The respondent, a rent controlled tenant, having prevailed after trial in this non-primary residence holdover proceeding, now seeks by notice of motion attorneys' fees. According to the petitioner, the parties' 1963 lease agreement ("lease") does not contain an attorneys' fee clause for the bringing or defending of a non-primary residence proceeding. The petitioner also alleges that the respondent has no reciprocal entitlement to attorneys' fees. Paragraph seven of the lease provides "[t]hat in case of default of rent or of any of the covenants . . . Landlord or Landlord's agents may re-enter the premises with or without the means of summary proceedings or any other method prescribed by law . . . and relet the premises . . . and out of any rent so collected or received Landlord shall first pay to itself . . . reasonable attorney's fees . . ." The paragraph preceding the lease's "whereof" clause provides that "[i]t is further agreed that . . . if the Tenant shall cease to occupy the premises . . . the lease may, at the option of Landlord or Landlord's agents or assigns, be terminated in the manner hereinbefore recited." Obviously, the plain language of the lease only provides attorneys' fees to the landlord; however, a tenant may have a reciprocal right to recover fees pursuant to Real Property Law § 234.

Real Property Law § 234 provides that whenever a residential lease permits a landlord in an action or summary proceeding to recover attorneys' fees and/or expenses incurred as the result of a tenant's failure to perform any covenant or agreement contained in such lease, there is an implied covenant that the landlord shall also pay the tenant reasonable attorneys' fees and/or expenses incurred by the tenant in the successful defense of any action or summary proceeding. It also provides that any waiver of this section shall be void as against public policy. As the respondent is a rent controlled tenant, there is only one lease (i.e., the 1963 lease), which means that the lease clause permitting attorneys' fees continues into the statutory rent controlled tenancy. (Duell v Condon, 84 NY2d 773 [1995].) The lease also provides that should the respondent cease to occupy the premises, the landlord may terminate same. This clause is consistent with the New York City Rent and Rehabilitation Law's primary residence requirement, (9 NYCRR § 2200.2(f)(18)), and likewise carries forward into the statutory tenancy. Based on the aforementioned, the lease does incorporate attorneys' fees incurred in non-primary residence proceedings, and it would appear that Real Property Law § 234 should apply to this rent controlled lease. [*2]

Given that most residential leases only provide the landlord with a right to recover attorneys' fees, the overriding public policy of Real Property Law § 234 was to level the playing field between landlords and residential tenants. (Duell v Condon, 84 NY2d 773, supra .) However, there is a split of authority between the First and Second Departments regarding when is a lease clause that permits attorneys' fees broad enough to trigger Real Property Law § 234. Consider for example a lease clause that permits a landlord to deduct its attorneys' fees from rents received upon re-letting. Such a clause would only permit the recovery of attorneys' fees upon the re-letting, and will ensure that the only party who could ever obtain attorneys' fees would be the landlord. The clause essentially eliminates any reciprocal right pursuant to Real Property Law § 234, and appears to be in direct contradiction to the public policy behind same. Yet despite this, the aforementioned clause would not be sufficiently broad in the Second Department to trigger Real Property Law § 234. (Gannett v El-Kam, 306 AD2d 312 [2nd Dept 2003]; Hamilton v Menalon, 14 Misc 3d 13 [App Term, 2nd & 11th Jud Dists 2006].) On the other hand, in 1992, the Appellate Division, First Department, in Bunny v Miller, (180 AD2d 460), found such language sufficiently broad to trigger a reciprocal entitlement, and noted that finding otherwise would enable, if not encourage, landlords to undermine entirely the effectiveness of Real Property Law § 234 through artful draftsmanship. This court sits in the First Department, and analyzing the instant lease language under Bunny, it finds that said language is sufficiently broad to trigger Real Property Law § 234.

Although the standard set forth in Bunny has been the law in this Department for the past 17 years, the petitioner alleges that the First Department in a recent decision entitled Oxford v Wagner, (58 AD3d 422 [2009]), has indicated a change that places it on par with the Second Department's decision in Gannett v El-Kam (306 AD2d 312, supra ). The relief prayed for in the Oxford complaint was a judgment declaring void a 1995 agreement between the plaintiff-landlord and defendant-tenant. The 1995 agreement provided for successive renewals of the parties' residential lease. Finding that the subject of the lawsuit was the 1995 agreement, and not the residential lease, the trial court in Oxford held that Real Property Law § 234 does not apply. (2007 WL 6344612 [Sup Ct, NY Cty 2007].) Besides agreeing with the trial court's finding that Real Property Law § 234 does not apply because the action arose out of the 1995 agreement and not the lease, the Appellate Division, First Department, in affirming, also noted as follows:

Paragraph 23(D)(3) of the lease, on which defendants rely, provides that

in the event the lease is cancelled, the landlord may re-rent the apartment,

and any such new rent received "shall be used first to pay landlord's expenses

. . . [which] expenses include the cost of getting possession and re-renting

the Apartment, including . . . reasonable legal fees." This is not the type of

provision covered by Real Property Law § 234 (emphasis added). (58 AD3d

at 423, supra .)

According to the petitioner, the First Department's finding in Oxford that the aforementioned provision is not covered by Real Property Law § 234 indicates its intent to no longer follow Bunny and instead follow Gannett.

As already noted, the trial court in Oxford did not grant Real Property Law § 234 relief due to the fact that the action was not based on a residential lease, and therefore, analyzing the [*3]lease language pursuant to Bunny was never required. Why the Appellate Division, First Department, in affirming the trial court's decision, decided to review the lease language is unclear, but nowhere does it make any reference to its earlier decision in Bunny. Without a clear signal from the Appellate Division, First Department, that it has decided to undo 17 years of precedent and one of its more prominent decisions regarding attorneys' fees, this court will continue to follow Bunny. Therefore, this court finds that the language regarding attorneys' fees in the parties 1963 lease agreement is sufficiently broad to trigger Real Property Law § 234. The respondent's motion is granted to the extent of setting this matter down for a hearing on July 30, 2009, 2:30 PM, Part F, room 830, to determine the appropriate amount to award the respondent for reasonable attorneys' fees. The respondent is directed to serve a copy of this decision with notice of entry by first class mail upon the petitioner on/before July 10, 2009.

This constitutes the decision and order of this court, copies of which are being mailed by the court to the parties.

Date 6/17/09/S/__________________

Judge, Housing Court

Petitioner's Attorney:

Douglas L. Fromme, P.C.

462 Seventh Avenue, 12th Floor

New York, New York 10018

Respondent's Attorney:

Robert E. Sokolski, Esq.

SOKOLSKI & ZEKARIA, PC

305 Broadway, Suite 402

New York, New York 10007