On December 24, 2013, the First Department issued a decision in RSB Bedford Assoc. LLC v. Ricky’s Williamsburg, Inc., 2013 NY Slip Op. 08526, showing how a prevailing party’s right to recover its litigation expenses can be limited by the degree to which it prevails.
In RSB Bedford Assoc., the First Department affirmed a damages award for breach of a real estate purchase contract. The First Department’s decision on the damages point is interesting and we recommend that you read it in the linked decision. However, for this post we wish to focus on the First Department’s discussion at the end of the decision regarding plaintiff’s attorneys’ fees. The court held:
While recovery of attorneys’ fees by “the successful party” is provided for in the lease, the Referee properly reduced the amount sought by plaintiff to reflect that while it was the prevailing party, it did not prevail on all of its claims, particularly those seeking “expectancy” (extraordinary) damages.
The right of the prevailing party to recover its attorneys’ fees sometimes provides an incentive for aggressive litigation. RSB Bedford Assoc. reminds us, however, that courts may not allow a prevailing party to recovery fees for aspects of the litigation in which it did not prevail.