Tenant Must Seek Yellowstone Injunction Before Cure Period Ends

On November 22, 2017, the Second Department issued a decision in Riesenburger Properties, LLLP v. Pi Associates, LLC, 2017 NY Slip Op. 08294, affirming the denial of a Yellowstone injunction because the tenant sought the injunction after the time to cure the defects alleged by the landlord had expired, explaining:

A Yellowstone injunction maintains the status quo so that a commercial tenant, when confronted by a threat of termination of its lease, may protect its investment in the leasehold by obtaining 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 of the lease. To obtain a Yellowstone injunction, the tenant must demonstrate that (1) it holds a commercial lease, (2) it received from the landlord either a notice of default, a notice to cure, or a threat of termination of the lease, (3) it requested injunctive relief prior to both the termination of the lease and the expiration of the cure period set forth in the lease and the landlord's notice to cure, and (4) it is prepared and maintains the ability to cure the alleged default by any means short of vacating the premises.

An application for Yellowstone relief must be made not only before the termination of the subject lease but must also be made prior to the expiration of the cure period set forth in the lease and the landlord's notice to cure. Where a tenant fails to make a timely request for a temporary restraining order, a court is divested of its power to grant a Yellowstone injunction.

Here, the Supreme Court properly denied the Pi defendants' motion for a Yellowstone injunction because they did not move for injunctive relief until after the cure period expired and after the notice of cancellation of the lease had been served. Contrary to their contentions, the notices of default were properly served according to the terms of the lease.

(Internal quotations and citations omitted) (emphasis added).

We litigate Yellowstone injunctions for both landlords and tenants. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you are involved in a dispute regarding the termination of a commercial lease because of a default under the lease.