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Attorneys’ Fee Provision of Proprietary Lease Is Enforced Against Tenant-Shareholder That Challenged Maintenance Calculation

A tenant-shareholder failed to pay part of her maintenance, so the Cooperative issued a notice to cure and placed a lien against her shares. The tenant-shareholder then sued the Cooperative seeking to cancel the notice to cure and the lien and disputing whether she owed the back maintenance that the Cooperative claimed.  A lower court agreed with the Cooperative that the tenant-shareholder owed the back maintenance.  However, the court rejected the Cooperative’s counterclaim to recover its attorneys’ fees as authorized under the proprietary lease, opining that “in view of [the tenant-shareholder’s] prompt request for a judicial determination of the dispute shortfall,” it would be inappropriate to award attorneys’ fees.

The Cooperative appealed and the appellate court reversed.  “Under the terms of the proprietary lease, [the tenant-shareholder] was obligated to pay the reasonable attorney’s fees incurred by [the Cooperative] in the event [it] was required to defend any action or proceeding based on [the tenant-shareholder’s] default.  As [the Cooperative] established that [tenant-shareholder] had defaulted in paying the back maintenance charges, [the Cooperative] was the prevailing party and therefore entitled to an award of attorneys’ fees.”   The fact that the tenant-shareholder went to court first, relied on by the lower court in declining to award fees, did not matter to the appeals court.  Matter of Ringel v. 11 Wooleys Lane Housing Corp., 2017 N.Y. Misc. LEXIS 528, 2017 N.Y. Slip Op. 50212 (App. Term 2d Dep’t Feb. 10, 2017).