Opinion
29248/10.
Decided July 1, 2011.
Plaintiffs Guy Gabai and Rinat Gabai were represented by Anthony Hilton, Esq. of the Law Offices of Joseph J. Mainiero. Defendant 130 Diamond Street LLC was represented by Hattie F. Ragone, Esq. of Tenenbaum Berger LLP.
As presented by the parties, the issue on Plaintiffs' motion is whether a "Yellowstone" injunction is available to toll the time to cure a default in the payment of rent under a residential lease. The Court concludes that, although injunctive relief would not necessarily be precluded in a proper case either by the character of the tenancy, or the nature of the default, it is not available here.
Plaintiffs Guy Gabai and Rinat Gabai are the "Tenant" and defendant 130 Diamond Street LLC is the "Landlord" under a Lease Agreement dated September 12, 2008 for occupancy of Apartment 3A at 130 Diamond Street, Brooklyn. With a Notice to Tenant/Five Day Rent Demand dated November 3, 2010, Defendant notified Plaintiffs of their default in the payment of rent due for the months of October and November 2010 at the monthly rate of $2,650; that they were "required to pay . . . on or before the expiration of five (5) days of service of [the] Notice upon [them], or give up possession of said premises to the Landlord"; and that if they failed "to pay or give up the premises, the Landlord [would] commence summary proceedings under the Statute to recover possession of the premises to the Landlord." Plaintiffs acknowledge that they have been withholding rent, but assert that there are defective conditions in the apartment and the common areas of the building that have not been remedied by Defendant as required.
By Order to Show Cause dated December 15, 2010, issued by another justice of this court, Plaintiffs move for an order, among other things, "enjoining Defendant, its agents and attorneys from filing, or staying if already filed, any proceedings against Plaintiffs in any other court to seek eviction and/or collection/payment of any rent in arrears pending the outcome of the trial in this action," and so restraining Defendant pending the hearing of the motion. (Order to Show Cause dated December 15, 2010.) The original return dated was January 5, 2011 before another justice of this court, but was adjourned at least twice by that justice, for reasons not reflected in the record, before the action was transferred to this Court and the motion heard on May 31, 2011.
Plaintiffs' motion papers include a Summons With Notice dated November 16, 2010, but apparently first served with the Order to Show Cause, stating that the action "is for declaratory and injunctive relief pursuant to CPLR §§ 3001, 6301, 6313, and for damages"; specifically, "temporary, preliminary and permanent injunctive relief, together with damages sustained by reason of defendant's prima facie tortious conduct, and for violations per se regarding the residence known as 130 Diamond Street." Despite the reference to damages, the Summons With Notice does not contain "the sum of money for which judgment may be taken in case of default," as required by CPLR 305 (b). The record does not indicate whether Defendant has made a written demand for a complaint or whether a notice of appearance has been served, so as to require service of a complaint ( see CPLR 3012 [b].)
There is, however, included with Plaintiffs' reply papers a Verified Complaint dated January 17, 2011, which purports to allege nine causes of action and seeks equitable relief and damages. The Verified Complaint does not show the clerk's filing stamp and is not accompanied by an affidavit of service or an answer; nor does the record otherwise show that the Verified Complaint was filed or served.
The record does not show that any action or proceeding is currently pending before the Housing Part of the Civil Court in which Defendant seeks possession of the premises occupied by Plaintiffs. A proceeding was instituted in that court by Plaintiffs against Defendant and the Department of Housing Preservation and Development, seeking, among other things, correction of alleged violations of the Administrative Code. The affidavits of Plaintiffs in support of this motion make clear that they are withholding payment of rent because of conditions in their apartment and the common areas of the building, but the proceeding in the Housing Part would not address their right to do so.
Taking its name from the Court of Appeals decision in First Natl. Stores v Yellowstone Shopping Center ( 21 NY2d 630), "[a] Yellowstone injunction maintains the status quo so that a . . . 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." ( See Graubard Mollen Horowitz Pomeranz Shapiro v 600 Third Ave. Assocs., 93 NY2d 508, 514.) The "limited purpose of a Yellowstone injunction" is "to stop the running of the applicable cure period." ( See id.)
Although courts continue to state that "[a] tenant requesting a Yellowstone injunction must demonstrate that . . . it holds a commercial lease" ( see Trump on the Ocean, LLC v Ash , 81 AD3d 713 , 716 [2d Dept 2011]), it is clear that the courts "have extended the availability of Yellowstone injunctions to residential tenants" ( see Caldwell v American Package Co., Inc. , 57 AD3d 15 , 20 [2d Dept 2008]; see also Post v 120 E. End Ave. Corp., 62 NY2d 19, 24-28; Hopp v Raimondi , 51 AD3d 726 , 727 [2d Dept 2008]; Brodsky v 165-35 Ninth Ave. Corp., 103 AD2d 105, 108-10 [2d Dept 1984].)
Although a dispute about the payment of rent might not ordinarily provide the occasion for injunctive relief on the showing traditionally required ( see Trump on the Ocean, LLC v Ash, 81 AD3d at 715-16), Yellowstone injunctions have been granted in such cases ( see id. at 716-17; see also Graubard Mollen Horowitz Pomeranz Shapiro v 600 Third Ave. Assocs., 93 NY2d 508; 3636 Greystone Owners, Inc. v Greystone Bldg., 4 AD3d 122, 123 [1st Dept 2004] [" Yellowstone relief is proper even where nonpayment of rent is the only issue."]; Lexington Ave. 42nd St. Corp. v 380 Lexchamp Operating, Inc., 205 AD2d 421 [1st Dept 1994].)
To say, however, that Yellowstone injunctions are available to residential tenants, and that Yellowstone injunctions have been granted where the dispute is about the payment of rent, is not to say that Yellowstone relief is necessarily available to toll the cure period in a residential lease where the only alleged breach is the failure to pay rent. In Post v 120 E. End Ave. Corp. ( 16 NY2d 19), the Court of Appeals addressed the effect of RPAPL 753 (subd 4), which applies to holdover tenants in residential dwellings in New York City, on the availability of Yellowstone relief. The provision states that where a summary holdover proceeding to recover possession "is based upon a claim that the tenant or lessee has breached a provision of the lease, the court shall grant a ten day stay of issuance of the warrant, during which time the [tenant or lessee] may correct such breach." ( See RPAPL 753.)
The Court in Post concluded that where RPAPL 753 (4) is applicable and the Civil Court "can grant full relief to the tenant," "the tenant will be unable to make the necessary showing to invoke the equitable powers of Supreme Court." ( See Post v 120 E. End Ave. Corp., 16 NY2d at 28.) But where "the tenant is unable to obtain complete relief in Civil Court," such as where the breach cannot be cured within the ten-day statutory cure and stay period, "then the jurisdiction of Supreme Court is still available." ( See id,; see also Brodsky v 163-35 Ninth Ave. Corp., 103 AD2d 105, 110 [2d Dept 1984].)
And so it has been said that "RPAPL 753 (4), which affords a losing residential tenant a 10-day period to cure lease violations before being subject to removal, has largely eliminated the need for Yellowstone injunctions in New York City." ( See Hopp v Raimondi, 51 AD3d at 727-28.) But RPAPL 753 (4) applies only to summary holdover proceedings, i.e., a proceeding pursuant to RPAPL 711 (1) where the "tenant continues in possession of any portion of the premises after the expiration of his term, without the permission of the landlord."
"Expiration has been construed to mean expiration by lapse of time, i.e., by natural conclusion of the lease term or by operation of a conditional limitation contained in the lease document which works an automatic termination of the tenancy upon the happening of a specific event." ( Matter of Calvi v Knutson, 195 AD2d 828, 830 [2d Dept 1993].) "A termination resulting from the landlord's option to exercise his or her reserved right of reentry upon the tenant's breach of a lease covenant, because it is not recognized to be an expiration by lapse of time, consistently has been recognized not to be an expiration within the meaning of RPAPL 711 (1)." ( Id.; see also TSS-Seedman's, Inc. v Elota Realty Co., 75 NY2d 1024, 1027; Matter of Watervliet Hous. Auth. v Bell, 262 AD2d 810, 811-12 [3d Dept 1999]; Lerner v Johnson, 167 AD2d 372, 374 [2d Dept 1990]; Perrotta v Western Regional Off-Track Betting Corp., 98 AD2d 1, 4-5 [4th Dept 1983].) It is not enough, moreover, that the lease provide for a conditional limitation on the lease term; the landlord must call the provision into operative effect in attempting to bring the lease to an end. ( See id. at 6-7.)
Here, the Lease Agreement provides in subparagraph A of paragraph 23:
"If Tenant fails to cure the default in the time stated, Landlord may cancel the Lease by giving Tenant a cancellation notice. The cancellation notice will state the date the Term will end which may be no less than 10 days after the date of the notice. On the cancellation date in the notice the Term of this Lease shall end."
"[A]ccepted rules requir[e] strict construction of language in written instruments which could work a forfeiture . . . and of the statutory provisions creating the summary proceeding remedy." ( See id. at 6.) The quoted provision of the Lease Agreement does not constitute a conditional limitation because it can not be understood as stating that the term automatically expires on expiration of the cure period if the default is not cured, but rather gives the landlord the option to cancel the lease at some unspecified future date as may be determined by the landlord.
This reading of the Lease Agreement is confirmed by Defendant's Notice to Tenant/Five Day Rent Demand, stating that if Tenant fails to pay or give up possession before the end of the five-day cure period, "Landlord will commence summary proceedings under the Statute to recover possession of the premises to the Landlord." Although not specified in Defendant's notice, the referenced Statute must mean RPAPL 711 (2), which provides for a summary proceeding for a default in the payment of rent after a demand for payment has been served as prescribed in RPAPL 735.
Although Defendant here apparently cannot commence a summary holdover proceeding against Plaintiffs, and, therefore, the ten-day statutory cure and stay period of RPAPL 753 (4) would not be applicable to preclude Yellowstone relief, Defendant may commence a summary nonpayment proceeding, as it said it would do in its Notice to Cure/Five Day Rent Demand, and such proceedings carry their own stay provision. "RPAPL 751 (1) enables a tenant found to be in default in payment of his rent to deposit the rent with the court or to pay the landlord directly within 10 days of the judgment, thereby staying the issuance of a warrant of removal and thus preserving the tenancy." ( Hollymount Corp. v Modern Business Assocs., 140 AD2d 410, 411 [2d Dept 1988].)
Just like RPAPL 753 (4) in the case of summary holdover proceedings, RPAPL 751 (1) in the case of summary nonpayment proceedings "obviat[es] the need for Yellowstone relief" ( see Top-All Varieties v Raj Dev. Co., 151 AD2d 470, 471 [2d Dept 1995].) Where as here, therefore, the landlord serves "a mere notice of nonpayment" ( see Purdue Pharma, LP v Ardsley Partners, LP, 5 AD3d 654, 655 [2d Dept 2004]) as a prerequisite to a statutory nonpayment proceeding, a Yellowstone injunction is unavailable, unless "the tenant has some equity or defense that could not be raised in the summary proceeding" ( see Top-All Varieties v Raj Dev. Co., 151 AD2d at 471; see also M.B.S. Love Unlimited v Jocelyn Realty Assoc., 215 AD2d 537, 538 [2d Dept 1995]; Hollymount Corp. v Modern Business Assocs., 140 AD2d at 411.)
Plaintiffs here make no such showing, and the Court will not speculate, particularly in light of the uncertainty in the record as to the status of the pleadings, and the policy that "Civil Court is the strongly preferred forum for resolving . . . landlord-tenant disputes" ( see Brecker v 295 Cent. Park W., Inc. , 71 AD3d 564 , 565 [1st Dept 2010]; see also Post v 120 E. End Ave. Corp., 62 NY2d at 28; All 4 Sports Fitness, Inc. v Hamilton, Kane, Martin Enters., Inc. , 22 AD3d 512, 513 [2d Dept 2005].)
For the same reasons, although injunctive relief may also be theoretically available pursuant to CPLR 6301 ( see Nobu Next Door, LLC v Five Arts Hous., Inc. , 4 NY3d 839 , 840), Plaintiffs have not established "danger of irreparable injury in the absence of an injunction" or "a balance of equities in [their] favor" ( see id.)
Moreover, in any event, "[s]ince courts cannot reinstate a lease after the lapse of time specified to cure a default . . ., an application for Yellowstone relief must be made not only before the termination of the subject lease — whether that termination occurs as a result of the expiration of the term of the lease, or is effectuated by virtue of the landlord's proper and valid service of a notice of termination upon the tenant after the expiration of the cure period — 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." ( Korova Milk Bar of White Plains, Inc. v PRE Props., LLC , 70 AD3d 646 , 647 [2d Dept 2010] [internal quotation marks and citation omitted]; see also Goldcrest Realty Co. v Bronx River Road Owners, Inc. , 83 AD3d 129 , 132-33 [2d Dept 2011].) Moreover, "motions for preliminary injunctions pursuant to CPLR 6301, like motions for Yellowstone injunctions, must also be made prior to the expiration of the cure period." ( Id. at 135.)
Here, the Lease Agreement provides for a three-day cure period for the "[f]ailure to pay rent or added rent on time" (¶ 23), but Defendant's November 3, 2010 notice specified five days. In any event, since Plaintiffs' application for an order to show cause with a temporary restraining order could not have been made earlier than the commencement of this action on November 30, the application was clearly untimely.
Plaintiffs' motion must, therefore, be denied.