A New York appellate court has reversed a lower court's decision in the breach of contract case of Davidoff v. Hershfield, affecting the outcome of a dispute over attorneys' fees. The ruling came from the Appellate Division of the Supreme Court of the State of New York on October 14, 2026, and it could have significant implications for future contract disputes involving similar issues.
The case centers around Jonathan Davidoff and Bruce Hershfield, who have been involved in a legal battle over the interpretation of a promissory note. This ruling is important because it clarifies how courts interpret contracts regarding the recovery of attorneys' fees, particularly in cases where the contract language is not explicit.
In this case, Davidoff initially faced legal action from the Hershfields in October 2018. The Hershfields sought declaratory relief and to recover on a promissory note against Davidoff and others. Davidoff responded by seeking to dismiss the complaint and requested attorneys' fees. The Supreme Court granted Davidoff's motion in part, awarding him $20,207.86 in attorneys' fees after a hearing in April 2020. The Hershfields appealed this decision, but the appellate court upheld the award.
Following the earlier ruling, Davidoff filed a new action against the Hershfields, claiming he was entitled to additional attorneys' fees based on the terms of the promissory note. The Hershfields moved to dismiss this new complaint in March 2025, while Davidoff sought summary judgment on the issue of liability. The lower court ruled in favor of Davidoff, granting his motion and denying the Hershfields' motion to dismiss.
However, the appellate court found that the lower court made an error in its ruling. The court stated, "The Supreme Court should have denied Davidoff's cross-motion for summary judgment on the issue of liability and should have granted the Hershfields' motion pursuant to CPLR 3211(a) to dismiss the complaint." This indicates that the appellate court believed the lower court had misinterpreted the contract.
The judges on the panel included Francesca E. Connolly, Linda Christopher, Lillian Wan, and Susan Quirk. They emphasized that the language of the promissory note did not clearly provide for the recovery of attorneys' fees associated with the pursuit of attorneys' fees, commonly referred to as "fees on fees." The court noted, "Given the absence of unmistakably clear intent regarding the recovery of fees on fees, a right to recover those fees should not be implied."
This ruling is significant as it sets a precedent regarding how courts interpret contractual language concerning attorneys' fees. It highlights the necessity for clear and explicit terms in contracts if parties wish to recover fees related to the enforcement of those contracts.
The impact of this ruling extends beyond the parties involved. It serves as a reminder for individuals and businesses to ensure that their contracts are drafted with precise language that clearly outlines the terms regarding attorneys' fees. This case may influence how future disputes are handled in similar contexts, particularly in New York.
Moving forward, the Hershfields may have the option to appeal this ruling to a higher court, although it is unclear if they will choose to do so. There are no related cases pending that are directly connected to this decision. However, the implications of this ruling may resonate in future contract disputes, especially those involving the interpretation of attorneys' fees in New York.