BENNETT v. WALDEN PARK APTS LOCKPORT ASSOCIATES (2018)

This small claims action arises out of a previous eviction proceeding between the Parties (See Case No. 18020276). In that case Walden Park Apts./Lockport Associates (Landlord) sought to evict Denise Bennett (Tenant) for failure to be recertified and thus a holdover cause of action was filed. That case was settled with Tenant agreeing to leave the premises by March 10, 2018. Landlord waived any monetary judgment including any rent, costs, disbursements and attorney's fees due under the lease. In the present case Tenant, who left on time and cleaned out the apartment, requests refund of her $520.00 ($505.00 agreed figure) security deposit. Landlord counterclaims for back rent of $339.93 and attorney's fees of $500.00.

The facts are not in dispute, other than an issue of waiver in the eviction proceeding. Landlord does not include any property damage claim in its counterclaim and Tenant's testimony that there was none is uncontroverted except for cigarette smoke.¹ The issues before the Court are whether or not Tenant is entitled to the return of all, some or none of her security deposit and is Landlord now entitled to rent and attorney's fees.

The Court has had an opportunity to review the entire eviction proceeding, including its notes, Stipulation of the Parties and the transcript of the February 28, 2018 hearing.

ISSUES OF LAW

1. Attorney's Fees

Defendant has asserted $500.00 of its $839.93 claim for attorney's fees expended in this defense of Plaintiff's action and the assertion of Defendant's counterclaim.

Under the long-standing “American Rule” attorney fees are deemed “incidents of litigation”, and a prevailing party cannot recover its legal fees “except where authorized by statute, agreement or court rule.” [See Gotham Partners, L.P. v. High River Limited Partnership, 76 A.D.3d 203, 906 N.Y.S.2d 205 (1st Dept. 2010), lv. denied 17 N.Y.3d 713, 2011 WL 4977339 (2011) ]. Thus in the absence of a contractual fee—shifting provision ² or applicable statute providing for the recovery of attorney fees each party to a civil action is generally responsible for its own legal fees [Hooper Associates, Ltd. v. AGS Computers, Inc. 74 N.Y.2d 487, 549 N.Y.S.2d 365, 548 N.E.2d 903 (1989) ].

The Court of Appeals in Hooper has an exacting test which requires a finding of unmistakable intent to waive the American Rule. The Hooper standard requires more than an inference of what the parties meant. It requires a specific written clause of having an unmistakable intent to waive the American Rule. Without this we are unable to award attorney fees to the prevailing party.

Defendant asserts the initial written lease between the parties gives a basis for its claim. The language can be found in paragraph 5 on page 9 of Exhibit C as follows:

“5. EVICTION: If Management terminates the lease agreement, Management shall have the right to repossess the apartment and cause the Resident to vacate the apartment in the manner provided by law. If Management is forced to evict Resident, Resident shall pay Management the expense incurred in obtaining possession of the apartment and all other damages sustained by Management, including attorneys' fees, to the extent permitted by law and the USDA, RD's regulations.”

The Court finds this language unpersuasive and not specific enough to be applied to post eviction proceedings or to meet the Hooper criteria. The Court will not broaden the language to cover all lawsuits between the parties but only the initial lawsuit to enforce Defendant's rights under the original lease. Accordingly, attorney's fees are denied.

2. Security Deposit

Plaintiff is entitled to a full return of her security deposit as no damage set-off is alleged by Defendant. The key issues which the Court must decide, however, is whether or not (1) a counterclaim for rent can be asserted against a claim for a security deposit return, or (2) whether it was waived in the original eviction proceeding.

The Court has reviewed the entire eviction proceeding and finds no waiver by Defendant regarding the return of the security deposit.³ The Court views Defendant's counterclaim herein as if Defendant independently asserted it in its own small claims action and thus is procedurally viable. However, the statute requires and Defendant has the burden of proof to show two estimates or paid receipts to establish its damages [Section 1804 Uniform Justice Court Act and Borman v. Purvis, 299 A.D.2d 615, 750 N.Y.S.2d 169 (3d Dept. 2002) ] As indicated above, no damage amount was set forth, nor proven at trial by a showing of two estimates or a paid receipt. Therefore, that cause of action must be dismissed. Defendant's claim for rent also fails as a specific waiver was contained in the previous eviction proceedings.⁴

FOOTNOTES

1.   Tenant was allowed to smoke in her apartment for three of her four year tenancy. Landlord submits a “Move Out Inspection Form” signed by Tenant (Exhibit B) acknowledging “heavy smoke damage” but no damage figure was presented to the Court.

2.   A typical fee-shifting provision reads as follows: “The prevailing party in any dispute arising out of or related to this agreement shall be entitled to an award of its reasonable costs and attorney fees.”

3.   Page 13 of February 28, 2018 transcript contains a specific reservation by Defendant to assert a small claim cause of action if damages exist. Page 14 shows Plaintiff's request for security deposit refund.

4.   Page 3, Lines 17FF of February 20, 2018 transcript contain a specific waiver for three months (December, January, February) rent as Defendant was paid in full.

Leonard G. Tilney Jr., J.