Fourth Department – Contract interpretation: Episcopal Church Home v. Gates Circle Holdings

New York State Supreme Court, Appellate Division, Fourth Judicial Department

Contract interpretation

Attorney’s fees

Episcopal Church Home v. Gates Circle Holdings

CA 20-01580

Appealed from Supreme Court, Erie County

Background: The parties entered into a purchase agreement whereby the plaintiff would buy certain property from the defendant. The property at issue required environmental remediation, and the parties anticipated that the remediation work would generate certain tax credits. The plaintiff commenced an action after the defendant refused to pay a portion of the tax credits generated as a result of the project. The defendant appealed from the grant of summary judgment awarding damages, attorneys’ fees, and costs.

Ruling: The Appellate Division modified by denying that part of the motion seeking attorneys’ fees but otherwise affirmed. The court noted that the agreement provided that the plaintiff was entitled to a portion of the tax credits received and realized by the defendant or its members. It is undisputed that the defendant did not receive the tax credit, but it is undisputed that the defendant’s sole member was a partnership and that it reported the tax credits as income. The Appellate Division further held that the agreement did not make it unmistakably clear that the defendant intended to waive the general rule against awarding attorneys’ fees.

R. Anthony Rupp III, of Rupp Baase Pfalzgraf Cunningham, for the defendant-appellant-respondent; Tristan D. Hujer, of Phillips Lytle, for the plaintiff-respondent-appellant.