LANG v. ZLOTNICK (2025)

DECISION & ORDER

In an action to recover on a promissory note, the plaintiff appeals from (1) a decision of the Supreme Court, Kings County (Lawrence Knipel, J.), dated November 18, 2021, and (2) an order of the same court dated October 31, 2022.  The order denied the plaintiff's motion for an award of attorneys’ fees and prejudgment interest on the unpaid principal under the promissory note.

ORDERED that the appeal from the decision is dismissed, as no appeal lies from a decision (see Schicchi v. J.A. Green Constr. Corp., 100 A.D.2d 509, 472 N.Y.S.2d 718);  and it is further,

ORDERED that the order is reversed, on the law, the plaintiff's motion for an award of attorneys’ fees and prejudgment interest on the unpaid principal under the promissory note is granted, and the matter is remitted to the Supreme Court, Kings County, for a hearing to determine the amount of reasonable attorneys’ fees to be awarded to the plaintiff, the calculation of interest due in accordance herewith, and the entry of an appropriate judgment thereafter;  and it is further,

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

In April 2012, the defendant executed a promissory note in which he promised to pay the plaintiff the sum of $60,000 by December 10, 2012.  The note provided that if the plaintiff prevailed in an action to collect on the note, the defendant would pay the plaintiff's reasonable attorneys’ fees.  In 2014, the plaintiff commenced this action against the defendant, seeking to recover an outstanding balance of $48,000 due on the note and an award of reasonable attorneys’ fees pursuant to the terms of the note.  After a nonjury trial, the Supreme Court determined that the plaintiff was entitled to recover the balance of $48,000 due on the note.  Thereafter, the plaintiff, as the prevailing party, moved for an award of an attorneys’ fees and prejudgment interest on the unpaid principal under the note.  The court denied the motion, and the plaintiff appeals.

“Under the American rule, attorney's fees are incidents of litigation and a prevailing party may not collect them from the loser unless an award is authorized by agreement between the parties, statute or court rule” (Sage Sys., Inc. v. Liss, 39 N.Y.3d 27, 30–31, 177 N.Y.S.3d 525, 198 N.E.3d 768 [internal quotation marks omitted];  see Blinds to Go [U.S.], Inc. v. Times Plaza Dev., L.P., 191 A.D.3d 939, 942, 138 N.Y.S.3d 915).  Only a prevailing party is entitled to recover an attorney's fee, and to “be considered a prevailing party, a party must be successful with respect to the central relief sought” (Blinds to Go [U.S.], Inc. v. Times Plaza Dev., L.P., 191 A.D.3d at 942, 138 N.Y.S.3d 915 [internal quotation marks omitted];  see Kefalas v. Valiotis, 197 A.D.3d 698, 703, 153 N.Y.S.3d 147).

Here, the plaintiff prevailed in this action to recover on the note, and, therefore, he was entitled to an award of reasonable attorneys’ fees pursuant to the terms of the note (see ProHealth Care Assoc., LLP v. Prince, 101 A.D.3d 699, 701, 955 N.Y.S.2d 626;  Luis Lopez & Son's, Inc. v. Dannie's Auto Care, 61 A.D.3d 643, 643, 876 N.Y.S.2d 504).  Therefore, the Supreme Court should have granted that branch of the plaintiff's motion which was for an award of attorneys’ fees.

The Supreme Court also erred in denying that branch of the plaintiff's motion which was for an award of prejudgment interest on the unpaid principal under the note, calculated from December 10, 2012, which was the date that the unpaid principal became due.  Pursuant to CPLR 5001, “[i]nterest shall be recovered upon a sum awarded because of a breach of performance of a contract” (id. § 5001[a]).  A breach of the obligation to pay on a promissory note is contractual for purposes of CPLR 5001 (see Spodek v. Park Prop. Dev. Assoc., 96 N.Y.2d 577, 581, 733 N.Y.S.2d 674, 759 N.E.2d 760;  Castle Restoration & Constr., Inc. v. Caste Restoration, LLC, 155 A.D.3d 678, 683, 67 N.Y.S.3d 72).  Moreover, “[i]nterest shall be computed from the earliest ascertainable date the cause of action existed” (CPLR 5001[b];  see Kachkovskiy v. Khlebopros, 164 A.D.3d 568, 572, 84 N.Y.S.3d 485).  Therefore, the plaintiff was entitled to recover prejudgment interest at the statutory rate of interest on the unpaid principal awarded from the date the unpaid principal became due under the terms of the note to the date liability was established (see Spodek v. Park Prop. Dev. Assoc., 96 N.Y.2d at 581, 733 N.Y.S.2d 674, 759 N.E.2d 760;  Castle Restoration & Constr., Inc. v. Castle Restoration, LLC, 155 A.D.3d at 683, 67 N.Y.S.3d 72).

Accordingly, we remit the matter to the Supreme Court, Kings County, for a hearing to determine the amount of reasonable attorneys’ fees to be awarded to the plaintiff (see Feiner v. Galpern, 187 A.D.3d 992, 994, 131 N.Y.S.3d 193;  Ross v. Sherman, 95 A.D.3d 1100, 1101, 944 N.Y.S.2d 620), the calculation of interest due in accordance herewith (see Castle Restoration & Constr., Inc. v. Castle Restoration, LLC, 155 A.D.3d at 683, 67 N.Y.S.3d 72), and the entry of an appropriate judgment thereafter.

DILLON, J.P., DOWLING, TAYLOR and VENTURA, JJ., concur.