Tenant Wins Legal Fees Against Landlord in Panel Ruling

, New York Law Journal

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1925 Adam Clayton Powell Blvd., the center of a tenant-landlord dispute in which an appeals panel narrowly awarded legal fees to the tenant.
1925 Adam Clayton Powell Blvd., the center of a tenant-landlord dispute in which an appeals panel narrowly awarded legal fees to the tenant.

A divided state appeals panel has awarded attorney fees to a tenant who prevailed against his landlord in a holdover proceeding, ruling that language in his lease allowing the landlord to recover attorney fees by re-renting the apartment was enough to create a reciprocal right for the tenant.

The 3-2 Appellate Division, First Department, panel ruled Tuesday in Graham Court Owners Corp. v. Taylor, 70520/10, that even though the lease provision never obligates the tenant to pay the landlord's fees if the landlord prevails, it does implicitly obligate the landlord to pay the tenant's fees if the tenant prevails.

Justice Dianne Renwick (See Profile) wrote the majority opinion, joined by Justices Karla Moskowitz (See Profile) and Judith Gische (See Profile). Justice Leland DeGrasse (See Profile) dissented, joined by Justice John Sweeny (See Profile).

The tenant's attorney, Mark Bierman of Bierman & Palitz, said he had not calculated what the fees would be, but said they would be "substantial."

The tenant, Kyle Taylor, moved into what he was told was an unregulated apartment at 1925 Adam Clayton Powell Blvd. in Manhattan in 2004, paying $2,200 per month. He subsequently filed an overcharge claim with the Division of Housing and Community Renewal, alleging that the apartment was in fact regulated.

The landlord, Graham Court Owners Corp., claimed that it had spent $60,000 renovating the apartment, which deregulated it. Taylor responded that the landlord had not renovated the apartment, and that, in fact, he had made electrical improvements to the apartment himself. DHCR ultimately found in favor of Taylor.

In April 2007, the landlord told Taylor that his lease would be terminated because he had made unauthorized changes to the apartment. Taylor didn't leave, and in May 2007, the landlord filed a holdover proceeding. Taylor testified that he made the electrical improvements before moving in with the permission of the landlord.

Following a non-jury trial, Housing Court Judge Jean Schneider dismissed the case, finding that the landlord's story was "entirely incredible" and that the landlord's key witness had "lied repeatedly and obviously" during the trial.

Taylor sought attorney fees under Real Property Law §223-b, which allows such fees to be awarded when an eviction proceeding is retaliatory.

He also sought fees under §234, which says that if a lease provides that "the landlord may recover attorneys' fees and/or expenses incurred as the result of the failure of the tenant to perform" any part of the lease, a reciprocal covenant "shall be implied" allowing the tenant to recover fees.

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