AD 1619 COMPANY v. VB MANAGEMENT INC

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Supreme Court, Appellate Term, New York,

AD 1619 COMPANY, Appellant, v. VB MANAGEMENT, INC., Doing Business as Broadway Computer Video, Respondent.

Decided: March 30, 1998

Present:  PARNESS, P.J., McCOOE and FREEDMAN, JJ. Itkowitz, Gottlieb & Harwood, New York City (Jay B. Itkowitz, of counsel), for appellant. George S. Locker, New York City, for respondent.

Order dated July 7, 1997 (Jose A. Padilla, Jr., J.) modified by granting landlord's application for attorney's fees in the nonpayment proceeding commenced under Index No. 109296/95, and by remanding the matter to the Civil Court for a hearing to determine the amount of reasonable attorney's fees and for calculation of prejudgment interest on the final judgment of August 14, 1995;  as modified, order affirmed, without costs.

 In the initial nonpayment proceeding (Index No. 82493/94), landlord failed to request attorney's fees in the petition or at any point during the 15 day trial.   The matter proceeded to judgment, followed by landlord's appeal to this court, without any application for amendment of the pleadings or argument on the issue.   A claim for attorney's fees was interposed for the first time in landlord's postjudgment and postappeal motion approximately nine months after our order.   We agree that this belated claim for fees was untimely and that Civil Court did not abuse its discretion in declining to “deem” the petition “amended” to include a prayer for that relief.   A party against whom substantial legal costs are sought should be apprised of that claim at or near the outset of the case, so that it may effectively frame its litigation strategy.   In this case, landlord delayed until the proceeding was at an end.   While it is premature for the court to address the issue of attorney's fees until a case has been completed (Solow v. Wellner, 86 N.Y.2d 582, 589, 635 N.Y.S.2d 132, 658 N.E.2d 1005), timely notice should be given by a litigant that fees will be claimed so as to avoid surprise or prejudice to the adversary.

 The claim for attorney's fees arising out of the second nonpayment petition (Index No. 109296/95) stands upon a different footing, as that petition did contain a demand for fees.   Shortly before trial, tenant tendered the rent sought without setoff or deduction.   Since landlord entirely prevailed on its substantive claim, it is entitled to recover the legal expenses incurred in prosecuting this proceeding pursuant to Article 19 of the parties' lease (Livigne v. D'Agostino Supermarkets, Inc., 207 A.D.2d 776, 616 N.Y.S.2d 515;  Wertheim v. Lexa Imports, Inc., N.Y.L.J., October 1, 1997, at 25, col. 1 [App. Term, 1st Dept.] ).   We have remanded the matter for an assessment on that issue.

 Landlord's motion for an award of prejudgment interest should have been granted, since landlord was entitled to interest as of right upon its recovery for rent in the possessory judgment of August 14, 1995 (Solow v. Wellner, 86 N.Y.2d 582, 589-590, 635 N.Y.S.2d 132, 658 N.E.2d 1005;  CPLR 5001 [a] ).   This issue was not waived on the previous appeal, since there had been no prior judicial determination with respect to interest and the trial court retained jurisdiction to fix interest at the statutory rate (Kiker v. Nassau County, 85 N.Y.2d 879, 626 N.Y.S.2d 55, 649 N.E.2d 1199).   We also note that our order of modification provided for a new trial on tenant's constructive eviction claim, and necessarily contemplated the entry of an amended judgment (see Solow v. Wellner, 86 N.Y.2d 582, 589, 635 N.Y.S.2d 132, 658 N.E.2d 1005).

I depart from the Majority on the issue as to whether the Landlord waived the right to attorney's fees by not requesting them in the Petition.   The Landlord's right to attorney's fees arose only after it was found to be the prevailing party.   The Tenant's obligation to pay according to Article 19 of the lease arose only after it was billed for the attorney's fees as additional rent.   The Landlord cannot be deemed to have waived its right to a cause of action that was not in existence at the commencement of the proceeding.   There is no evidence of an intent by the Landlord to relinquish a known right to attorney's fees.   The Petition should have been amended to conform to the evidence (CPLR 3025[c]) in the interests of judicial economy.   Otherwise the Landlord should have the right to commence a new proceeding for additional rent.   The absence of a claim for attorney's fees could not affect the Tenant's trial strategy and in any event it was aware of the attorney's fee clause from the proceeding denominated the second nonpayment proceeding by the Majority.

The Order should be reversed granting the Landlord's application for attorney's fees in both proceedings.

PER CURIAM.