Court Opinion

ID: 3196466
Source: CourtListenerOpinion
Date Created: 2016-04-21 15:06:26.655983+00
Date Added: 2024-06-11T14:37:08.173142
License: Public Domain

State of New York
                    Supreme Court, Appellate Division
                       Third Judicial Department
Decided and Entered: April 21, 2016                     521525
________________________________

CATSKILL MOUNTAIN RAILROAD
   COMPANY, INC.,
                    Respondent,
      v                                      MEMORANDUM AND ORDER

COUNTY OF ULSTER,
                    Appellant.
________________________________

Calendar Date:   February 11, 2016

Before:   Garry, J.P., Egan Jr., Lynch, Devine and Clark, JJ.

                              __________

      Beatrice Havranek, County Attorney, Kingston, for
appellant.

      The West Firm, PLLC, Albany (Mark J. Wagner Jr. of
counsel), for respondent.

                              __________

Lynch, J.

      Appeal from an order of the Supreme Court (Mott, J.),
entered October 21, 2014 in Ulster County, which, among other
things, denied defendant's motion to renew its opposition to
plaintiff's application for a Yellowstone injunction.

      Plaintiff leased a 38-mile railroad right-of-way from
defendant for a term beginning in May 1991 and extending through
May 2016. Pursuant to the lease, plaintiff was authorized to,
among other things, operate a tourist railway for passengers. In
June 2013, defendant issued a "Notice of Default Demand to Cure"
wherein it alleged that plaintiff failed to rehabilitate and
maintain the track, restore and repair defendant's damaged
property, obtain necessary permits and approvals, pay the
                              -2-                521525

requisite amount of rent based on gross revenue, provide certain
documentation, obtain appropriate insurance, and allow members of
the public to enter upon the property, all as agreed pursuant to
the lease agreement. In July 2013, plaintiff commenced this
action seeking a temporary restraining order and a Yellowstone
injunction (see First Natl. Stores v Yellowstone Shopping Ctr.,
21 NY2d 630 [1968]). Defendant answered and imposed several
counterclaims. In November 2013, Supreme Court granted the
Yellowstone injunction and required plaintiff to post a surety
bond of $75,000. Thereafter, defendant served plaintiff with
discovery demands dated December 31, 2013 and plaintiff served
its responses approximately one month later. In August 2014,
defendant moved to renew its opposition to plaintiff's
application for a Yellowstone injunction and moved to compel
discovery. The court denied both motions and defendant now
appeals.

      Where, as here, a landlord seeks the early termination of a
commercial lease based on allegations of default, Yellowstone
injunctions are routinely granted to maintain the status quo of
the tenancy while the underlying allegations are litigated (see
Graubard Mollen Horowitz Pomeranz & Shapiro v 600 Third Ave.
Assoc., 93 NY2d 508, 514-515 [1999]). The tenant seeking a
Yellowstone injunction must demonstrate, insofar as is relevant
here, that "it is prepared and maintains the ability to cure the
alleged default by any means short of vacating the premises" (id.
at 514 [internal quotation marks and citation omitted]; see TSI
W. 14, Inc. v Samson Assoc., LLC, 8 AD3d 51, 52-53 [2004];
Jemaltown of 125th St. v Leon Betesh/Park Seen Realty Assoc., 115
AD2d 381, 382 [1985]). Here, in opposition to plaintiff’s motion
for a Yellowstone injunction, defendant submitted evidence
demonstrating that the railway had significantly deteriorated
during plaintiff's tenancy and argued that given the condition of
the railway, plaintiff lacked the resources to cure its default
of its maintenance obligations. By its November 2013 decision
and order, Supreme Court determined that plaintiff sufficiently
demonstrated its ability to cure the alleged lease violations
through the use of skilled volunteers able to provide labor and
the accessibility of grant money.
                              -3-                521525

      A motion to renew must "be based upon new facts not offered
on the prior motion that would change the prior determination"
(CPLR 2221 [e] [2]; see Howard v Stanger, 122 AD3d 1121, 1122-
1123 [2014], lv dismissed 24 NY3d 1210 [2015]). It is not
intended as an opportunity to present evidence that, had the
party exercised due diligence, would have been offered on the
original motion (see Hyman v Schwartz, 127 AD3d 1281, 1285
[2015]; Onewest Bank, FSB v Slowek, 115 AD3d 1083, 1083 [2014]).
Further, because it is an issue generally for the trial court's
"sound discretion" (Hyman v Schwartz, 127 AD3d at 1285), we
generally do not disturb a trial court's determination on a
motion to renew (see M & R Ginsburg, LLC v Orange Canyon Dev.
Co., LLC, 84 AD3d 1470, 1472 [2011]; First Union National Bank v
Williams, 45 AD3d 1029, 1030-1031 [2007]). Here, on its motion
to renew, defendant seeks to submit an affidavit by an expert who
inspected the railway, detailed the deficiencies and opined as to
the cost to restore the track to a condition that would comply
with the lease. Although defendant contends that as a
municipality, it was faced with certain statutory obligations
that hindered its ability to retain an expert, the record instead
demonstrates that the track conditions were well known and
documented and that defendant obtained a proposal from the expert
in April 2013. Still, defendant made the tactical decision to
forgo the formal inspection until May 2014. Accordingly, we
agree with Supreme Court's determination that defendant did not
demonstrate a reasonable justification for its failure to obtain
and provide an inspection report until almost one year after
plaintiff commenced this action (see Webber v Scarano-Osika, 94
AD3d 1304, 1306 [2012]; Abrams v Berelson, 94 AD3d 782, 784
[2012], lv dismissed 19 NY3d 949 [2012]).

      Defendant also challenges Supreme Court's denial of its
motion to compel plaintiff to produce certain financial records.
It is well settled that "'[t]rial courts have broad discretionary
power to control and supervise discovery and determine what
documents are 'material and necessary' under CPLR 3101 (a), with
appellate courts intervening only where there has been a clear
abuse of discretion'" (Deep v Boies, 121 AD3d 1316, 1322 [2014],
lv denied 25 NY3d 903 [2015], quoting Div-Com, Inc. v Tousignant,
116 AD3d 1118, 1119 [2014]). A disclosure request that is
"overly broad" or "lacking in specificity" is palpably improper
                              -4-                  521525

(Matter of New York Cent. Mut. Fire Ins. Co. v Librizzi, 106 AD3d
921, 921 [2013]) or if it "seeks information of a confidential
and private nature that does not appear to be relevant to the
issues in the case" (Saratoga Harness Racing v Roemer, 274 AD2d
887, 889 [2000] [internal quotation marks and citations
omitted]). Generally, tax returns and private financial
documents are "not discoverable in the absence of a strong
showing that the information is indispensable to the claim and
cannot be obtained from other sources" (id.; see Div-Com, Inc. v
Tousignant, 116 AD3d at 1119).

      Here, defendant demanded, among other things, 10 years of
plaintiff's financial statements, all bank statements, receipts
for capital expenses and tax returns, all documents detailing its
assets and liabilities, and all receipts for all capital
expenses. Defendant argued that these records were necessary to
establish that plaintiff would not be able to cure the alleged
lease violations and that, because it did not properly compute
its gross revenue, it did not pay the appropriate rent. As set
forth above, however, a party seeking a Yellowstone injunction
does not need to demonstrate that it can, in fact, cure the
alleged defects (see Jemaltown of 125th St. v Leon Betesh/Park
Seen Realty Assoc., 115 AD2d at 382). Contrary to defendant's
argument, Supreme Court was not obligated to "prune" the
discovery requests for defendant as it was within its discretion
to vacate the overly broad and largely irrelevant demands (see
Payne v Enable Software, 229 AD2d 880, 882 [1996]).

     Garry, J.P., Egan Jr., Devine and Clark, JJ., concur.

     ORDERED that the order is affirmed, with costs.

                             ENTER:

                             Robert D. Mayberger
                             Clerk of the Court