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Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: July 6, 2018

Mandatory Injunction Properly Denied Because There Were No Extraordinary Circumstances

On June 28, 2018, the First Department issued a decision in Spectrum Stamford, LLC v. 400 Atlantic Title, LLC, 2018 NY Slip Op. 04853, holding that a mandatory injunction had been properly denied because there were no extraordinary circumstances, explaining:

Here, Supreme Court properly exercised its discretion in denying plaintiff’s motion for an injunction. Defendant should be permitted an opportunity to defend itself. There is no imperative, urgent, or grave necessity that the current property manager be replaced with CBRE at this time. While plaintiff argues that it sustained irreparable harm because the property continues to be managed by an agent that it does not desire, citing Rakosi v Sidney Rubell Co., LLC (155 AD3d 564, 565 [1st Dept 2017]) and Fieldstone Capital, Inc. v Loeb Partners Realty (105 AD3d 559, 560 [1st Dept 2013]), plaintiff’s interests are different from the plaintiffs in those cases. Plaintiff is merely an assignee of the lender and has solely an economic interest, whereas the plaintiffs in Rakosi and Fieldstone were owners of the properties with concerns about title and entered directly into property management agreements with the defendants.

Finally, plaintiff’s request for relief is primarily mandatory in nature as it requires defendant and the current property manager to assist with the transition to CBRE (whether explicitly to benefit CBRE or implicitly to protect its own proprietary information). A mandatory preliminary injunction by which the movant would receive some form of the ultimate relief sought as a final judgment is granted only in unusual situations, where the granting of the relief is essential to maintain the status quo pending trial of the action. A mandatory injunction should not be granted, absent extraordinary circumstances, where the status quo would be disturbed and the plaintiff would receive the ultimate relief sought, pendente lite. Here, while plaintiff may have a contractual right to choose the property manager, there has been no showing of extraordinary circumstances requiring CBRE immediately assume management of the property.

(Internal quotations and citations omitted).

It is common in commercial litigation that parties seek equitable relief such as injunctions, attachments or the appointment of a temporary receiver in order to preserve assets or maintain the status quo when money damages will not make them whole at the end of a litigation. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding seeking–or opposing–such relief.

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