Yellowstone Injunctions: Tolling the Cure Period in New York Lease DisputesAugust 24, 2021 – Westlaw Today
Attorneys Muhammad Faridi, Jacqueline Bonneau, Nadav Ben-Zur, and Wolete Moko have published a three-part article series in Westlaw. This three-part series provides an overview of the key legal considerations in obtaining or defending against a Yellowstone injunction.
Part One traced the historical background of this unique remedy and sets forth the essential elements of a claim for Yellowstone relief. Part Two discussed whether injunctive relief can be obtained in certain common default scenarios. Finally, Part Three will highlight some recent developments in this area of law.
Part I: Historical Background and Key Elements of Yellowstone Injunctions
Yellowstone injunctions take their name after the 1968 Court of Appeals case that first formally recognized the possibility of granting injunctive relief to stay the cure period in a commercial lease — First National Stores Inc. v. Yellowstone Shopping Center.
The case involved a dispute between the landlord and tenant regarding which party was responsible for installing an automatic sprinkler system. Rather than install the sprinkler system after receiving a notice of default, the tenant filed a declaratory judgment action and a motion for preliminary injunction, which the tenant made returnable after the cure period had passed.
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Part II: The Ability to Cure Common Default Scenarios
While courts can typically quickly resolve the first three requirements of a Yellowstone injunction — the existence of a lease, proper notice of default and a timely request for relief — the fourth requirement — a tenant's ability and willingness to cure — usually requires a more in-depth, fact-specific analysis.
Nonetheless certain types of defaults occur with sufficient frequency that a survey of the case law involving such defaults provides insight into the considerations that typically animate a court's resolution of the case and the type of proof that may be sufficient to demonstrate ability and willingness to cure.
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Part III: Recent Developments in Yellowstone Injunction Jurisprudence
In an attempt to circumvent the legal protections provided to New York commercial tenants via Yellowstone injunctions, it became a more common practice in recent years for landlords to insist upon waiver provisions in commercial leases that would foreclose a tenant’s ability to seek Yellowstone relief.
The enforceability of such waivers as against public policy was hotly contested, and in 2019, the issue reached a head. That year, the Court of Appeals held in 159 MP Corp. v. Redbridge Bedford that the inclusion of a Yellowstone waiver in a commercial lease did not violate the public policy of the State of New York.
To continue reading Part III, please click here.