Fifth Ave. Rest. Corp. v RCPI Landmark Props., LLC

[*1] Fifth Ave. Rest. Corp. v RCPI Landmark Props., LLC 2006 NY Slip Op 51708(U) [13 Misc 3d 1206(A)] Decided on July 19, 2006 Supreme Court, New York County Ling-Cohan, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through September 14, 2006; it will not be published in the printed Official Reports.

Decided on July 19, 2006
Supreme Court, New York County

Fifth Avenue Restaurant Corp., Plaintiff,

against

RCPI Landmark Properties, LLC, Defendant.



104750/06

Doris Ling-Cohan, J.

Plaintiff commercial tenant, is the owner and operator of a restaurant business (as a successor entity pursuant to bankruptcy) located on the concourse floor of the building located at 630 Fifth Avenue, Rockefeller Center, New York, NY. The tenancy is pursuant to a written lease with defendant ("lease") dated February 29, 1996, First Amendment to Lease dated March 7, 1997, Agreement of Assignment and Assumption of Lease dated January 1, 2004 and Second Amendment to Lease dated January 1, 2004. The lease term is 15 years, commencing on July 16, 1996 and expiring on July 31, 2011. On or about April 28, 2004, the parties entered into a separate storage lease for a portion of the concourse designated as "Space C", located at 630 Fifth Avenue, New York, NY ("storage lease").

On or about November 30, 2005, the parties entered into a stipulation ("stipulation agreement") in which plaintiff agreed to pay arrears pursuant to a payment plan. On or about March 22, 2006, defendant served upon plaintiff a notice to cure based upon alleged violations of Articles 1, 5, 20, 24, 31 of the lease and Article 2 of the Second Amendment to the Lease. The alleged violations are based upon plaintiff's failure to pay arrears pursuant to the stipulation agreement.

The underlying action was commenced by plaintiffs for a judgment declaring that, inter alia, plaintiff is not in violation of the lease, nor the stipulation agreement.

Plaintiff filed the within order to show cause seeking an order: (1) enjoining defendant from instituting any proceeding to terminate plaintiff's lease and plaintiff's tenancy; (2) staying any proceedings currently pending against plaintiff by defendant for the termination of the subject lease; (3) enjoining defendant from harassing plaintiff; (4) permitting plaintiff to remain at plaintiff's current location pursuant to the lease; and (5) declaring the notice of acceleration dated March 10, 2006 of the stipulation between the parties dated November 30, 2005 to be deemed satisfied and/or substantially satisfied and/or unconscionable.

In seeking the within injunctive relief, specifically a Yellowstone injunction pursuant to First National Stores, Inc. v. Yellowstone Shopping Center, Inc., 21 NY2d 630 (1968), plaintiff claims [*2]that it has satisfied all monetary arrears enumerated in the stipulation agreement, that it is not in violation of the lease, and that if found to be in default of the lease an/or stipulation, plaintiff is "ready, willing and able to effectuate a cure". [See ¶11, Affidavit in Support]. Plaintiff further asserts that it has satisfied the criteria for the granting of a Yellowstone injunction in that it possesses a commercial lease, received a notice to cure and faces a threat of lease termination, filed for the within relief prior to the expiration of the cure period, and has a desire and ability to cure any alleged defaults.

In opposition, defendants maintain, inter alia, that, plaintiff's are not entitled to the injunctive relief sought since plaintiff has failed to "produce any evidence" of its ability to cure. [See ¶2, Affirmation in Opposition]

To obtain a Yellowstone injunction, the tenant-movant must show that: (1) it holds a commercial lease; (2) the landlord served upon tenant-movant a notice to cure or notice of defect, or that it faces threat of lease termination; (3) it sought injunctive relief prior to the termination of the lease; and (4) it is prepared and maintains the ability to cure the alleged default by any means other than vacating the subject premises. Lexington Ave. & 42nd St. Corp. v. 380 Lexchamp Operating, Inc., 205 AD2d 421, 423 (1st Dept 1994); see also 225 E. 36th St. Garage Corp. v. 221 E. 36th Owners Corp., 211 AD2d 420 (1st Dept 1995).

"The purpose of a Yellowstone injunction is to maintain the status quo so that the tenant may challenge the landlord's assessment of its rights without the tenant, during the pendency of the action, forfeiting its valuable property interest in the lease...As such, it may be granted on less than the normal showing required for preliminary injunctive relief...".

Lexington Ave. & 42nd St. Corp. v. 380 Lexchamp Operating, Inc., 205 AD2d at 423; see also Graubard Mollen Horowitz Pomeranz & Shapiro v. 600 Third Ave. Assoc., 93 NY2d 508 (1999); Garland v. Titan West Associates, 147 AD2d 304 (1st Dept 1989).

Here, plaintiffs have made a sufficient showing to warrant the granting of a Yellowstone injunction as conditioned below; specifically, it holds a commercial lease, received a notice to cure from the landlord, timely requested injunctive relief, and is prepared and able to cure. Thus, a temporary injunction is proper to preserve the status quo and the forfeiture of plaintiff's valuable interest in the leasehold, prior to the adjudication of the parties' rights . See Lexington Ave. & 42nd St. Corp. v. 380 LexChamp Operating, Inc., 205 AD2d at 424; Caspi v. Madison 79 Assoc., Inc., 85 AD2d 583 (1st Dept 1981).

Although defendant argues that plaintiff's application should be denied for its failure to "produce any evidence" of its ability to cure, defendant has cited no case law to support such premise. [See ¶2, Affirmation in Opposition]. In fact, as stated by the court in Jemaltown of 125th Street, Inc. v. Leon Betesh/Park Seen Rlty Assoc., 115 AD2d 381 (1st Dept 1985):

"Rather than requiring the tenant to prove, on his application, that he can cure the alleged defects, all he need do to obtain a Yellowstone injunction is convince the court of his desire and ability to cure the defects by any means short of vacating the premises..." [*3]

(citation omitted)(emphasis supplied). Thus, Jemaltown, supra, makes clear that the full evidentiary proof of its ability to cure is not required at this juncture, contrary to defendant's claim. Here, movant has made an adequate showing to warrant the granting of a Yellowstone injunction.

The Court notes that "the law does not favor [the] forfeiture of...leasehold[s] (Herzfeld & Stern v. Ironwood Rlty. Corp., [102 AD2d 737, 738]". 225 E. 36th St. Garage Corp. v. 221 E. 36th Owners Corp., 211 AD2d at 422. Thus, this order is rendered to maintain the status quo during the course of this litigation.

In this court's discretion, however, the injunctive relief granted, is conditioned upon the payment by plaintiff to defendant of undisputed arrears pendente lite and the posting of a bond with respect to disputed arrears, as detailed below. See Lexington Ave. & 42nd St. Corp. v. 380 LexChamp Operating, Inc., 205 AD2d at 424; 3636 Greystone Owners, Inc. v. Greystone Building, 4 AD3d 122 (1st Dept 2004); 401 Hotel, L.P. v. MTI/The Image Group, Inc., 271 AD2d 228 (1st Dept 2000).

Based upon the above, it is

ORDERED that plaintiff's motion for, inter alia, a Yellowstone injunction is granted to the extent that the cure period provided in the subject Notice to Cure is tolled on condition that: (1) within 5 days of service of a copy of this order with notice of entry, plaintiff shall pay to defendant the undisputed arrears through April 30, 2006 (which plaintiff has indicated is $118,000.00) [FN1], together with the undisputed arrears for the months of May, June and July 2006; (2) within 10 days of service of a copy of this order with notice of entry, plaintiff shall post a bond in the amount of the disputed arrears; (3) plaintiff shall timely pay the undisputed rent throughout the course of this litigation.

Should the parties have difficulty calculating the disputed/undisputed arrears, the parties shall appear at the below ordered conference with a detailed description of each party's calculation, which shall have been previously exchanged between the parties, and such dispute shall be referred to a Referee. Such exchange shall be received by the parties at least five (5) days before (with courtesy copy to be supplied to the court at 80 Centre Street, Room 279 or mailbox on 1st flloor, Attn. Part Clerk, together with a copy of this order on top); reply papers shall be supplied on the conference date, August 10, 2006.

It is further

ORDERED that all parties shall appear before this court for a preliminary discovery conference on, Thursday, August 10, 2006, at 11 o'clock a.m;

ORDERED that within 5 days of entry of this decision/order, plaintiff shall serve a copy [*4]upon defendant with notice of entry.

This constitutes the decision and order of the Court.Copies of this order shall be supplied by the Clerk of the Part to counsel .

Dated: July ___, 2006

Doris Ling-Cohan, JSC Footnotes

Footnote 1: See ¶5, Savocchi Affidavit in Support, dated April 27, 2006.