State of New York
Supreme Court : County of Monroe

PATRICIA ANN MARION, BARBARA
MARY PAVIS and ELIZABETH ELLEN
FRANCIS,

Plaintiffs,

- against -

Index No. 96/2932

EDWARD J. INZANA, LAURA L. INZANA
MARYANNE ABASCIANO, GRACE
ABASCIANO, WILLIAM J. KAISER, JR.
ANTHONY R. HOCKENBERRY, and
H.K. WAINWRIGHT,

Defendants.

__________________________

MEMORANDUM DECISION

This is an ordinary foreclosure action, in which the defendants served at best a limited notice of appearance; and the court issued a judgment of foreclosure upon the ex parte application of the plaintiffs on September 4, 1996. Before signing the judgment, however, the court reviewed the terms of the mortgage and struck a provision granting attorneys' fees to the plaintiffs.

Telephone calls from John D'Amanda, the plaintiffs' attorney, followed, questioning the court's reasons for doing so. The court suggested to Mr. D'Amanda that he submit law and argument supporting his claim to fees, and by letter and enclosures dated September 27, 1996, he complied with this suggestion. These papers were so detailed that the court has decided to treat the application as one to reargue the issue of attorneys' fees. That application is hereby granted, and the court now turns to the merits of the claim.

The clause at issue is Paragraph 9 of Blumberg form 667. It is titled, "Expenses of Mortgagee", and reads as follows:

Mortgagor must pay all expenses of Mortgagee, including reasonable attorney's fees, if (a) Mortgagee is made a party in a suit relating to the Property, or (b) Mortgagee sues anyone to protect or enforce Mortgagee's rights under this Note and Mortgage.

Relying on a Rockland County case, Leifer v Unger (NYLJ, December 23, 1993), and upon that case's citation to Chelsea/22 Associates v Fleissner (150 AD2d 212 [1st Dept]), plaintiffs' attorney claims that "no [other] case *** ever litigated paragraph 9." This absence of precedent "is proof that it has been consistently read and understood by the Bar at large." He also cites suggested fee clauses from Bergman, New York Mortgage Foreclosures, § 26.05 [2] [b], none of which exactly parallel the clause in question, which he submits demonstrate that the word "enforce" encompasses foreclosure actions. Unless "torturing the English language is a priority", he argues, the clause must be read as authorizing attorneys' fees in foreclosures.

It is not this court's ambition to torture English or any other language. If any such untoward acts have taken place they have been carried out by Mr. D'Amanda. The cases he cites do not support his position, except for Leifer, which is neither binding, persuasive, nor correct; Bergman in fact states that Paragraph 9 does not authorize attorneys' fees; and the Appellate Divisions of two Departments, including the Fourth, have examined the language in question and held likewise.

Just a few pages before the sections of Bergman which Mr. D'Amanda supplied to the court is the following:

The legal fee clause used in the typical statutory or title company form mortgage provides for the payment of attorneys' fees in any action or proceeding brought to defend or uphold the mortgage lien. This clause has been construed as providing for the recovery of legal fees incurred in an adversary proceeding other than to foreclose a mortgage (§ 26.02).

If this is not sufficiently precise, Bergman goes on to discuss the leading case on the subject, Jamaica Savings Bank v Cohan (38 AD2d 841 [2d Dept]), which held,

In our opinion, plaintiff is not entitled to payment of attorney's fees in connection with this action. Under paragraph 18 of the mortgage, defendants Cohan undertook to pay plaintiff "all sums that may be advanced or liability for which may be incurred by the mortgagee, including reasonable attorney's fees, either to remedy default by mortgagor or to defend or preserve the rights and liens created by said bond or note, mortgage and any extension agreement." An action to foreclose a mortgage is not one "to remedy default by the mortgagor" under paragraph 18. Such an action is directed at the satisfaction of the mortgage debt and in design is broader than the obtaining of compensation for the mortgagee for its payment of sums which the mortgagor should have paid under the mortgage. Nor is the foreclosure action at bar one in which the mortgagor seeks to "defend or preserve the rights and liens" created by the note and mortgage. That language contemplates acts by the mortgagee undertaken to sustain the secured relationships of the mortgagor and mortgagee; it does not envision acts in foreclosure undertaken to terminate that relationship (38 AD2d, 841Ç842, emphasis supplied).¹

It may be argued that a provision permitting fees in an action "to defend or preserve the rights and liens" created by the mortgage can be distinguished from one permitting them in an action "to protect or enforce Mortgagee's rights" under the Mortgage. This would be a tendentious argument at best; but it would be unavailing no matter how it were made, for in Eight Tobey Road Corp. v Markesteyn (198 AD2d 865) the Fourth Department considered the exact form at issue here, and held "The note and mortgage contain no provision that entitled plaintiff to attorney's fees or that obligated Markesteyn to pay those fees" (198 AD2d, 867).² This in itself is enough to deny the application for fees.

In a later paragraph Bergman, citing Leifer, lends support to Mr. D'Amanda's position. In view of the clear holding in Eight Tobey Road, this court could not follow either a textbook or the Supreme Court of Rockland County, even if it were convinced that the Fourth Department had erred. However, there can be little doubt that Leifer was wrongly decided. It is inconsistent with Jamaica Savings Bank, the controlling decision in its own Department; more fatally, the case it relies upon, Chelsea/22 Associates v Fleissner (supra, 150 AD2d 212), has no application. First of all, Chelsea was not a foreclosure case;³ secondly, in the clause the First Department there construed the plaintiff obligated itself to pay "all reasonable attorneys fees, costs and disbursements incurred or owed by Mortgagee in respect of anything related to or arising out of this Mortgage and/or Mortgage Note and Agreement before or after the Extended Due Date." This is very different language and clearly conveys an intention to grant fees in any type of action whatsoever, so long as it is connected with the mortgage.

Mr. D'Amanda has not established his claim. Beyond that, he has cited selectively, neglected to look closely at the cases he does cite, and failed to make use of resources that would have shown him the untenability of his position. Regardless of the understanding of Mr. D'Amanda or his colleagues, Paragraph 9 of Blumberg Form 667 does not authorize the addition of attorneys' fees to the judgment amount in a foreclosure action. The motion for attorneys' fees is denied. The submission of further fee requests based on this and similar clauses may be held to be sanctionable (see generally, Sibley Mortgage Corp. v Sobotka, 155 Misc 2d 616, affd for reasons stated 210 AD2d 1001). Because there is no opposing party, this decision may be filed as an order of the court, should plaintiffs wish to appeal.

DATED: Rochester, New York
October 23, 1996

Andrew V. Siracuse, J.S.C.

Note 2. The text of the mortgage is not cited in the decision but may be found in the Record on Appeal.

RETURN

Note 3. This fact, too, can only be determined from the Record on Appeal.

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