Court Opinion

ID: 9962546
Source: CourtListenerOpinion
Date Created: 2024-04-23 20:10:33.054973+00
Date Added: 2024-06-11T08:19:01.377413
License: Public Domain

170 Tlllary Corp. v Gold Tillary Realty LLC
               2024 NY Slip Op 31338(U)
                     April 16, 2024
             Supreme Court, Kings County
        Docket Number: Index No. 510354/2022
                Judge: Leon Ruchelsman
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                       publication.
  FILED: KINGS COUNTY CLERK 04/16/2024 02:09 PM                                  INDEX NO. 510354/2022
  NYSCEF DOC. NO. 142                                                      RECEIVED NYSCEF: 04/16/2024

           SUPREME COURT OF THE STATE OF NEW YORK
           COUNTY OF KINGS .: CIVIL TERM: COMMERCIAL 8
           ------- ------ ----- -------------- ----- X
           17Q TlLLARY CORP.,
                                                 Plaintiff,          Decision and order

                             "'""against -                         Index No. 510354/2022

           GOLD TILLARY REALTY LLC,
                                                 Defendant,                April 16, 2024
           ------- .------ .-------------------. -------x
           PRESENT: HON. LEON RUCHELSMAN                                   Motion Seq. #4

                       The defendant has moved pursuant to CPLR §2221 seeking to

           reargue a decision and order dated August          ~i   2023.    The plaintiff

           has opposed the motion.           Papers were submitted by the parties and

           arguments held.         After reviewing all the arguments, tl1is court

           now makes the fpllowing determination.

                       As recorded in prior orders, on October 7, 1999 the

           plaintiff tenant entered into a lease with lancUord concerning

           the rental of space located at 170 Tillary Street in Kings

           County.         A riotice demanding rent was served on May 8, 2023

           alleging the failure to pay water and sewer charges through May

           2023 and real estate taxes and rent from November 2021 through

           May 2023.         The tenant sought and was granted a Yellowstone,

           staying any termination .of the lease pending the resolution of

           th~ disp:ute regarding the demand.          The court held there were

           disputed• is.sues whether the amourtt sought was clas~ified 1:3.s rent.

           Moreoye.r, the. court explained th9 t even i,f the .amount s.c:iught was

           rent a Yellowstone was the proper relief following a trotice to

           ·CU:i:e ~

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  FILED: KINGS COUNTY CLERK 04/16/2024 02:09 PM                           INDEX NO. 510354/2022
  NYSCEF DOC. NO. 142                                               RECEIVED NYSCEF: 04/16/2024

                   The defendant has now moved seeking to reargue that

           determination.     They assert that they never filed a notice to

           cure, rather, they filed    a simple rent demand.    They further

           arguie that defaulting a rent demand results in anon-payment

           proceeding.     This is different is substance than a holdover

           proceeding which results when a tenant fails to cure pursuant to

           a notice to cure.     Consequently, a Yellowstone is only available

           to toll a holdover proceeding and not a non-payment proceeding.

           Therefore, the defendant seeks reargument and upon such

           reargument the termination of the Yellowstone injunction.

                                     Conclusion~ of Law

                   A motion to .teargue rnust be based upon the fact the court

           overlooked or misapprehended fact .or law or for some othex reason

           mistakenly arrived at in its earlier decision (Deutsche Bank

           National Trust CcL,    v. Russo, 170 AD3d 952, 96 NYS3d 617 J2d
           Dept., 2019]).

                   As recorded in the prior decision,   there are seriot.1.s factual

           issues whether the additional rent Sought can be classified as

           rent.     Thus, the notice dated May 8, 2023, regardless of how it

            is classified or labeled, is not a mere rent demand.        If the

           additional rents sought are .riot deemed rent th~n t.h.e dema.nd is,

            in essence, a notice to cure which maj be the snbjett of a
           Yellowstone injunction.     Thedefertdant concedes the possibility

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  FILED: KINGS COUNTY CLERK 04/16/2024 02:09 PM                             INDEX NO. 510354/2022
  NYSCEF DOC. NO. 142                                                 RECEIVED NYSCEF: 04/16/2024

           of this reality, however, asserts it does not matter.           The

           defendant argues that even if the amounts sought are not rent and

           the payments of real estate taxes to the City amount to a

           leasehold covenant ''the consequence would merely be that

           PTairi.tiff would have a defense to a non-payment prnceecting

           predicated on these amounts. This would in no way convert the New

           Rent Demand to a notice to cure 11 (see, Memorandum in Support,

           page 6 [NYSCEF Doc. No. 128]).          However, other than the payment

           of strict rent there would be no basis to conduct a non-payment

           proceeding at all.     Indeed, there is no dispute the tenant has

           made all strict rental payments and this dispute only involves

           other charges including taxes and sewer payments and whether

           these other charges may properly be Classified as rent.           Thus,

           there would be no non-payment proceeding at all in which to

            assert these defenses.     Indeed, these defenses should be raised

            in a holdover proceeding.     Therefore, as already explained, the

            notice dated May 8, 2023 could only he challenged by seeking a

            Yellowstone regardless of the notice's purported representations

            as nothing more than a rent demand.        Further, it is well settled

            that when questions of fact exist a Yellowstone injunction should

            hot be denied since doing so would adjudicate the underlying case

            ( se-e, Boi 'To Go Inc. , v. Second 8.00 No. 2 LLC, 58 AD3d 482, 8 7 0

            NY'S2d 334 [Pt Dept • .1 2009], W & G Wines LLC v. Golden Chariot

            Holdings LLC,   46 M.Isc3d 1202 (A),    7 .NYS3d 245· [Supreme Court Kings

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  FILED: KINGS COUNTY CLERK 04/16/2024 02:09 PM                                                     INDEX NO. 510354/2022
  NYSCEF DOC. NO. 142                                                                       RECEIVED NYSCEF: 04/16/2024

              County 2014]) .         Thus, the fact there are questions about the

              nature of the additional rent does not mean a Yellowstone cannot
              be granted.

                       Additionally, the legal truism that a tenant is not faced

              with the termination of a lease in a non,...pay'ment proceeding: is

              really beside the point.               As explained, the additional rent, at

              this juncture, ha:s not been adjudicated as rent a:nd therefore a
              non-payment proceeding is not the right venue to adjudicate these

              claims.       Indeed, these arguments can be viewed as a request to

              reargue the underlying determination that the additional rent

              sought may not be base rent.                  While such arguments are not

              expressly made, the repeated insistence that a non-payment
              proceeding is the proper method of adjudicating these issues,

              highlights such relief.               Based on the reasons outlined in the

              prior decision the court declines to reconsider the conclusions

              reached there.
                      Consequently, since the claims contained in the May B, 2023
              llotice s.eek compliance regarding matters other than rent a

              Yellowstone is proper.               Therefore, the motion seeking reargurnent

              is denied.

                      Turning to the issue of ari Undertaking, it is well settled

              that upon .granting a Yellowstone inj unctiOn the court may impose
               reasonable .conditions iricludihg the po·sting of an undertaking.

               (Sportsplex of Middletown, :tnc., v. Catskill Re.gidnal Off:..,Track

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 FILED: KINGS COUNTY CLERK 04/16/2024 02:09 PM                                   INDEX NO. 510354/2022
 NYSCEF DOC. NO. 142                                                     RECEIVED NYSCEF: 04/16/2024

          Betting Corp., 221 AD2d 428,       633 NYS2d 588 [2d Dept., 1995]) .

          Thus, the imposition of an undertaking is discretionary (see,

          Mayfair Super Markets Inc., v. Serota, 262 AD2d 461, 692 NYS2d

          415 [2d Dept., 1999]).      An undertaking would be appropriate for

          an amount rationally related to the damages that can be suffered

          if the relief should not have been granted (Bennigen's of New

          York Inc., v. Great Neck Plaza L. P., 223 AD2d 615;            636 NYS2d 835

          [2dDept., 1996]).

                In this case the defendant has not presented any damages

          that it could incur if the Yellowstone should not have been

          issued.      In fact, the defendant admits i t seeks an undertaking

          just to insure the plaintiff maJntains the ability to cure.

          However, that is an improper basis since that does not relate to

          the damages if the injunction should not have been granted (see,

          East 54 th Operating LLC v. Brevard Owners LLC, 223 AD3d 407, 202

          NYSJd 320 [ rt Dept., 2024], Ballirtteer Corp v. SNRP West 37 LLC,

          217 AD3d 597, 191 NYS3d 632 [Pt Dept., 2023]).           This is

          especially true in this case where any taxes owed are stayed

          pending a determination rega:tding the tenant's tax certiorari

          action instituted ag,3.inst New York City.        Thus, no damages can

          accrue to the defendant.         Therefore, the motion seeking an

          undertaking is denied at this time.

               So ordered.
                                  ENTER:                                   ;.'

          DATED.: April 16, 2024
                  Brooklyn N.Y.                Han. Leon RU:chel~mP- •
                                               JSC

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