Key Points

  • The Appellate Division, First Department, unanimously affirmed, with costs, a Supreme Court order requiring Panasia Estate Inc. to pay MKF Realty Corp. $41,196.70 in attorneys' fees in Panasia's RPAPL 881 license proceeding.
  • The panel held, as it had in its 2022 and 2024 decisions in the same case, that the American rule does not preclude fee awards to RPAPL 881 respondents.
  • The court reasoned that RPAPL 881 fees go to respondents haled into court solely for the petitioner's benefit, not to a prevailing party, so a prevailing-party determination is not required.
  • The court held that the recent amendment to RPAPL 881, RPAPL 881(5)(b), even if applicable retroactively, would not preclude a fee award to respondents or affect the court's discretion in awarding fees.
  • The court rejected Panasia's contention, first raised in its reply, that Supreme Court failed to state the basis for the fees, holding that the court expressly stated it.

A New York appeals court on Thursday upheld an order requiring a property owner that went to court to gain access to its neighbors' land to pay one neighbor's legal bills, ruling that a recent amendment to the state's neighbor-access statute does not undo that kind of fee award.

The Appellate Division, First Department, unanimously affirmed, with costs, an order directing Panasia Estate Inc. to pay $41,196.70 in attorneys' fees to MKF Realty Corp. MKF Realty was one of the respondents in a proceeding Panasia brought under Section 881 of the Real Property Actions and Proceedings Law for a license to enter adjoining real property. The unsigned decision came from a five-justice panel of Justices Manzanet-Daniels, who presided, Shulman, Rodriguez, Higgitt and Rosado.

The decision follows earlier rulings in which the First Department held, in this same case, that neighbors brought into an access proceeding can recover their legal fees. It is also the court's response to the recent amendment to Section 881, cited in the decision as RPAPL 881(5)(b). The panel held that the amendment, "even if applicable retroactively, would not preclude an award of attorneys' fees to respondents or affect the court's discretion in awarding fees."

The panel first addressed the American rule governing fee awards. It resolved that question by pointing to its own earlier rulings in the dispute. "As this Court has previously held multiple times, the American rule governing fee awards does not preclude an award of fees to respondents under RPAPL 881," the court wrote.

The panel then explained why the statute's fee awards do not depend on which side wins. Under Section 881, the court said, fees go to respondents who "are not accused of any wrongful conduct but are haled into court by a petitioner seeking access to their properties solely for its own benefit." The court took that language from its 2024 decision in the same case, reported at 224 A.D.3d 414.

From that premise, the panel drew its conclusion about the amendment. Fees under Section 881 are awarded to respondents rather than to the prevailing party, the court reasoned, and "[t]hus, a 'prevailing party' determination is not required." Because the award rested on no finding about who prevailed, the panel held, the amendment would not bar it even if it reached a proceeding already underway. The decision did not quote the text of subdivision 5(b), and the panel left open whether the amendment applies retroactively.

The proceeding, New York County Index No. 157852/19, has reached the First Department on fees before. The panel cited its 2022 decision, reported at 204 A.D.3d 33, and its 2024 decision. In each of those earlier rounds, the Court of Appeals dismissed an application for leave to appeal, according to the citations in Thursday's decision.

Panasia also argued on appeal that the trial court had failed to explain the basis for the fees it awarded to MKF Realty. The panel noted that Panasia raised that argument for the first time in its reply brief. It rejected the argument on the merits all the same, holding that Supreme Court "expressly stated the basis for the fees awarded to MKF." For that point the panel cited Matter of Panstar Realty LLC v. New York Teachers Hous. Corp., a First Department decision issued earlier in 2026.

The order on appeal, issued by Lyle E. Frank of Supreme Court, New York County, was entered on or about June 6, 2025. Panasia's briefs limited the appeal to the part of that order requiring payment of MKF Realty's fees. The panel disposed of everything else Panasia raised in a single sentence: "We have considered petitioner's remaining contentions and find them unavailing."

The caption names 29 West 19 Condominium and others as respondents. The decision's counsel listing identifies the condominium and two individuals, Lauren Cipicchio and Daniel Daly, as respondents represented by a single law firm. It does not say whether they sought or received fees in the order Panasia appealed.

Lawyers for Panasia included Peter C. Dee of Tuttle Yick LLP. The condominium and the two individual respondents were represented by Thomas V. Juneau, Jr. of Fox Rothschild LLP. MKF Realty was represented by Van Leer & Greenberg.

The affirmance, with costs, leaves the $41,196.70 award in place. The decision, 2026 NY Slip Op 06015, is uncorrected and subject to revision before publication in the Official Reports.