Adam Leitman Bailey P.C. Secures Yellowstone Injunction Victory for Midtown Manhattan Personal Injury Law Firm
The burgeoning and crowded Manhattan real estate market, with commercial tenants jostling for every inch of space and aggressive commercial landlords seeking to capitalize on profits, creates the perfect habitat for the Yellowstone injunction to thrive. These injunctions, taking their name from the landmark New York Court of Appeals case of National Stores, Inc. v. Yellowstone Shopping Center, 21 N.Y.2d 630 (1968), is an emergency application to State Supreme Court by commercial tenants who have been served with a notice to cure by their landlord alleging lease defaults. The injunction, when successful, obtains an extension from a court to cure the default and prevent the landlord from terminating the tenant’s valuable leasehold interest.
After purchasing a 25-story mixed-use residential and office tower in midtown Manhattan, a large and prominent real estate developer sought to empty the building of its commercial tenants holding long-term lease in order to maximize profits. As part of its scheme, the landlord struck deals with 10 out 14 office tenants at the building and served bogus notices to cure upon the tenants that refused buyout offers and chose to remain in the building for the duration of their leases. A small personal injury law firm with a handsome suite of offices in the building and the holder of a long-term lease was caught right in the middle of the greedy developer’s crosshairs and was similarly served with a notice to cure alleging that the law firm was in default of the lease for subletting without the landlord’s consent and failing to maintain the necessary insurance coverage. Under threat of losing their law practice, the law firm turned to Adam Leitman Bailey, P.C. attorneys for assistance.
While the legal elements a commercial tenant must demonstrate to be entitled to a Yellowstone injunction seem straightforward enough, given the high stakes involved, only experienced attorneys thoroughly familiar with the subtle minutiae of this doctrine should be trusted to stave-off a tenant’s eviction. This case demonstrates some of the complexities involved in obtaining a Yellowstone Injunction.
After assessing the lease and related documents, Adam Leitman Bailey, P.C. attorneys proceeded with a two-pronged attack. First, Adam Leitman Bailey, P.C. attorneys moved by order to show cause seeking Yellowstone injunctive relief arguing that contrary to the landlord’s assertions, the client did in fact have the requisite insurance in place for the entire duration of the lease and that any alleged default as a for unauthorized subletting was waived by the prior landlord who had acquiesced to the law firm’s subtenants by placing the subtenants’ names on the lobby directory and issuing them key cards for access to the building. Second, utilizing New York’s recently minted Commercial Tenant Harassment Law, Adam Leitman Bailey, P.C. brought causes of actions against the landlord for purposeful tenant harassment under the guise of construction to force the law firm out of the building. Adam Leitman Bailey, P.C. attorneys drafted a complaint alleging that the landlord had purposefully left the area outside the law firm’s office in a state of complete disrepair with hanging wires and unfinished ceilings and walls. The complaint further alleged that the construction disrupted essential services such as elevator service, air conditioning, and water and generated noise that was both unreasonable and intolerable, forcing the law firm repeatedly to close its practice for several days on end.
Despite the landlord’s attorneys’ oral and written opposition, in a closely written Decision and Order, the court agreed with the arguments advanced by Adam Leitman Bailey, P.C. and granted the Yellowstone Injunction. The court ultimately concluded that the law firm should not be forced to forfeit its valuable leasehold interest after the tenant had demonstrated a desire and ability to cure any alleged lease default. With the tenant’s lease secure, the case against the developer/landlord for purposeful tenant harassment will now move forward unimpeded.
Adam Leitman Bailey, P.C. attorneys Adam Leitman Bailey and Colin Kaufman on oral argument and Dov Treiman on the papers secured the win for the tenant and continue to represent the tenant in the underlying litigation against the landlord.