Real Estate Law

PORN PALACE DENIED "YELLOWSTONE"

One of the easiest injunctions for a tenant to get -- particularly when faced with the threatened termination of its tenancy -- is the type known as a "Yellowstone" injunction.*

The purpose of this equitable relief is to stop a landlord from prematurely ending a lease until there has been some formal adjudication of the dispute on the merits.

In order to secure this remedy, a tenant must demonstrate that it has:

• an unexpired lease agreement for the premises in question;
• received some form of notice from the landlord threatening termination of that leasehold interest;
• timely sought the court's intervention (ideally, prior to the lapse of any validly-issued default or curative notice); and
• the ability and desire to address the landlord's objection(s) "by any means short of vacating the premises."

When one or more of these elements are absent, relief will likely be denied, as was demonstrated in Hempstead Video, Inc. v. 363 Rockaway Assoc., LLP. In that case, Hempstead Video had reached an agreement (back in 1996) with the Village of Valley Stream wherein Hempstead Video represented that it would refrain from situating its "adult" video stores in certain locations. Interestingly, its lease with 363 Rockaway Associates was "explicitly conditioned upon" the video store's compliance with that agreement.

Some time later, the Village sued the tenant for violating the agreement, and a judgment declaring Hempstead Video in breach was affirmed by the United States Court of Appeals for the Second Circuit.

When the landlord sought to terminate the tenancy based on the breach of the 1996 agreement, Hempstead ran to the Nassau County Supreme Court and requested an order stopping the eviction process. When that "Yellowstone" request was rebuffed, the company then appealed to the Appellate Division, Second Department, which affirmed the denial.

Since the tenant had been stripped of its lease and its rights to remain in possession -- as a result of its breach of the 1996 agreement and the adverse ruling the company received from the federal court -- the AD2 was of the opinion there was nothing left to preserve.

Clearly, its lapses exposed this tenant to eviction.

For a copy of the Appellate Division's decision, please use this link: Hempstead Video, Inc. v. 363 Rockaway Assoc., LLP

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*For our other posts on this topic, please use this link: Yellowstones

From Real Estate Law Blog posted 2007-04-19.