Issues concerning attorneys’ fees also arise in other contexts. Board of Managers of 60 East 88th Street v. Bailey, Index No. 104571/11, NYLJ 1202640082837 (Sup. Ct. N.Y. Co. Jan. 8, 2014), involved a dispute between a condominium and its own attorney over the amount of fees due for handling a litigation.
The underlying case arose when a unit owner leased the unit to a tenant, who moved into the unit in the late 1990s, accompanied by two dogs, whose barking allegedly became a nuisance. The Board of Managers retained counsel, who filed a lawsuit against the tenant involving the dogs as well as certain parking rights. By 2006, when the tenant moved out with his dogs, he had accumulated $150,000 in fines for alleged violations of the house rules, which the Board of Managers sought to collect, together with attorneys’ fees. Attempts to settle the matter were unsuccessful and both parties moved for summary judgment. The court dismissed the Board’s claims for parking fines and attorneys’ fees and set the matter for trial on the fines for the dog-barking.
The Board terminated its lawyer and hired a new lawyer. Further settlement negotiations resulted in the former tenant’s agreeing to pay $70,000. By then, the new counsel had billed approximately $114,000. The Board challenged the second lawyer’s fees, and the court held a hearing. Finding that the case was a straightforward one and was essentially ready for trial when the second lawyer stepped into it, the court awarded a fee of $60,000. The court reasoned that for the Board to pay $114,000 for the second lawyer to recover $70,000 meant that it would have been better off accepting the tenant’s initial settlement offer ($35,000), or even walking away from the matter once the tenant moved out. Even with the court-ordered reduction of the second lawyer’s fee, the Condominium paid a total of more than $200,000 to the two lawyers, to recover $70,000 in fines.