Marshall v. New York City Health and Hospitals Corp., 186 A.D.2d 542, 588 N.Y.S.2d 364 (N.Y.A.D. 2 Dept., Oct 05, 1992) (NO. 91-00675)

Supreme Court, Appellate Division, Second Department, New York.
Doriel MARSHALL, Appellant-Respondent,v.NEW YORK CITY HEALTH AND HOSPITALS CORPORATION, et al., Defendants,First American Land Title Insurance Company of New York, Respondent-Appellant,Chicago Title Insurance Company, Defendant-Respondent.

Oct. 5, 1992.

 In action for judgment declaring rights of parties under deposit and escrow agreement, the Supreme Court, Kings County, Garry, J., permitted title insurance company to deduct legal fees and interest from deposited funds and released second title insurance company from liability to property owner. Property owner appealed.   The Supreme Court, Appellate Division, held that: (1) title insurance company was entitled to interest earned on deposited funds pursuant to clear and unambiguous terms of contract;  (2) although title insurance company was entitled under terms of agreement to deduct counsel fees from deposited funds, court was first required to hold evidentiary hearing with respect to reasonable value of attorney's services;  and (3) trial court improperly released codefendant from any liability to property owner since neither party moved for summary on that issue.
 Affirmed as modified;  remitted.

West Headnotes
[1] Interest  6219k6 Most Cited Cases
Trial court properly awarded title insurance company interest earned on funds deposited in escrow, for stated purpose of inducing company to provide title insurance to property, pursuant to clear and unambiguous terms of contract.
[2] Deposits and Escrows  15122Ak15 Most Cited Cases
Title insurance company was entitled under terms of escrow agreement to deduct from deposited funds its counsel fees in connection with suit seeking declaration of rights of parties under agreement;  however, since award of counsel fees was contested, court was required to hold evidentiary hearing with respect to reasonable value of attorney's services.
[3] Judgment  186228k186 Most Cited Cases
Trial court improperly released title insurance company from any liability to property owner pursuant to codefendant's motion for summary judgment, where neither party moved for summary judgment on that issue. **365 Lorge & Lorge, Brooklyn (George B. Headley, of counsel), for appellant-respondent.
 Dollinger, Gonski, Grossman, Permut & Hirschhorn, Carle Place (Matthew Dollinger, of counsel), for respondent-appellant.
 Kirschenbaum & Kirschenbaum, P.C., Garden City (Samuel Kirschenbaum and  Burton Aronson, of counsel), for defendant-respondent Chicago Title Ins. Co.

 Before SULLIVAN, J.P., and BALLETTA, O'BRIEN and COPERTINO, JJ.


 *542 MEMORANDUM BY THE COURT.
 In an action, inter alia, for a judgment declaring the rights of the parties under a deposit and escrow agreement, (1) the plaintiff appeals from so much of an amended order of the Supreme Court, Kings County (Garry, J.), entered September 21, 1990, as (a) permitted the defendant First American Land Title Insurance Company of New York to deduct legal fees and interest from the deposited funds, and (b) released the defendant Chicago Title Insurance Company from liability to her, and (2) the defendant First American Land Title Insurance Company of New York cross-appeals from so much of the amended order as limited its award of legal fees to $2,000 plus $43.70 in disbursements.
 ORDERED that the amended order is modified, by deleting the fifth decretal paragraph thereof and by deleting from the seventh decretal paragraph thereof the phrase "all parties shall thereby be released and discharged from any further liability to the plaintiff herein" and substituting the phrase "all parties except Chicago Title Insurance Company shall thereby be released and discharged from any further liability to the plaintiff herein";  as so modified, the amended order is affirmed insofar as appealed and cross-appealed from, without costs or disbursements, and the matter is remitted to the Supreme Court, Kings County, for a hearing on the reasonableness of the attorneys' fees requested by First American Land Title Insurance Company of New York, and further proceedings consistent herewith.
 The plaintiff deposited certain funds with the defendant First American Title Insurance Company of New York (hereinafter First American) pursuant to a "deposit and escrow agreement" for the stated purpose of inducing First American to provide title insurance for property she owned.   The agreement provided that First American could use the deposited *543 funds to satisfy three outstanding judgments affecting her property which were held by the defendant New York City Health and Hospitals Corporation (hereinafter HHC) if the plaintiff failed to produce satisfactions of judgment within five months. Before the five months expired, the plaintiff commenced this action, inter alia, for a declaration as to HHC's claim against her property, and moved to stay First American from using the deposited funds to satisfy the judgments. The judgments were ultimately satisfied by other parties to this action without recourse to the plaintiff's funds deposited with First American.
 **366 [1] On appeal, the plaintiff contends that the court erred in awarding First American all of the interest earned on the deposited funds. This contention is without merit.   It is well settled that "when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms" (W.W.W. Assocs. v. Giancontieri, 77 N.Y.2d 157, 162, 565 N.Y.S.2d 440, 566 N.E.2d 639;  see also, Austin v. Canbar Assocs., 175 A.D.2d 195, 572 N.Y.S.2d 339;  Slamow v. Delcol, 174 A.D.2d 725, 571 N.Y.S.2d 335,  aff'd, 79 N.Y.2d 1016, 584 N.Y.S.2d 424, 594 N.E.2d 918).   Here, the parties' agreement provided that it was "expressly understood and agreed" that First American could invest the funds deposited by the plaintiff for its own benefit and that "[i]n no event" would interest be allowed to the plaintiff.   Accordingly, as the terms of the contract were clear and unambiguous, the court did not err in awarding the interest earned on the funds to First American (see, e.g., Austin v. Canbar Assocs., supra; Commonwealth Land Title Insurance Co. v. Leidner, 169 A.D.2d 699, 564 N.Y.S.2d 187).
 [2] Similarly, the court did not err in determining that First American was entitled under the terms of the agreement to deduct from the deposited funds its counsel fees in connection with this action.   However, since the award of counsel fees was contested, we find that the court erred in arbitrarily setting the award at $2,000 without explanation and without holding a hearing with respect to the reasonable value of the attorneys' services (see, e.g., Popack v. Popack, 179 A.D.2d 746, 578 N.Y.S.2d 650;  Gutin v. Gutin, 155 A.D.2d 586, 548 N.Y.S.2d 34;  P & L Group v. Garfinkel, 150 A.D.2d 663, 541 N.Y.S.2d 535).   We therefore remit the matter to the Supreme Court, Kings County, for an evidentiary hearing on the reasonable value of the services provided by First American's attorneys.   We further note that, since this is a declaratory judgment action, the court, upon remittal, should enter an appropriate judgment declaring the rights of the parties.
 [3] The court erred in releasing the defendant Chicago Title Insurance Company from any liability to the plaintiff, as *544 neither party moved for summary judgment on that issue (see, e.g., Conroy v. Swartout, 135 A.D.2d 945, 522 N.Y.S.2d 354).   Moreover, as the record indicates that the issues raised by Chicago Title Insurance Company on appeal were not presented to the Supreme Court in the first instance, we decline to consider them (see, Szigyarto v. Szigyarto, 64 N.Y.2d 275, 280, 486 N.Y.S.2d 164, 475 N.E.2d 777;  Fresh Pond Rd. Assocs. v. Estate of Schacht, 120 A.D.2d 561, 502 N.Y.S.2d 55).
588 N.Y.S.2d 364, 186 A.D.2d 542
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