Quinn McCabe LLP recently made precedent in the RPAPL Section 881 context, obtaining a decision which should give neighbors pause before engaging in tactics designed to delay a project owner’s access to the neighbor’s property. Specifically, In the Matter of 419 Partners LLC v. Eli Zabar et al., Index No. 156089/2022, Justice Andrea Masley of the Commercial Division determined for the first time that the neighbor required to provide access to its property pursuant to a court-ordered license must pay certain professional fees of the project owner.
David M. Peraino, Esq., a partner of the firm, and Wendy Chavez, Esq., an associate of the firm, successfully argued that the respondent-neighbors engaged in delay tactics and other bad faith conduct to delay the petitioner-developer’s construction project, and that, in such circumstances, the plain wording of RPAPL Section 881 authorizes a Court to require the neighbor to reimburse the project owner for certain of its professional fees. Specifically, the Court held as follows:
“Petitioner’s request for fees is granted because respondents have interfered with a development project essential to the community: providing homeless services during a crisis…While petitioner is not entitled to reimbursement of all of its fees, it will be reimbursed for the excessive fees it was compelled to incur.”
The Court justified its decision by noting that “respondents have engaged in bad faith efforts to delay the Project”, otherwise engaged in “shameful tactics that were anything but good faith”, and made misrepresentations to the Court. Justice Masley also rejected the neighbor’s request for reimbursement of its attorneys’ and other professional fees, and awarded the respondent a license fee of just $500 per month.
This decision should send a powerful message to neighbors not to abuse the license agreement negotiation process. A neighbor opposing a request for a license to access its property often has minimal incentive to engage in good faith negotiations, as many RPAPL 881 proceedings result in the project owner being ordered to reimburse the neighbor for its professional fees irrespective of the neighbor’s conduct. Even in the worst case scenario, a recalcitrant neighbor simply was not awarded reimbursement of its professional fees. As a result of this decision, however, a neighbor is strongly incentivized to engage in good faith negotiations, knowing that its failure to do so could lead to an order requiring the neighbor to reimburse a project owner for a portion of the project owner’s professional fees.
If you have questions about these developments, please contact one of our partners: Matthew S. Quinn, at (212) 447-5510 or mquinn@QMlegal.com, Christopher P. McCabe, at (212) 447-5520 or cmccabe@QMlegal.com, Simon Block, at (212) 447-5530 or sblock@QMlegal.com, Jonathan Krukas, at (212) 447-5560 or jkrukas@QMlegal.com.