170 Tlllary Corp. v. Gold Tillary Realty LLC

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170 Tlllary Corp. v Gold Tillary Realty LLC 2024 NY Slip Op 31338(U) April 16, 2024 Supreme Court, Kings County Docket Number: Index No. 510354/2022 Judge: Leon Ruchelsman Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

FILED: KINGS COUNTY CLERK 04/16/2024 02:09 PM INDEX NO. 510354/2022 NYSCEF DOC. NO. 142 RECEIVED NYSCEF: 04/16/2024

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS .: CIVIL TERM: COMMERCIAL 8 ------- ------ ----- -------------- ----- X 17Q TlLLARY CORP., Plaintiff, Decision and order

"'""against - Index No. 510354/2022

GOLD TILLARY REALTY LLC, Defendant, April 16, 2024 ------- .------ .-------------------. -------x PRESENT: HON. LEON RUCHELSMAN Motion Seq. #4

The defendant has moved pursuant to CPLR §2221 seeking to

reargue a decision and order dated August ~i 2023. The plaintiff

has opposed the motion. Papers were submitted by the parties and

arguments held. After reviewing all the arguments, tl1is court

now makes the fpllowing determination.

As recorded in prior orders, on October 7, 1999 the

plaintiff tenant entered into a lease with lancUord concerning

the rental of space located at 170 Tillary Street in Kings

County. A riotice demanding rent was served on May 8, 2023

alleging the failure to pay water and sewer charges through May

2023 and real estate taxes and rent from November 2021 through

May 2023. The tenant sought and was granted a Yellowstone,

staying any termination .of the lease pending the resolution of

th~ disp:ute regarding the demand. The court held there were

disputed• is.sues whether the amourtt sought was clas~ified 1:³.s rent.

Moreoye.r, the. court explained th9 t even i,f the .amount s.c:iught was

rent a Yellowstone was the proper relief following a trotice to

·CU:i:e ~

FILED: KINGS COUNTY CLERK 04/16/2024 02:09 PM INDEX NO. 510354/2022 NYSCEF DOC. NO. 142 RECEIVED NYSCEF: 04/16/2024

Betting Corp., 221 AD2d 428, 633 NYS2d 588 [2d Dept., 1995]) .

Thus, the imposition of an undertaking is discretionary (see,

Mayfair Super Markets Inc., v. Serota, 262 AD2d 461, 692 NYS2d

415 [2d Dept., 1999]). An undertaking would be appropriate for

an amount rationally related to the damages that can be suffered

if the relief should not have been granted (Bennigen's of New

York Inc., v. Great Neck Plaza L. P., 223 AD2d 615; 636 NYS2d 835

[2dDept., 1996]).

In this case the defendant has not presented any damages

that it could incur if the Yellowstone should not have been

issued. In fact, the defendant admits i t seeks an undertaking

just to insure the plaintiff maJntains the ability to cure.

However, that is an improper basis since that does not relate to

the damages if the injunction should not have been granted (see,

East 54 th Operating LLC v. Brevard Owners LLC, 223 AD3d 407, 202

NYSJd 320 [ rt Dept., 2024], Ballirtteer Corp v. SNRP West 37 LLC,

217 AD3d 597, 191 NYS3d 632 [Pt Dept., 2023]). This is

especially true in this case where any taxes owed are stayed

pending a determination rega:tding the tenant's tax certiorari

action instituted ag,3.inst New York City. Thus, no damages can

accrue to the defendant. Therefore, the motion seeking an

undertaking is denied at this time.

So ordered. ENTER: ;.'

DATED.: April 16, 2024 Brooklyn N.Y. Han. Leon RU:chel~mP- • JSC

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Footnotes

[1] of 5 [* 1] The defendant has now moved seeking to reargue that determination. They assert that they never filed a notice to cure, rather, they filed a simple rent demand. They further arguie that defaulting a rent demand results in anon-payment proceeding. This is different is substance than a holdover proceeding which results when a tenant fails to cure pursuant to a notice to cure. Consequently, a Yellowstone is only available to toll a holdover proceeding and not a non-payment proceeding. Therefore, the defendant seeks reargument and upon such reargument the termination of the Yellowstone injunction. Conclusion~ of Law A motion to .teargue rnust be based upon the fact the court overlooked or misapprehended fact .or law or for some othex reason mistakenly arrived at in its earlier decision (Deutsche Bank National Trust CcL, v. Russo, 170 AD3d 952, 96 NYS3d 617 J2d Dept., 2019]). As recorded in the prior decision, there are seriot.1.s factual issues whether the additional rent Sought can be classified as rent. Thus, the notice dated May 8, 2023, regardless of how it is classified or labeled, is not a mere rent demand. If the additional rents sought are .riot deemed rent th~n t.h.e dema.nd is, in essence, a notice to cure which maj be the snbjett of a Yellowstone injunction. Thedefertdant concedes the possibility

[2] of 5 [* 2] of this reality, however, asserts it does not matter. The defendant argues that even if the amounts sought are not rent and the payments of real estate taxes to the City amount to a leasehold covenant ''the consequence would merely be that PTairi.tiff would have a defense to a non-payment prnceecting predicated on these amounts. This would in no way convert the New Rent Demand to a notice to cure 11 (see, Memorandum in Support, page 6 [NYSCEF Doc. No. 128]). However, other than the payment of strict rent there would be no basis to conduct a non-payment proceeding at all. Indeed, there is no dispute the tenant has made all strict rental payments and this dispute only involves other charges including taxes and sewer payments and whether these other charges may properly be Classified as rent. Thus, there would be no non-payment proceeding at all in which to assert these defenses. Indeed, these defenses should be raised in a holdover proceeding. Therefore, as already explained, the notice dated May 8, 2023 could only he challenged by seeking a Yellowstone regardless of the notice's purported representations as nothing more than a rent demand. Further, it is well settled that when questions of fact exist a Yellowstone injunction should hot be denied since doing so would adjudicate the underlying case ( se-e, Boi 'To Go Inc. , v. Second 8.00 No. 2 LLC, 58 AD3d 482, 8 7 0 NY'S2d 334 [Pt Dept • .1 2009], W & G Wines LLC v. Golden Chariot Holdings LLC, 46 M.Isc3d 1202 (A), 7 .NYS3d 245· [Supreme Court Kings

[3] of 5 [* 3] County 2014]) . Thus, the fact there are questions about the nature of the additional rent does not mean a Yellowstone cannot be granted. Additionally, the legal truism that a tenant is not faced with the termination of a lease in a non,...pay'ment proceeding: is really beside the point. As explained, the additional rent, at this juncture, ha:s not been adjudicated as rent a:nd therefore a non-payment proceeding is not the right venue to adjudicate these claims. Indeed, these arguments can be viewed as a request to reargue the underlying determination that the additional rent sought may not be base rent. While such arguments are not expressly made, the repeated insistence that a non-payment proceeding is the proper method of adjudicating these issues, highlights such relief. Based on the reasons outlined in the prior decision the court declines to reconsider the conclusions reached there. Consequently, since the claims contained in the May B, 2023 llotice s.eek compliance regarding matters other than rent a Yellowstone is proper. Therefore, the motion seeking reargurnent is denied. Turning to the issue of ari Undertaking, it is well settled that upon .granting a Yellowstone inj unctiOn the court may impose reasonable .conditions iricludihg the po·sting of an undertaking. (Sportsplex of Middletown, :tnc., v. Catskill Re.gidnal Off:..,Track 4 ,., ;4]. ; , . ; . , " ' - ' · - - - - - - - - - - - - - - - - -4 -of- -5 - - - - - - - - - - - - - - - - - - - - - - - - - - - - [*