Confession of Judgment and The Pursuit of Legal Fees

• Posted on: Feb 19 2025

By: Jeffrey M. Haber

The question that clients most often ask their attorney is whether they can get back their attorney’s fees if they prevail on their claims. As we have explained in past articles (e.g., here, here, here, and here), attorney’s fees are not generally recoverable in litigation under the “American Rule”.

Under the American Rule, “attorney’s fees are incidents of litigation and a prevailing party may not collect them from the loser unless an award is authorized by agreement between the parties, statute or court rule.”[1] Courts will not infer an agreement to award attorney’s fees incurred in litigation between contracting parties unless such intention is “unmistakably clear from the language” used in the writing.[2]

In Upfront Megatainment, Inc. v. Thiam, 2025 N.Y. Slip Op. 00932 (1st Dept. Feb. 18, 2025) (here), the Appellate Division, First Department, addressed the question whether reasonable attorney’s fees were recoverable pursuant to a confession of judgment that was not filed. As discussed below, the Court answered the question in the negative.

[Eds. Note: the factual discussion comes from the briefing on appeal.]

Upfront Megatainment arose from the alleged breach of a settlement agreement, dated October 25, 2018, between defendant and plaintiffs (the “Settlement Agreement”), which resolved a 2017 lawsuit between the parties.

Under the Settlement Agreement, defendant agreed to make payments to plaintiffs in two ways: (1) a fixed amount payable in four installments, the first on the date on which the Settlement Agreement was signed and thereafter on the 31st day of October for three consecutive years; and (2) a share of defendant’s music revenues from certain legacy works under specified conditions.

The Settlement Agreement was intended to provide plaintiffs a mechanism by which they could compel defendant to make installment payments through a confession of judgment. Paragraph 2(c) of the Settlement Agreement authorized plaintiffs to file the confession of judgment to accelerate payment of the unpaid installment balance “plus … reasonable attorney’s fees actually incurred to enforce the judgment.” To underscore this right, the confession of judgment specifically provided the following: “I hereby confess judgment in this Court … plus … reasonable attorney’s fees incurred to enforce the judgment.”

Defendant failed to pay the final installment due under the Settlement Agreement in a timely manner. Plaintiffs did not file the confession of judgment to enforce the judgment. Rather, they filed plenary action to recover, among other things, the unpaid installment payment.

In a second amended complaint, plaintiffs asserted two causes of action, only the first of which is relevant to the appeal. In plaintiffs’ first cause of action, plaintiffs sought payment from defendant of the attorney’s fees incurred in connection with their effort to recover the final installment payment. Defendant moved to dismiss, arguing that plaintiffs could not recover the sought after attorney’s fees because such fees were recoverable only when “actually incurred to enforce” the “file[d]” confession of judgment. Defendant maintained that plaintiffs never filed or attempted to enforce the confession of judgment.

On December 14, 2022, the motion court denied the motion. Defendant appealed. The First Department unanimously reversed the order.

First, the Court held that plaintiffs could not rely on the confession of judgment to recover any attorney’s fees.[3] The Court explained that CPLR 3218, as amended,[4] “prohibit[ed] a party from enforcing a confession of judgment against a nonresident of New York State.”[5] Defendant is a nonresident of the State.[6]

Moreover, even if the confession of judgment was enforceable, the Court held that it “was not an agreement to pay attorneys’ fees, but at most was merely evidence of an agreement.”[7]

Second, the Court held that plaintiffs could not rely on the settlement agreement as the mechanism to recover their attorney’s fees.[8] The Court noted that “[t]he agreement provided that in the event of a default of any settlement payment, plaintiffs ‘may file a confession of judgment’ for the amount owed, plus interest, costs, ‘and reasonable attorney’s fees actually incurred to enforce the judgment.’”[9] From this language, concluded the Court, “the parties agreed that plaintiffs could receive attorneys’ fees through the filing of the confession of judgment, which plaintiffs did not file.”[10]

Moreover, said the Court, “the settlement agreement contemplated that plaintiffs could obtain attorneys’ fees through, and only through, the process of enforcing the confession of judgment. Plaintiffs did not use that process; they brought this plenary action to enforce the settlement agreement.”[11] Thus, concluded the Court, “[a]bsent any agreement, statute, or rule allowing plaintiffs to collect attorneys’ fees for enforcing the settlement agreement, plaintiffs cannot obtain them.”[12]  

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Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice.

[1]  Sage Sys., Inc. v. Liss, 39 N.Y.3d 27, 30-31 (2022) (quoting Hooper Assoc. v. AGS Computers, 74 N.Y.2d 487, 491 (1989). See also Alyeska Pipeline Service Co. v. Wilderness Soc’y, 421 U.S. 240, 251 (1975); Rossman v. Windermere Owners LLC, 111 A.D.3d 429, 429-430 (1st Dept. 2013) (citing A.G. Ship Maint. Corp. v. Lezak, 69 N.Y.2d 1, 5 (1986)). This Blog examined Sage, here.  

[2] See Hooper, 74 N.Y.2d at 492 (“[T]he court should not infer a party’s intention to waive the benefit of the rule [that each side bears its own attorney’s fees] unless the intention to do so is unmistakably clear from the language of the promise.”); see also Mount Vernon City Sch. Dist. v. Nova Cas. Co., 19 N.Y.3d 28, 39 (2012) (affirming denial of fees because “under a precise reading of the contractual language, the disputed fees are outside the scope of the agreements”); Rossman, 974 N.Y.S.2d at 430 (reversing fee award because agreement’s attorney’s fee provision did not cover the parties’ dispute).

[3] Slip Op. at *1. To find articles related to confessions of judgment under CPLR 3218, as amended, visit the “Blog” tile on our website and enter “confession of judgment” or any other related search term in the “search” box.

[4] In 2019, the New York State Legislature amended CPLR 3218. By the amendment, the Legislature eliminated the ability of creditors to file confessions of judgment against non-New York residents. Section 2 of the amendment provides that “[t]his act shall take effect immediately and apply to judgments by confession entered upon affidavits filed on or after such effective date.” 2019 Sess. Law News of N.Y. Ch. 214 (S. 6395). The amended statute applies to any confession of judgment filed after the 2019 amendment, regardless of when the confession was signed.

[5] Id.

[6] Id. As set forth in defendant’s brief on appeal, defendant was not a New York resident. At the time the parties settled their disputes in 2018, defendant lived in both Georgia and California. Defendant currently resides in both locations.

[7] Id. (citations omitted).

[8] Id.

[9] Id.

[10] Id.

[11] Id.

[12] Id. (citing Rossman, 111 A.D.3d 429, 429 (1st Dept. 2013)).