88 A.D.3d 345
N.Y. App. Div.2011Background
- Real Property Law § 234 creates an implied covenant for tenants to recover reasonable attorney’s fees incurred in defending a landlord action when the lease authorizes such fees.
- Juaregui, the tenant, faced a holdover summary proceeding under a Queens lease with paragraph 16 detailing landlord remedies and fee recovery on reentry and re-rental.
- The Civil Court dismissed the petition against the tenant; the Appellate Term affirmed, holding paragraph 16 did not trigger § 234’s implied covenant.
- The Court of Appeals reversed, interpreting paragraph 16 as triggering § 234 because it governs attorney’s fees incurred in eviction/relinquishment scenarios and fits the statute’s remedial purpose.
- The Court remanded for a hearing on the amount of the attorney’s fee to be awarded to Juaregui.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does paragraph 16 trigger § 234's implied covenant? | Juaregui argues paragraph 16 permits fee recovery under § 234. | Casamento contends paragraph 16 only covers re-rental costs and does not trigger the covenant. | Yes; paragraph 16 triggers § 234. |
| Does 'added rent' include an attorney’s fee incurred in eviction proceedings? | Juaregui contends the landlord’s fees are within 'added rent' since they are recoverable from rerental. | Casamento argues the clause is limited to re-renting costs, not litigation fees. | Yes; attorney’s fees fall within 'added rent' when incurred in eviction/litigation. |
| Is Bunny Realty v Miller still controlling precedent regarding § 234 applicability to similar lease language? | Juaregui relies on Bunny Realty to show broad interpretation favoring tenant recovery. | Casamento argues Oxford Towers and Madison-68 undermine Bunny Realty. | Bunny Realty remains persuasive for properly interpreted lease language; not overruled by Oxford Towers or Madison-68 in this context. |
| Should the case be remitted for amount of attorney’s fee after finding § 234 eligibility? | Juaregui seeks an amount determination consistent with § 234. | Casamento opposes or delays fee amount until proper review. | Remand for hearing on the fee amount; award granted. |
Key Cases Cited
- Bunny Realty v Miller, 180 AD2d 460 (1992) (lease clause can support attorney’s fee recovery for eviction-related fees)
- Oxford Towers Co., LLC v Wagner, 58 AD3d 422 (2009) (held not applicable where action arose from non-lease agreement)
- Madison-68 Corp. v Malpass, 65 AD3d 445 (2009) (discussed in tension with Bunny Realty; not expressly overruling it)
- Gannett Suburban Newspapers v El-Kam Realty Co., 306 AD2d 312 (2003) (appellate decision on commercial lease; limited relevance to residential §234)
- Matter of Duell v Condon, 84 NY2d 773 (1995) (discussed remedial purpose and purpose of §234 in leveling bargaining power)