Individual Lender Wins Appeal

Summary Judgment and Order of Over $600,000 in Attorney’s Fees is Vacated

Our client was an experienced real estate developer and investor. He provided funding for numerous projects in which he gave his wife and children ownership interests. Family disputes lead to protracted litigation spanning more than a decade between our client and one of his daughters. Our client sought repayment of loans he made to the daughter. The daughter argued she was not liable for the loans, as well as claimed she had not received her fair share of the profits of one of the enterprises. She sought attorney’s fees based on frivolous conduct by our client for filing his suit. The matters were settled during trial in Supreme Court Rockland County before the Hon. Linda Jamieson. The claim for counsel fees was severed from the settlement and was the subject of a multi-day hearing before Judge Charles Apotheker, which resulted in an award of $626,000.00 in counsel fees. Ostrer & Associates appealed that award to the Appellate Division Second Department.

We Successfully Argued the Wrongful Findings of the Trial Court

Ben Ostrer argued that the trial court erroneously imposed sanctions upon our client for alleged frivolous conduct and wrongfully granted the award. He claimed the court denied our client an opportunity to disprove the claim of frivolous conduct and defend himself against the court’s arbitrary findings of fact and law.

Mr. Ostrer pointed out that:

1. The law required the trial court to conduct an evidentiary hearing on whether our client’s conduct was frivolous prior to holding any hearing on the amount of attorney’s fees to be imposed.
2. The trial court failed to view the evidence in the light most favorable to our client, the party who did not move for summary judgment, as required by law. Instead the court granted summary judgment on its own accord affording every favorable inference to the daughter to grant relief that had not even been requested.
3. The trial court failed to identify the conduct which was allegedly frivolous as required by NYCRR.

A Successful Appeal

The Supreme Court of New York Appellate Division: Second Judicial Department reversed and vacated the trial court’s orders which granted the daughter’s request for attorney’s fees based on frivolous conduct, thereby overturning the $626,000.00 sanction.

The Appellate Division found that the trial court erred in granting the daughter’s request for attorney’s fees based on frivolous conduct. The court noted that the daughter only specified for the first time in her reply papers that she sought attorney’s fees. Since our client did not have notice, the daughter was not entitled to this relief without giving our client an opportunity to be heard, which the court did not afford.

The Appellate Division also found that the trial court failed to specify in a written decision the frivolous conduct upon which the award for attorney’s fees was based and the reasons why it found that conduct to be frivolous.