Morrison Cohen Successfully Obtains Stay of Enforcement from the Second Department in Real Estate Dispute

January 23, 2018 – Morrison Cohen and co-counsel successfully obtained  a stay of enforcement from the Appellate Division, Second Department of an order denying a motion for a Yellowstone injunction and making a determination that rent was past due.  Morrison Cohen's client Century 21 Fulton LLC (“Tenant”) operates a department store in a building located at City Point, One DeKalb Avenue, Brooklyn, New York and owned by Albee Development LLC and Albee Retail Development LLC (“Landlord”).  Tenant and Landlord dispute when Tenant's obligation to pay rent to Landlord begins, as well as the application of rent abatements.  After Landlord served Tenant with a 10-day notice of default stating for nonpayment of rent, Tenant filed an action seeking a Yellowstone injunction to prevent the termination of the Lease. 

The Supreme Court, Kings County, in an opinion by Justice Ruchelsman, denied Tenant's request for Yellowstone injunction, and went on to render a determination that rent had already commenced and was therefore past due (the “Supreme Court Order”).  Tenant filed an immediate notice of appeal and filed a motion with the Appellate Division, Second Department to stay enforcement of the Supreme Court Order pending appeal.  Among other things, Tenant argued that the Supreme Court improperly denied the Yellowstone injunction, and impermissibly ruled on the merits of the underlying case, effectively granting summary judgment for Landlord even though neither party had moved for it.  On December 17, 2017, the Second Department granted a preliminary injunction, and on January 18, 2018, the Second Department approved the stay pending hearing and determination of Tenant's expedited appeal.

The Morrison Cohen team included Y. David Scharf, Alvin C. Lin, and Michael Mix.