SUN MEI INC v. 101 LLC (2005)

Order, Supreme Court, New York County (Walter B. Tolub, J.), entered January 21, 2004, which dismissed the action on grounds of res judicata and collateral estoppel but did not impose sanctions or award defendants attorneys' fees, unanimously modified, on the law, the application for attorneys' fees granted and the matter remanded for calculation of said award, and otherwise affirmed, without costs.

 According the complaint a liberal construction, accepting the facts as true, and making all inferences in plaintiffs' favor (Leon v. Martinez, 84 N.Y.2d 83, 87-88, 614 N.Y.S.2d 972, 638 N.E.2d 511 [1994] ), the complaint was properly dismissed.   Because plaintiffs' challenge to the existence and validity of the lease at 225 Centre Street in Manhattan had earlier been litigated and brought to a final conclusion, these subsequent claims with respect to validity of the lease were barred by res judicata (O'Brien v. City of Syracuse, 54 N.Y.2d 353, 357, 445 N.Y.S.2d 687, 429 N.E.2d 1158 [1981];  Marinelli Assoc. v. Helmsley-Noyes Co., 265 A.D.2d 1, 705 N.Y.S.2d 571 [2000] ).   Since the validity of the lease was decided in a prior proceeding in which plaintiffs had a full and fair opportunity to contest the issue, this action was also barred by collateral estoppel (see Allied Chem. v. Niagara Mohawk Power Corp., 72 N.Y.2d 271, 276, 532 N.Y.S.2d 230, 528 N.E.2d 153 [1988], cert. denied 488 U.S. 1005, 109 S.Ct. 785, 102 L.Ed.2d 777 [1989];  see also Parker v. Blauvelt Volunteer Fire Co., 93 N.Y.2d 343, 349, 690 N.Y.S.2d 478, 712 N.E.2d 647 [1999] ).

 The court did not improvidently exercise its discretion in failing to impose sanctions under the Rules of the Chief Administrator of the Courts (22 NYCRR) § 130-1.1.   However, because the leases provided for payment of reasonable legal fees, the court erred in failing to grant defendants' application for such an award.   The matter should be remanded for calculation of attorneys' fees.

We have considered the parties' remaining arguments for affirmative relief and find them without merit.