Court Opinion

ID: 6027624
Source: CourtListenerOpinion
Date Created: 2022-01-13 12:30:32.434687+00
Date Added: 2024-06-11T08:51:05.092870
License: Public Domain

Rosenberger, J. P.,
dissents in a memorandum as follows: I dissent and would affirm the order on appeal. I do not share the majority’s view that plaintiff ceased to be in default as soon as it began paying rent into the escrow account pursuant to the Yellowstone injunction. Nor did the lease provision concerning the interest payable upon default become inapplicable when the injunction went into effect.
The limited purpose of a Yellowstone injunction is to maintain the status quo so that the tenant will not be evicted during the pendency of its legal challenge to the landlord’s determination that the tenant is in default (Lexington Ave. & 42nd St. Corp. v 380 Lexchamp Operating, 205 AD2d 421, 423). In contrast to the usual preliminary injunction, which requires a showing of likelihood of success on the merits, a Yellowstone injunction will be granted to any commercial tenant who receives a notice to cure, seeks injunctive relief before the cure period ends and demonstrates that the tenant is willing and able to cure if it ultimately is found that such cure is necessary (Garland v Titan W. Assocs., 147 AD2d 304, 307-308).
Yellowstone relief requires a lesser standard of proof than a standard preliminary injunction because the remedy is a limited one. The Yellowstone injunction merely tolls the period within which the tenant may cure its default (supra, at 307). It *456is only what it says it is. It is an injunction. It is not a declaration of status or of rights.
The opinion of the Court of Appeals in Waldbaum, Inc. v Fifth Ave. of Long Is. Realty Assocs. (85 NY2d 600) undermines the majority’s reasoning. The lease gave the commercial tenant a right to renew, but only if it was not in default at the time it exercised this option. The tenant allegedly breached certain lease obligations and obtained a Yellowstone injunction to protect itself from eviction while the issue was being litigated. The tenant, meanwhile, tried to cure the alleged breaches. The Court of Appeals held that during this period the tenant could not exercise its renewal option. While the Yellowstone injunction had stayed the landlord’s exercise of the eviction remedy, “[t]he injunction could not, in and of itself, relieve plaintiff of the necessity of complying with the condition precedent * * * that plaintiff not be in default” {supra, at 606).
Given this distinction, it is clear that the tenant in the case at bar was still in default while the injunction was in effect. Thus, the injunction did not supersede the lease provision calling for nine percent interest on rent arrears in the event of a default in rent payments (see, Titleserv, Inc. v Zenobio, 210 AD2d 311, 313 [Yellowstone injunction prevented landlord from evicting tenant for non-payment of rent, but not from drawing upon letter of credit]). This type of injunction is “limited to the prevention of a specific irreparable harm” of eviction {supra, at 313) and should not suspend the landlord’s right to resort to monetary remedies permitted by the lease. Accordingly, I would affirm the order and judgment.