OQ Partners, LLC v Izzo
Annotate this CaseDecided on June 28, 2007
Supreme Court, Nassau County
OQ Partners, LLC, Plaintiff,
against
Joyce Izzo, as Co-Executrix of the Estate of Josephine Tamburello, Deceased, and Michael Izzo, Defendants.
1192-07
COUNSEL FOR PLAINTIFF
Markowitz & Rabbach, LLP
290 Broad Hollow Road, Suite 301
Melville, New York 11747
COUNSEL FOR DEFENDANT
Cooper, Paroff, Cooper & Cook, Esqs.
80-02 Kew Gardens Road - Suite 300
Kew Gardens, New York 11415
Leonard B. Austin, J.
Plaintiff, OQ Partners, LLC ("Partners") moves for a Yellowstone injunction. See, First National Stores, Inc. v. Yellowstone Shopping Center, Inc., 21 NY2d 630 (1968). Defendants, Joyce Izzo, as Co-Executrix of the Estate of Josephine Tamburello ("Joyce") and Michael Izzo ("Michael") (collectively "Izzo"), cross-move for summary judgment dismissing the complaint.
BACKGROUND
The late Josephine Tamburello, Joyce's decedent, owned premises 1265 Round Swamp Road, Glen Head, New York ("the Property"). The Property consists of three one-family houses and a cottage. The houses and cottage all have open back yards.
By lease dated April 27, 2006, Joyce, as Co-Executrix of the Estate of Josephine Tamburello ("Estate"), leased one of the houses on the Property to Partners.Joyce and her husband, Michael, reside in one of the houses. Michael does not have an ownership interest in the Property.
The house leased to Partners is presently occupied by Christopher Reinhardt ("Reinhardt") and his family. Reinhardt is the managing member of Partners. As part of his benefits as managing partner, Partners leases the one-family house at the Premises
Paragraph 1 of the lease indicates that the premises may be used only for residential purposes.
Paragraph 7 of the lease provides, in relevant part:
"7. Alterations. Tenant must obtain Landlord's prior written consent to install any paneling, flooring, "built in" decorations, partitions, railings, or make alterations or to paint or wallpaper the premises. Tenant must not change the plumbing, ventilation, air conditioning, electric or heating system."
Paragraph 46 of the lease provides:"46. The Tenant shall not make any alterations of Premises or electrical installations on Premises without the written consent of the Landlord. All
alterations of Premises and electrical installations shall be at the Tenant's own expense. Furthermore, the Tenant is required to obtain all permits necessary in regard to any alterations of Premises, at his own
expense, and written permission of the Landlord."
[*2]
Joyce alleges that Reinhardt has violated these provisions of the lease by painting the kitchen cabinets and banister, erecting a play set in an unauthorized area of the yard, drilling holes in the foundation of the premises for the installation of cable television and performing electrical work. All of this was done without obtaining landlord's consent. Estate asserts it has not been provided with plans for the electrical work.
By notice dated December 19, 2006, Estate advised Partners that they were required to cure the breaches of the lease by December 31, 2006 or the lease would be terminated. By letter dated January 11, 2007, Estate extended Partners time to cure the breaches up to January 22, 2007. Rather than curing the breaches, Partners moves for a Yellowstone injunction.
DISCUSSION
A.Yellowstone Injunction
The purpose of a Yellowstone injunction is to permit a commercial tenant confronted with the threat of the termination of a lease to obtain a stay tolling the cure period so that after the action has been resolved on its merits, the tenant may cure the defect and avoid the loss the leasehold. Kings Party Center of Pitkin Avenue, Inc. v. Minco Realty, L.L.C., 286 AD2d 373 (2nd Dept. 2001).
In order to obtain a Yellowstone injunction, the tenant must hold a commercial lease, must have received from the landlord a notice of default, a notice to cure or a threat of termination of the lease , the application for a temporary restraining order was 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. Hempstead Video, Inc. v. 363 Rockaway Assocs., LLP, 38 AD3d 838 (2nd Dept. 2007); 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).
The key issue in this case is whether the Partners lease is a residential or commercial lease. Estate asserts that, since the lease indicates that the premises are to be used only for residential purposes and the premises are being occupied by Reinhardt and his family as their primary residence, it is a residential lease. Partners asserts that since the lease is with a business entity, it is a commercial lease.
" A residential lease is now effectively deemed a sale of shelter and service by the landlord." Park West Management Corp. v. Mitchell, 47 NY2d 316, cert. den., 444 U.S. 992 (1979). In determining whether a lease is commercial or residential, the court must determine how the property is being used and not who the parties to the lease are or if the lease is designated commercial or residential. See, U.B.O. Realty Corp. v. Mollica, 257 AD2d 460 (1st Dept. 1999); and Benroal Realty Assocs., L.P. v. Lowe, 9 Misc 3d 4 (App. Term, 2nd Dept. 2005); and A Real Good Plumber, Inc. v. Kelleher, 191 Misc 2d 94 (App. Term, 2nd Dept. 2002).
In this case, the property is undeniably being used for residential purposes. Reinhardt, in his affidavit in support of his motion, avers states that his family and he are provided with a rental house as a benefit of his being the managing member of Partners. Reinhardt does not state that he uses the premises to conduct Partners' business. There is no evidence that Reinhardt uses the premises for any commercial purposes.
Estate premises its Notice to Cure upon allegations that Reinhardt painted cabinets and bannisters without permission, drilled holes in the foundation to install cable service, erected a play set in the yard and performed electrical work without obtaining landlord's permission. All [*3]of these items relate to residential use of the property.
The first element of a Yellowstone injunction is the existence of a commercial lease. Since this a residential lease, Plaintiff cannot obtain relief under a Yellowstone. .
Yellowstone injunctionshave, on limited occasions, been issued in to tenant-shareholders who have a cooperative proprietary lease. See, Post v. 120 East End Ave. Corp., 62 NY2d 19 (1984); Cohn v. White Oak Cooperative Housing Corp., 243 AD2d 440 (2nd Dept. 1997); Demasi v. Trousdell Village Owners, Inc., NYLJ 28, col.3 (8/9/2000); and Saada v. Master Apt., Inc., 152 Misc 2d 861 (Sup.Ct. NY Co. 1991). Such a circumstance is not presented here.
A key factor in each of these cases is that the tenant owns shares in a cooperative apartment. Courts are concerned that, if a tenant-shareholder, in the time to cure is not tolled, the tenant-shareholder will not only lose their lease but will also lose the equity they have as an owner.
Additionally in Cohn, the court found issues regarding whether the notice to terminate adequately advised tenant of the rule and regulations being violated and the consequences of its failure to cure. This issue does not exist in this case. The notice in this case states the specific provisions of the lease alleged to be violated and the specific violations of those provisions.
Partners does not deny it violated the provisions of the lease. The determination of whether these violations constitute a substantial breach of the lease can be made in a landlord-tenant proceeding in the District Court. (See, Post v. 120 East End Ave. Corp., supra), which isthe preferred venue for landlord-tenant disputes. See, All 4 Sports & Fitness, Inc. v. Hamilton, Martin Enterprises, Inc., 22 AD3d 512 (2nd Dept. 2005). Partners has failed to place before the court a single case in which a residential tenant in a non-cooperative situation has been entitled to a Yellowstone injunction. Therefore, Partners application for a Yellowstone injunction must be denied.
B.Summary Judgment
Defendants seek summary judgment dismissing this action. Since the court is denying Partners a Yellowstone injunction, the claims asserted in the first, second and third causes of action will be resolved in the landlord-tenant proceedings.
The only cause of action in the complaint that is not related to the lease is the fourth cause of action which alleges that Michael intentionally procured a breach of the lease. This cause of action alleges a cause of action for tortious interference with contract. See, Lama Holding Co. v. Smith Barney Inc., 88 NY2d 413 (1996); and Kronos, Inc. v. AVX Corp., 81 NY2d 90 (1993); and Bernberg v. Health Mgt. Systems, Inc., 303 AD2d 348 (2nd Dept. 2003).
However, this cause of action is predicated upon a determination that the lease was breached. If Partners prevails in the landlord-tenant proceedings, then this cause of action fails.
The lease contains a "No Counterclaims" provision. Additionally, since Michael is not the landlord, he will not be a party to the landlord-tenant proceeding.
The court believes prosecution of this cause of action is, at best, premature. If Partners prevails in the landlord-tenant action, then this cause of action will be rendered moot.
Thus, the prosecution of this action should be stayed pending the hearing and determination of the landlord-tenant action. CPLR 2201.
Accordingly, it is,
ORDERED, that Plaintiff's motion for a Yellowstone injunctionis denied; and it is [*4]further,
ORDERED, that the temporary restraining order tolling the cure period in regard to the Notice to Cure dated December 21, 2006 is hereby vacated: and it is further,
ORDERED, that, on the Court's own motion, the prosecution of this action is stayed pending the hearing and determination of any landlord-tenant proceeding that may be brought regarding this matter.
This constitutes the decision and order of this Court.
Dated: Mineola, NY_____________________________
June 28, 2007Hon. LEONARD B. AUSTIN, J.S.C.
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