DBCA, LLC v Cohen

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[*1] DBCA, LLC v Cohen 2018 NY Slip Op 28372 Decided on November 29, 2018 District Court Of Nassau County, First District Fairgrieve, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the printed Official Reports.

Decided on November 29, 2018
District Court of Nassau County, First District

DBCA, LLC, Plaintiff(s),


Mitchell K. Cohen, Defendant(s).


For Plaintiff: Jordan Slavens, Esq., Sheldon May & Associates, P.C., 255 Merrick Road, Rockville Centre, NY 11570, (516) 763-3200

For Defendant: Michael A. Katz, Esq., 107 Cherry Street, Katonah, NY 10536-1003, (212) 682-6260
Scott Fairgrieve, J.

The following named papers numbered 1 to 3 submitted on this Motion for Attorney's Fees on October 4, 2018

papers numbered

Notice of Motion for Attorneys Fees 1

Affirmation in Opposition 2

Defendant's Reply Memorandum of Law in Support of Motion for Attorneys Fees 3

The plaintiff commenced this breach of contract action in May of 2006, to recover the balance owed by defendant cardholder under a credit card agreement. On August 22, 2006, the plaintiff was awarded a default judgment in the sum of $14,926.07. On February 26, 2018, some twelve years later, the defendant moved by Order to Show Cause to vacate his default and the money judgment rendered thereon. By decision and order of June 18, 2018, (Darcy, J) the matter was set down for a Traverse hearing, as the court found that the defendant had successfully raised an issue of fact as to whether personal jurisdiction was properly obtained. A Traverse hearing was held on August 16, 2018. This court granted the defendant's motion, vacated the money judgment and dismissed the plaintiff's action in its entirety.

Now before the court, is a motion by defense counsel for an award of reasonable attorney's fees and costs. "Under the general rule, attorney's fees are incidents of litigation and a prevailing party may not collect them from the loser unless an award is authorized by agreement between the parties, statute or court rule" (Hooper Assoc., Ltd. v AGS Computers, Inc., 74 NY2d 487, 491 [1989]).

In the case at bar, the Card Member Agreement specifically authorizes the recovery of [*2]attorney fees. Thus, defense counsel's motion is based thereon. Moreover, counsel argues that the defendant is the prevailing party, as he successfully asserted and won his claim of a lack personal jurisdiction. The Card Member Agreement, which the plaintiff's complaint was based upon, contains the following language:

"Default/Collection Costs... In the event we refer your Account after your default to an attorney who is not our regularly salaried employee, you agree to pay the reasonable fees of such attorney and actual court costs."

Thus, clearly the agreement provides for the plaintiff's right to recover attorney fees and costs in any successful action on the contract. The defendant, however, argues that General Obligations Law §5-327, creates a reciprocal right for the defendant's recovery of such attorney fees and costs on a consumer contract (see, Velocity Investmemts, LLC v Cocina, 2011 WL 13137640 [2011]; compare Christie's Inc v Croce, 5 F Supp. 2d 206 [1998]). The court agrees.

In pertinent part, GOL §5-327(2), which applies to the instant consumer transaction, provides the following:

"Whenever a consumer contract provides that the creditor, seller or lessor may recover attorney's fees and expenses incurred as the result of a breach of any contractual obligation by the debtor, buyer or lessee, it shall be implied that the creditor, seller or lessor shall pay the attorney's fees and expenses of the debtor, buyer or lessee incurred as the result of a breach of any contractual obligation by the creditor, seller or lessor, or in the successful defense of any action arising out of the contract commenced by the creditor, seller or lessor. Any limitations on attorney's fees recoverable by the creditor, seller or lessor shall also be applicable to attorney's fees recoverable by the debtor, buyer or lessee under this section. Any waiver of this section shall be void as against public policy" (emphasis added).

Simply stated:

"The statute evens the playing field between a consumer and a creditor, seller, or lessor by providing that whenever a consumer contract provides that the creditor, seller, or lessor may recover attorneys' fees, a reciprocal right shall be implied on behalf of the consumer (the debtor, buyer, or lessee). As such, even if not provided for by contract, a consumer may recover its attorneys' fees in a successful breach-of-contract action against a creditor, seller, or lessor or in the event of a successful defense of an action for breach of contract brought by the creditor, seller, or lessor."

(Robert L. Haig, Commercial Litigation in New York State Courts §53:73 [Note: online Version] [4th ed 4A West's NY Prac Series 2018]).

Accordingly, the defendant's motion is granted. Defense counsel's request for attorney's fees and expenses shall be placed on the court's inquest calendar.

This constitutes the decision and order of the court.

So Ordered:

Dated: November 29, 2018

Hon. Scott Fairgrieve