Times Square Stores Corp. v. Bernice Realty Co.

107 A.D.2d 677, 484 N.Y.S.2d 591, 1985 N.Y. App. Div. LEXIS 49801
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJanuary 14, 1985
StatusPublished
Cited by17 cases

This text of 107 A.D.2d 677 (Times Square Stores Corp. v. Bernice Realty Co.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Times Square Stores Corp. v. Bernice Realty Co., 107 A.D.2d 677, 484 N.Y.S.2d 591, 1985 N.Y. App. Div. LEXIS 49801 (N.Y. Ct. App. 1985).

Opinion

— In an action for a judgment declaring the rights and legal obligations of the parties pursuant to a lease agreement entered into between plaintiff and defendant’s assignor in 1968, defendant appeals (1) from an order of the Supreme Court, Kings County (Rader, J.), dated April 18,1983, which, inter alia, granted plaintiff’s motion for a preliminary injunction enjoining defendant from taking any action to declare plaintiff in breach of its lease with respect to the alleged violations thereof and directing the parties to proceed expeditiously with respect to plaintiff’s application to amend the certificate of occupancy for the building on the premises, and (2) from so much of an order of the same court, dated June 15, 1983, as granted plaintiff’s motion to compel it to execute an application to amend the certificate of occupancy theretofore filed by plaintiff with the New York City Department of Buildings and denied defendant’s cross motion to vacate, in whole or in part, the preliminary injunction granted by the prior decision and order.

[678]*678Orders modified by deleting the provisions thereof which directed defendant to act affirmatively regarding plaintiff’s application to amend the certificate of occupancy and substituting therefor provisions denying plaintiff’s motions insofar as they sought such relief, and order dated April 18, 1983 further modified by adding thereto a provision requiring that plaintiff file in the office of the clerk of the Supreme Court, Kings County, an undertaking pursuant to CPLR 6312 (subd [b]) and serve a copy of the same upon the defendant. As so modified, order dated April 18, 1983 affirmed, and order dated June 15, 1983 affirmed, insofar as appealed from, with one bill of costs to defendant, and matter remitted to the Supreme Court, Kings County, for the purpose of conducting a hearing to fix the amount of the undertaking and the date on or before which said undertaking is to be served and filed, unless the parties stipulate to an appropriate amount on said date, and for resolution at trial of all factual issues raised by plaintiff’s application for mandatory injunctive relief.

The facts are essentially undisputed. Plaintiff (hereinafter TSS) has been the sole tenant of the subject premises pursuant to a lease dated September 30, 1968 with Rentar Development Corporation. Rentar assigned its interest as landlord to defendant on or about April 23, 1979. Section 4.01 of the lease delineates the purposes for which the premises may be utilized. That section provides in full:

“4.01. Tenant shall use and occupy the demised premises for the following purposes and none other:

“Warehouse and distribution center for Tenant’s retail, wholesale and import operations; printing, sign making and service and repair departments; manufacturing, processing and assembling operations; general and administrative offices.

“Tenant may in conjunction with the foregoing engage in all activities permitted by law for such business. Tenant, however, shall do no act that contravenes the certificate of occupancy” (emphasis added).

The certificate of occupancy limits occupancy to specified levels which TSS has admittedly exceeded.

By letter dated December 14, 1982, defendant notified TSS that it was occupying the premises in violation of the certificate of occupancy issued with respect thereto and that unless such breach was cured the failure to cure would be deemed a default resulting in termination of the leasehold. Justification for this action was found in paragraph 18.01 of the lease which provides, in pertinent part:

[679]*679“18.01. Each of the following shall be deemed a default by Tenant and a breach of this lease, namely * * *

“(b) A failure on the part of Tenant to observe or perform any of the other terms, covenants or conditions of this lease on the part of Tenant to be observed and performed, which failure persists after the expiration of thirty (30) days from the date Landlord gives notice to Tenant calling attention to the existence of such failure; provided, however, that if the matter which is the subject of the notice is of such a nature that it cannot reasonably be corrected within thirty (30) days, then no default shall be deemed to have occurred if Tenant, promptly upon the receipt of the notice, commences the curing of the default and diligently prosecutes the same to completion; but if Tenant does not adhere to such prompt and diligent prosecution the grace period shall be deemed to expire as of the end of said thirty-day period and Landlord may proceed accordingly notwithstanding the intervening payment of rent by Tenant”.

By letter dated January 21,1983, TSS advised defendant that it had undertaken to cure its alleged breach. TSS’s efforts consisted of filing an application with the New York City Department of Buildings to “correct” the existing certificate of occupancy in such manner that it would be in compliance therewith. Defendant rejected these efforts and apprised TSS of its intention to serve it with a lease termination notice on January 27, 1983. Defendant moreover informed counsel for TSS that “in flagrant violation of the Use Clause [of the lease] and in egregious violation of the Certificate of Occupancy your client has created an occupancy which is dangerous and detrimental to human life, which constitutes unlawful occupancy, and which constitutes an unsafe building condition by permitting an occupancy which is approximately twice the occupancy permitted by the Certificate of Occupancy”. Defendant unequivocally refused to execute plaintiff’s application to amend the certificate of occupancy, called an “Altered Building Application”, on the ground that the only way for TSS to have cured its default was “to have reduced its occupancy to the number of persons and vehicles permitted by the existing, wholly correct Certificate of Occupancy”.

Upon TSS’s application, Special Term, by the order appealed from dated April 18, 1983 (Rader, J.), enjoined defendant from taking any action to declare TSS in breach of its lease, tolled the running of the period within which to cure TSS’s violations and directed the parties to proceed expeditiously with the processing of the application to amend the certificate of occupancy.

[680]*680The Department of Buildings thereafter issued notices of violation with respect to the subject premises. The first violation noted was “changing occupancy of [the] premises without obtaining [a] new certificate of occupancy”. TSS thereupon moved to compel defendant to comply with the prior court order by executing its proposed “Altered Building Application”.

The motion of TSS was granted by the order appealed from dated June 15, 1983 (Rader, J.), and that portion of defendant’s cross motion which sought a vacatur of the court’s prior order was denied. All proceedings to enforce the orders appealed from have been stayed pending determination of the appeals.

To avoid the injustice of subjecting a tenant in TSS’s position to summary eviction proceedings during the pendency of its declaratory judgment action without any further opportunity to cure its breach, courts have devised “the Yellowstone injunction, i.e., a preliminary injunction by a tenant prior to the expiration of the cure period, which stays the running of that period, and allows the lease to remain in effect until the underlying dispute has been resolved” (Brodsky v 163-35 Ninth Ave. Corp., 103 AD2d 105, 106; First Nat. Stores v Yellowstone Shopping Center, 21 NY2d 630).

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Cite This Page — Counsel Stack

Bluebook (online)
107 A.D.2d 677, 484 N.Y.S.2d 591, 1985 N.Y. App. Div. LEXIS 49801, Counsel Stack Legal Research, https://law.counselstack.com/opinion/times-square-stores-corp-v-bernice-realty-co-nyappdiv-1985.