21ST MORTGAGE CORPORATION v. NWEKE (2026)

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Richmond County (Desmond A. Green, J.), dated February 14, 2023.  The order, upon remittitur from this Court by decision and order dated October 3, 2018 (see 21st Mtge. Corp. v. Nweke, 165 A.D.3d 616, 85 N.Y.S.3d 127), and after a hearing, denied the plaintiff's motion to reject a referee's report, granted the cross-motion of the defendant Magdalene Nweke to confirm the referee's report, and awarded that defendant attorneys' fees and expenses pursuant to Real Property Law § 282 in the sum of $100,020.

ORDERED that the order is affirmed, with costs.

In September 2014, the plaintiff commenced this action to foreclose a mortgage against the defendant Magdalene Nweke (hereinafter the defendant), among others.  In an order dated September 11, 2015, the Supreme Court denied the plaintiff's motion for summary judgment on the complaint insofar as asserted against the defendant, granted that branch of the defendant's cross-motion which was for summary judgment dismissing the complaint insofar as asserted against her as time-barred, and denied the other branches of the defendant's cross-motion.  The court also, sua sponte, imposed an equitable mortgage in favor of the plaintiff.  The defendant appealed.

By decision and order dated October 3, 2018, this Court, inter alia, reversed the order dated September 11, 2015, insofar as appealed from, granted those branches of the defendant's cross-motion which were for summary judgment on her counterclaims to cancel and discharge the mortgage pursuant to RPAPL 1501(4) and for an award of attorneys' fees and expenses pursuant to Real Property Law § 282, vacated that portion of the order which imposed an equitable mortgage in favor of the plaintiff, and remitted the matter to the Supreme Court, Richmond County, for a hearing to determine the amount of attorneys' fees and expenses to be awarded to the defendant pursuant to Real Property Law § 282 (see 21st Mtge. Corp. v. Nweke, 165 A.D.3d 616, 616–617, 85 N.Y.S.3d 127).

Upon remittitur, following a two-day hearing, a referee issued a report.  Thereafter, the plaintiff moved to reject the referee's report, and the defendant cross-moved to confirm the referee's report.  In an order dated February 14, 2023, the Supreme Court denied the plaintiff's motion, granted the defendant's cross-motion, and awarded the defendant attorneys' fees and expenses pursuant to Real Property Law § 282 in the sum of $100,020.  The plaintiff appeals.

As an initial matter, the plaintiff's contention that the defendant is not entitled to an award of attorneys' fees was decided and rejected in this Court's decision and order on the prior appeal (see 21st Mtge. Corp. v. Nweke, 165 A.D.3d at 619, 85 N.Y.S.3d 127).  Therefore, the plaintiff's contention is barred by the law of the case doctrine (see Loughlin v. Meghji, 240 A.D.3d 875, 877, 240 N.Y.S.3d 132).  Moreover, the plaintiff waived its contention that the defendant was not entitled to attorneys' fees because she was represented by a not-for-profit legal services provider (see Nationstar Mtge., LLC v. Dunn, 230 A.D.3d 1327, 1329, 217 N.Y.S.3d 238;  Wells Fargo Bank, N.A. v. Trupia, 181 A.D.3d 953, 955, 122 N.Y.S.3d 117).

The Supreme Court properly confirmed the referee's report, as it was substantially supported by the record, and the referee clearly defined the issues and resolved matters of credibility (see CPLR 4518[a];  Wells Fargo Bank, N.A. v. Quinche, 241 A.D.3d 1400, 1401–1402, 242 N.Y.S.3d 60).

The portion of the award for legal fees and costs incurred by the defendant in prosecuting her claim for an award of attorneys' fees—so-called “fees on fees,” for services performed to recover a fee award—generally must be based upon a specific contractual provision or statute (see Matter of Aron Law, PLLC v. New York City Fire Dept., 239 A.D.3d 972, 973, 238 N.Y.S.3d 438;  Hawthorne Funding, LLC v. Karish Kapital, LLC, 236 A.D.3d 998, 1001, 231 N.Y.S.3d 527).  Where a contract provides for indemnification for “legal costs and charges, including counsel fees” (IG Second Generation Partners, LP v. Kaygreen Realty Co., 22 A.D.3d 463, 466, 802 N.Y.S.2d 203), this Court has determined that such provision did not provide for “fees on fees” in the absence of “unmistakably clear intent regarding” their recovery (IG Second Generation Partners, L.P. v. Kaygreen Realty Co., 114 A.D.3d 641, 643, 980 N.Y.S.2d 479).

However, both the Court of Appeals and this Court have authorized the inclusion of fees for prosecuting or defending an appeal dealing with an award of attorneys' fees (see Matter of Duell v. Condon, 84 N.Y.2d 773, 784 n 2, 622 N.Y.S.2d 891, 647 N.E.2d 96;  Diaz v. Audi of Am., Inc., 57 A.D.3d 828, 873 N.Y.S.2d 308), which was the case here.  Matter of Duell v. Condon (84 N.Y.2d 773, 622 N.Y.S.2d 891, 647 N.E.2d 96) dealt with Real Property Law § 234, which permits a residential tenant to recover “fees on fees” in the absence of evidence that the landlord would be precluded under the lease from recovering “fees on fees” if the landlord prevailed (see Senfeld v. I.S.T.A. Holding Co., 235 A.D.2d 345, 345–346, 652 N.Y.S.2d 738;  Kumble v. Windsor Plaza Co., 161 A.D.2d 259, 261, 555 N.Y.S.2d 290).  As stated by the Court of Appeals in Matter of Duell v. Condon (84 N.Y.2d at 780, 622 N.Y.S.2d 891, 647 N.E.2d 96), “[t]he overriding purpose of Real Property Law § 234 was to level the playing field between landlords and residential tenants, creating a mutual obligation that provides an incentive to resolve disputes quickly and without undue expense.  The statute thus grants to the tenant the same benefit the lease imposes in favor of the landlord.”

Real Property Law § 282 is “similar to the reciprocal attorneys fees rights given tenants by Real Property Law Section 234” (2010 N.Y. Legis Ann at 415).  In the instant case, the note provided that in the event of a default, the note holder would have the right to be paid back in full “for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law” and those expenses included attorneys' fees.  The mortgage further provided that “[i]n any lawsuit for Foreclosure and Sale, Lender will have the right to collect all costs and disbursements and additional allowances allowed by law and will have the right to add all reasonable attorneys' fees to the amount [Borrower] owe[s].”

In the Supreme Court, the plaintiff, recognizing the reciprocity requirements of Real Property Law § 282, took the position that these provisions did not authorize the lender to recover “fees on fees,” and therefore, “there is no corollary right for [the defendant] to do so under the fee shifting provision of [Real Property Law § ] 282.”  However, in Gertler v. Davidoff Hutcher & Citron, LLP (233 A.D.3d 846, 848, 226 N.Y.S.3d 232), this Court awarded “fees on fees,” because the statute authorizing the award of attorneys' fees used the language “all reasonable attorney's fees” (Labor Law § 198[1–a] ).  Therefore, the plaintiff's interpretation of the terms of its contract is contrary to this Court's interpretation of similar language which granted a right to “fees on fees.”

Real Property Law § 282 does not use the term “all,” and neither does Real Property Law § 234.  However, the legislative intent—as was recognized by the plaintiff—was to impose reciprocal obligations upon lenders and landlords.  To hold otherwise would give the lender an undue advantage by permitting it to litigate the issue of attorneys' fees with impunity, and frustrate the legislative purpose (see generally Matter of Fresh Meadow Med. Assoc. [Liberty Mut. Ins. Co.], 49 N.Y.2d 93, 99, 424 N.Y.S.2d 361, 400 N.E.2d 303;  Reilly v. United States Fid. & Guar. Co., 174 A.D.2d 909, 571 N.Y.S.2d 606).  In the instant case, since the plaintiff may recover, like the plaintiff in Gertler, “all” reasonable attorneys' fees, including “fees on fees,” the defendant may recover “fees on fees.”  The evidence submitted by the defendant was sufficient to establish the reasonableness of the requested fees (see Klein v. Wiley, 241 A.D.3d 808, 810, 241 N.Y.S.3d 349).

Accordingly, we affirm the order.

BARROS, J.P., VOUTSINAS, GOLIA and HOM, JJ., concur.