Quinn McCabe News & Insights

Quinn McCabe LLP recently obtained a favorable ruling in the Appellate Division, First Department which will benefit developers in future license agreement negotiations and RPAPL § 881 Actions. Specifically, In the Matter of 419 Partners LLC v. Eli Zabar et al., Index No. 156867/2021, Case No. 2022-00982, the First Department ruled in favor of the developer’s position that neighbors are not entitled to an award of professional fees when a license is not actually awarded. The ruling incentivizes neighbors to reach resolution on access issues rather than opposing them, lest they be required to pay their own professional fees.
 
David M. Peraino, Esq., a partner of the firm, successfully argued that the plain wording of RPAPL 881 does not authorize the award of professional fees to a neighbor without the award of a license. Specifically, Mr. Peraino argued that although the statute provides that a license may be granted “upon such terms as justice requires”, when a license is not granted, the statute does not allow for equitable relief, including a neighbor’s legal and engineering fees. Mr. Peraino further noted that the relief was both consistent with First Department precedent, and achieved the equitable balance favored by courts: given that a neighbor would not be burdened with a license, a developer should not have to pay their fees. The trial court agreed, and the First Department unanimously affirmed.
 
The decision is an important one in the ever-changing landscape of access agreement negotiations and litigations as it disincentives neighbors from focusing their efforts on opposing access requests. Neighbors inclined to do so will face a best-case scenario that they temporarily stave off access, but in the process, incur potentially significant legal and engineering fees which will not be reimbursed by the developer, as is often the case. Rational neighbors are likely to either grant access to a developer pursuant to amicable negotiations, or, in responding to an RPAPL 881 petition, seek favorable access terms rather than opposing the award of a license.

If you have questions about these developments, please contact one of our partners: Matthew S. Quinn, at (212) 447-5510 or This email address is being protected from spambots. You need JavaScript enabled to view it., Christopher P. McCabe, at (212) 447-5520 or This email address is being protected from spambots. You need JavaScript enabled to view it., Simon Block, at (212) 447-5530 or This email address is being protected from spambots. You need JavaScript enabled to view it., Jonathan Krukas, at (212) 447-5560 or This email address is being protected from spambots. You need JavaScript enabled to view it., or David M. Peraino at (212) 447-5540 or This email address is being protected from spambots. You need JavaScript enabled to view it..

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 This email address is being protected from spambots. You need JavaScript enabled to view it., Christopher P. McCabe, at (212) 447-5520 or This email address is being protected from spambots. You need JavaScript enabled to view it., Simon Block, at (212) 447-5530 or This email address is being protected from spambots. You need JavaScript enabled to view it., Jonathan Krukas, at (212) 447-5560 or This email address is being protected from spambots. You need JavaScript enabled to view it., or David M. Peraino at (212) 447-5540 or This email address is being protected from spambots. You need JavaScript enabled to view it..