Pursuant to Real Property Law Section 234, where a residential lease provides for the landlord to recover attorney fees in an action involving the tenant's breach, the tenant is entitled to a reciprocal award of attorney fees in an action involving the landlord's breach. A party, however, may only recover such fees if that party "prevails" with respect to the central relief sought.1 The Appellate Division, First Department has repeatedly held that in order for a party to have "prevailed," the judgment must be "substantially favorable" to that party.2 This "requires an initial consideration of the true scope of the dispute litigated, followed by a comparison of what was achieved within that scope."3
The appellate courts have held that where the controversy has a "mixed outcome" that was not substantially favorable to either party, neither party should be awarded attorney fees as the prevailing party.4 Moreover, the courts have discretion to deny attorney fees to a party based on equitable considerations and fairness.5
