to ensure that the nonmonied spouse "will be able to litigate the action, and do so on equal footing with the monied spouse" (Prichep v Prichep, 52 AD3d 61, 65).

Here, the evidence submitted by the defendant revealed a significant disparity in the financial circumstances of the parties, as the plaintiff owns and derives his income from a successful [*2]construction business, and the defendant, who has not been employed outside the home since the beginning of the marriage, has relatively few financial resources. Thus, the evidence established that the defendant is the nonmonied spouse. Further, the record reflects that the Supreme Court had a sufficient basis to award the defendant interim counsel fees in the sum of $15,000 (see Domestic Relations Law § 237[a]; Vistocco v Jardine, 116 AD3d 842; Palmeri v Palmeri, 87 AD3d 572; Penavic v Penavic, 60 AD3d 1026; Prichep v Prichep, 52 AD3d at 66)."

LIMITING THE RECOVERY OF LEGAL FEES IN HOUSING COURT

Sokolow v. NEUMANN-WERTH, 2018 NY Slip Op 28351 - NY: Appellate Term, 2nd Dept. 2018:

"Where a lease does not deem attorney's fees to be additional rent, a court entertaining a summary proceeding lacks subject matter jurisdiction to entertain a landlord's claim for attorney's fees (see RPAPL 741 [5]; Jacoby v Cabrera, 60 Misc 3d 136[A], 2018 NY Slip Op 51079[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2018]; Green v Weslowski, 53 Misc 3d 144[A], 2016 NY Slip Op 51568[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2016]; Inland Diversified Real Estate Serv., LLC v Keiko NY, Inc., 51 Misc 3d 139[A], 2016 NY Slip Op 50613[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2016]; Saunders St. Owners, Ltd. v Broudo, 32 Misc 3d 135[A], 2011 NY Slip Op 51459[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]; Henry v Simon, 24 Misc 3d 132[A], 2009 NY Slip Op 51369[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2009]; see also 172 Van Duzer Realty Corp. v Globe Alumni Student Assistance Assn., Inc., 24 NY3d 528, 534 [2014]; Matter of Bedford Gardens Co. v Silberstein, 269 AD2d 445 [2000]).

…….

The provisions in the lease, as set forth in paragraph 23, limit landlord's right to recover attorney's fees to instances where the tenant's default leads to landlord's cancelling the lease, taking back the apartment, and deducting landlord's expenses, which include reasonable legal fees, from the rent received from the new tenant. "New York public policy disfavors any award of attorneys' fees to the prevailing party in a litigation [and] a provision in an agreement allowing the recovery of attorneys' fees that are incidents of litigation should be strictly construed" (Horwitz v 1025 Fifth Ave., Inc., 34 AD3d 248, 249 [2006] [internal quotation marks and citation omitted]; see 40-50 Brighton First Rd. Apts. Corp. v Henderson, 51 Misc 3d 1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]). Since the conditions in paragraph 23 upon which landlord may recover attorney's fees as "added rent" are not present in this holdover proceeding based on the termination of a month-to-month tenancy, where there was no default by tenants which prompted the cancellation of the lease or the taking back and rerenting of the apartment by landlord, the Civil Court lacked subject matter jurisdiction to entertain landlord's claims for attorney's fees in this summary proceeding (see Jacoby v Cabrera, 60 Misc 3d 136[A], 2018 NY Slip Op 51079[U]; Green v Weslowski, 53 Misc 3d 144[A], 2016 NY Slip Op 51568[U],*1; Inland Diversified Real Estate Serv., LLC v Keiko NY, Inc., 51 Misc 3d 139[A], 2016 NY Slip Op 50613[U], *2). Were the issue properly in the case, we would find, for the same reason, that landlord is not entitled to such fees."

RECOVERING LEGAL FEES - PART 137

Zisholtz & Zisholtz, LLP v Mandel, 2018 NY Slip Op 07349, Decided on October 31, 2018, Appellate Division, Second Department:

"On the merits, in light of the absence of an enforceable agreement to settle this action, the Supreme Court should have granted the cross motion to dismiss the complaint pursuant to CPLR 3211(a)(7). "A plaintiff's failure to provide the defendant with written notice of his or her right to elect to submit the fee dispute to arbitration, and the failure to allege in the complaint that the defendant received such notice and did not file a timely request for arbitration, or that fee dispute arbitration is inapplicable to the matter for specified reasons, requires dismissal of the complaint" (Pascazi Law Offs., PLLC v Pioneer Natural Pools, Inc., 136 AD3d 878, 878-879; see Gary Friedman, P.C. v O'Neill, 115 AD3d 792, 793; Herrick v Lyon, 7 AD3d 571). Here, the complaint fails to allege either compliance with the notice requirements of 22 NYCRR 137.6(a)(1), or that the matter is not covered by the Fee Dispute Resolution Program (22 NYCRR part 137) for one or more reasons specified in 22 NYCRR 137.1 (see Pascazi Law Offs., PLLC v Pioneer Natural Pools, Inc., 136 AD3d at 879; Kerner and Kerner v Dunham, 46 AD3d 372). However, under the circumstances of this case, the dismissal is without prejudice to the commencement of a new action by the plaintiff, if it be so advised, following its compliance with the notice and arbitration requirements of 22 NYCRR part 137 (see Pascazi Law Offs., PLLC v Pioneer Natural Pools, Inc., 136 AD3d at 879)."

AWARDING ATTORNEY FEES IN CUSTODY HEARING

Matter of Yu Wei v Mathews, 2018 NY Slip Op 06922, Decided on October 17, 2018, Appellate Division, Second Department:

"The parties are the parents of one child. The mother commenced this proceeding seeking custody of the child. While the custody proceeding was pending, the parties were also litigating separate family offense and child support proceedings, as well as a partition action regarding their jointly owned home. The mother moved for an award of counsel fees in the amount of $60,000 in the custody proceeding. In an order dated December 7, 2017, the Supreme Court granted the mother's motion. Subsequently, the parties settled the custody proceeding. Thereafter, the father moved, inter alia, for leave to renew his opposition to the mother's motion for an award of counsel fees. Upon renewal, the Supreme Court adhered to its determination to award the mother counsel fees, but decreased the award from $60,000 to $30,000. The father appeals.

The court in a custody proceeding has the authority to award counsel fees when the circumstances warrant (see Family Ct Act § 651[b]; Domestic Relations Law § 237[b]; Matter of Tundis v Tundis, 155 AD3d 882, 883; Matter of Catto v Howell, 144 AD3d 1146, 1147). The award of reasonable counsel fees is a matter entrusted to the trial court's sound discretion (see Matter of Zaydenverg v Zaydenverg, 151 AD3d 871, 872, Matter of Feng Lucy Luo v Yang, 104 AD3d 852). Such an award "is to be based on the financial circumstances of the parties and the circumstances of the case as a whole, which may include the relative merit of the parties' positions, but should not be predicated solely on who won and who lost" (Matter of O'Neil v O'Neil, 193 AD2d 16, 20; see Matter of Tundis v Tundis, 155 AD3d at 883).

Here, upon renewal, the Supreme Court providently exercised its discretion in awarding the mother counsel fees, based on the court's interactions with the parties, the court's [*2]participation in the custody proceeding, and the court's determination that the father had unnecessarily prolonged the litigation of the custody proceeding (see Matter of Zaydenverg v Zaydenverg, 151 AD3d at 872; Matter of Tuglu v Crowley, 96 AD3d 862, 863).

However, the billing records and other evidence submitted by the mother in support of her motion were insufficient to demonstrate that the $30,000 in counsel fees the Supreme Court awarded upon renewal were all incurred in the context of the custody proceeding, and not the parties' separate family offense and child support proceedings pending before the court, or the partition action pending before a different court. Inasmuch as the court predicated its award of counsel fees upon the father's dilatory conduct in the custody proceeding alone, the court failed to justify awarding the mother counsel fees to the extent that the counsel fees were incurred in the separate family offense and child support proceedings. Moreover, the court was not empowered to award any fees that may have related to the partition action (see Family Ct Act § 651[b]; Domestic Relations Law § 237[b]; Zeitlin v Zeitlin, 250 AD2d 606).

Moreover, inasmuch as the father objected to the time and value of the mother's attorneys' claimed services, and there is no indication in the record that the father stipulated that an award of counsel fees could be made solely on the papers or otherwise was on notice that the court would adopt that procedure, the Supreme Court was required to hold an evidentiary hearing on this issue (see Tenaglia v Tenaglia, 134 AD3d 801, 803; O'Connor v O'Connor, 89 AD3d 703, 704; Pfluger v Pfluger, 35 AD3d 828, 828-829; cf. Messinger v Messinger, 24 AD3d 631; Sieratzki v Sieratzki, 8 AD3d 552). Contrary to the mother's contention, this is not an issue that requires preservation (see O'Connor v O'Connor, 89 AD3d at 704; Pfluger v Pfluger, 35 AD3d at 828-829).

Accordingly, we remit the matter to the Supreme Court, Westchester County, for a hearing and determination on the issues of the amount of counsel fees the mother incurred in the custody proceeding that were outstanding at the time of her original motion for counsel fees and the extent and value of her attorneys' services (see Tenaglia v Tenaglia, 134 AD3d at 803; O'Connor v O'Connor, 89 AD3d at 704; Mattana v Mattana, 79 AD2d 702; Zeitlin v Zeitlin, 250 AD2d at 607)."

IMPROPER AFFIDAVIT OF SERVICE NOT FRIVOLOUS

U.S. Bank, N.A. v Rosario, 2018 NY Slip Op 06050, Decided on September 12, 2018, Appellate Division, Second Department:

"The plaintiff commenced this action to foreclose a mortgage given by the defendants Roberto Rosario and Jose Lopez to secure a note. The plaintiff moved, in effect, for leave to enter a default judgment against Rosario and Lopez, upon their failure to timely appear or answer the [*2]complaint, and for an order of reference. The plaintiff subsequently withdrew the motion insofar as it related to Rosario. Rosario and Lopez cross-moved pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against them, contending, inter alia, that the Supreme Court lacked personal jurisdiction over Rosario. They also moved to impose sanctions against the plaintiff pursuant to 22 NYCRR 130-1.1. In an order dated October 2, 2015, the court denied the plaintiff's motion and granted the cross motion. Subsequently, in an order dated December 15, 2015, the court, after a hearing, awarded Rosario and Lopez an attorney's fee pursuant to 22 NYCRR 130-1.1 in the sum of $5,600. The plaintiff appeals.

In support of their cross motion, Rosario and Lopez argued that the process server's affidavit of service as to Rosario was "wholly devoid" of any reference to the mailing prong of CPLR 308(2) and that the requisite mailing "was not done." They further contended that inasmuch as personal jurisdiction was not obtained over Rosario (see CPLR 3211[a][8]), the complaint must also be dismissed as to Lopez (see CPLR 1001, 3211[a][10]; RPAPL 1311). However, in opposition to the cross motion, the plaintiff submitted an affidavit of service wherein the process server attested that three days after serving a person of suitable age and discretion at Rosario's place of business, he served the summons and complaint by mail (see CPLR 308[2]). Accordingly, the Supreme Court should have denied that branch of cross motion of Rosario and Lopez which was pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against them.

"An applicant for a default judgment against a defendant must submit proof of service of the summons and complaint, proof of the facts constituting the claim, and proof of the defaulting defendant's failure to answer or appear" (Wells Fargo Bank, N.A. v Mayen, 155 AD3d 811, 813 [internal quotation marks omitted]; see CPLR 3215[f]). Here, the plaintiff demonstrated its entitlement to a default judgment against Lopez and to an order of reference by submitting, inter alia, the mortgage, the unpaid note, the complaint, the affidavit of a representative of its servicing agent attesting to Lopez's default, and proof that Lopez failed to appear or answer within the time allowed (see CPLR 308[1]; 3215[f]; RPAPL 1321; Wells Fargo Bank, N.A. v Mayen, 155 AD3d at 813; Wells Fargo Bank, NA v Ambrosov, 120 AD3d 1225, 1226). In opposition, Lopez failed to submit evidence sufficient to defeat the plaintiff's facially adequate motion (see HSBC Bank USA, N.A. v Traore, 139 AD3d 1009, 1011). Accordingly, the Supreme Court should have granted the plaintiff's motion, in effect, for leave to enter a default judgment against Lopez and for an order of reference (see CPLR 3215[f]; RPAPL 1321).

Under the circumstances, the plaintiff's conduct was not frivolous within the meaning of 22 NYCRR 130-1.1 (see Joan 2000, Ltd. v Deco Constr. Corp., 66 AD3d 841). Accordingly, the Supreme Court should have denied that branch of the cross motion of Rosario and Lopez which was to impose sanctions against the plaintiff."

DIVORCE - AWARDING COUNSEL FEES FOR VIOLATING SETTLEMENT

Boukas v Boukas, 2018 NY Slip Op 05273, Decided on July 18, 2018, Appellate Division, Second Department:

"The parties were married in 1991 and have two children together. In 2011, the plaintiff commenced an action for a divorce and ancillary relief. The parties executed a stipulation of settlement dated September 10, 2013, which was incorporated but not merged into a judgment of divorce entered March 14, 2014, and included a vacation and parental access schedule with regard to the parties' children. The defendant moved to find the plaintiff in contempt of the parties' stipulation of settlement based on alleged violations of this schedule. The plaintiff cross-moved to hold the defendant in contempt, alleging noncompliance by the defendant with certain terms of the stipulation of settlement. The parties settled all issues with the exception of counsel fees, which issue was referred to the court for determination. In the order appealed from the Supreme Court, inter alia, denied that branch of the defendant's motion which was for an award of counsel fees.

In determining whether an award of counsel fees is appropriate, the court must [*2]consider the equities and circumstances of each particular case, the relative merit of the parties' contentions and their respective financial positions (see Domestic Relations Law § 238; Mons Pinto v Pinto, 151 AD3d 715; Ackerman v Midura, 145 AD3d 647; Pelgrim v Pelgrim, 127 AD3d 710, 714; Hackett v Hackett, 115 AD3d 800, 803; Pathak v Shukla, 109 AD3d 891, 892; Quinn v Quinn, 73 AD3d 887; Lauria v Usak-Lauria, 65 AD3d 1017).

Here, the defendant was entitled to reasonable counsel fees in connection with this matter, as the plaintiff's conduct in violation of the stipulation of settlement caused these fees to be incurred (see Pathak v Shukla, 109 AD3d 891, 892; Quinn v Quinn, 73 AD3d 887; Lauria v Usak-Lauria, 65 AD3d 1017). An award of counsel fees in the sum of $15,000 is supported by the record."

AN ACTION FOR LEGAL FEES

Holtzman v Griffith, 2018 NY Slip Op 04540, Decided on June 20, 2018, Appellate Division, Second Department:

"In January 2009, the defendant retained the plaintiff to represent him in a divorce action commenced against him by his former wife. The divorce action culminated in a settlement. The plaintiff represented the defendant from January 2009 through June 2011, and periodically sent invoices to the defendant for legal services rendered in accordance with a retainer agreement executed by the defendant. The defendant received the invoices and made payments with respect thereto through October 22, 2010. Thereafter, he made no further payments to the plaintiff. When the defendant discharged the plaintiff in June 2011, there were outstanding invoices in the total sum of $18,581.50. The plaintiff commenced this action, inter alia, to recover on an account stated. The defendant answered and interposed counterclaims alleging legal malpractice against the plaintiff. The plaintiff moved for summary judgment on the cause of action for an account stated and dismissing the defendant's counterclaims. The Supreme Court granted the motion, and the defendant appeals.

"An account stated is an agreement between parties, based upon their prior transactions, with respect to the correctness of the account items and the specific balance due'" (Bashian & Farber, LLP v Syms, 147 AD3d 714, 715, quoting Citibank [South Dakota], N.A. v Abraham, 138 AD3d 1053, 1056). "Although an account stated may be based on an express [*2]agreement between the parties as to the amount due, an agreement may be implied where a defendant retains bills without objecting to them within a reasonable period of time, or makes partial payment on the account" (Citibank [South Dakota], N.A. v Abraham, 138 AD3d at 1056; see Fleetwood Agency, Inc. v Verde Elec. Corp., 85 AD3d 850). The "agreement" at the core of an account stated is independent of the underlying obligation between the parties (see Citibank [South Dakota], N.A. v Abraham, 138 AD3d at 1056; Citibank [S.D.] N.A. v Cutler, 112 AD3d 573).

Here, the plaintiff demonstrated her prima facie entitlement to judgment as a matter of law on the cause of action to recover legal fees on an account stated in the amount of $18,581.50, with interest from July 11, 2011 (see Bashian & Farber, LLP v Syms, 147 AD3d at 715). In opposition, the defendant failed to raise a triable issue of fact (see Langione, Catterson & Lofrumento, LLP v Schael, 148 AD3d 797). The plaintiff also demonstrated her prima facie entitlement to judgment as a matter of law dismissing the defendant's counterclaims. The plaintiff's submissions demonstrated that in representing the defendant, who was also the defendant in the divorce action, she exercised the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the stipulation of settlement executed by the defendant in the divorce action was not the product of any mistakes by the plaintiff (see Schiff v Sallah Law Firm, P.C., 128 AD3d 668, 669). The stipulation of settlement recited, among other things, that the defendant reviewed and understood its terms, had an opportunity to consult with counsel and have the legal and practical effect of the stipulation fully explained to him, executed the stipulation voluntarily, without coercion or pressure of any kind, and believed the stipulation to be fair and reasonable (see Chamberlain, D'Amanda, Oppenheimer & Greenfield, LLP v Wilson, 136 AD3d 1326, 1328; Schiff v Sallah Law Firm, P.C., 128 AD3d at 669). In opposition, the defendant failed to raise a triable issue of fact."

WHEN CAN AN EMPLOYER RECOVER ATTORNEY FEES WHEN A WHISTLEBLOWER CASE IS DISMISSED

Berde v North Shore- Long Is. Jewish Health Sys., Inc., 2018 NY Slip Op 03955, Decided on June 6, 2018, Appellate Division, Second Department:

"The plaintiff commenced this action to recover damages for unlawful termination of employment in violation of Labor Law § 740. After years of discovery and motion practice, including two appeals in which this Court vindicated the plaintiff's right to proceed with this action (see Berde v North Shore-Long Is. Jewish Health Sys., Inc., 98 AD3d 932, 932-933; Berde v North Shore-Long Is. Jewish Health Sys., Inc., 50 AD3d 834, 835-836), the Supreme Court, following a nonjury trial, decided in favor of the defendant in a decision dated July 25, 2014. In an order dated October 21, 2014, the court awarded the defendant attorneys' fees and costs pursuant to Labor Law § 740(6) in the sum of $591,071.70. The court entered a judgment dated March 20, 2015, upon the decision and the order. In an order dated September 8, 2015, the court granted the plaintiff's motion [*2]for leave to reargue the award of attorneys' fees and costs, but upon reargument, adhered to its original determination. The plaintiff appeals from the judgment and the order dated September 8, 2015.

Although the decision of the trial court upon which the judgment was based did not state the essential facts (see CPLR 4213[b]), this Court has before it the complete trial record, which is sufficient to conduct an independent review of the evidence so as to make the requisite findings of fact (see Park E. Constr. Corp. v East Coast Mech. Servs., Inc., 133 AD3d 581, 582; Hugh O'Kane Elec. Co., LLC. v MasTec N. Am., Inc., 45 AD3d 413, 414; Atlantic Contr. Corp. v Hartford Acc. & Indem. Co., 155 AD2d 571, 572). " In reviewing a determination rendered after a nonjury trial, the power of this Court is as broad as that of the trial court, and this Court may render the judgment it finds warranted by the facts'" (Galbraith v Westchester County Health Care Corp., 140 AD3d 696, 697, quoting Furino v O'Sullivan, 137 AD3d 1208, 1209-1210). Upon our independent review, we conclude that the determination to dismiss the complaint was warranted by the facts presented at trial (see Hookman v Lenox Hill Hosp., 241 AD2d 333, 333). In particular, the weight of the evidence established that the defendant had a nonretaliatory justification for dismissing the plaintiff, as she had numerous conflicts with other hospital staff and failed to improve in that respect despite opportunities to do so.

Labor Law § 740(6) provides that a court, in its discretion, may award an employer attorneys' fees and costs if it determines that the employee's action is " without basis in law or in fact'" (Tomo v Episcopal Health Servs., Inc., 85 AD3d 766, 768-769, quoting Labor Law § 740[6]). Here, the trial record included testimonial and documentary evidence of the plaintiff's numerous complaints about ongoing sterility problems in the operating room, which problems arguably constituted a violation of applicable regulations and posed a present, substantial, and specific danger to patient health. The plaintiff and other witnesses testified that these issues arose hundreds of times over the relevant time period and were not seriously addressed until after the plaintiff finally complained to her supervisor's supervisor. The plaintiff's annual performance evaluations demonstrate that she met or exceeded expectations throughout her tenure as a nurse manager and, despite identifying areas for improvement, did not indicate a risk of dismissal until after she complained to upper management. While ultimately unpersuasive in light of the defendant's evidence, the plaintiff's action "cannot reasonably be characterized as being without basis in law or in fact'" (Lukose v Long Is. Med. Diagnostic Imaging, P.C., 120 AD3d 1312, 1313-1314, quoting Labor Law § 740[6]). The Supreme Court therefore improvidently exercised its discretion in awarding the defendant attorneys' fees and costs pursuant to Labor Law § 740(6)."

CHILD CUSTODY - WHO PAYS FOR ATTORNEY FOR CHILD

Matter of Young v Young, 2018 NY Slip Op 03850, Decided on May 30, 2018, Appellate Division, Second Department:

"Courts are authorized to direct that " a parent who has sufficient financial means to do so pay some or all of the [attorney for the child's] fees'" (Pascazi v Pascazi, 65 AD3d 1202, 1203, quoting Matter of Plovnick v Klinger, 10 AD3d 84, 89; see 22 NYCRR 36.4; Judiciary Law § 35[3]; Rupp-Elmasri v Elmasri, 8 AD3d 464; Jain v Garg, 303 AD2d 985, 986; Pascarelli v Pascarelli, 283 AD2d 472). Further, the mere fact that the attorney for the child adopted positions that were not favorable to the father does not demonstrate that the attorney for the child was biased against the father (see Matter of Luizzi v Collins, 60 AD3d 1062, 1063). In custody proceedings, the role of the attorney for the child is to "zealously advocate the child's position," not the positions of the parents (22 NYCRR 7.2[d]). Under the circumstances of this case, we agree with the Family Court's determination to direct the father to pay half of the total amount of counsel fees awarded to the attorney for the child (see Pascazi v Pascazi, 65 AD3d at 1203; Pedreira v Pedreira, 34 AD3d 225; Matter of Plovnick v Klinger, 10 AD3d at 91)."

DIVORCE - AWARDING COUNSEL AND EXPERT FEES

Greco v Greco, 2018 NY Slip Op 03509, Decided on May 16, 2018, Appellate Division, Second Department:

"The parties were married in 1999 and have two children together. In May 2010, the plaintiff commenced this action for a divorce and ancillary relief. Following a custody trial, the plaintiff was awarded full custody of the children. Thereafter, a trial was held on the financial issues, and the Supreme Court issued a judgment of divorce. Following the conclusion of the trial on financial issues, the defendant moved for awards of counsel fees and expert witness fees. The court granted those branches of the motion which were for awards of counsel fees in the sums of $70,000 payable to Lawrence J. Glynn and $37,500 payable to John A. Gemelli, and for an award of expert witness fees in the sum of $12,700 payable to the defendant. The plaintiff appeals.

In a matrimonial action, an award of counsel fees is a matter committed to the sound discretion of the trial court (see Montoya v Montoya, 143 AD3d 865, 865; Vitale v Vitale, 112 AD3d 614, 614-615). However, court rules impose certain requirements upon attorneys who represent clients in domestic relations matters (see 22 NYCRR part 1400). These rules were designed to [*2]address abuses in the practice of matrimonial law and to protect the public, and the failure to substantially comply with the rules will preclude an attorney's recovery of a fee from his or her client (see Montoya v Montoya, 143 AD3d at 865; Hovanec v Hovanec, 79 AD3d 816, 817; Pillai v Pillai, 15 AD3d 466; Bishop v Bishop, 295 AD2d 382) or from the adversary spouse (see Rosado v Rosado, 100 AD3d 856; Wagman v Wagman, 8 AD3d 263). A showing of substantial compliance must be made on a prima facie basis as part of the moving party's papers (see Montoya v Montoya, 143 AD3d at 866; Gottlieb v Gottlieb, 101 AD3d 678, 679).

Here, the evidence proffered by the defendant in support of that branch of her motion which was for an award of counsel fees for work performed by Glynn demonstrates that Glynn failed to substantially comply with the rules requiring periodic billing statements at least every 60 days (see 22 NYCRR 1400.2, 1400.3[9]; Montoya v Montoya, 143 AD3d at 866; Rosado v Rosado, 100 AD3d at 856; Gahagan v Gahagan, 51 AD3d 863). Accordingly, the Supreme Court erred in granting that branch of the defendant's motion which pertains to Glynn's counsel's fees. However, the evidence before the court showed that Gemelli substantially complied with the rules (see Matter of Felix v Felix, 110 AD3d 805, 806). Accordingly, we agree with the court's determination to grant that branch of the defendant's motion which pertains to Gemelli's counsel fees.

"The award of expert witness fees in a matrimonial action is left to the sound discretion of the trial court, and should be made upon a detailed showing of the services to be rendered and the estimated time involved" (Vistocco v Jardine, 116 AD3d 842, 844). "Absent affidavits from the expert witnesses at issue, the Supreme Court lacks a sufficient basis to grant a motion for the award of such fees" (Avello v Avello, 72 AD3d 850, 852; see Corrao v Corrao, 209 AD2d 573, 574; Ahern v Ahern, 94 AD2d 53, 58). Here, the defendant failed to submit such expert affidavits. Thus, the Supreme Court improvidently exercised its discretion in awarding the defendant expert witness fees."

DIVORCE - DELAYING TACTICS CAN COST A LITIGANT

Culen v Culen, 2018 NY Slip Op 00542, Decided on January 31, 2018, Appellate Division, Second Department:

" Pursuant to Domestic Relations Law § 237(a), a court in a divorce action may award counsel fees to a spouse to enable that spouse to carry on or defend the action or proceeding as, in the court's discretion, justice requires, having regard to the circumstances of the case and the respective parties'" (Samimi v Samimi, 134 AD3d 1010, 1012, quoting Aloi v Simoni, 82 AD3d 683, 686). "The decision to award an attorney's fee in a matrimonial action lies, in the first instance, in the discretion of the trial court and then in the Appellate Division whose discretionary authority is as broad as that of the trial court" (Black v Black, 140 AD3d 816, 816 [internal quotation marks omitted]; see O'Brien v O'Brien, 66 NY2d 576, 590). "In exercising that discretion, the court must consider the financial circumstances of the parties and the circumstances of the case as a whole, including the relative merits of the parties' positions, and whether either party has delayed the proceedings or engaged in unnecessary litigation" (Black v Black, 140 AD3d at 816-817 [internal quotation marks omitted]; see Guzzo v Guzzo, 110 AD3d 765, 766).

Here, the plaintiff was entitled to an award of an attorney's fee in the amount of $90,000 based upon, inter alia, the relative merits of the parties' positions and the defendant's obstructionist tactics, which unnecessarily prolonged the litigation (see Cohen-McLaughlin v McLaughlin, 132 AD3d 716, 717-718; Baron v Baron, 71 AD3d 807, 810; Curatola v Curatola, 43 AD3d 974, 976; Schek v Schek, 49 AD3d 625, 626). These tactics included, but were not limited to, the defendant's insistence that the parties proceed to a jury trial on the grounds for the divorce, despite the plaintiff having agreed either to settle on a ground other than cruel and inhuman treatment or to withdraw the case and re-file on the ground of irretrievable breakdown of the marital relationship, and the defendant's motion filed after trial on the issues of equitable distribution and maintenance to exclude the plaintiff from a tennis club where the parties were both previously members. The defendant unnecessarily prolonged the litigation by attempting to obstruct the plaintiff from obtaining discovery regarding an inheritance that the defendant was entitled to receive [*3]from his aunt's estate, even though it is well established that parties to a divorce action are entitled to liberal and broad discovery from one another, including with respect to separate property that is not subject to equitable distribution (see Owens v Owens, 107 AD3d 1171, 1174; Jaffe v Jaffe, 91 AD3d 551, 554; Dorsa v Dorsa, 50 AD3d 842, 843)