Marilyn Shafer, J.C.C.

This is a commercial non-payment proceeding in which petitioner is suing for outstanding rent from January 1994 and respondent is alleging constructive eviction from part of the premises. A trial was held on fifteen separate days from December 1994 to May 1995. The Court now makes the following findings:

The parties entered in to a twenty-year lease agreement for both the ground floor space and the basement space under the ground floor. The monthly rent is calculated for the total space which, pursuant to a diagram attached to and made part of the lease, includes the basement value space. Respondent uses the ground floor as selling space and the basement, including the vault space, was divided to use half for storage and half for selling.

Although there were sporadic leaks in the premises from the commencement of the tenancy, no major events occurred until December, 1993, when pieces of concrete, water and parts of the drop ceiling fell on to the basement floor. One of the pieces of fallen concrete weighed approximately 35 pounds. The fallen concrete was from girders that were located in the area of the vault space.

Even though this was the second time that concrete had fallen from the ceiling slab (two months earlier ______________________________gas meter room), the petitioner ________________________cement but merely sent workers to help mop up the debris, remove an additional 15 to 20 feet of loose concrete from the beam, remove concrete that had fallen through the drop ceiling and offered to replace the damaged ceiling tiles. Petitioner never made any real attempt to make the major repairs necessary to the vault and ceiling slab, but attempted to solve the problem by replacing ceiling tiles. Requests by the landlord for yet another "inspection" were not good faith attempts to make the required repairs. This Court specifically finds that it was the petitioner's failure to make the necessary repairs, and not respondent's failure to give access, that has resulted in an unimproved premises.

Understandably, because of the falling concrete, respondent was forced to change his use of the space and could not use the vault area and the adjoining basement space. Based on respondent's engineer's testimony that the entire basement was not unsafe, but only the vault area of approximately 15 feet and an additional 20 feet of the adjoining basement space and the testimony of petitioner's witness who testified that they observed respondent using parts of both the selling and storage areas from January 1994 to the present, this Court finds that respondent was and is constructively evicted from the entire vault area of the basement and the adjoining twenty feet into the basement are for a total loss of 35 feet. Any leaks that occurred in other parts of the premise did not materially or substantially deprive respondent of the beneficial use of those areas. Furthermore, the results of asbestos testing of nay part of the premises, other than the aforementioned 35 feet did not result in any additional abandonment of the premise.

Therefore, based on this Court's finding that the leased premise includes the vault area and the finding that respondent is constructively evicted from 35 feet of the basement area, respondent is entitled to an abatement to correspond to that constructive eviction.

This reflects the Decision and Order of the Court.

Stanley Parness, P.J., William P. McCooe, Helen E. Freedman, JJ.

Landlord appeals from a final judgment of the Civil Court, New York County, entered August 14, 1995 after trial (Marilyn Shafer, J.), insofar as it awarded tenant a rent abatement of $161,058.70 and limited landlord's recovery for arrears to the sum of $399,487.75.

Final judgment entered August 14, 1995 (Marilyn Shafer, J.) modified by vacating the award on tenant's constructive eviction claim relating to the vault space, and by remanding time matter for a new trial on damages on tenant's constructive eviction claim relating to the basement space; as modified, judgement affirmed, without costs.

After a trial in a commercial nonpayment proceeding, Civil Court determined that tenant had been constructively evicted from the entire vault space and from a portion of the basement space of the store premises. The court erred in finding that the demised premises comprised the vault area, and improperly included the 840 square feet of vault space when calculating tenant's rent abatement. Article 14 of the parties' lease expressly excluded the vault space from the terms of the lease, and, in consequence, there could not be any eviction entitling tenant to apportionment of rent or damages. To sustain a claim for constructive eviction, the tenant must have been deprived of something to which it was entitled under or by virtue of the lease (Silver v. Moe's Pizza, Inc., 121 AD2d 376, 377).

Contrary to tenant's argument, the vault space was not included in the general description of the demised premises on the first page of the lease. Moreover, Article 14 applies notwithstanding ". . . anything containing in or indicated on any sketch, blueprint or plan, or anything contained elsewhere in this lease and with respect to the basement space, the weight of the evidence demonstrates that tenant continued to use the selling area without interruption during the period in issue. Tenant was deprived of the use of the top shelves in the storage area, and its recovery for partial constructive eviction attributable to the falling concrete should be limited to that portion of the basement (see Minjak Co. v. Randolph, 140 AD2d 245,248-249).

We remand for a new trial on damages, at which landlord may seek to establish, through expert testimony, that the portion of rent allocable to the basement was less than the portion allocable to the street level store (see generally, 487 Elmwood, Inc. v. Hassett, 107 AD2d 285).

Kibbie F. Payne, J.C.C.

Petitioner's motion for an order striking respondent's first through seven, nine and ten affirmative defenses and two counterclaims and respondent's cross-motion granting it summary judgment are consolidated for decision.

Respondent's first defense based on improper service of the rent demand is stricken. In addition to the process server's affidavit swearing that a "Tony Rossi," a person of suitable age and discretion, was served with the rent demand, an additional affidavit of a paralegal with petitioner's law firm corroborates that the person so served stated that he was indeed "Tony Rossi." In rebuttal, Victor Benatar, an officer of respondent merely denies having an employee named "Tony Rossi" and does not further deny employing anyone with the physical description of the person served as stated on the affidavit of service. Moreover, respondent in its affidavit fails to rebut petitioner's contention that any of its employees accepted service of the three day rent demand. Additionally, this court finds that the mailings of the rent demand sent to the subject premises and at 724 Seventh Avenue and 712 Seventh Avenue (two addresses of respondent's other places of business) and its attorney at 430 Park Avenue (as pursuant to Articles 27 and 63 of the lease) were proper. Accordingly, the first affirmative defense is stricken.

Respondent's second affirmative defense based on lack of personal jurisdiction over its person is also stricken. In light of the fact that respondent elected to counterclaim for damages for petitioner's alleged leasing the subject premises illegally and this counterclaim is unrelated to petitioner's claim for possession, respondent has waived any jurisdictional defenses, in particular the service of the notice of petition and petition. (Textile Technology v. Davis, 81 NY2d 56, 58-59.) The third affirmative defense based on improper verification of the petition is also stricken as respondent failed to notify petitioner's attorney with due diligence that it elected to treat the petition as a nullity for defective verification thereby waiving any defects in the verification. (CPLR 3022). Any irregularities in the verification of the petition by landlord's attorney is inconsequential and amendable at any stage of the proceeding. (Leshinsky v. Lawsen, NYLJ, Feb. 24, 1994 at 30, col 6 [App Term lst Dept].)

The fourth through sixth affirmative defenses, for defective rent demand, improper description of the subject premises in the petition and failure to state a cause of action, are stricken as totally baseless and without merit.

With respect to the seventh affirmative defense of partial actual eviction, the law in New York is well settled that "an actual eviction occurs only when the landlord wrongfully ousts the tenant from physical possession of the leased premises [and] … that there must be a physical expulsion or exclusion. (Barash v. Pennsylvania Terminal Real Estate Corp., 26 NY2d 77, 82.) While respondent claims that the water leak caused a disruption of its business and forced it to discontinue the use of the area under the leak, respondent fails to describe the size of the area so discontinued, the time period of the discontinuance and the effect this had on its business.

Furthermore, respondent falls short of stating that it abandoned any portion of the subject premises. Giving respondent every favorable inference in its partial actual eviction claim, this court finds that respondent has failed to sufficiently allege wrongful conduct and damage to withstand a motion to dismiss. Accordingly the seventh affirmative defense is also stricken.

The ninth and tenth affirmative defenses for illegal use and breach for failure to repair and maintain are also stricken. The corresponding counterclaims are severed and dismissed, to renew in a plenary action. A tenant's obligation to pay rent is independent of petitioner's obligation as landlord to provide its commercial tenants essential services. (Towers Organization, Inc. v. Glockhurst Corp., N.V., 160 AD2d 597, 599; Earbert Restaurant, Inc. v. Little Luxuries, Inc., 99 AD2d 734.) It is also the rule of law that the commercial tenant's independent obligation to pay rent continues so long as it remains in possession and is not suspended because of the landlord's alleged failure to make certain repairs on the premises. (See 335 Broadway/193 Worth Co. v. Heller, NYLJ, Mar. 21, 1994 at 30 col I [App. Term 1st Dept].) As it is undisputed that respondent still occupies the subject premises, its defense based on breach of lease for failure to repair and maintain lacks any merit and is likewise stricken. Additionally, it is well established that counterclaim waiver clauses found in lease agreements are valid and enforceable. (Amdar Co. v. Hahalis, 145 Misc2d 987 [App Term, 1st Dept]; Bomze v. Jaybee Photo Suppliers, 117 Misc2d 957; Amazon Management Corp. v. Paff, 166 Misc 438 [App Term, 1st Dept].) This is especially true in the context of commercial tenancies more often than in residential tenancies because business entities are presumed ostensibly to have equal bargaining power. (Perlbinder v. Village Merchants Inc., NYLJ, October 3, 1994, p. 29, col 3 [Civ. Ct NY Co.].) Moreover, the counterclaims are unrelated to petitioner's claim for possession and are best litigated in a plenary action.

Based on the foregoing, petitioner's motion is granted to the extent that the first through seventh, ninth and tenth affirmative defenses are stricken and dismissed and the two counterclaims severed and dismissed and respondent's cross-motion for summary judgment is, in all respects, denied. This matter shall be restored to the Part 52 Trial calendar on March 12, 1996 at 10 a.m. for trial. The foregoing constitutes the decision and order of this court.

Jose A. Padilla, Jr., J.C.C.

Motion granted only to the extent of directing a hearing to determine if petitioner was prevailing party in this litigation and for a determination of attorney fees to be awarded, if any. (See 90^th Realty Co. v. Scolnik, NYLJ 12/23/96 p25c6 [AT1].) Hearing is scheduled for 7/07/97 at 10 am in Room 823. After oral argument on the record on 7/07/97, and review of the underlying moving papers and the procedural manner in which the controversy appears before the court, the court determines, that as a matter of law, petitioner was not a prevailing party in this litigation involving #'s 82493/94 and 109296/95. (See decision on record.)

Stanley Parness, P.J., William McCooe, Helen Freedman, JJ.

Landlord appeals from an order of the Civil Court, New York County, dated July 7, 1997 (Jose A. Padilla, Jr., J.) denying its motion for an award of attorneys' fees and pre-judgment interest.

PER CURIAM:

Order dated July 7, 1997 (Jose A. Padilla, Jr., J.) modified by granting landlord's application for attorneys' fees in the nonpayment proceeding commenced under Index No. 109296/95, and by remanding the matter to the Civil Court for a hearing to determine the amount of reasonable attorneys' fees and for calculation of prejudgment interest on the final judgment of August 14, 1995; as modified, order affirmed, without costs.

In the initial nonpayment proceeding (Index No. 82493/94), landlord failed to request attorneys' fees in the petition or at any point during the 15 day trial. The matter proceeded to judgment, followed by landlord's appeal to this court, without any application for amendment of the pleadings or argument on the issue. A claim for attorneys' fees was interposed for the first time in landlord's postjudgment and postappeal motion approximately nine months after our order. We agree that this belated claim for fees was untimely and that Civil Court did not abuse its discretion in declining to "deem" the petition "amended" to include a prayer for that relief. A party against whom substantial legal costs are sought should be apprised of that claim at or near the outset of the case, so that it may effectively frame its litigation strategy. In this case, landlord delayed until the proceeding was at an end. While it is premature for the court to address the issue of attorneys' fees until a case has been completed (Solow v. Wellner, 86 NY2d 582, 589), timely notice should be given by a litigant that fees will be claimed so as to avoid surprise or prejudice to the adversary.

The claim for attorneys' fees arising out of the second nonpayment petition (Index No. 109296/95) stands upon a different footing, as that petition did contain a demand for fees. Shortly before trial, tenant tendered the rent sought without setoff or deduction. Since landlord entirely and prevailed on its substantive claim, it is entitled to recover the legal expenses incurred in prosecuting this proceeding pursuant to Article 19 of the parties' lease. (Livigne v. D'Agostino Supermarkets, Inc., 207 AD2d 776; Wertheim v. Lexa Imports, Inc., NYLJ, October 1, 1997, at 25, col 1 [App Term, 1st Dept].) We have remanded the matter for an assessment on that issue.

Landlord's motion for an award of prejudgment interest should have been granted, since landlord was entitled to interest as of right upon its recovery for rent in the possessory judgment of August 14, 1995. (Solow v. Wellner, 86 NY2d 582,589-590; CPLR 5001 [a].) This issue was not waived on the previous appeal, since there had been no prior judicial determination with respect to interest and the trial court retained jurisdiction to fix interest at the statutory rate. (Kiker v. Nassau County, 85 NY2d 879.) We also note that our order of modification provided for a new trial on tenant's constructive eviction claim, and necessarily contemplated the entry of an amended judgment. (See Solow v. Wellner, 86 NY2d, 582, 589.)

Ellerin, P.J., Lerner, Andrias, Saxe, JJ.

Order of the Appellate Term of the Supreme Court, First Department, entered March 31, 1998, which modified an order of Civil Court, New York County (Jose Padilla, Jr., J.), entered on or about July 7, 1997, to grant in part petitioner's previously denied application for an award of attorneys' fees and prejudgment interest, unanimously modified, on the law and the facts, to grant the application to the further extent of determining that petitioner did not waive its contractual entitlement to an award of attorneys' fees in either of the two subject consolidated commercial nonpayment proceedings, and to remand the matter to Civil Court for a hearing to determine the amount of reasonable attorneys' fees to be awarded in both proceedings, and otherwise affirmed, without costs.

The record does not.establish that petitioner landlord intentionally relinquished its claim for attorneys' fees (see, Gilbert Frank Corp. v. Federal Ins. Co., 70 NY2d 96G, 968), and respondent tenant can make no tenable claim that amendment of the first nonpayment petition to include a claim for attorneys' fees would be surprising or prejudicial, since respondent was aware of Article 19 of the lease providing for the landlord's recovery of attorneys, fees if the landlord prevailed in litigation over nonpayment of rent, and, indeed, since the landlord's petition in the second of the two consolidated nonpayment proceedings expressly demanded such fees. Appellate Term properly concluded that petitioner landlord prevailed on its substantive nonpayment claim, particularly where, prior to trial, respondent tenant paid all of the outstanding arrears and abandoned its alleged defense of partial constructive eviction (see, Excelsior 57^th Corp. v. Winters, 227 AD2d 146, denied 1996 NY App Div LEXIS 9554), and that rationale applies equally to the first proceeding.

27 H.C.R. 686A, 12/6/99 N.Y.L.J. 25, (col. 6) (Civ. Ct. N.Y. Cty.)

Faviola A. Soto, J.C.C.

Pursuant to Decision and Order of the Supreme Court, Appellate Division, First Department, dated March 23, 1999 (the "Order"), this matter was remanded for an attorney fee hearing. That hearing was held before me on August 10 and 11, 1999. Both petitioner and respondent submitted post-hearing memoranda.

This court must determine the reasonable amount of attorneys' fees to be paid by the commercial respondent-tenant to petitioner-landlord. There is no dispute that the lease permits recovery of attorneys' fees. While respondent appears, in part, to argue that the landlord is not entitled to attorneys' fees because it was not the prevailing party, the Appellate Division has ruled to the contrary. Accordingly, the issue before this court is determining the amount of reasonable attorneys' fees. Both the scope and the size of the fees are heavily contested, as the landlord seeks to recover all of the fees and disbursements of both the original trial counsel and the second trial counsel who joined the original counsel after ten days of trial, and, thereafter, represented petitioner on appeal of the first proceeding, at the pre-trial level of the second proceeding, and at the trial and appellate level of both proceedings after consolidation.

Overview: Nature of the Proceedings

The fee request considered by the court is in connection with two summary non-payment proceedings against the respondent; fees incurred in an initial non-payment are not covered by the Order, and the court denies recovery for such fees. What follows is a summary of the proceedings, given to convey the nature of the litigation and the nature of the fee request.

The first proceeding, L & T Index No. 82493/94, involved extensive motion practice. At trial, the first proceeding included the remaining defenses of partial actual or constructive eviction due to water leakage, asbestos contamination, and the deterioration of beams in the cellar.

Petitioner submitted six trial memoranda and post-trial memoranda. The outstanding rent was found to be $821,728.11. The trial court awarded an abatement of 19.6%, and, crediting the monies deposited in the court or paid by respondent, awarded petitioner a judgment of $399,487.75. Petitioner appealed.

During the appeal of the first proceeding, petitioner instituted the second non-payment, L & T Index 109296/95, to recover for rents for August, September, and October 1995, totaling $131,438.50. Respondent filed an answer asserting ten affirmative defenses and two counterclaims. Motion practice ensued. The proceeding was marked off the calendar by stipulation pending the outcome of the appeal.

The Appellate Term vacated the abatement award and remanded for a new trial on the constructive eviction claim. Petitioner's motion for consolidation was granted. Petitioner's counsel prepared for a new trial on the issue of damages in the first proceeding, and for a trial in the second proceeding. The afternoon before the consolidated matter was scheduled for trial, respondent paid all outstanding rent.

Petitioner thereafter made a motion, opposed by respondent, for attorneys' fees. Petitioner appealed the trial court's order denying attorneys' fees. The Appellate Term modified the trial court order by granting attorneys' fees in the second non-payment. Petitioner sought leave to appeal that part of the order which denied recovery of attorneys' fees for the first Nonpayment; respondent cross-moved for leave to appeal that part of the order that granted attorneys' fees for the second nonpayment. Both the motion and cross-motion were granted. The Appellate Division determined that petitioner, as the prevailing party, was permitted to recover its reasonable attorneys' fees in both proceedings.

Petitioner moved for an award of attorneys' fees and pre-judgment interest. Respondent cross-moved for a stay on the attorneys' fees hearing, pending respondent's motion for leave to reargue or permission to appeal to the Court of Appeals. The cross-motion for a stay was denied. The Appellate Division denied respondent's motion. This court, in the exercise of its discretion, granted petitioner's motion for pre-judgment interest in the amount of $95,602.51 (calculated) from the date of each month's non-payment). The fee hearing was held before me on August 11 and 12, 1999. Respondent's motion for leave to appeal to the Court of Appeals was denied on September 2, 1999. Thereafter, both sides submitted post-hearing memoranda.

The Fee Request

Petitioner's original counsel is requesting $75,977.65 in attorneys' fees and costs. Petitioner's second counsel is requesting a total of $350,517.19 in attorneys' fees and disbursements, and in experts. Contrary to one of respondent's arguments, the court's determination is not made by examining the amount recovered, and then awarding a percentage of that sum; using this method, respondent suggests the court should award 10% of the judgment entered in the first proceeding. Rather, the court's determination was guided by the multi-step analysis set forth in Matter of Rahmey v. Blum, 95 A.D.2d 294, as well as the recent appellate opinions in 1050 Tenants Corp. v. Lapidus, NYL7, October 19, 1999, at 26, col. 1 (App. Term 1st Dept.); 1050 Tenants Corp. v. Lapidus, NYLJ, July 30, 1998, at 21, col. 1 (App. Term 1st Dept.). See also Tige Real Estate Development Co. v. Rankin-Smith, 233 A.D.2d 227 (App. Div. 1st Dept). The court's determination also was assisted by the considerable body of decisions on evaluating attorney fee requests, in the landlord-tenant field as well as other areas. Ultimately, the court's determination was based on the careful exercise of its sound discretion.

Hours Reasonably Expended

First, in assessing the fees, the court determined the nature and extent of the services provided from each of the law firms retained by petitioner. The court closely examined the contemporaneous time sheets and disbursements (including those fees expended for experts) submitted by both firms, carefully considered the testimony adduced at the fee hearing, and carefully reviewed the papers submitted prior to, during, and subsequent to the hearing. The court also extensively reviewed the 1,298-page transcript of the trial held before the Hon. Marilyn Shafer. The court considered respondent's arguments that a large portion of the fee request was for services that were unnecessary or unreasonable, and petitioner's arguments that the fees were reasonable and necessary. Generally, these arguments were not specific as to particular entries or specific stages of the litigation, but in the form of general arguments regarding the nature of the work for broad stages of the litigation, i.e. at the trial court level, or at the appellate level.

The court then weighed the hours claimed by petitioner, and disputed by general category by respondent, against the court's own knowledge, experience and expertise, and, as detailed below, disallowed or adjusted those hours that the court found to reflect duplication of services, inefficiencies, or hours that were otherwise excessive, redundant or unnecessary. The court also adjusted the hours for services which, while no doubt considered time and money well spent by petitioner or petitioner's counsel, the court found to be unnecessary for the enhancement of the record or the proceedings, and, accordingly, fees that should not be borne by the respondent.

Reasonable Hourly Rate

The court examined, and arrived at, the reasonable hourly charge for each category of services. The court considered the reasonable and customary fee charged for similar services by attorneys in the community with similar experience and reputation. While the court was aided in this determination by the uncontroverted expert testimony presented at the fee hearing, the court also applied the court's own knowledge, and carefully examined whether the charge was reasonable in the context of the particular phase of the proceedings and the nature of the work.

The original trial counsel charged, for the trial partner's time, $190.00 an hour, and for associate time, $135.00 per hour. Second trial counsel charged, depending on the attorney, $215 to $225 per hour for partner time (a former partner charged $175-$225), $125 and $175 per hour for associate time, $100 per hour for summer associate and law clerk time, and $65 per hour for paralegal time. Both counsel's rates were applied uniformly for in-court as well as out-of-court time. Overall, the court found that these rates were reasonable. The court adjusted the rates, however, where it found that the rate was too high in light of the particular work undertaken, in that, for example, certain of the work was of a clerical nature or could have been undertaken by an associate or non-attorney.

The Calculation and Adjustments

The court next multiplied the hours reasonably expended by the reasonable hourly rate. Thereafter, the court adjusted this figure to account for a number of factors, including those set forth in Blum, supra. To the extent the court utilized the Lodestar method, that analysis was included in the court's general analysis of the factors set forth, and in the court's detailed determination of the fee award for the various stages, as set forth below.

The Initial Proceeding

The first firm is seeking $4,000 for services rendered in connection with the initial proceeding, which was withdrawn by petitioner. The Opinion does not provide for recovery of attorneys' fees for this proceeding. Rather, it provides for recovery for what it refers to as the first and second proceeding (which counsel often refer to as the second or third proceeding); accordingly, the court denies this portion of the attorneys' fee application.

The First Proceeding: Single Representation

The first firm is seeking $71,977.64 for services rendered in connection with L & T Index No. 824931/94. The court notes that the first firm is not seeking recovery for that portion where it already discounted its fee, as set forth in the invoices.

The court finds that the fees and disbursements incurred at the pre-trial stage, and in the first seven days of trial, are reasonable and necessary. The court notes that respondent has not specified an objection to fees incurred at this stage.

Respondent's primary objection with respect to the first firm's fees, however, is to those incurred in the second half of the trial, which respondent argues is directly related to the second firm's entry on day eleven of the fifteen day trial. To support its arguments that the fees are unreasonable and excessive, respondent points out that according to its calculation, 77% of the first firm's fee at trial is sought for the second half of trial.

Yet, it is not unusual for the fees incurred in connection with preparation for and presentation of petitioner's prima facie case on a non-payment to be less extensive than those incurred in defending against a respondent's claims of abatement and constructive eviction. The court finds those fees and disbursements directly involved in the first firm's own preparation for and conducting of the first ten days of the trial to be reasonable. To the extent, if at all, that the court might have been inched to adjust the fee to reflect a limited amount of duplication or inefficiencies, the invoices and the amount now sought already reflect that adjustment.

The First Firm: Dual Representation and Double In-Court and Out-of-Court Time

The adjustment that the court has made is to the time of the first firm (and the second), for those out-of-court hours that reflect the time incurred preparing or working with the second firm to step in as co-counsel, and the in-court and out-of-court dual representation hours. (The court's adjustments to the hours of the second firm for the overlapping in and out of court time are described separately below.)

Petitioner has not shown, and the court's inquiry has not determined, that the fees incurred by both firms for the overlapping in and out-of-court time was necessary or reasonable. The court so determined after examining a number of factors, including: (i) that the second firm's involvement almost tripled the number of days petitioner's first firm previously estimated to be remaining in the trial (see the estimate of two afternoons as the remaining time, at page 576 of the transcript as renumbered for the appeal); (ii) the trial court's statements, as reflected on the record, that the second firm's involvement failed to enhance the record (see, for example, transcript at 694, 774, 798, 808, 809,838, 851, 876, 1047, 1117, and 1296); (iii) this court's own assessment, upon an independent review of the record, that the second firm's involvement did not substantially enhance the record; (iv) that the dual representation was not necessitated by respondent's own trial conduct, and (v) that a sizeable portion of the out-of-court time spent by both firms, particularly in the beginning of the second firm's involvement as trial counsel, consisted of the second firm being familiarized or familiarizing itself with what transpired.

The court notes petitioner's arguments that duplication did not occur because, for, example, the first firm utilized only a partner, and no longer an associate as well, during the dual representation by both firms. But this adjustment in staffing for in-court time, while recommendable, begs the question.

The issue is not whether counsel attempted to avoid certain aspects of the inevitable duplication resulting from dual representation. Similarly, the issue is not whether petitioner decided that it was willing, at this late stage, to pay a premium and incur a benefit of having experienced partners from two law firms simultaneously trying a case. The issue is whether respondent should be made to pay the fees of two law firms for dual representation by partners from each firm, when petitioner has not shown and the court's inquiry has not found that the dual representation at this stage of the proceedings was reasonable or necessary.

While the court will not award in-court time for both the first and second firm, the court, in the exercise of its discretion, will award the first firm (but not the second) its in-court fees for the days eleven through fifteen. Covered in days eleven through fifteen was the continued trial of respondent's defenses and petitioner's rebuttal, and the court finds that the first firm's in-court time consisting of one partner's continued representation was reasonable.

The court considered an alternative method of allocating these fees: guesstimating the hours spent by each firm in preparing for and questioning the witnesses handled by each firm, and making a partial award to the second firm, while subtracting a partial award from the first firm. The court, in the exercise of its discretion, declined to follow this alternative. First, the invoices did not lend themselves to this allocation, and the court did not deem it appropriate to guesstimate the allocation under the circumstances herein. Second, such allocation would have little practical effect, as the court was not inclined to award a greater sum. Third, petitioner has not shown that it was necessary for more than one firm to try this case. In any event, the court awarded the fees incurred by the first firm for the entire remaining five days of trial, which was three days more than estimated as remaining on day ten. The court believes the award to be more than adequate, and will not make any additional award.

Accordingly, the court makes the following award. The court is awarding the first firm its in-court time, and its out-of-court time which the court can determine was directly related to the preparation of witnesses and preparation for the ongoing trial. The court has adjusted the fee and subtracted $8,000, the amount representing the hours incurred by the first firm in preparing the second firm for its involvement in the trial, and for similar duplicitous or unnecessary services incurred in out-of-court time prior to and during the stage of dual representation.

The court therefore awards the first firm the sum of $64,000.00, representing reasonable fees and disbursements incurred in connection with the first firm's representation. This amount also includes the limited time spent in assisting the second firm in preparing for the appeal.

The Second Firm: Dual Representation and Double In-Court and Out-of-Court Time

For the reasons noted above, the court, in the exercise of its discretion, declines to award the second firm for its time incurred in the remaining days of trial of the first proceeding. This is not a reflection of counsel's good standing, expertise, and deserved reputation. Nor need it be a reflection that petitioner should not have elected to pay a premium and get the benefit of two experienced firms trying its case. Rather, the court has determined, after careful consideration of the factors set forth above, and in the exercise of its discretion, that respondent should not bear these fees, as petitioner has not shown and the court has not found the additional fees necessary or reasonable.

Accordingly, the court adjusts the second firm's fees to subtract $45,519.84, representing the time spent preparing for and during trial. The court will award the second firm its disbursements, which the court finds reasonable; the award for these disbursements is included infra.

The Experts

Petitioner retained a number of experts. The court has examined whether the retention of these experts was necessary and reasonable, and, if so, whether the actual fees charged by these experts were reasonable. These fees were paid directly by petitioner, and are not sought as disbursements by counsel.

The court will award the following fees incurred for the following experts, as the services were reasonable and necessary and the amount was reasonable: engineering consultants, $17,499.22 (regarding the alleged damage to respondent's basement space); architectural services, $2,180.00 (to rebut contentions regarding the existence of asbestos); lab testing, $2,400.00 (air-testing to disprove contentions regarding airborne asbestos); private investigator, $1,220.78 (retained to respond to respondent's assertions that it was entitled to an abatement because it was unable to use the cellar to sell additional merchandise). Accordingly, the court awards reasonable expert fees in the amount of $23,300.00.

With respect to the various fees incurred at various stages of the proceedings in connection with a real estate appraiser, the trial court noted that the appraiser was unnecessary, and the testimony was not permitted at trial. Similarly unnecessary was the appraiser's retention as a possible witness at a subsequent hearing, as that court also found the testimony was not necessary and the testimony was not permitted. Accordingly, the court finds that the services were not reasonable or necessary and denies petitioner's request for the expert fee incurred by the real estate appraiser, which totaled $8,025.00 ($4,325.00, $1,200.00 and $2,500.00).

Post-Trial Appellate Practice, the Second Proceeding, the Consolidated Action, and Matters Prior to April 29, 1999

Following conclusion of the trial of the first proceeding, the second firm continued its representation. Entries that were not billed to the client were similarly not sought as part of the fee application.

Respondent's primary challenge to these fees is that all of the litigation costs incurred by petitioner to pursue its claim for attorneys' fees were incurred by petitioner's failure and "neglect" to assert a claim for attorneys' fees in the original pleadings that initiated the non-payment proceeding. Respondent calculates that 45% of the second firm's fee request is attributable to the appeals, characterized as related to attorneys' fees, and should be disallowed.

The court's analysis is different. First, petitioner's appellate costs were not incurred solely with respect to litigation concerning attorneys' fees. Second, the court finds generally that the trial and appellate litigation concerning recovery of attorneys' fees are reasonable and necessary.

What is troubling to the court, however, are other aspects of the fee application for this and the subsequent periods. While the second firm spent an inordinate amount of time preparing the motion papers and preparing for the hearing, no breakdown by category was provided for the various stages for which these fees were incurred. Thus, the court's task in analyzing the reasonableness of the fees was made unnecessarily arduous in that the court, in addition to determining the reasonableness of each entry, had to calculate these entries by categories to determine the reasonableness of the overall fee for various stages of the litigation. For example, the court had to separate from each invoice and then total the fees incurred in connection with the first appeal, or in connection with the second proceeding, or in connection with the 1999 motion and hearing for attorneys' fees.

Second, while the second firm represented that it made the adjustments to the invoices for litigation in the Supreme Court, the court has found, just from the description alone, that there are quite a number of entries that were not deleted. For example, there is a charge of $1,800 for one partner's work on April 14, 1999, for "completed motion papers re: insurance violation." This work, unrelated to the instant litigation, was not deleted. There are also other entries which, while not as easily ruled out from the description alone, so match in the description and period for dates of services for items that were identified by petitioner as not related to the instant litigation, so as to create the presumption that they too should be omitted, particularly as petitioner has not shown otherwise.

Third, in the supplemental affirmation, petitioner also seeks recovery for $23,013.87, for post-trial services that appeared on an invoice dated July 10, 1995, which petitioner asserts was inadvertently omitted from the motion papers. The invoice, however, was not attached to the affirmation, was not included in petitioner's post-hearing memorandum, and was not described in detail at the attorney fee hearing so as to permit the court to determine whether the fees incurred were reasonable.

Fourth, also included in invoices for services rendered in 1999 prior to April 29th were fees incurred in this period for preparing the motion for attorneys' fees, and in preparing for the attorneys' fees hearings. This portion of the fees incurred in connection with the 1999 fee application totaled $7,500, in both partner and associate time. The court notes that, while not so summarized on the invoices, this work also was incurred in connection with the motion seeking pre-judgment interest, as the motion was a joint application. Accordingly, the court will credit a percentage of this work within this section. As the more substantial portion of the work was devoted to the attorneys' fees, however, the majority of these fees, and the approximate additional $20,000 fees subsequently incurred in connection with the fee application, are addressed separately below.

After omitting the fees incurred in this period in connection with the Supreme Court action, the missing invoice, and the 1999 attorneys' fee hearing, the court then examined the remaining time and disbursements. While recognizing the nature of the staffing decisions and staffing changes that occur over the years, the court notes that the motion identifies three partners, a total of eleven associates, and a total of eleven paralegals who rendered services, to various degrees at various times. Again, the focus for the court is not whether it is reasonable for a firm to seek payment for these services from the client (who chose the firm and is no doubt pleased with its services), but whether, under the analysis herein, adjustments should be made for those entries which appear to the court to be more related to the staffing changes and the resulting learning curve, inefficiencies, duplication, and additional work. The court has found that adjustments should be made, and has made these adjustments.

The court further has adjusted the fees to account for duplication, work done at a higher billing rate that could have been done by clerical staff, a paralegal, or an associate, and for work that the court finds otherwise not supported.

Accordingly, for the period beginning with the second firm's entry at the trial of the first proceeding, through April 28, 1999, and including disbursements incurred at trial, the court finds $180,000.00 to be the reasonable amount of attorneys' fees and disbursements.

Invoice Dated June 23, 1999

The second firm also seeks recovery for fees and disbursements appearing on an invoice dated June 23, 1999, for entries from April 29, 1999 through June 23, 1999, submitted as part of the Supplemental Affirmation in Support of Motion for Attorneys' Fees dated June 23, 1999.

The first adjustment made by the court is to omit a duplicate bill. Only one invoice, in the amount of $23,165.05, was submitted for this time period; in paragraph 8 of the affirmation, this amount is adjusted to $18,827.55 to omit various entries for time spent on a separate Supreme Court action. Yet, both the unadjusted sum of $23,165.05 and the adjusted sum of $18,827.55 are listed in Paragraph 9 and are sought as part of the fee application. Accordingly, the unadjusted figure of $23,165.05 is subtracted to account for this clerical error of seeking recovery for one invoice twice. To the extent, if at all, the second firm is claiming that the $23,165.05 and $18,827.55 amounts are sought for different services, only one invoice covering this period was submitted, and the court will consider only that one invoice.

The court next examined the entries on the invoice to ensure that all of the entries for services rendered in connection with the Supreme Court action were deleted. It appears from the descriptions appearing on the invoice that additional adjustments should have been made. Additionally, no adjustment was made for disbursements incurred in the Supreme Court matter. The court therefore made these adjustments.

As to the time and disbursements that were shown to have been incurred in connection with this proceeding, they appear to have been incurred un connection with the fee application and hearing. Accordingly, the remaining sum sought is addressed within the "fee on fee" section below.

Invoices Dated July 8, 1999; July 30, 1999 and September 2, 1999

The court has reviewed these invoices to determine which fees and disbursements were incurred in connection with the opposition to respondent's leave to appeal application; fees and expenses incurred in connection with the fee hearing are addressed below. The court also has reviewed these invoices to delete charges that appear to have been incurred in connection with the Supreme Court action. For example only, with respect to the June 23rd invoice, counsel indicated that the entries on June 22 and June 23, "preparation of documents," should be omitted, as they related to the Supreme Court action. Yet, the same entries from the same attorney on June 24th were not omitted from the July 8, 1999 invoice. Similarly, not a single adjustment was made to the disbursements to account for those incurred in connection with the Supreme Court action.

Of the time incurred in connection with this proceeding and preparation of opposition to respondent's leave to appeal, the court has determined that counsel has supported $1,950.00, and awards this amount. The court makes no award for related disbursements, if any, because counsel has failed to specify which disbursements were so incurred, and no delineation is possible from the face of the invoices.

Fee on a Fee

Counsel may recover for hours reasonably spent in preparing and litigating the fee application, although the court may refuse further compensation or grant it sparingly if the time spent is unnecessarily high or the fee exorbitant. The first firm is not seeking recovery for time it incurred in connection with the instant fee application.

As to the second firm's application, the court has reviewed the entries for time and disbursement in connection with the fee application appearing on the invoices of: April 16, 1999; April 26, 1999; June 23, 1999; July 8, 1999; July 30, 1999; and September 2, 1999.

As to the entries related to the fee application (both out-of-court and in-court time), the court has adjusted the amount sought to adjust for: duplication; out-of-court time that could have been handled by a paralegal, clerical staff, or an associate; and the number of hours reasonably incurred in preparing the 1999 motion and for the 1999 attorneys' fee hearing. Particularly of concern to the court were the extensive hours of preparation for this hearing; while the amount sought was sizeable, the legal issues of entitlement to the attorneys' fees were addressed on appeal. This fee hearing did not involve novel issues or complicated fact patterns, and experienced counsel need not devote the substantial number of hours expended here by both partners and associates.

As to the disbursements listed on these invoices, and as noted previously, petitioner has failed to show which disbursements are recoverable as they were incurred in connection with the instant fee application, in contrast to the disbursements which are not recoverable as they were incurred in connection with the Supreme Court action. For example, petitioner has not shown, and it would not appear, that the process server fees of May 5, 1999; June 23, 1999; and July 14, 1999 are related to the fee application.

After careful consideration and in the exercise of its discretion, the court awards $64,000.00 in reasonable attorneys' fees for this stage of the litigation. This amount represents approximately one quarter of the supported entries which were clearly related to the fee application, including preparation of the motion papers and subsequent submissions, preparation for and appearances on the adjourned dates, and preparation for, appearances and testimony at the fee hearing.

After careful review of the disbursements, the court awards $1,000.00. This sum includes the fee for the transcript of the fee hearing, reasonable copying charges that the court can reasonably allocate to the fee application and hearing, and other disbursements which the court can determine were related to the fee application.

Final Calculation of the Award:

First Firm: $64,000.00 in attorneys' fees and disbursements
Second Firm: $181,950.00 in attorneys' fees and disbursements
Experts: $23,300.00
Second Firm Fee on Fee: $7,400.00 in attorneys' fees and disbursements
Total: $276,650.00

While respondent has requested that the judgment not be tied to possession, the lease provides that attorneys' fees constitute additional rent, and, therefore, this award is tied to possession.

Accordingly, the court awards a judgment in favor of petitioner and against the respondent in the amount of $276,650.00. The Clerk is hereby directed to enter judgment accordingly, with execution stayed for five days.

This constitutes the decision and order of the court.