Attorney Fee Application Granted in Part

Posted: July 28, 2025 / Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. Turner / Category Attorney Fees

Attorney Fee Application Granted in Part

On June 20, 2025, Justice Joel M. Cohen granted in part prevailing defendants’ application for contractual attorneys’ fees and costs. The case is Nicklaus Cos., LLC v. GBI Invs., Inc., Index No. 656284/2022.

Having obtained dismissal of claims brought against them by plaintiff Nicklaus Companies, LLC (the “Company”) under a Purchase and Sale Agreement (“PSA”), defendants GBI Investors, Inc. (“GBI”) and its owner, Jack W. Nicklaus, sought $6,267, 902 in attorneys’ fees and $361,150.72 in litigation costs under fee-shifting provisions in the PSA and related LLC and non-competition agreements.

As the Company’s claims under the PSA were asserted only against GBI, the PSA’s fee shifting provision, which was limited to claims seeking recourse against Mr. Nicklaus or his immediate family, had not been triggered:

The fact that an award against GBI might have impacted Mr. Nicklaus (as its owner) does not mean that the Company was seeking “recourse” against Mr. Nicklaus for GBI’s breach of the agreement, even if that breach was the result of Mr. Nicklaus’s conduct. Accordingly, the fee-shifting provision contained in section 10.7 [of the PSA] is inapplicable.

Slip op., p. 3 (quoting PSA).

Fee shifting was warranted to the extent the Company’s claims arose under the LLC or non-competition agreements, slip op. p. 2, and Justice Cohen allocated 50% to them collectively and 50% to the PSA because:

While the LLC Agreement and Non-Competition Agreement were important to the outcome, they were in effect satellites orbiting the PSA, adding provisions that could have been included in the PSA but instead were broken out separately.

Slip op., p. 5. Justice Cohen found both the time charged and the attorneys’ hourly rates to be reasonable, including the rate up to $1,850 per hour for the highest-charging attorney whose rate was the focus of the Company’s challenge. “While on the high side, Mr. Stearns’s rates still fall within the range of rates charged by top-tier firms in the New York community for similar services and comparable skill and reputation.” Id., pp. 7-8.

Defendants were thus awarded 50% of the amounts sought -- $3,133,951.00 in attorneys’ fees and $180,575.36 in litigation costs. Id., p. 9.

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning an application for or award of attorneys’ fees.