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The Do's and Don'ts of 'Yellowstone' Injunctions: A Brief Survey
A Yellowstone injunction proceeding — named after the Queens, NY, case, First National Stores Inc. v. Yellowstone Shopping Center Inc., 21 N.Y.2d 630 (1968) — is a proceeding in New York court in which a commercial tenant seeks to enjoin the landlord from evicting the tenant for an alleged breach of the lease. This temporary relief preserves the tenant's ability to cure should the court determine that the tenant is in breach, and thus avoid forfeiting its substantial investment in the leasehold. See Zaid Theatre v. Sona Realty Co., 18 A.D.3d 352, 355 (1st Dep't 2005); Marathon Outdoor v. Patent Constr. Sys. Div. of Harsco, 306 A.D.2d 254, 255 (2d Dep't 2003). As with any other injunction, the tenant normally will be required to post an injunction bond if its application is granted. New York Civil Practice Law and Rules § 6312(b)(2). See Barsyl Supermarkets v. Ave. P. Assocs., 86 A.D.3d 545, 546 (2d Dep't 2011).
To obtain relief, the tenant must demonstrate four elements:
- The tenant holds a commercial lease;
- the landlord provided the tenant with either a notice of default, notice to cure or threat of termination;
- the tenant requested an injunction prior to the termination of the lease; and
- the tenant is “prepared and maintains the ability to cure the alleged default by any means short of vacating the premises.”
Graubard Mollen Horowitz Pomeranz & Shapiro v. 600 Third Ave. Assocs., 93 N.Y.2d 508, 514 (1999). See also Ray & W Cut v. 240 West 37, 58 A.D.3d 415, 415 (1st Dep't 2009); Barsyl Supermarkets, 86 A.D.3d at 546.
The fourth element above is perhaps the most heavily scrutinized. Absent a demonstration both that the alleged breach is curable and that the tenant is prepared to cure, no injunction will issue. See Am. Youth Dance Theater v. 4000 East 102nd St., 140 A.D.3d 630, 630 (1st Dep't 2016) (injunction affirmed where the trial court “properly found that [tenant's] defaults were curable”); WPA/Partners v. Port Imperial Ferry, 307 A.D.2d 234, 237 (1st Dep't 2003) (the tenant need not “prove its ability to cure; rather, '[t]he proper inquiry is whether a basis exists for believing that the tenant … has the ability [to cure]“) (internal quotations omitted).
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