Opinion
Index No. 651499/2024
07-18-2024
New York Hudson Care LLC D/B/A MEDRITE, Plaintiff, v. Capt. Crow Management LLC, Defendant.
Herrick, Feinstein LLP, New York, NY (Ansdrew J. Wagner and Devin W. Ness of counsel), for plaintiff. Axelrod, Fingerhut & Dennis, New York, NY (Hotan Rohparvar of counsel), for defendant.
Unpublished Opinion
Herrick, Feinstein LLP, New York, NY (Ansdrew J. Wagner and Devin W. Ness of counsel), for plaintiff.
Axelrod, Fingerhut & Dennis, New York, NY (Hotan Rohparvar of counsel), for defendant.
Gerald Lebovits, J.
This is an action seeking a Yellowstone injunction, brought by plaintiff-subtenant, New York Hudson Care LLC, against defendant-sublessor, Capt. Crow Management LLC. This court previously granted interim Yellowstone relief pending the hearing of this motion for injunctive relief. Plaintiff's motion is granted.
BACKGROUND
Plaintiff subleased a commercial space on the ground floor of One Hudson Street in New York City from defendant. The lease was dated August 30, 2021, with rental term through September 14, 2031. Defendant has issued a notice to cure dated March 6, 2024, alleging a number of lease defaults against plaintiff, including improperly disposing waste, placing signs outside the building, and failing to repair an opening in a wall. The notice to cure gave plaintiff until March 28, 2024, to cure the defaults and threatened to terminate the lease if plaintiff did not cure by that date. Plaintiff alleges that it is not in default of the lease but that if the court determines that a default exists, plaintiff has the desire and ability to cure.
DISCUSSION
Under the doctrine promulgated in First National Stores, Inc. v Yellowstone Shopping Center, Inc. (21 NY 630 [1968]), a tenant may obtain a restraining order tolling the running of the notice to cure until a declaration of the parties' rights may be had. A party seeking a Yellowstone injunction must demonstrate that it (1) holds a commercial lease; (2) received either a notice to cure, a notice of default, or a threat of termination of the lease; (3) requested injunctive relief before the expiration of the cure period set forth in the lease as well as the landlord's notice to cure; and (4) is prepared, willing, and able to cure the alleged default by means short of vacating the premises. (E.g. 225 E. 36th St. Garage Corp. v 221 E. 36th Owners Corp., 211 A.D.2d 420, 422 [1st Dept 1995].)
Defendant does not contend that plaintiff fails to satisfy the first three elements required to obtain a Yellowstone injunction. Rather, defendant contends that plaintiff does not satisfy the fourth element. Citing 146 Broadway Assoc., LLC v Bridgeview at Broadway, LLC (164 A.D.3d 1193, 1194-1195 [2d Dept 2018]), defendant argues that a tenant seeking a Yellowstone injunction "must provide proof of the substantial effort it has already made in addressing the default." Defendant alleges that plaintiff did not take action to address maintenance issues despite repeated warnings before plaintiff received the notice to cure, and that this inaction demonstrates a lack of willingness and ability to cure. (NYSCEF Doc. No. 18 at 4.)
In response, plaintiff argues that a party seeking a Yellowstone injunction is required to show only that "'a basis exists for believing that the tenant desires to cure and has the ability to do so through any means short of vacating the premises.'" (NYSCEF Doc. No. 29 at 4, quoting Herzfeld & Stern v Ironwood Realty Corp., 102 A.D.2d 737, 738 [1st Dept 1984].) Plaintiff asserts that it has adequately established, to the extent required by the law, its desire and ability to cure. Plaintiff disputes defendant's factual allegations that plaintiff is liable for defaulting and has failed to correct the defaults.
This is not a case in which the defaults are impossible to cure or indisputable. Thus, it is materially different from the caselaw on which defendant relies: In 146 Broadway Assoc., plaintiff's own expert found that the plaintiff failed to correct certain violations of noise regulations; 146 Broadway Assoc. represents a situation in which plaintiff's default was indisputable. (146 Broadway Assoc., 164 A.D.3d at 1194-1195.) In this case, defendant's allegation that plaintiff "failed to set forth any efforts that it has undertaken to correct the violations" is not sufficient to demonstrate that plaintiff has no ability to cure the default, or that plaintiff is indisputably liable for creating the defaulting situations. The defaults defendant alleges include improper disposal of waste and failing to repair an opening in the wall, all of which are curable. Moreover, the liability with respect to the obligation to cure is contested and is subject to this court's future decision on whether plaintiff is in default. Obtaining a Yellowstone injunction "does not require a tenant to demonstrate a likelihood of success on the merits." (Sokoloff Arts Foundation Inc. v Nur Ashki Jerrahi Community, 192 A.D.3d 524, 525 [1st Dept 2020].) Therefore, "a tenant [is not] required to prove its ability to cure prior to obtaining a Yellowstone injunction," and "[t]he proper inquiry is whether a basis exists for believing that the tenant desires to cure and has the ability to do so through any means short of vacating the premises." (Herzfeld & Stern, 102 A.D.2d at 738.)
During oral argument, defendant's counsel stated that he had obtained an email proving that the contract between plaintiff and a waste disposal company is a "sham" and that plaintiff continues to dispose of garbage improperly. Defendant asked the court to review and consider that email. The court declined to consider it, because it was being offered for the first time at oral argument, rather than included in the written record before the court on the motion. In any event, the parties will have the opportunity to develop the record further if plaintiff seeks a permanent injunction in this action.
In New Deal Realty LLC v 684 Owners Corp. (204 A.D.3d 447, 164 [1st Dept 2022]), the Court ruled that an affidavit establishes a sufficient basis to believe that plaintiff is willing and able to cure when plaintiff's managing member writes in an affidavit that "[i]n the event... that the Court determines that [plaintiff] owes the rent demanded, [it] is ready, willing, and able to cure." In the present case, a member of plaintiff has stated in an affidavit that "in the event that the Court ultimately determines that Plaintiff has defaulted under the Lease, Plaintiff stands ready, willing, and able to cure such defaults by pursuant to the Court's determination, which it will be able to do by means short of vacating the Premises." (NYSCEF Doc. No. 4 at 3.) This affidavit establishes an adequate basis to believe that plaintiff is willing and able to cure, as required by New Deal. This is consistent with the purpose of a Yellowstone injunction: If "Plaintiff is ultimately found to be in breach of the lease, Yellowstone relief allows it to cure the defect and retain its tenancy." (New Deal, 204 A.D.3d at 447.)
Accordingly, it is
ORDERED that plaintiff's motion for a Yellowstone injunction is granted; and it is further
ORDERED that the cure period (and expiration date) set forth in the March 6, 2024, notice to cure issued by defendant is tolled pending further order of this court; and it is further
ORDERED that defendant, its employees, and anyone acting on its behalf or under its control are enjoined, pending further order of this court, from issuing a notice of termination, commencing a summary holdover proceeding or action for ejectment, or otherwise acting to terminate or purport to terminate plaintiff's lease on the grounds set forth in the March 6 notice to cure; and it is further
ORDERED that the parties appear before this court for a telephonic preliminary conference on August 2, 2024.