Despite Prevailing on Some Issues, Plaintiffs Were Not Prevailing Party for Purposes of Award of Fees

On August 25, 2021, the Second Department issued a decision in Kefalas v. Valiotis, 2021 NY Slip Op. 04750, holding that plaintiffs were not prevailing parties for purposes of an award of fees notwithstanding that they prevailed on some issues, explaining:

[T]he Supreme Court should not have awarded attorneys’ fees to the plaintiffs under the terms of the 2012 Purchase Agreement. That provision only allows for an award of attorneys’ fees to the “successful party” in the event of litigation. In general, contractual provisions awarding attorneys’ fees are to be construed strictly. Only a prevailing party is entitled to recover an attorney’s fee, and, to be considered a prevailing party, a party must be successful with respect to the central relief sought. Such a determination requires an initial consideration of the true scope of the dispute litigated, followed by a comparison of what was achieved within that scope. Here, considering the scope of the dispute litigated and what was achieved within that scope, the plaintiffs constitute neither prevailing nor successful parties under the terms of the 2012 Purchase Agreement and thus are not entitled to an award of attorneys’ fees pursuant to those terms.

(Internal quotations and citations omitted) (emphasis added).

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