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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: November 21, 2018

Plaintiff Should Have Been Granted Yellowstone Injunction

On November 20, 2018, the First Department issued a decision in 106 Spring St. Owner LLC v. Workspace, Inc., 2018 NY Slip Op. 07951, holding that a plaintiff should have been granted a Yellowstone Injunction, explaining:

Plaintiff met all four of the required elements for a Yellowstone injunction, whose purpose is to toll the cure period pending resolution of the dispute over whether a commercial tenant breached its lease, and its motion for a Yellowstone injunction should have been granted. The nature of the “standstill” ordered by the court in lieu of a Yellowstone injunction may be, for all intents and purposes, equivalent to the requested relief, as defendants contend, but it is not clear, and plaintiff raises the reasonable concern that it omitted a key aspect of Yellowstone relief: tolling the time to cure; we resolve any ambiguity here by granting the Yellowstone injunction.

The court lacked adequate basis to assume, as it did, that any failure on plaintiff’s part to maintain the cooling tower meant it had jeopardized public health and safety in a manner which is incurable. Defendants’ October 2017 letter and December 2017 Notice of Default, demanding cure, belie the notion of incurability. The notices are, moreover, silent on the issue of public health and safety, as were defendants’ affidavits opposing the motion. The issue, raised only in their memorandum of law was, in any case, unsubstantiated. The record before us contains no evidence to support the claim, or the court’s conclusion that the violations at issue are incurable.

(Internal quotations and citation omitted).

We litigate Yellowstone injunctions–a motion to prevent a landlord from evicting a commercial tenant for defaults under the lease–for both landlords and tenants. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you are involved in a dispute regarding the termination of a commercial lease because of a default under the lease.

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