Hercules Corp. v Monaco Equities
Annotate this CaseDecided on March 21, 2006
Supreme Court, Nassau County
HERCULES CORP., Plaintiff,
against
MONACO EQUITIES, Defendant,
20684-05
COUNSEL FOR PLAINTIFF
Weinberg, Gross and Pergament, LLP
400 Garden City Plaza
Garden City, New York 11530
COUNSEL FOR DEFENDANT
Rubel, Rosenblum & Bianco LLP
100 Merrick Road
Rockville Centre, New York 11570
Leonard B. Austin, J.
ORDER
The following papers were read on Plaintiff's motion for a Yellowstone injunction:
Order to Show Cause dated December 28, 2005;
Affidavit of Carole Fitzgerald sworn to on December 22, 2005;
Affirmation of Marc J. Weinberg, Esq. dated December 23, 2005;
Plaintiff's Memorandum of Law.
[*2]
Plaintiff Hercules Corp. ("Hercules") moves for a Yellowstone injunction (See, First National Stores Inc. v. Yellowstone Shopping Center Inc., 21 NY2d 630 [1968])
enjoining the Defendant Monaco Equities ("Monaco") from commencing any actions or proceedings to terminate Hercules lease of laundry room at Defendant's premises.
BACKGROUND
Hercules is in the business of providing coin operated laundry service in residential multiple dwellings. Monaco is the owner of the premises located at 142-01 41st Avenue, Flushing, New York ("the Premises").
By lease dated January 1, 2005, Hercules leased the laundry room at the Premises for a period of one year running from January 1, 2005 through December 31, 2005. Hercules provided coin operated laundry equipment, washing machines and dryers, to the Premises.
The lease has a renewal provision that provides that it would be automatically renewed for a one year period unless either party gave written notice of its intention to terminate the lease not less than ninety (90) or more than one hundred twenty (120) days prior to the expiration of the term.
The lease also granted to Hercules a right of first refusal which required Monaco to provide Hercules with a copy of any bona fide written lease or agreement to provide laundry room equipment at the expiration of the term. Hercules is then given the opportunity to meet that offer. If Monaco failed to provide Hercules with a copy of the proposed lease or agreement, then the existing lease with Hercules remained in effect until Monaco provided Hercules with a copy of the lease and Hercules was given the opportunity to exercise its right of first refusal.
By letter dated December 2, 2005, K & W Real Estate Services ("K & W"), the managing agent of the Premises, advised Hercules that Monaco had signed a lease with another laundry company to service the Premises as of January 1, 2006. The letter advised Hercules to remove its equipment from the Premises by December 31, 2005.
Hercules responded by sending a letter to K & W indicating that they would not remove its equipment until it had been given the opportunity to exercise its right of first refusal. Hercules also advised K & W not to remove or otherwise tamper with its property at the Premises.
In response, counsel for Monaco advised Hercules that Monaco would not honor the right of first refusal provision of the lease since these provisions had been found to be unenforceable. See, Inwood Park Apartments, Inc. v. Coinmach Industries, Co., 22 AD3d 350 (1st Dept. 2005).
Upon receipt of the letter from Monaco's counsel, Hercules commenced this action. Upon commencement, Hercules moved for a preliminary injunction enjoining Monaco from terminating the lease during the pendency of this action.
DISCUSSION
In order to obtain a Yellowstone injunction, the tenant must hold a commercial [*3]lease, must have received a notice of default, a notice to cure or a threat of termination of the lease from the landlord, the application for a temporary restraining order is made prior to the termination of the lease and the tenant has the willingness and ability to cure
the alleged default by means other than vacating the premises. Purdue Pharma, LP v. Ardsley Partners, LP, 5 AD3d 654 (2nd Dept. 2004); and Long Island
Gynecological Services v. 1103 Stewart Ave. Assocs. Ltd. Partnership, 224 AD2d 591. (2nd Dept. 1996).
A Yellowstone injunction will be issued to enable a commercial tenant who has been served with a notice of default, a notice to cure or a threat to terminate its lease to obtain a stay tolling the running of the cure period so that the tenant may after a determination of the merits cure the defect and avoid forfeiture of the lease. Top-All Varieties, Inc. v. Raj Development Co., 151 AD2d 470 (2nd Dept. 1989).
Hercules has not been served with a service of a notice of default or notice to cure in the manner prescribed by Real Property Actions and Proceedings Law §735. See, Real Property Actions and Proceedings Law §713; and Brullo v. Suen, 76 Misc 2d 896 (Civ. Ct. NY Co. 1973). Hercules did receive a letter from Monaco's attorney indicating that Hercules should remove its equipment from the premises by December 31, 2005. The attorney's letter was not served in the manner required by the statute which requires delivery of the notice to the corporation at the property to be recovered and at the corporation's principal office or principal place of business within the state. See, Real Property Actions and Proceedings Law §735 (l)(b).
Since Hercules has not been served with a notice to cure or a notice of default in the statutorily required manner, its application for a Yellowstone injunction on this basis is premature.
Hercules has received a threat to terminate its lease. Monaco's attorney's letter directed Hercules to remove its equipment and property from the premises by December 31, 2005. This is clearly an indication that Monaco will seek to terminate Hercules' lease.
While Monaco's attorney's letter asserts that the right of first refusal provision is unenforceable, Monaco's attorney makes no mention of the automatic renewal provisions of the lease.
Monaco has taken the position that the lease expired as of midnight, December 31, 2005. If this is true, then Hercules would become a holdover tenant as of the expiration of the lease. If the lease is for a definite term, the landlord does not have to provide the tenant with notification to terminate the tenancy. Real Property Law §232-b.
A lease, like any other contract, is to be interpreted in accordance with the intent of the parties. 74 NY Jur2d, Landlord and Tenant §§65, 66; and George Backer Mgt. Corp. v. Acme Quilting Co., 46 NY2d 211 (1978). See also Martin v. Glenzan Assoc., Inc., 75 AD2d 660 (3rd Dept. 1980). If an agreement is clear and unambiguous, the [*4]court must determine its meaning as a matter of law based upon the terms of the
agreement without resort to extrinsic language. Greenfield v. Philles Records, Inc. 98 NY2d 562 (2002) and Katina v. Famiglietti, 306 AD2d 440 (2nd Dept. 2003).
Paragraph 2 of the lease states:
"This lease shall continue for like successive terms after the expiration of the original term unless either party shall give notice of its intention not to renew, sent by certified mail, return receipt requested, received by Lessee,
no less that Ninety (90) and no more than One Hundred Twenty (120) days prior to the expiration of the original term of any successive term thereafter."
This provision sets forth the clear intent of the parties that the lease would automatically renew unless either party took affirmative steps to terminate the lease during a specific period of time. Neither party has placed before the Court proof of compliance with this provision. Hercules asserts that since Monaco did not cancel the lease in the required manner or within the required time, the lease automatically renewed.
Hercules is entitled to a Yellowstone injunction on this basis. Hercules should have the opportunity to litigate the issue of whether the lease was automatically renewed for a one year period commencing on January 1, 2006 as a result of Monaco's failure to terminate the lease in accordance with its terms.
Accordingly, it is,
ORDERED, that Plaintiff's motion for a Yellowstone injunction is granted conditioned upon Hercules making timely and full payment of all sums due under the terms of the lease dated January 1, 2005 during the pendency of this action; and it is further,
ORDERED, that counsel for the parties are directed to appear for a Preliminary Conference on May 11, 2006 at 9:30 a.m.
This constitutes the decision and Order of the Court.
Dated: Mineola, NY _____________________________
March 21, 2006 Hon. LEONARD B. AUSTIN, J.S.C.
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