STONY BROOK TECHNOLOGY CENTER ASSOCIATION INC v. SRM 23 LLC LLC (2025)

The matter before us is a dispute concerning the operation of a cannabis dispensary. Plaintiffs’ application obliges the Court to decide the question of whether a restrictive covenant bars a use which has been sanctioned by both State and Town government.

This is an action sounding, inter alia, in breach of contract and nuisance as well as a statutory claim under RPL 339-j. Plaintiffs seek a permanent injunction and monetary damages. The instant motion, brought by order to show cause is an application for a preliminary injunction. On August 13th, 2025, the Court issued a temporary restraining order which (pending the determination of this motion) enjoined defendants from operating a cannabis dispensary at the locus in quo.

Defendants oppose this application and brought a separate motion by order to show cause seeking to renew and reargue the issuance of the temporary restraining order on August 13th. Defense counsel also requested that their papers in support of their 2221 motion be considered as the opposition to plaintiffs’ motion.

Initially, the Court would be remiss if it did not compliment Messrs. Egan, Schriever and Holland for the thoughtful, zealous advocacy they brought forward on behalf of their respective clients. Such counsel honor the Court.

As stated in Merling v. Ash Dev., LLC, 198 A.D.3d 743, 156 N.Y.S.3d 257 (2d Dept. 2021),

The party seeking a preliminary injunction must demonstrate (1) a likelihood of success on the merits, (2) danger of irreparable harm in the absence of an injunction, and (3) a balance of the equities in favor of the injunction [citations omitted].

CPLR §§ 6301 and 6313(a) provide for the granting of a temporary restraining order pending the hearing for a preliminary injunction where it appears that immediate and irreparable injury, loss or damage will result unless the defendant is restrained before the hearing can be had.

Although the standard of proof for the granting of a preliminary injunction is clear and convincing evidence, the case of Yonkers Racing Corp. v. Catskill Reg'l Off-Track Betting Corp., 143 A.D.2d 345, 346, 532 N.Y.S.2d 407, 408 (2d Dept. 1988) acknowledges that a TRO may be based “․ on a demonstration ․ [of] ․ immediate and irreparable injury” in the absence of restraint (at 346 citing CPLR 6301).

As discussed below, plaintiffs have met the more stringent standard and shall be granted the relief requested.

The Stony Brook Technology Center (aka the “Complex”, “Tech Center”) is a 103-acre technology park located in East Setauket. The defendant, SRM, is the owner of the Tech Center unit located within the Tech Center at 19 Technology Drive. The defendant Strong Strains is a tenant of SRM and is now operating a retail cannabis dispensary at the locus in quo. It is uncontroverted that Strong Strains has obtained the necessary license and permit from the State of New York and the Town of Brookhaven to operate a cannabis dispensary.

It is uncontroverted that the individual condominium units are burdened with restrictions on their use. They consist of (1) a Declaration of Restrictions filed with the County Clerk (“Restrictive Covenant”) and (2) the “Plan of Condominium Ownership: Declaration of Northgate Plaza at Stony Brook Pursuant to Article 9-B of the Real Property Law of the State of New York” (the “Plan”) filed with the Suffolk County Clerk. Additionally, Northgate Plaza (the sub-association that manages Tech Center units 7 through 21) operates under its By-Laws. All these documents prohibit uses in the units that contravene federal law. (Exhibits B, C, & D of the Complaint).

Section 1 of the Restrictive Covenant reads in pertinent part as follows:

In addition, no part of the Property or any improvements thereon shall be used or occupied for any purpose which in Declarant's opinion constitutes a nuisance or is noxious or offensive or results in the emission or creation outside of any building of fumes or noise; or violates any federal, state, county or town laws

Section 19 of The Tech Center's Offering Plan “Covenants and Restrictions” at paragraph (f) states

No ․ unlawful use shall be made of the property nor any part thereof and all valid laws, zoning ordinances and regulations of all governmental bodies having jurisdiction thereof shall be observed

Section 6(3) of Article IX (“Rules and Regulations”) of the Bylaws provides:

No Unit Owner shall permit anything to be done, or kept in his Unit, or in the common elements, which will result in an increase or the cancellation of insurance on the Building, or contents thereof, or which would be in violation of any law or regulation. No waste shall be committed on the common elements. (italics ours)

It is uncontroverted that the manufacture, possession, and/or distribution of cannabis is illegal under federal law (see, e.g., 21 U.S. Code § 841[a]).

On December 12th, 2024, Mr. Mike Smith, Alisa Tarsa, Seth Walker and Mallory Guerin, on behalf of the Board of Managers and Managing Agent of Northgate Plaza at Stony Brook Condominium sent a letter which listed as its subject “Request for Unit Owner Vote on Special Permit and Variance Request for Cannabis Retail Sales at Unit #19 (19 Technology Drive)” to all unit owners.

The letter detailed that the defendant Dr. Sandhu proposed the operation of a cannabis retail establishment at 19 Technology Drive, within the Northgate Plaza at Stony Brook Condominium. The letter specified

The proposal seeks approval for changes to the current L-1 zoning regulations, which require the consent of unit owners. As such, your vote is necessary to approve or reject the requested special permit and variance.

With the exception of the defendant Dr. Sandhu, all the unit owners voted against the proposal.

The defendants assert that this action by the other owners did not constitute a rejection of the proposed use. The Court disagrees. Although the wording of the proposal did not state that it was a vote to disallow the cannabis dispensary, the disapprobation of the other unit owners was clearly manifest.

Despite this action of the plaintiffs and being charged with knowledge of the negative easements governing the use of the realty, the defendants continued their preparations to open the facility.

Before their opening and on or about June 9, 2025, plaintiffs sent defendants a cease-and-desist letter outlining the above issues as well as defendants’ violation of the Tech Center's sign regulations. (Exhibit F)

According to Dr. Sindhu's affirmation, the business opened to the public on June 9th, 2025.

Before we consider if the plaintiffs have met their burden and established the tri-partite prerequisite for a preliminary injunction, the Court will first consider the defendants argument that the plaintiffs waived their right to enforce the covenant and are estopped from seeking this relief.

Defendants bring to the Court's attention certain actions of Mr. Smith, specifically: that he approved of the defendants’ business and actively assisted them. “[T]his is not conduct evincing an unequivocal intention to enforce the “unlawful use” restriction upon which plaintiffs’ entire case rests — it shows the opposite of an intent to enforce that restriction. Defendants relied to their detriment on this conduct by moving forward after the December 2024 vote, with Smith's explicit encouragement.” (NYSCEF Doc No. 22)

In support of this contention, Defense counsel cites to the holdings in Bd. of Managers, Washington's Headquarters Townhouses Condo. v. Gottlieb, 186 A.D.2d 525, 527, 588 N.Y.S.2d 347 (2d Dept. 1992); Airco Alloys Division Airco Inc. v. Niagara Mohawk Power Corp., 76 A.D.2d 68, 81, 430 N.Y.S.2d 179 (4th Dept. 1980) and Nassau Trust Co. v. Montrose Concrete Products Corp., 56 N.Y.2d 175, 184, 451 N.Y.S.2d 663, 436 N.E.2d 1265 (1982)

In Nassau Trust Co., the Court opined

an estoppel “rests upon the word or deed of one party upon which another rightfully relies and so relying changes his position to his injury” (Triple Cities Constr. Co. v. Maryland Cas. Co., 4 N.Y.2d 443, 448 [176 N.Y.S.2d 292, 151 N.E.2d 856 (1958)]; Lynn v. Lynn, 302 N.Y. 193, 205 [97 N.E.2d 748 (1951)]; Metropolitan Life Ins. Co. v. Childs Co., 230 N.Y. 285, 292 [130 N.E. 295 (1921)]). It is imposed by law in the interest of fairness to prevent the enforcement of rights which would work fraud or injustice upon the person against whom enforcement is sought and who, in justifiable reliance upon the opposing party's words or conduct, has been misled into acting upon the belief that such enforcement would not be sought (White v. La Due & Fitch, 303 N.Y. 122, 128 [100 N.E.2d 167 (1951)]). While estoppel requires detriment to the party claiming to have been misled, waiver requires no more than the voluntary and intentional abandonment of a known right which, but for the waiver, would have been enforceable (at 183 citing City of New York v. State of New York, 40 N.Y.2d 659 [389 N.Y.S.2d 332, 357 N.E.2d 988 (1976)]; Davison v. Klaess, 280 N.Y. 252 [20 N.E.2d 744 (1939)]).

A fair review of the proffered cases indicates that they actually favor the plaintiffs’ cause. In Bd. of Managers, Washington's Headquarters Townhouses Condo. v. Gottlieb, supra, estoppel was found to be appropriate because the plaintiff condominium board never formally demanded the cessation of the offending conduct and “․ at other times explicitly acquiesced in [defendant's] conduct” (at 525).

By contrast, the plaintiffs in the matter sub judice have established that they opposed the defendants proposed use of Unit 19 and took a vote disapproving of such behavior. We acknowledge the defendants’ proof of communications between Mr. Smith and Dr. Sindhu which indicate that the former had privately expressed support for the dispensary. When this is juxtaposed, however, against the fact that there was a clearly worded covenant forbidding the defendants desired use, any reliance on Mr. Smith's utterances cannot be considered reasonable. Dr. Sindhu proceeded at foreknowledge of the risk and cannot now use his current financial distress (or the straitened circumstances of his unfortunate employees) as a shield to continue violating a restrictive covenant.

The fact patterns in Airco and Nassau Trust Co.(a breach of contract and a mortgage foreclosure case respectively) also limit their utility.

The Court in Nassau, however, made reference to an earlier decision, Imperator Realty Co. v. Tull, 228 N.Y. 447, 127 N.E. 263 (1920), in which the immortal Cardozo distilled waiver and estoppel to their essence: “The truth is that we are facing a principle more nearly ultimate than either waiver or estoppel, one with roots in the yet larger principle that no one shall be permitted to found any claim upon his own inequity or take advantage of his own wrong” (concurrence at 457 citing Riggs v. Palmer, 115 N.Y. 506, 22 N.E. 188 (1889)).

Who then is the wrongful actor? Mr. Smith, who publicly opposed the offending use yet purportedly feigned acquiescence in private communiques to Dr. Sindhu? Or the defendants, who facing unanimous disapprobation from their fellow unit owners and, most importantly the stark prohibition of a restrictive covenant, conceived and brought to fruition a business which exists in violation of the laws of these United States? This Court finds that the defendants cannot assert estoppel in light of their own admitted behavior.

Ultimately, the actions of Mr. Smith are of no moment. The restrictive covenant did not require board action to govern the actions of the defendants. Given the clear, unambiguous language found in the negative easement, the relief which the defendants desire can only be provided by a successful plenary action “to obtain a declaration with respect to enforceability of the restriction” (RPAPL § 1951) or by the federal government's repeal of those provisions of the CSA of 1970 which trigger the restrictive covenant's prohibitions

Moreover, in order for estoppel to apply, the Court would be tacitly condoning (and enforcing) an agreement between Mr. Smith and Dr. Sindhu to violate a Federal Statute (see Kelley v. Levitt & Sons, 262 A.D. 92, 28 N.Y.S.2d 175 [Ap.p Div. 2d Dept. 1941]). It has been pointed out by more learned Courts that the federal government has been refraining from prosecuting under the CSA of 1970. This is a course fraught with peril. I remind the parties that absent a change in federal law, let Lord Coke's venerable, yet viable maxim Dormiunt leges aliquando, nunquam moriuntur.¹ serve to caution. Estoppel cannot lie under such circumstances.

The foregoing discussion constrained the Court to consider the merits of the plaintiffs claim for breach of contract. We find that, by clear and convincing evidence, the movants have proven a likelihood of success (EdCia Corp. v. McCormack, 44 A.D.3d 991, 993, 845 N.Y.S.2d 104 [2d Dept. 2007])

We next address the defense's argument that the granting of a preliminary injunction would impermissibly disturb the status quo. Relying on the holdings in Zoller v. HSBC Mortgage Corp. (USA), 135 A.D.3d 932, 933, 24 N.Y.S.3d 168 (2d Dept. 2016) and MacIntyre v. Metropolitan Life Ins. Co., 221 A.D.2d 602, 602, 634 N.Y.S.2d 180 (2d Dept. 1995), the defendants posit that the sought after relief constitutes a mandatory injunction which would require a finding of “extraordinary circumstances” (Zoller at 933, 24 N.Y.S.3d 168). This argument is problematic. Initially, the Court finds that the status quo is the operation of a business in accord with the restrictive covenant. Additionally, as noted above, the defendants proceeded with their business plan even though they were forewarned by clear language from the restrictive covenant and the Board of Managers that this was unacceptable.

Defendants also argue that the plaintiffs seek the ultimate relief in the complaint and cite to Bd. of Managers of Wharfside Condo. v. Nehrich, 73 A.D.3d 822, 824, 900 N.Y.S.2d 747 (2d Dept. 2010); St. Paul Fire & Marine Ins. Co. v. York Claims Serv., Inc., 308 A.D.2d 347, 765 N.Y.S.2d 573 (1st Dept. 2003); SHS Baisley, LLC v. Res Land, Inc., 18 A.D.3d 727, 728, 795 N.Y.S.2d 690 (2d Dept. 2005).

In order to obtain a preliminary injunction which has the effect of granting the ultimate relief sought, the party seeking same must show “extraordinary circumstances” are present. (Nehrich at 824, 900 N.Y.S.2d 747).

The actions of the defendants, described above, demonstrate an obdurate desire to commence a business which a reading of any of these documents (The Declaration of Restrictions; The Plan or The By-Laws) would have shown to be forbidden. In this light, the interest in enforcing the restriction on use rises to the level of an extraordinary circumstance.

The case of SHS Baisley, LLC v. Res Land, Inc., supra, involved a Yellowstone Injunction which brings us to defendants’ argument that the Court should apply, by analogy, the caselaw pertaining to same.

A Yellowstone Injunction is an equitable device limited to commercial leases; it allows a commercial tenant to, “․ 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.” (146 Broadway Assocs., LLC v. Bridgeview at Broadway, LLC, 164 A.D.3d 1193, 1195, 84 N.Y.S.3d 241, 244 [2d Dept. 2018]).

In order 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.” (JT Queens Carwash, Inc. v. 88-16 N. Blvd., LLC, 101 A.D.3d 1089, 1090, 956 N.Y.S.2d 536 (2d Dept. 2012), quoting Barsyl Supermarkets, Inc. v. Avenue P. Assoc., LLC, 86 A.D.3d 545, 546, 928 N.Y.S.2d 45 [2d Dept. 2011]).

This argument, though eloquently made, has a fatal defect. In obtaining a Yellowstone injunction, the tenant must possess an ability to cure the defect which gives rise to the Landlord's desire to end the tenancy. In this case, the “cure” is for the defendants to cease the operation of the cannabis dispensary, precisely the relief sought in the complaint.

The next factor for review is whether the plaintiffs have shown that they will suffer irreparable harm if they do not obtain a preliminary injunction.

Defendants contend that the plaintiffs have failed to show any “concrete harm” as a result of the continued operation of the cannabis dispensary.

Against the defendants’ position, however, are the array of cases submitted by plaintiffs: Moody v. Filipowski, 146 A.D.2d 675, 537 N.Y.S.2d 185 (2d Dept. 1989); Board of Mgrs. of Bond Parc Condominium v. Broxmeyer, 62 A.D.3d 925, 881 N.Y.S.2d 106 (2d Dept. 2009); N. Haven Point Ass'n, Inc. v. 27 on the Bluff LLC, 2023 NY Misc LEXIS 66505, Index No. 606082/2023 (Sup Ct Suffolk Cty, June 13, 2023); Board of Mgrs. of the S. Star v. Grishanova, 2013 N.Y. Slip Op. 33560(U), 2013 WL 497180 (Sup. Ct. NY Cty., Feb. 7, 2013); Board of Mgrs. of Clinton W. Condominium v. Desmond, 2018 N.Y. Slip Op. 30907(U), 2018 WL 2180239 (Sup. Ct. NY Cty., May 11, 2018); and Beechwood Plainview Old Bethpage LLC v. Grindell, 2019 NY Misc LEXIS 13735 (Sup Ct Nassau Cty, May 14, 2019).

In Moody v. Filipowski, the defendants were constructing a dwelling on property which was the subject of negative easement limiting the realty's use to beach recreation and swimming. In granting the preliminary injunction, the Court noted that “continued construction would interfere with the plaintiffs’ full use of the property.” (Id. at 679, 537 N.Y.S.2d 185)

The proof offered by the plaintiffs on the subject of irreparable harm is found in the Affidavit of Mr. Michael Smith dated August 5th, 2025

A substance abuse medical treatment center operates at 21 Technology Drive, just next door to defendants’ dispensary. Defendants’ operation has impeded and will continue to impede that business's ability to treat patients. A childcare center and a school for special needs children are located on Research Way, approximately 1,500 feet and 1,000 feet respectively from defendants’ dispensary. The dispensary also operates next to my gym, Outlift Athletics, which occupies 13, 15, and 17 Technology Drive. My gym is a family-oriented operation with beginner classes and customers of all age groups, including children and the elderly. Since defendants’ opening, customers and employees of my gym have complained of cannabis smoke and aroma emanating from the parking lot and the Unit. The dispensary use ․ is also incompatible with the Tech Center's purpose and general light-industrial uses. The Tech Center is not made to accommodate busy retail uses such as defendants’ operation. It is already disruptive to the parking and traffic in and around Northgate Plaza. Customers are and will be less likely to frequent the above-referenced businesses as a result of defendants’ operation.

The Court finds this to be a sufficient demonstration, by the necessary quantum of proof, of irreparable harm

With respect to the balancing of competing equities, the Court must decide whether the irreparable harm that the plaintiffs would suffer in the absence of an injunction “substantially outweighs the injury that the injunctive relief would cause to the defendant[s]” (Xiaokang Xu v. Xiaoling Shirley He, 147 A.D.3d 1223, 1225—26, 48 N.Y.S.3d 530, 534 [3rd Dept. 2017] citing Parry v. Murphy, 79 A.D.3d 713, 715, 913 N.Y.S.2d 285 [2d Dept. 2010]; see Nassau Roofing & Sheet Metal Co. v. Facilities Development Corp., 70 A.D.2d 1021, 1022, 418 N.Y.S.2d 216, 218 (3d Dept. 1979), appeal dismissed 48 N.Y.2d 654).

The concepts of irreparable harm and balancing of the equities are slightly different. The former focuses on an individual litigant as well as the urgency of the moment. The latter is not so constrained by time and allows the Court to look at the prospect of the ultimate consequences of granting or denying a preliminary injunction.

Defense counsel states that if the motion is granted, the “defendants will lose their business, fifteen employees will lose their livelihoods (with irreparable consequences like foreclosure), and defendants will be out $3 Million invested plus profits they would have made plus the opportunity to have a long-standing business indefinitely at this state-and-locally approved location” (Mr. Schriever's memorandum of law dated August 26th, 2025). In addition to their argument, the defense has proffered affidavits from fifteen of the defendants’ employees which detail their financial predicament in the event of the dispensary closing (NYSCEF Docs 22-37).

The Court must point out to the defendants that they are not being dispossessed of their property. Their title is undisturbed. They may put it to productive commercial use, and employ those persons affected by this decision, within the bounds of the covenant.

The plaintiffs, if denied injunctive relief, will suffer from a continuous use of Unit 19 in a manner which violates the covenant (see RPAPL Sec. 339-j) and results in the harm described by Mr. Smith. Additionally, given the manner in which the defendants proceeded to knowingly breach the Condominium Plan and open their business in the absence of authority shows that for the purpose of this application, it is they who have unclean hands (Amarant v. D'Antonio, 197 A.D.2d 432, 434, 602 N.Y.S.2d 837 [1st Dept. 1993]; Peconic Surgical Grp., P.C. v. Cervone, 31 Misc.3d 1240(A), 930 N.Y.S.2d 175 (Sup. Ct. 2011, Emerson J.). Additionally, the interests of the general public will not be affected whether the establishment remains open or closed (DePina v. Educ. Testing Serv., 31 A.D.2d 744, 745, 297 N.Y.S.2d 472 [2d Dept. 1969]). Accordingly, at this time the balancing of the equities favor the plaintiffs (see Clarion Assocs., Inc. v. D.J. Colby Co., 276 A.D.2d 461, 463, 714 N.Y.S.2d 99, 101 [2d Dept. 2000]).

Under the circumstances presented, the Court finds that the plaintiffs have established, by clear and convincing evidence, the elements necessary for a preliminary injunction (Broadway-Flushing Homeowners’ Ass'n, Inc. v. Dilluvio, 97 A.D.3d 614, 616, 948 N.Y.S.2d 386, 389 [2d Dept. 2012]).

This holding in no way conflicts with the decisions found in Buenos Hill Inc. v. Saratoga Springs Plan. Bd., 83 Misc.3d 494, 206 N.Y.S.3d 902 (NY Sup. Ct., Saratoga County, 2024), affd 240 A.D.3d 990, ––– N.Y.S.3d –––– (3d Dept. 2025) Richard A. Kupferman, J.; Cannabis Impact Prevention Coal., LLC v. Hochul, 85 Misc.3d 827, 222 N.Y.S.3d 891 (NY Sup. Ct., Albany County, 2024) James H. Ferreira J.; and Cannabis Impact Prevention Coal., LLC v. New York State Cannabis Control Bd., ––– Misc.3d ––––, 229 N.Y.S.3d 854 (NY Sup. Ct., Albany County, 2025) Peter A. Lynch, J.

Those Courts considered the question of whether the State Cannabis Law was pre-empted by the Federal Controlled Substance Act of 1970. All answered that question in the negative. None of those cases involved a determination of whether the State Cannabis Law overrides a restrictive covenant which forbids uses in violation of federal law.

We have considered the remaining contentions of defense counsel and although they have been argued with commendable zeal, they fail to persuade the Court.

The Court having granted plaintiffs motion must next determine the proper amount to set as an undertaking. CPLR Rule 6212 (b) states

․ prior to the granting of a preliminary injunction, the plaintiff shall give an undertaking in an amount to be fixed by the court, that the plaintiff, if it is finally determined that he or she was not entitled to an injunction, will pay to the defendant all damages and costs which may be sustained by reason of the injunction ․ (2339 Empire Mgmt., LLC v. 2329 Nostrand Realty, LLC, 71 A.D.3d 998, 999, 897 N.Y.S.2d 241 [2d Dept. 2010]).

The Parties are directed to submit affirmations and any documentary proof for the Court's consideration on or before October 1st, 2025. The Court will set the undertaking on or before October 7th, 2025. As stated in Lelekakis v. Kamamis, 303 A.D.2d 380, 380—81, 755 N.Y.S.2d 665, 666 (2d Dept. 2003), the amount “․ must be rationally related to the amount of the defendant's potential liability if the preliminary injunction later proves to be unwarranted ․ and not based upon speculation.” (At 380-381 cites omitted)

Accordingly, it is

ORDERED that the motion (seq. no. 001) for a preliminary injunction is granted. The temporary restraining order issued by the Court in connection with this matter shall continue until October 7th, 2025, to permit the setting of an undertaking. It is further

ORDERED that the defendants’ motion (seq. no. 002) seeking an order vacating the temporary restraining order issued on August 13th, 2025, is denied.

This memorandum also constitutes the Order of the Court

FOOTNOTES

1.   The law sometimes sleeps but never dies (2 Inst.161)

James Hudson, J.