53 Misc. 3d 1030
N.Y. Sup. Ct.2016Background
- Plaintiff sued his ex-wife for breach of a confidentiality clause in a March 20, 2005 so‑ordered matrimonial settlement after the defendant made statements to a 2007 Village Voice article (“Daddy’s Dog”) repeating earlier incest allegations first published in 2006.
- The stipulation provided recovery of actual damages for a “material breach” and also allowed recovery of “all expenses, costs and reasonable attorney’s fees.”
- On November 19, 2009 the defendant served a CPLR 3220 offer to allow judgment for $250,000 "with costs accrued thus far"; plaintiff did not accept.
- At trial the defendant conceded liability and stipulated that plaintiff was entitled to $1,000,000 in attorneys’ fees accrued to the start of trial and to additional future fees; the jury nevertheless awarded plaintiff only nominal damages ($1) and no actual damages.
- Defendant moved for recovery of expenses under CPLR 3220 for the period after her offer; plaintiff moved for additional post‑stipulation fees ($255,428.75) and to set aside the verdict as against the weight of the evidence.
- Court held hearings are required to (1) determine whether the plaintiff obtained a more favorable judgment than the CPLR 3220 offer by calculating damages plus costs and fees "then accrued" at the time of the offer, and (2) determine the reasonableness/necessity of plaintiff’s claimed post‑trial fees; plaintiff was awarded $1 nominal damages and his motion to set aside the verdict was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a CPLR 3220 offer that is silent on attorney’s fees includes fees as part of “costs then accrued” | Marek (plaintiff) argued his later recovery of attorney’s fees exceeds the $250,000 offer | Defendant argued the offer (silent on fees) should be treated as inclusive of costs then accrued and thus entitles her to post‑offer expenses if judgment is not more favorable | Court held attorney’s fees recoverable by agreement are included within CPLR 3220’s “costs then accrued”; compare offer to recovery plus costs/fees accrued at time of offer. Hearing ordered to quantify those amounts. |
| Whether plaintiff obtained a more favorable judgment than the CPLR 3220 offer | Plaintiff argued recovery of $1,000,000 in attorneys’ fees (and nominal damages) is more favorable than $250,000 | Defendant argued, relying on Marek analogy, that post‑offer fees should not be included in the comparison and only fees/costs accrued at offer date count | Court adopted Marek’s approach: exclude post‑offer fees from the comparison; compare offer ($250,000) to nominal damages plus costs and attorney’s fees then accrued at time of offer. |
| Whether defendant may recover expenses (including attorney’s fees) incurred trying damages after the offer | N/A (plaintiff opposed liability) | Defendant sought expenses under CPLR 3220 because plaintiff failed to beat the offer | Court held that if plaintiff did not obtain a more favorable judgment after computing amounts as of the offer date, defendant is entitled to recover expenses incurred trying damages from the time of the offer; hearing to determine expenses. |
| Whether plaintiff is entitled to additional attorney’s fees incurred after the stipulation at trial commencement | Plaintiff sought $255,428.75 for fees after the stipulation | Defendant challenged necessity and reasonableness and argued action was baseless | Court refused to deny fees outright; ordered a hearing to determine necessity/reasonableness and disallowed some entries acknowledged unrelated; awarded nominal $1 damages. |
| Whether to set aside the jury verdict as against the weight of the evidence | Plaintiff argued the Daddy’s Dog article caused millions in losses and jury verdict (no damages) was against weight of evidence | Defendant argued other publications and market factors could explain losses and the jury could credit or reject plaintiff’s witnesses and experts | Court denied the motion to set aside, deferring to the jury’s credibility assessments and finding the evidence allowed the verdict. |
Key Cases Cited
- Marek v. Chesny, 473 U.S. 1 (U.S. 1985) (Federal Rule of Civil Procedure 68 “costs” encompasses all costs properly awardable under the substantive statute; post‑offer fees generally excluded from comparison to offer)
- U.S. Underwriters Ins. Co. v. City Club Hotel, LLC, 3 N.Y.3d 592 (N.Y. 2004) (prevailing party may not recover attorney’s fees absent statute, agreement, or rule)
- Abreu v. Barkin & Assoc. Realty, Inc., 115 A.D.3d 624 (1st Dept. 2014) (discussing CPLR 3220 and the availability of a hearing on attorney’s fees where plaintiff fails to obtain a more favorable judgment)
- Degregorio v. Richmond Italian Pavillion, Inc., 90 A.D.3d 807 (2d Dept. 2011) (fee reasonableness standard; court discretion and reduction principles)
- Farrar v. Hobby, 506 U.S. 103 (U.S. 1992) (degree of success controls fee awards; in some cases a prevailing plaintiff may receive no attorney’s fees)
- RMP Capital Corp. v. Victory Jet, LLC, 139 A.D.3d 836 (2d Dept. 2016) (contract action fee‑award reductions for block billing and vague entries)