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Revising the Yellowstone Injunction to Fit New York's Commercial Brooklyn Journal of Corporate, Financial & Commercial Law Volume 14 Issue 1 Article 7 12-27-2019 “Fair Enough”? Revising the Yellowstone Injunction to Fit New York’s Commercial Leasing Landscape and Promote Judicial Economy Gabriel W. Block Follow this and additional works at: https://brooklynworks.brooklaw.edu/bjcfcl Part of the Bankruptcy Law Commons, Business Organizations Law Commons, Litigation Commons, Property Law and Real Estate Commons, and the State and Local Government Law Commons Recommended Citation Gabriel W. Block, “Fair Enough”? Revising the Yellowstone Injunction to Fit New York’s Commercial Leasing Landscape and Promote Judicial Economy, 14 Brook. J. Corp. Fin. & Com. L. (). Available at: https://brooklynworks.brooklaw.edu/bjcfcl/vol14/iss1/7 This Note is brought to you for free and open access by the Law Journals at BrooklynWorks. It has been accepted for inclusion in Brooklyn Journal of Corporate, Financial & Commercial Law by an authorized editor of BrooklynWorks. FAIR ENOU REIIN TE YELLOWSTONE INJUNCTION TO FIT NEW YORK COMMERCIAL LEAIN LANCAPE AN PROMOTE JUICIAL ECONOMY ABTRACT The Yellowstone injunction is an equitable remedy that tolls any applicable cure period and gives tenants a better opportunity to maintain their leasehold when they have defaulted under their lease. The remedy is available to commercial tenants in New York City and to commercial and residential tenants throughout the State. This Note examines the Yellowstone injunction in the context of New York City’s commercial tenants, who employ it most frequently and benefit most from its protections. This Note examines the development and application of the Yellowstone injunction and proposes changing the doctrine to exclude cases of monetary defaults and expired or nonexistent cure periods from the realm of Yellowstone relief. INTROUCTION ere i, perap, no uriiction in te worl in wic lanlortenant relation ae uc a prominent place in te law a New York City te City or New York n te City, a uine reputation an reconition can mean te ifference etween ucce or failure, epecially in te realm of commercial leain One of a uine mot aluale aet in te City may e te leaeol itelf1 Een orterterm leae in te City ten to lat for a ecae or more, tou lonterm roun leae can lat up to ninety nine year2 ome run een loner tan tat, an te alue of uc an interet i ifficult to calculate Oer te year, a tenant may rely on teir leaeol to uil up a eicate clientele witin te neioroo, earn an international reputation for ecellence tat raw cutomer from aroun te worl, or inet time an money to improe te leae premie to 1. See Empire tate Bl oc rump Empire tate artner, NY2 1, pp i 199 i cae i a clear eample of te potential alue of a leaeol in te City e arm to Empire from loin te leae coul well e irreparale, ince it i ifficult to imaine ow amae coul aeuately compenate Empire for te alue of te approimately 9 year remainin uner te leae an it potential renewal in a uilin of uc notale caracter a te Empire tate Builin Id. 2 Barara au, In Profit and Loss, for 99 Years, E REL EL Mar 1, 2010, ttpterealealcomiuearticleinprofitanlofor99year e Empire tate Builin wa uect to a 114year roun leae See Mark Lewi, Soap Opera Ends as Trump Sells Out, FORBE Mar 19, 2002, ttpwwwforecom 2002019019empiretml1fffe4e0 4 BROO J COR FN & COM L Vol 14 create a pace tat i teir own4 lon a te uine i oin well, or well enou tat te rent can e pai, an peronal relation are maintaine, neiter tenant nor lanlor i likely to try to leae or terminate te tenancy oweer, lanlortenant relation are not alway o amicale an New York i urpriinly one of te leat profitale citie for lanlor nationwie Many factor, incluin rent control, rent tailiation, an oter tatutory an cae law tat ten to faor tenant, encumer te City lanlor uicial remey uniue to New York tate i te Yellowstone inunction or Yellowstone, oriinatin in te eponymou First National Stores, Inc. v. Yellowstone Shopping Center, Inc9 e Yellowstone inunction operate y tollin te cure perio of a tenant, alleely in efault, until te unerlyin uicial action i conclue tu, it preent te tenant oterwie ineitale forfeiture of te leaeol10 e implie arm in eery Yellowstone cae i te tenant lo of teir leaeol11 an in a city wit powerful lanlor it eem conitent wit pulic policy to reaily proie inunctie relief to tenant, wo are traitionally een a ain le arainin power12 Leaeol forfeiture wa te riin concern ein te oriinal contruction of te Yellowstone inunction an 4. See, e.g., onoue New York, 10 NY 109 up Ct 190 reconiin tat tenant leaeol an oter inetment in rente property were inificant factor, wic oul e ien weit in euity conieration Unlike many uriiction, te City a eparate ouin court, wic may e a prouct of te complicate lanlortenant relation an tenancy law in te City a muc a it i te reult of te City eer ie an ineitaly lare uicial ocket See Li Lent, The New York City Housing Court, E COOEROR June 2010, ttpcooperatorcomarticletenewyorkcity ouincourtfull nela unt, Least Profitable County for Rentals? New York, Data Shows, E REL EL pr 1, 2014, ttpterealealcom20140401leatprofitalecountyforrental lanlornewyorkataow owin tat in 2014, Manattan New York County wa te leat profitale market for lanlor of all U countie . See, e.g., arren E Eti an Jeffrey urkel, HSTPA-2019: Some Observations, NY LJ July 2, 2019, ttpwwwlawcomnewyorklawournal2019002tpa2019ome oeration ecriin implication of te ouin taility an enant rotection ct of 2019 ou tey are typically limite to te City, le tan a oen reporte ir an Fourt epartment ppellate iiion cae are Yellowstone inunction a of Octoer 2019 9 Firt Natl tore, nc Yellowtone oppin Ctr, nc, 2 NE2 NY 19 10 Lon lan ynecoloical er, C 110 tewart e oc Lt p, NY2 99, 92 pp i 199 11. Yellowstone cae enerally inole commercial leaeol, tou tenant wit lonterm roun leae ae alo out Yellowstone relief on occaion See 0 uon Owner, LCC Rector Curcaren & Vetrymen of rinity Curc in te City of NY, 9 NY2 4, 4 up Ct 2009 4 Brie t LLC R& oc LLC, No 09 CV 104 L, 2009 U it LE 111, at 2 ENY ec , 2009 EC Elec, nc mluntorp olin nc, No 101194200, 200 NY Mic LE 04, at 1 up Ct pr 2, 200 12 e City proie tenant, particularly reiential tenant, a ey of rit an protection See generally NY REL RO C Conol 201 NYC MN COE 2102 201 uaranteein aic leal aitance for reiential tenant facin eiction proceein 2019 Revising the Yellowstone Injunction i te ai for it continue ue1 oweer, if court are aumin te nature of te arm ae on te form of relief ein out, ten te Yellowstone octrine oul e moifie to enure tat te tenant i facin enuine an inificant pecuniary lo14 Moreoer, te merit of te Yellowstone inunction oul e eamine accorin to it alue an efficacy a a uicial remey an not wit repect to te power ynamic etween lanlor an tenant t eem intuitie tat a remey like te Yellowstone inunction woul alreay ae een aailale to tenant in te City n a way, it wa aailale uner te traitional form of inunctie relief proie for in New York tate i wa reconie in First National, wic wa ecie ae on te uual tanar for inunctie relief1 in te New York Ciil ractice Law an Rule CLR1 e aailaility of tee traitional form of inunctie relief i a founation of ti Note itout te CLR, te Yellowstone inunction woul e more inipenale Fortunately for ariee tenant an many oter plaintiff acro New York tate, te CLR coifie teir aility to eek inunctie relief art of ti Note preent te eelopment of te Yellowstone inunction an riefly outline te tenion etween traitional inunctie relief an te Yellowstone inunction art eamine Yellowstone’ application in 1 cae turnin on monetary eru nonmonetary efault an wit tenant facin ankruptcy a a uet of monetary efault, an 2 cae inolin leae wit epire or noneitent cure perio Finally, art analye tee ituation a roaer reflection of te tenuou outcome aociate wit Yellowstone relief an, more narrowly, a wee iue wic te court can reole an terey curtail te ineitale epanion or miapplication of te Yellowstone octrine i Note oe not uet tat te New York tate Court of ppeal Court of ppeal 1. See rauar Mollen orowit omeran & apiro 00 ir e oc., 1 NE2 11, 120 NY 1999 ee inunction ae ecome commonplace, wit court rantin tem routinely to aoi forfeiture of te tenant utantial interet in te leaeol premie 14 For eample, not all leaeol are te ame ome are uniue an in etremely mall upply ee supra tet accompanyin note 1 Conerely, we mit not acrie te ame leaeol alue to a typical commercial pace occupie y a lare fatfoo cain, cellerice proier, or ank, an in uc a cae it i le likely a court will fin te tenant a emontrate irreparale arm reuire uner te CLR But see 112 4t t oc, LLC 1121400 rae rop LLC, 944 NY2 , pp i 2012 notin tat te 114year term of te leae oul e coniere ran Manor ealt Relate Facility, nc amilton Euitie, nc., 92 NY2 100, 100 pp i 2011 itout te inunction, plaintiff, wic operate a reiential ealt care facility, woul e at rik of loin it aluale leaeol an incurrin inificant permanent amae to more tan 0 year of arearne oowill 1 Firt Natl tore, nc Yellowtone oppin Ctr, nc, 2 NE2 , 9 NY 19 See also onoue New York, 10 NY 109 up Ct 190 reconiin tat tenant leaeol an oter inetment in rente property were inificant factor, wic oul e ien weit in euity conieration 1.
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