Confidence Beauty Salon Corp. v 299 Third SI, LLC
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Confidence Beauty Salon Corp. v 299 Third SI, LLC 2015 NY Slip Op 32284(U) December 3, 2015 Supreme Court, New York County Docket Number: 157777/2015 Judge: Joan M. Kenney Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK PART 8 ---------------------------------------x CONFIDENCE BEAUTY SALON CORP., Index # 157777/2015 DECISION & ORDER Plaintiff, -against299 THIRD SA, 299 THIRD SI, LLC, and 299 SMNA, LP, Defendants. ---------------------------------------x KENNEY, JOAN, M., J.S.C. For Defendant: For Plaintiff: Goldberg Scudieri & Lindenberg, 45 West 45th Street, Ste. 1401 New York, NY 10036 Mark S. Freidlander, Esq. P. C. 15 Maiden Lane, Ste. 2000 New York, NY 10038 (212) 962-2877 212-921-1600 Papers considered in review of this motion seeking a Yellowstone injunction: Papers Numbered Order to Show Cause, & Affirmation Affirmation in Partial Opposition & Exhibit 1-2 3-5 Plaintiff Yellowstone moves, by injunction Order seeking To Show to toll Cause the (OSC), period for to a cure plaintiff's alleged violations of the commercial lease (the lease), attendant to the beauty salon located on the second floor, of 297 Third Avenue, New York, NY (the expires by its own terms on December 31, On or about April 21, 2015, premises) The front, lease 2017. defendants (collectively the landlord) purchased three buildings adjacent to and including the premises at issue. In or about 2009, plaintiff alleges that it subleased the rear portion of the first floor, of 297 Third Avenue, [* 2] New NY York, from the predecessor-in-interest. 1 landlord's Plaintiff states further that the prior owner/landlord permitted the salon to expand its business, by consenting to an oral subletting arrangement for additional space below and to the rear of the premises (the additional space) . Plaintiff claims that the sublessor was DJ Visual Aid Services Inc. (DJ). An entity wholly owned by the landlords' predecessor-in-interest. Plaintiff does not dispute that it erected an internal staircase from the premises to the additional space. The purpose of the staircase was to have access to additional treatment rooms that were The donstructed. landlord denies that the prior owner consented to any subletting arrangement between plaintiff and DJ. In support of this contention, the landlord proffers an affidavit from the attorney who represented the current owner in connection with the purchase of the buildings. As part of the process to obtain financing for the transaction, plaintiff provided the landlord with estoppel certificates for the premises at issue as well as for the 23rd street location, which not the subject of the instant application. The estoppel opposition papers certificates and are include, attached inter to alia, the landlord's the following 1 Plaintiff also leases a commercial space located at 202 East 23~ Street, New York, NY (the 23~ street premises) from the landlord. A separate lease between plaintiff and the landlord's successor-in-interest of the 23rd street premises expires on April 30, 2021, and is not the subject of this lawsuit. 2 [* 3] representations made by plaintiff: ratification of the existence of the lease; the lease was not modified in any way and represents the entire understanding of the parties; there has not been subletting of the leased premises or assignment of the lease. The landlord's 30 day notice to cure, dated June 22, 2015, sets forth a litany of alleged lease violations, that include: unlawful occupation of the additional space; illegal construction of the additional space without obtaining building permits; failure to obtain sufficient insurance; occupying the additional space in violation of the building's certificate of occupancy; illegal alteration of the electrical and plumbing systems without obtaining proper permits. The notice to cure provided plaintiff with the opportunity to correct the lease violations, e.g., by removing the staircase and ceasing to use the additional space. The notice to cure also informed plaintiff that the landlord's consent was not needed to correct the $30,000.00), lease violations, subject to (if filing the plans cost and did not obtaining exceed all the necessary permits to correct the changes to the premises. "The purpose of a notice to cure is to specifically apprise the tenant of claimed defaults in its obligations under the lease and of the forfeiture and termination of the lease if the claimed default is not cured within a set period of time. Corp. v Prince Fashions, Inc., 542 Holding 46 AD3d 309 (1'' Dept 2007). Plaintiff's contention that an oral sublet agreement with the former owner of the premises is 3 not credible. The evidence· [* 4] establishes that plaintiff made representations in the estoppel certificate contrary to those it asserts here. Plaintiff also had knowledge that it's representations would be acted upon, and it upon those appears representations. Pla~ntiff of affairs of the premises. Street LLC, 27 AD3d 392 Corp. v Soho Plaza Corp., relied detrimentally landlord that had actual knowledge of the true state JRK Franklin, [1st Dept 2006]); LLC, v 164 East 87th (see also, Health-Loom 272 AD2d 179, 181 [1st Dept 2000]). Moreover, an estoppel certificate will be enforced unless the certifying party can show a defense to the making of the document, such as fraud or duress, or that the assignee (the landlord), accepted the certificate with knowledge of the contrary, and true, state of the facts (Hammelburger v Foursome Inn Corp., 54 NY2d 580, at 586-587 [1981]). No such defense has been asserted here, and no evidence was submitted to establish that the representations in the certificates were false. landlord knew the (Id) . First Nat. Stores, Inc. v Yellowstone Shopping Ctr., Inc., 21 NY2d 630 (1968), and its progeny established a four prong test for determining whether a "Yellowstone" injunction should be granted. The requirements for obtaining Yellowstone relief are as follows: (1) plaintiff holds a commercial lease, a notice to cure, (2) the landlord has served (3) the referenced cure period has not expired, and (4) plaintiff has to demonstrate an ability and willingness to "cure." ERS Enterprises, Inc. v Empire Holdings, LLC, 286 AD2d 4 206 [* 5] l" Dept 2001); Purdue Pharma LP v Ardsley Partners, LP, 5 AD3d 654 (2nd Dept 2004). A Yellowstone injunction maintains the status quo so that a commercial tenant, when confronted by a threat of termination of its lease, may protect its investment in the leasehold by obtaining a stay tolling the cure period so that upon an adverse determination on the merits the tenant may cure the default and avoid a forfeiture of the lease (Post v 120 E. End Av. Corp., 62 NY 2d 19, 26 [1988]). Additionally, the very nature of this kind of injunction is designed to "forestall the cancellation of a lease to afford the tenant an opportunity to obtain a judicial determination of its breach, the measures necessary to cure it, and those required to bring the tenant in future compliance with the terms of the lease (see, Waldbaum, Inc. v Fifth Ave. of Long Is. Realty 85 NY2d 600, 606 [1995]. Assocs., Furthermore, plaintiff has not shown that it is prepared and nor that it has the ability to cure the alleged defaults Holding Lipstick LLC, and CB LLC, v Metropolitan Richard Ellis, Inc., 885 Third Avenue Leasehold 95 AD3d 708 [1st Consequently, and for the reasons set forth herein, interim ~ecision, dated July 29, 2015, (Aegis Dept 2012]). this Court's is hereby vacated and the motion is denied. Accordingly, it is ORDERED that plaintiff's motion is denied; and it is further 5 [* 6] ORDERED that this Court's prior decision is vacated, as we'll as, any stay granted therein; and it is further ORDERED receipt of that notice plaintiff of entry has of this landlord's notice to cure, dated, Dated: December '!_J_, 30 days Order, June 22, 2015 E N T E R: 6 from to 2015. it's comply attorneys' with the
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