Order Granting Motion to Dismiss Sufficient to Make Party “Prevailing Party”

On January 13, 2023, Justice Andrea Masley of the New York County Commercial Division issued a decision in Parkmerced Invs., LLC v. WeWork Cos. LLC, 2023 N.Y. Misc. LEXIS 213, holding that a party was the “prevailing party” for the purpose of awarding attorneys’ fees pursuant to a contractual provision permitting the award of fees to the prevailing party where it had obtained an order granting its motion to dismiss the claims against it in its entirety. The Court explained:

To determine whether a party has 'prevailed' for the purpose of awarding attorneys' fees, the court must consider the 'true scope' of the dispute litigated and what was achieved within that scope. To be considered a 'prevailing party,' one must simply prevail on the central claims advanced, and receive substantial relief in consequence thereof." (Sykes v RFD Third Ave. I Assoc., LLC, 39 AD3d 279, 279, 833 N.Y.S.2d 76 [1^st Dept 2007] [citation omitted].) WeWork was successful on its motion to dismiss the entire complaint. The fact that there is another action pending does not change the fact that WeWork prevailed and received substantial relief in this action, i.e., the dismissal of this action.

The Court further rejected the arguments that a pending motion to renew and reargue the court’s dismissal, that there might be an amended complaint or that there might be a successful appeal of the Court’s decision, rendered the request for fees premature.

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning a “prevailing party” provision in an agreement or your entitlement to legal fees for a successful litigation.