Judge Increases Attorney Fees in New York Rent Contact Dispute
January 7, 2022
A recent Law 360 story by Max Jaeger, “Judge Ups Atty Fees in Wolf Haldenstein Rent Row,” reports that if anything is rising from the ashes of Wolf Haldenstein Adler Freeman & Herz LLP's "scorched earth" rent dispute, it's the firm's award for attorney fees, which a New York state judge more than doubled from $300,000 to $700,000.
The award, some $125,000 shy of what the Manhattan firm sought, was necessary "since the overwhelming majority of the tenant's attorneys' fees were generated in response to discovery demands from the landlord and/or the conduct of the bench trial," Justice Barry Ostrager wrote in an order, explaining that he had erroneously limited the potential award to $300,000 in November.
Wolf Haldenstein sued its longtime Madison Avenue landlord in April, alleging it was owed rent credits and damages because the landlord failed to complete office renovations required under a 2019 lease agreement. While Justice Ostrager mostly sided with Wolf Haldenstein in November, he chided the parties for turning an "exquisitely simple" case into "scorched earth" litigation through protracted discovery.
"This case should have been resolved early," Wolf Haldenstein counsel Scott Mollen of Herrick Feinstein LLP told Law360 in a statement. "Clearly Herrick's legal fees were a direct result of the scorched earth tactics of the landlord. This highly respected plaintiffs class action firm sought to resolve this matter through negotiation or mediation. However, a settlement requires that each side be reasonable."
Once the court resolved the rent dispute, the battleground shifted to fees. Justice Ostrager said in November that Wolf Haldenstein could seek $300,000 to pay attorneys at Herrick Feinstein LLP but acknowledged in a Dec. 15 order that Wolf Haldenstein sought more and that he'd relied on incorrect numbers. On Dec. 14, Wolf Haldenstein told the judge in a letter that the landlords had blown a deadline to oppose the full $827,000 request. In a response that same day, the landlords claimed they thought the firm was only asking for $300,000.
That led Justice Ostrager to issue the Dec. 15 order clarifying himself the following day. "Nothing is either simple or non-contentious in this case which could have been consensually resolved last April if reason and common sense had prevailed. Regrettably, in describing the tenant's claim for attorneys' fees in its [Nov. 22] decision, the court referenced the amount of fees Wolf Haldenstein had paid Herrick Feinstein, rather than the amount of attorneys' fees Wolf Haldenstein had incurred," Justice Ostrager wrote, adding the landlord "knows full well [$300,000] is not the sum plaintiff requested."
In opposition papers filed Dec. 20, the landlord argued Wolf Haldenstein's request was excessive, because Herrick Feinstein LLP allegedly overstaffed hearings, inflated bills for what amounted to public relations work, and engaged in imprecise block-billing practices that should trigger "a substantial reduction" in the award.
Justice Ostrager agreed "that the tenant's fee application is excessive inasmuch as multiple tasks for which attorneys' fees are sought did not require the number of attorneys whose time was submitted to the court for approval," but again pointed out that none of the fees would have been generated had the landlord not dragged out litigation.
Herrick Feinstein charged its standard hourly rates, less a 10% courtesy discount, the justice said in his Dec. 15 order. While he said it had no bearing on his ruling, the judge called it "telling" that the landlord's attorney fees were some 30% higher than Wolf Haldenstein's, at $1.2 million.