In the case of Artcorp. Inc. v. Citirich Realty Corp., Peter Moulinos represented the Plaintiff Artcorp which is a tenant under a commercial lease. The landlord, Citirich Realty, sought to evict Artcorp from its commercial lease premises on the basis that it defaulted under its lease by effectuating an illegal assignment via the transfer of the ownership of Artcorp from one person to another.
On an application to the Supreme Court for the State of New York, County of New York, for a yellowstone injunction, the Hon. Nancy Bannon ruled that Artcorp was not entitled to a yellowstone injunction. A yellowstone injunction prevents a landlord from terminating a commercial lease when a landlord serves a notice of termination on a commercial tenant and the tenant indicates a desire to cure any alleged default. The lower court failed to set forth a valid basis for denying Artcorp injunctive relief.
On appeal, the Appellate Division, First Department, reversed the lower Court’s decision and granted Artcorp a yellowstone injunction. The Appellate Division stated that To obtain Yellowstone relief a tenant need not show a likelihood of success on the merits and that a commercial tenant can simply deny the alleged breach of its lease. The Appellate Division ruled that Artcorp “clearly asserted its willingness to cure the allegedly improper assignment of its shares, and had the ability to do so either by
transferring its shares back to the deceased owner’s estate or by seeking consent from the landlord”. More importantly, the Appellate Division ruled that a cure of an alleged improper assignment of a commercial lease may take place after the assignment by seeking the consent of the landlord. This decision sets a favorable precedent for commercial tenants in New York.