National Bank of North America v. Arthur R. Smith Mechanical Corp.

In an action upon a promissory note and guarantee, defendants Arthur R. Smith and Natalie Smith appeal from an order and judgment (one paper) of the Supreme Court, Nassau County, dated August 15, 1979, which granted plaintiffs motion for summary judgment, denied their cross motion for summary judgment, and awarded plaintiff judgment in the amount of $35,000, with interest, together with attorney’s fees in the amount of $7,000. Order and judgment modified, on the law, by deleting so much of the second decretal paragraph thereof as awarded attorney’s fees in the amount of $7,000. As so modified, order and judgment affirmed, with $50 costs and disbursements to plaintiff, and action remitted to Special Term for a hearing on the issue of the reasonableness of the attorney’s fees and for the entry of an appropriate amended order and judgment in accordance herewith. The guarantee executed by appellants included a provision for an award of counsel fees in a fixed percentage in the event an attorney’s services were required to enforce collection. Special Term, without a hearing, granted plaintiffs request for attorney’s fees solely on the basis of the provision in the guarantee. Attorney’s fees unilaterally fixed by contract are no less subject to the test of reasonableness than are attorney’s fees awarded by the court. Therefore, the award of attorney’s fees to the plaintiff pursuant to the guarantee provision must be deleted and the case remitted for a hearing on the reasonableness of the legal services rendered (see Federal Deposit Ins. Corp. v Kassel, 72 AD2d 787; Tuttle v Juanis, 54 AD2d 589). We have considered appellants’ other contentions and have found them to be devoid of merit. Mollen, P. J., Gibbons, O’Connor and Weinstein, JJ., concur.