Eastern Athletic, Inc. v Congregation Beth Elohim

Annotate this Case

Download PDF

Eastern Athletic, Inc. v Congregation Beth Elohim 2021 NY Slip Op 32450(U) November 24, 2021 Supreme Court, Kings County Docket Number: Index No. 527047/21 Judge: Leon Ruchelsman Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: 1] KINGS COUNTY CLERK 11/24/2021 04:20 PM NYSCEF DOC. NO. 51 INDEX NO. 527047/2021 RECEIVED NYSCEF: 11/24/2021 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS : CIVIL TERM: COMMERCIAL 8 ---· ---·-. ---·------·------·---· - . - - - - - - - - ·- ... X EASTERN ATHLETICj INCwj Plaintiff, Decision and order Index No. 527047/21 - .against CONGREGATION BETH ELOHIM, Defendant, November 24, 2021 ----- ---- - -- - ----- ------ -----------x PRESENT: HON. LEON RUCHELSMAN The plaintiff has moved seeking a Yellowstone injunction. The defendant has opposed the motion. the parties and arguments held. Papers were submitted by After reviewing all the arguments, this court now makes the following determination. On April 18, 1985 the plaintiff tenant entered into a lease with landlord conc:::erni,ng the rental of space located at 17 Eastern Parkway in Kings County. The defendant landlord asserts that it entered into a. contract to purchase property insurance for the building commencing the end of August 2021 and that the insurance company only agreed to in.sure the property on the express condition. a swimming pool owned by the t.enant plaintiff on the sixth floor of the building would be drained, The plaintiff did hot agree to drain the pool and consequently the property did not have any insµrance. The landlord se.rved a notice of default pursuant to Article 6 of the .lease which provides that "tenant shaii not do or permit any act ox thing to be done in or to the demised premises which is contrary to law.,. or which wi.11 irtva.lidate ot be in conflict with p:ublic li..ability,, 1 of 6 [*FILED: 2] KINGS COUNTY CLERK 11/24/2021 04:20 PM INDEX NO. 527047/2021 NYSCEF DOC. NO. 51 RECEIVED NYSCEF: 11/24/2021 fire or other policies of insurance at any time carried by or for the benefit of Owner;, (see, Lease 1 6). The landlord argues the tenant's failure to accommodate the landlord's ability to obtain insurance constituted a default which is incurable; The plaintiff moved seeking a Yellowstone injunction. Conclusions of Law A Yellowstone injunction is a remedy whereby a tenant may obtain 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" (Graubard Mallen Horowitz Pomeranz & Shapiro v. 600 Third Ave. Assocs., 93 NY2d 508, 693 NYS2d 91 [1999], First National Stores v. Yellowstone ~hopping Cente£ Irtc., 21 For a Yellowstone iri.junctioh to NY2d 630, 290 NYS2d 721 [1968]); be granted the plaintiff, among other things, must demonstrate that "it is prepared and maintains the ability to cure the alleged default by any means short of vacating the premises" (Graubard, supra). Thus, a tenant s-eekiri.g a Yellowstone must demonstrate that: (2) it has received from the {l) it holds a corninercial lease, lancilord a notice of default, (3) its application for a temporary restraining order was made prior to expiration of the cure period and termination of the lease, and (4) it has the desire and abili:ty to cure the alleged default by any means short of . . 2 2 of 6 . . [*FILED: 3] KINGS COUNTY CLERK 11/24/2021 04:20 PM NYSCEF DOC. NO. 51 INDEX NO. 527047/2021 RECEIVED NYSCEF: 11/24/2021 vacat1ng the premises (see, Xiotis Restaurant.Corp., v. LSS Leasing Ltd. Liability Co., 50 AD3d 6-78, 855 NYS2d 578 [2d Dept.; 2008] ) . The defendant argues the plaintiff's failure to drain the pool violated Article 6 of the lease and that even if the pool was ultimately drained, the failure to do so when requested renders the default incurable. The defendant argues that the failure to drain the pool on or before August 3L, 2021 invalidated the insurance policy "the tnomertt that policy began to run, because the pool was not "drained for the d11ration the Qf policy period"" (see, Affirmation in Opposition, 1 19) . The de.fendant argues that even though the lease contemplated the use of plaintiff's pool in article 2 of the Lease such accommodation was subject to the landlord's rights "reserved under Article 6 of the Lease, that arty such useregardless of whether or hot permitted under the lease-would not invalidate the Congregation's insurance for the '.Building or otherwise interfere with the Congregation's ability to insure the Building" (see, Affirmation in Opposition, 'TI 11), However, Article 6 only deals with fire insurance and hot any other insurance at all. The introduction to the Article states in vo.l ved "Requirements of Law, :r i r_e it Insurance, F.loor Loads" ( id) . Indeed, a careful review of the contents of the pro.visions of Article 6: do not involve liability or property insu.rance at a.11. 3_ 3 of 6 [*FILED: 4] KINGS COUNTY CLERK 11/24/2021 04:20 PM INDEX NO. 527047/2021 NYSCEF DOC. NO. 51 RECEIVED NYSCEF: 11/24/2021 The Article fi.tst requites the tenant t6 comply with all rules and regulations promulgated by the New York Board of Fire Underwriters. Next, the Article prohibits the tenant from maintaining anything on the premises prohibited by the Fire Department and further orders an adjustment of fire insurance premiums if the tenant does anything to increase such :fire insur-ance premiums. The Article c,loes contain language supported by the defendant that states, as noted, that "tenant shall not do or permit any act or thing to be done in or to the demised premises which is contrary to law, or which will invalidate or be in conflict with public liability, fire or other policies of insurance at any time carried by or for the benefit of Owner requires some positive act or activity which frustrates the owner's ability to maintain insurance'' (id) . Thus, the language ''other policies of insurance' most probably refers to fire. insurance, the subject of the article as a whole. It is improbable that contained within a large article dealing with fire insurance there is a passing reference to "other policies of insurance" which conclusively refers to liability insurance and thus. govern the outcome in this case. While further litigation in this regard is surely necessary i t does not defeat the application for a Yellowstone at this time since there are surely questions whether Article 6 even references liability insurance at all. 4 4 of 6 [*FILED: 5] KINGS COUNTY CLERK 11/24/2021 04:20 PM NYSCEF DOC. NO. 51 INDEX NO. 527047/2021 RECEIVED NYSCEF: 11/24/2021 Even if Article 6 does deal with liability insurance, the language of Article 6 spetif.:i..tally notes that the "tenant shall not do or permit ahy act or thing to be done" to the premises. Failihg to drain the pobl is hot an act that was dbne to the premises, rather, it was a failure to act, which can hardly be considered a breach of the provision. Thus, the failure to drain the pool could not have been an "act" which invalidated the insurance policy. The defendant argues that "Article 6 .of the Lease expressly reserved the Congregation's right to insure its valuable Building and that tight is a condition of Eastern Athletic's use of the subject Premises" (see, Affirmation of Michael P.ensabl,me in Opposition, 11) . 'J[ HowevE=r ,. Article 6 does not intertwine..or condition the tenant's use of the premises with the landlord's right to insure the building. Rather, Article 6 merely prohibits the tenant from comrilitting any act that would invalidate ahy insurance polity. Cohtinuing to maintain the pool is simply not an act that invalidated any insurance. Of course, this leads to an inescapable and circular question Of fault. The landlord COllld not secure insurance, which the tenant may not frustrate, because of the pool's continued existence, yet the pool's con:tihued existence is, not a violation of the lease and not an act of f:i;ustration by the tenant. an impossible situation for the landlord. This r.eality .res.ults in They cannot secure ins.urartce and cannot force the. tenant to facilitate such 5 of 6 [*FILED: 6] KINGS COUNTY CLERK 11/24/2021 04:20 PM INDEX NO. 527047/2021 NYSCEF DOC. NO. 51 RECEIVED NYSCEF: 11/24/2021 insurance. By the same token, the tenant's passive refusal cannot be a cause of landlord's problems although as long as the pool is not drained no insurance is possible. In any event, the above demonstrates that it is premature, to conclude the, default is incurable since it is possible no such default even exits. Therefore, based on the foregoing, Yellowstone is granted, the motion seeking a Since the pool has been drained in any event the motion seeking a bond is denied. To he sur:e, the issues of damages incurred survives any Yellowstone analysis, however, those issues will develop throughout discovery. As noted, the motion seeking a Yellowstone injunction is granted. So ordered. ENTER: DATED: November 24, 2021 Brooklyn N.Y. Hon. Leon Ruchelsman JSG 6 6 of 6

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.