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HERE THE PLAINTIFFS-TENANTS WERE ENTITLED TO A YELLOWSTONE INJUNCTION WHICH TOLLS THE CURE PERIOD UNTIL A COURT DETERMINES WHETHER THE TENANT HAS ACTUALLY DEFAULTED; PURPOSES OF AND CRITERIA FOR A YELLOWSTONE INJUNCTION CLEARLY EXPLAINED (FIRST DEPT). ​

The First Department reversed Supreme Court and granted plaintiff’s a “Yellowstone” injunction to allow time for a court to determine the nature and status of an ambiguous lease. Supreme Court had erroneously struck the “temporary restraining order” paragraph in plaintiffs-tenants’ order to show cause, which allowed the period to cure the alleged defaults to run out resulting in termination of the lease. The opinion includes a clear explanation of the nature and equitable purpose of a Yellowstone injunction, which is applicable to commercial leases. One of the issue here was whether the lease was commercial or residential:

A Yellowstone injunction “maintains the status quo so that a commercial tenant, when confronted by a threat of termination of its lease, may protect its investment in the leasehold by obtaining a stay tolling the cure period so that upon an adverse determination on the merits the tenant may cure the default and avoid a forfeiture” … .

… [T]he Yellowstone injunction tolls the relevant cure period, thereby preventing the termination of the lease … . With the Yellowstone injunction in place, the tenant can litigate with some confidence: if the tenant prevails in the underlying dispute with the landlord, the tenant walks away from the litigation with the lease intact; if the tenant loses the underlying dispute, the tenant can cure the demonstrated lease defaults before the expiration of the remaining cure period … .

* * * Yellowstone relief is a unique injunction. Unlike a standard preliminary injunction that can be granted only upon a demanding three-part showing of a likelihood of success on the merits, irreparable injury, and that the equities favor the party seeking the preliminary injunction, a Yellowstone injunction is granted on “far less” a showing … .

The party seeking Yellowstone relief must demonstrate the following four elements: “(1) It holds a commercial lease; (2) it received from the landlord either a notice of default, a notice to cure, or a threat of termination of the lease; (3) it requested injunctive relief prior to the termination of the lease; and (4) it is prepared and maintains the ability to cure the alleged default by any means short of vacating the premises” … . Wharton-Bickley v 388 Broadway Owners LLC, 2025 NY Slip Op 00802, First Dept 2-11-25

Practice Point: Consult this decision for a clear explanation of the purposes of and the criteria for a Yellowstone injunction.

 

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