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Yulia Safanovskaya and Sergey Slitinskiy v. Mollie Fidel Ostrow

SUPREME COURT OF THE STATE OF NEW YORK APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS


December 23, 2011

YULIA SAFANOVSKAYA AND SERGEY SLITINSKIY,
RESPONDENTS,
v.
MOLLIE FIDEL OSTROW, STANLEY FIDEL, INDIVIDUALLY, AND STANLEY FIDEL AS ESCROW AGENT,
APPELLANTS.

Appeal from an order of the Civil Court of the City of New York, Kings County (Pamela L. Fisher, J.), entered June 18, 2010.

Safanovskaya v Ostrow

Decided on December 23, 2011

Appellate Term, Second Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

PRESENT: PESCE, P.J., RIOS and STEINHARDT, JJ

The order denied defendants' motion for additional attorney's fees.

ORDERED that the order is affirmed, without costs.

Plaintiffs entered into a contract to purchase a cooperative apartment from the sellers, defendants Mollie Fidel Ostrow and Stanley Fidel, and subsequently commenced this action to recover their down payment. The down payment in the sum of $19,000 had been paid by plaintiffs and held in escrow by Stanley Fidel, Esq., as escrow agent of the parties to the contract of sale. Defendants moved for summary judgment and also sought an award of attorney's fees. Plaintiffs cross-moved for summary judgment. By order dated October 11, 2006, the Civil Court, among other things, granted defendants' motion for summary judgment and awarded defendants the principal sum of $5,000 in attorney's fees. On an appeal from this order, insofar as it granted defendants' motion for summary judgment, this court affirmed (Safanovskaya v Ostrow, 32 Misc 3d 136[A], 2010 NY Slip Op 52414[U] [App Term, 2d, 11th & 13th Jud Dists 2010]). Thereafter, defendants moved in the Civil Court to recover additional attorney's fees incurred to defend against the appeal and to enforce the judgment insofar as it awarded them the principal sum of $5,000. Defendants argued that plaintiffs had a duty to indemnify them for the attorney's fees incurred in the action pursuant to the indemnification provision contained in the contract of sale. By order entered June 18, 2010, the Civil Court denied defendants' motion.

The outcome of this appeal turns on the language of the contract of sale, which, in relevant part, provides as follows: "13.3 Subject to the provision of ¶ 4.3, each Party indemnifies and holds harmless the other against and from any claim, judgment, loss, liability, cost or expense resulting from theindemnitor's breach of any of its representations or covenants stated to survive Closing, cancellation of termination of this contract. Purchaser indemnifies and holds harmless Seller against and from any claim, judgment, loss, liability, cost or expense resulting from the Lease obligations accruing from and after the Closing. Each indemnity includes without limitation, reasonable attorney's fees and disbursements, court costs and litigation expenses arising from the defense of any claim and enforcement or collection of a judgment under this indemnity, provided the indemnitee is given Notice and opportunity to defend the claim. This ¶ 13.3 shall survive Closing, cancellation or termination of this contract."

Attorney's fees incurred during an action are considered an incident of litigation and, unless authorized by statute, court rule, or written agreement of the parties, are not recoverable (see TAG 380, LLC v ComMet 380, Inc., 10 NY3d 507, 515-516 [2008]; Centennial Constrs. Enters. v East NY Renovation Corp., 79 AD3d 690 [2010]). The indemnity clause quoted above was clearly intended to apply to third-party actions (see Hooper Assoc. v AGS Computers, 74 NY2d 487, 491-492 [1989]; Tonking v Port Authority of NY & NJ, 3 NY3d 486 [2004]). From the language of the agreement, it is clear that the parties never intended to provide for the recovery of attorney's fees as damages for breach of contract in an action brought by one against the other. Indeed, the contract of sale provides that the "exposure for actual damages" is limited to the amount of the down payment. Consequently, defendants are not entitled to recover additional attorney's fees against plaintiffs. We note that an appellate court is not bound by the law of the case doctrine (see Meekins v Town of Riverhead, 20 AD3d 399 [2005]). Accordingly, the order of the Civil Court denying defendants' motion is affirmed. Pesce, P.J., Rios and Steinhardt, JJ., concur.

Decision Date: December 23, 2011

20111223

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