Daily Development for Friday, December 7, 2001

By: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

LANDLORD/TENANT; LANDLORD'S REMEDIES; ATTORNEY'S FEES: Attorney's fees may be denied upon a showing of bad faith on the part of the prevailing party.

Jacreg Realty Corp. v. Matthew Barnes 727 N.Y.S.D.2d 103 (A.D. 1 Dept. 2001).

New York intermediate appeals court cases characteristically are so briefly stated that it is often difficult to ascertain what really happened unless one was there. In this case, it appeared that landlord sent to tenant a lease renewal agreement, which tenant executed and returned, thus creating a binding renewal of the lease. Nevertheless, landlord attempted to withdraw from the renewed lease in response to tenant's inquiry to the Division of Housing and Community Renewal as to the legal rent status of the apartment. Tenant thereafter apparently elected not to proceed with the renewal and acquiesced in landlord's rejection of the renewal, but then held over beyond the original term.

Landlord brought a suit for occupancy rent for the period of the holdover and obtained summary judgment. Nevertheless the court denied attorney's fees, apparently normally available in such actions under New York law or the contract (the case is unclear as to which), and the landlord appealed.

Held: Affirmed: Where bad faith of a party is evident in the overall proceeding, a prevailing party may not be entitled to an award of attorney's fees. Despite the fact that the landlord was entitled to recover for the holdover, the facts underlying the fact of the holdover suggested that landlord's bad faith conduct played a role in bringing about the dispute, and landlord cannot recover fees resulting from the problem.

LANDLORD/TENANT; LANDLORD'S REMEDIES; ATTORNEY'S FEES: A party that prevails for any reason may be considered a prevailing party and thus have a claim for attorney's fees.

Soho Village Realty, Inc. v Gaffney 727 N.Y.S.D.2d 261 (Supp. 2001). There had been eighteen months of litigation, including two motions to dismiss by tenant, one of which was granted and later reversed on appeal. Ultimately, tenant vacated the apartment on the eve of a court ordered deposition. The court thereupon dismissed the action, but denied landlord's attorney's fees because there had been no judicial proceeding leading to a successful result. The lease agreement provided for such fees to the "prevailing party."

Held: Modified and remanded. Landlord was entitled to fees.

The court held that where a landlord initiates a holdover proceeding against a tenant and the tenant does not ultimately appeart in court to contest such proceeding, but vacates the premises, the landlord obtains an ultimate outcome in its favor by securing the relief sought, the surrender of the premises. Since the landlord was thus the prevailing party it is entitled to attorney's fees despite the tenant's lack of contestation.

Comment: Both cases make complete sense, of course. New York courts in landlord/tenant cases often have a way of cutting through all the fertilizer and reaching a practical result.

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