New York Courts sometimes take hard positions on lawyers which can significantly impact their condo, coop and other board clients. Clients sometimes need a “do over” and if they wait too long, they may be trapped in the attorney-client relationship with fees spiraling out of control. Seeking independent advice early on can give boards the clarity and control they need.
In one recent decision, a Supreme Court Judge was asked to award a coop $464,164 in legal fees that their attorneys incurred in defending them to victory. There was a provision in that coop-tenant case where the winner could recover reasonable legal fees from the loser and the Court had to decide if the fees were reasonable. This Judge explained the billing by the Greenberg Traurig firm where multiple attorneys were working on the case and some charged as much as $1,000 per hour. The Judge also noted that this case was not a complicated one, but rather could have been dismissed simply on the ground that the case was time barred.
The suit was by five residents of Seward Park Housing Corp., who were upset over a decision by the coop’s board to switch to a valet parking system. The residents filed a summary proceeding, seeking to annul the board’s decision. The Judge determined that the lawyers over-lawyered this case and ran up an unreasonable amount of legal fees. According to the Judge, the nearly half-million-dollar fee request was not in the context of “industrial or technological behemoths battling each other for market supremacy, but in the context of a handful of middle-class cooperators upset with a board of directors’ decision.”
After all, the Judge said, these days, $464,164—more than twice the salary of a New York State Supreme Court justice—could buy a one-bedroom coop apartment on the Upper East Side with a doorman and onsite parking garage; a one-bedroom co-op in Bay Ridge with a live-in super and high ceilings; or “your very own private house in suburban Elmont, Nassau County, just over the Queens border.”
The Judge awarded only 38 percent to the coop, leaving the balance of $287,781, for the coop to pay to their attorneys. That’s a lot of money. With the $175,000 that the Judge did award, he emphasized that with that, you could buy you a 55-foot yacht, equipped with multiple staterooms; a salon/galley/dining area; a washer-dryer; and stall showers.” He considered that reasonable, but what is unreasonable is the board having to now require the coop shareholders to pay the remainder, over a quarter-million-dollars shortfall.
It’s way too late to push the re-do button and reconsider having a large law firm where lawyers charge $1,000 per hour, dealing with a condo, coop litigation like this one. The Seward Park board is probably wishing that they could have a do over, but the time to have done that is long gone.
Click here to read the Decision.
