BALLINTEER CORP v. SNRP WEST 37 LLC (2023)

Order, Supreme Court, New York County (Verna L. Saunders, J), entered October 31, 2022, which unconditionally granted plaintiff's motion for a Yellowstone injunction, unanimously affirmed, without costs.

The court providently exercised its discretion in determining that an undertaking was not necessary to protect defendant landlord's interests in light of plaintiff's showing that it invested a substantial amount in the premises and has a colorable defense regarding arrears and that it was unable to use the premises as a restaurant for an extended period during the pandemic (see WPA/Partners v. Port Imperial Ferry Corp., 307 A.D.2d 234, 237, 763 N.Y.S.2d 266 [1st Dept. 2003];  Kuo Po Trading Co. v. Tsung Tsin Assn., Inc., 273 A.D.2d 111, 111, 709 N.Y.S.2d 89 [1st Dept. 2000]).  Notably, plaintiff submitted evidence that the premises were unavailable not only due to Executive Orders issued in response to the Covid–19 pandemic, but due to defendant's continued use of the premises as a storage facility, even after indoor dining resumed in October 2020, so that an issue of fact exists concerning whether plaintiff is liable for rental arrears, and if so, the amount.

Although the court may direct a tenant to remit use and occupancy as a condition to Yellowstone relief (Gap, Inc. v. 44–45 Broadway Leasing Co., LLC, 191 A.D.3d 549, 550, 143 N.Y.S.3d 6 [1st Dept. 2021];  RPAPL 745[2][a]), it also retains broad discretion in awarding use and occupancy pendente lite (Alphonse Hotel Corp. v. 76 Corp., 273 A.D.2d 124, 124, 710 N.Y.S.2d 890 [1st Dept. 2000]), and the “remedy for any over or underpayment [of use and occupancy] is a speedy trial” (Mushlam, Inc. v. Nazor, 104 A.D.3d 483, 961 N.Y.S.2d 120 [1st Dept. 2013]).  Here, plaintiff submitted evidence that defendant had deprived it of use of the premises by using it as a storage facility, and the record on appeal does not include any opposing evidence from defendant, although the order on appeal references an affidavit from defendant's managing member.  Absent evidence that plaintiff has use of the premises, we cannot determine that the court improvidently exercised its discretion in declining to order ongoing rent or use and occupancy at this time.  We note, however, that issuance of a Yellowstone injunction does not “relieve plaintiff of the necessity of complying” with the lease terms, including payment of rent and arrears, but only protects plaintiff from eviction (Graubard Mollen Horowitz Pomeranz & Shapiro v. 600 Third Ave. Assoc., 93 N.Y.2d 508, 515, 693 N.Y.S.2d 91, 715 N.E.2d 117 [1999]).

Finally, plaintiff need not, as a prerequisite to the granting of a Yellowstone injunction, demonstrate a likelihood of success on the merits (Herzfeld & Stern v. Ironwood Realty Corp., 102 A.D.2d 737, 738, 477 N.Y.S.2d 7 [1st Dept. 1984]).  The focus is on maintaining the status quo in Yellowstone applications.