RAD VENTURES CORP v. ARTUKMAC (2006)

In an action to recover on a personal guarantee and for an award of an attorney's fee, the defendant appeals from (1) an order of the Supreme Court, Westchester County (Rudolph, J.), entered October 1, 2004, which granted the plaintiff's motion for summary judgment on the complaint and denied his cross motion for summary judgment dismissing the complaint, and (2) a judgment of the same court dated March 9, 2005, which, upon the order, is in favor of the plaintiff and against him in the total sum of $922,308.12.

ORDERED that the appeal from the order is dismissed;  and it is further,

ORDERED that the judgment is modified, on the law and as a matter of discretion, by reducing the award of an attorney's fee to the plaintiff, as set forth therein, from the sum of $74,730.04 to the sum of $48,669, and by reducing the total award to the plaintiff, as set forth therein, from the sum of $922,308.12 to the sum of $896,247.08;  as so modified, the judgment is affirmed;  and it is further,

ORDERED that one bill of costs is awarded to the plaintiff.

 The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 N.Y.2d 241, 248, 383 N.Y.S.2d 285, 347 N.E.2d 647).   The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a] [1] ).

“The construction and interpretation of an unambiguous written contract is an issue of law within the province of the court, as is the inquiry of whether the writing is ambiguous in the first instance” (Katina, Inc. v. Famiglietti, 306 A.D.2d 440, 441, 761 N.Y.S.2d 327;  see W.W.W. Assoc. v. Giancontieri, 77 N.Y.2d 157, 162, 565 N.Y.S.2d 440, 566 N.E.2d 639;  Van Wagner Adv. Corp. v. S & M Enters., 67 N.Y.2d 186, 191, 501 N.Y.S.2d 628, 492 N.E.2d 756;  805 Third Ave. Co. v. M.W. Realty Assoc., 58 N.Y.2d 447, 451, 461 N.Y.S.2d 778, 448 N.E.2d 445;  Master-Built Constr. Co. v. Thorne, 22 A.D.3d 535, 802 N.Y.S.2d 713;  Hindes v. Weisz, 303 A.D.2d 459, 460, 756 N.Y.S.2d 601;  Fetner v. Fetner, 293 A.D.2d 645, 741 N.Y.S.2d 256;  National Loan Investors v. First Equities Corp., 261 A.D.2d 518, 690 N.Y.S.2d 646).

“If the language is free from ambiguity, its meaning may be determined as a matter of law on the basis of the writing alone without resort to extrinsic evidence” (Katina, Inc. v. Famiglietti, supra at 441, 761 N.Y.S.2d 327;  see W.W.W. Assoc. v. Giancontieri, supra at 163, 565 N.Y.S.2d 440, 566 N.E.2d 639;  Chimart Assoc. v. Paul, 66 N.Y.2d 570, 572-573, 498 N.Y.S.2d 344, 489 N.E.2d 231;  Master-Built Constr. Co. v. Thorne, supra;  Pirrera v. Bath & Tennis Mar. Corp., 2 A.D.3d 613, 614, 769 N.Y.S.2d 565;  Hindes v. Weisz, supra at 460-461, 756 N.Y.S.2d 601;  Weiner v. Anesthesia Assoc. of W. Suffolk, 203 A.D.2d 454, 610 N.Y.S.2d 606).   The court's role is “to determine the parties' intention as derived from the language employed in the contract” (Katina, Inc. v. Famiglietti, supra at 441, 761 N.Y.S.2d 327;

see Greenfield v. Philles Records, 98 N.Y.2d 562, 569, 750 N.Y.S.2d 565, 780 N.E.2d 166;  Slamow v. Del Col, 79 N.Y.2d 1016, 1018, 584 N.Y.S.2d 424, 594 N.E.2d 918;  Chimart Assoc. v. Paul, supra;  Slatt v. Slatt, 64 N.Y.2d 966, 967, 488 N.Y.S.2d 645, 477 N.E.2d 1099;  Master-Built Constr. Co. v. Thorne, supra;  Hindes v. Weisz, supra at 461, 756 N.Y.S.2d 601).   Thus, when interpreting a contract, “the court should arrive at a construction which will give fair meaning to all of the language employed by the parties to reach a practical interpretation of the expressions of the parties so that their reasonable expectations will be realized” (Joseph v. Creek & Pines, 217 A.D.2d 534, 535, 629 N.Y.S.2d 75;  see Master-Built Constr. Co. v. Thorne, supra;  Fetner v. Fetner, supra;  Partrick v. Guarniere, 204 A.D.2d 702, 704, 612 N.Y.S.2d 630).

 The disputed contract in this case contains the unambiguous acknowledgments of Tristar Petroleum, Inc. (hereinafter Tristar), U.S.A. Petroleum Products Corp. (hereinafter UPPC), and the defendant that they jointly and severally owed a $500,000 debt to the plaintiff, and an unambiguous acknowledgment by the defendant that he had personally guaranteed the obligations of Tristar and UPPC in that regard.   There is no dispute that the contract obligates the plaintiff to forgive that debt only if it acquires a fee simple ownership interest in certain real property in Medford, New York, currently leased to Tristar, and then only as an element of the purchase price of that real property.   Because neither Tristar nor UPPC have paid the plaintiff any portion of the debt, and the plaintiff has not been able to acquire a fee simple interest in the real property despite its diligence, the Supreme Court correctly determined that the plaintiff established, as a matter of law, that the debt remains outstanding, and that the defendant failed to raise a triable issue of fact in opposition.   The Supreme Court thus properly granted summary judgment to the plaintiff on its cause of action against the defendant seeking to recover on the guarantee, and properly denied the defendant's cross motion for summary judgment dismissing the complaint.

 The judgment should be modified, however, by reducing the award of an attorney's fee to the plaintiff from the sum of $74,730.04 to the sum of $48,669, and accordingly, reducing the total amount awarded in the judgment.   As a general rule, the award of an attorney's fee as part of a recovery in an action is not permitted, unless the right to such an award has been established by agreement, statute, or court rule (see U.S. Underwriters Ins. Co. v. City Club Hotel, LLC, 3 N.Y.3d 592, 597, 789 N.Y.S.2d 470, 822 N.E.2d 777;  Chapel v. Mitchell, 84 N.Y.2d 345, 349, 618 N.Y.S.2d 626, 642 N.E.2d 1082;  Hooper Assoc. v. AGS Computers, 74 N.Y.2d 487, 491, 549 N.Y.S.2d 365, 548 N.E.2d 903;  Matter of A.G. Ship Maintenance Corp. v. Lezak, 69 N.Y.2d 1, 5, 511 N.Y.S.2d 216, 503 N.E.2d 681;  Mighty Midgets v. Centennial Ins. Co., 47 N.Y.2d 12, 21-22, 416 N.Y.S.2d 559, 389 N.E.2d 1080;  Clelland v. Lettro, 15 A.D.3d 874, 789 N.Y.S.2d 795;  1199 Hous. Corp. v. International Fidelity Ins. Co., 14 A.D.3d 383, 788 N.Y.S.2d 88;  Culinary Connection Holdings v. Culinary Connection of Great Neck, 1 A.D.3d 558, 559, 769 N.Y.S.2d 544).

The contract in dispute contains such an agreement, and an award of an attorney's fee is thus available to the plaintiff (see Levine v. Infidelity, Inc., 2 A.D.3d 691, 692-693, 770 N.Y.S.2d 83).   Nonetheless, the award of an attorney's fee, whether pursuant to agreement or statute, must be reasonable and not excessive (see Solow Mgt. Corp. v. Tanger, 19 A.D.3d 225, 226, 797 N.Y.S.2d 456;  Sempra Energy Trading Corp. v. PG & E Tex. VGM, 284 A.D.2d 253, 254, 728 N.Y.S.2d 16).   Such an award should only take account of work actually performed, and fees actually incurred (see Spindel v. Shor & Assoc., 297 A.D.2d 244, 746 N.Y.S.2d 301;  cf. Union State Bank v. STPT Realty, 265 A.D.2d 478, 697 N.Y.S.2d 115).   In this action, the fee provision contained in the contract entitles the plaintiff to an award of an attorney's fee only in connection with legal work performed on its behalf, and undertaken after the execution of the contract, to collect the underlying $500,000 debt or to enforce the contract in the case of default under its terms by Tristar, UPPC, and the defendant.

The Supreme Court improperly included, in its award, the sum of $1,258.24 in legal fees incurred by the plaintiff in connection with a separate action settled long before the execution of the contract, and the sum of $22,889.30 in legal fees incurred in connection with the very action settled by the contract itself.   It also improperly included the sum of $1,913.50 in fees attributable to legal work undertaken in a third related action (see Tristar Petroleum, Inc. v. RAD Energy Corp., 31 A.D.3d 437, 818 N.Y.S.2d 531 [decided herewith] ), allegedly performed long after that action had been disposed of by the Supreme Court.   Because those fees were not directly occasioned or made necessary by the violation of or a default under the contract, and were not directly related to the collection of the $500,000 debt, they should not have been included in the award (see Becker Parkin Dental Supply Co. v. 450 Westside Partners, LLC, 7 A.D.3d 441, 776 N.Y.S.2d 796;  cf. Hooper Assoc. v. AGS Computers, supra at 491, 549 N.Y.S.2d 365, 548 N.E.2d 903;  Popyork, LLC v. 80 Court St. Corp., 23 A.D.3d 538, 806 N.Y.S.2d 606;  Gannett Suburban Newspapers v. El-Kam Realty Co., 306 A.D.2d 312, 314, 760 N.Y.S.2d 553).

The defendant's remaining contentions either are without merit or were improperly raised for the first time on appeal (see Gammal v. La Casita Milta, 5 A.D.3d 630, 774 N.Y.S.2d 771;  Sandoval v. Juodzevich, 293 A.D.2d 595, 595-596, 740 N.Y.S.2d 217;  Mourounas v. Shahin, 291 A.D.2d 537, 737 N.Y.S.2d 647;  Weber v. Jacobs, 289 A.D.2d 226, 733 N.Y.S.2d 910).