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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: July 21, 2019

Party Not Entitled to Fees on Fees

On July 8, 2019, Justice Scapulla of the New York County Commercial Division issued a decision in Park Union Condominium v. 910 Union St., LLC, 2019 NY Slip Op. 31994(U), holding that a prevailing party was not entitled to fees on fees, explaining:

Plaintiffs argue that the Referee Report’s award of $34,200 for Plaintiffs’ hearing preparation and the four-day hearing itself was proper and does not constitute fees on fees. Defendant counters that the $34,200 was an impermissible fees on fees award and should not be confirmed.

New York courts have generally held that a party is not entitled to recover attorneys’ fees that were incurred in prosecuting a claim to recover attorneys’ fees, so called fees on fees. There are two exceptions to this general rule, namely that fees on fees are allowed where such fees are explicitly provided for by either a statute or the parties’ agreement..

First, the cases cited by Plaintiffs in support of its position are inapposite. Second, as this Court previously stated in the November 2017 Decision, here the Agreement does not explicitly provide for an award of fees on fees and thus they are not recoverable. I find that the $34,200 award for the expenses that Plaintiffs incurred in connection with the referee proceeding was improper because it enables Plaintiffs, in contravention of caselaw and the law of the case, to recoup fees on fees. Accordingly, Plaintiffs are only entitled to recover attorneys’ fees and costs in the amount of $138,015.06 and I confirm the Referee Report, as modified, in that amount.

(Internal quotations and citations omitted).

Litigating for fees can be hard–both because of the high burden you sometimes must meet to be entitled to fees and because it is important to avoid the pitfall of getting an award of fees that is less than what it costs to move for fees. As this decision shows, generally, you are not entitled to recover the attorneys’ fees expended in moving for fees. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you are litigating an attorney fee award.

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