Sun Mei Inc. v. Chen

Order, Supreme Court, New York County (Walter B. Tolub, J.), entered January 21, 2004, which dismissed the action on grounds of res judicata and collateral estoppel but did not impose sanctions or award defendants attorneys’ fees, unanimously modified, on the law, the application for attorneys’ fees granted and the matter remanded for calculation of said award, and otherwise affirmed, without costs.

According the complaint a liberal construction, accepting the facts as true, and making all inferences in plaintiffs’ favor (Leon v Martinez, 84 NY2d 83, 87-88 [1994]), the complaint was properly dismissed. Because plaintiffs’ challenge to the existence and validity of the lease at 225 Centre Street in Manhattan had earlier been litigated and brought to a final conclusion, these subsequent claims with respect to validity of the lease were barred by res judicata (O’Brien v City of Syracuse, 54 NY2d 353, 357 [1981]; Marinelli Assoc. v Helmsley-Noyes Co., 265 AD2d 1 [2000]). Since the validity of the lease was decided in a prior proceeding in which plaintiffs had a full and fair opportunity to contest the issue, this action was also barred by collateral estoppel (see Allied Chem. v Niagara Mohawk Power Corp., 72 NY2d 271, 276 [1988], cert denied 488 US 1005 [1989]; see also Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 349 [1999]).

The court did not improvidently exercise its discretion in failing to impose sanctions under Rules of the Chief Administrator of the Courts (22 NYCRR) § 130-1.1. However, because the leases provided for payment of reasonable legal fees, the court erred in failing to grant defendants’ application for such an award. The matter should be remanded for calculation of attorneys’ fees.

We have considered the parties’ remaining arguments for affirmative relief and find them without merit. Concur—Andrias, J.P., Marlow, Sullivan, Ellerin and Nardelli, JJ.