SUPREME COURT SHORT FORM ORDER STATE OF NEW YORK s c.p\ K Present: HON. ROBERT ROBERTO, JR. Justice TRIALMS PART NASSAU COUNTY DIESEL FITNESS, INC., d//a DIESEL TANING Plaintiff( s), Index No. 2102/04 -against- Motion Date: 5/5/04 FORD COYLE PROPERTIES, INC. Cal. No. SEQ. # Defendant( s). The following papers read on this motion Order to Show Cause, with supporting papers..... Affirmation in Opposition...... Reply............,. Letter to Justice Skelos, dated April 13, 2004... Upon the foregoing papers it is ordered that this motion by plaintiff for a Yellowstone injunction and related relief is decided as follows: In this landlord-tenant dispute, the landlord/defendant Ford Coyle Properties, Inc. ("FCP") served a "5 Day Notice" to cure three specific violations ofthe lease between the paries. These violations read as follows: "(1) You must stop using electrcal current that exceeds the capacity of the "building and overloads and interferes with the other tenants of the building as set forth in Clause 12 of your lease. (2) You must pay bounced check fee of$10. and electrcal & taxes heretofore biled of $2 386.39. (3) You must cease habitual late payment of rent and additional rent. After a temporary Yellowstone stay was granted by the undersigned at Special Term, Part n, to prevent termination ofthe lease for failure to cure, the case was assigned to Justice Skelos. While the motion was pending, the paries agreed to adjournments!hereof, and to the continuation of the stay. Upon Justice Skelos s appointment to the Appellate Division, Second Department, the case was reassigned to this Cour for all purposes. From a review of the papers it is apparent that the key issue is the electrical service coming into the building. With regard thereto, the lease states at paragraph 12 as follows:
DIESEL v FORD INEX #2102/04 '?tj Electrc Current: Tenant covenants and agrees that all times its use of electrc curent shall not exceed the capacity of existing feeders to the building or the risers or wiring installation and Tenant may not use any electrical equipment which, in Owner s opinion, reasonably exercised, wil overload such installations or intptff"tp utith thp 11CP thptpnfh" nthpt tp.."..tc nfthp hn ilrtinn- T1,p,.1,,,"n-,: ",t "'"" t;1'': nft1,,,,.1,...,.t "'.1""-""--'" -."'.L""''._.L.&_.LJI.U _.L."'.L-,-_.a ""...L b-.l.a.&- _.L.Lu..l c"" ""'' Y... 1..1.1.1.1- V.I ".1.1"' "'.I.Iu.U,"".1 \..1 electrc service shall in no wise make Owner liable or responsible to Tenant, for any loss, damages or expenses which Tenant may sustain. Plaintiffs President, Ralph DelGiorno, alleges in his affdavit that the plaintiff, which maintains a "tanning salon" at the premises, was not in violation ofthis provision. He claims that shortly after he signed the lease in April of 2003 he arranged for a representative of the Long Island Power Authority ("LIP A") to approve work by electricians he had hired to set up wiring for the store. However, he asserts that the LIP A representative, in the presence of Leonard Weingaren, the President of defendant FCP, indicated that the wiring coming into the building itself had to be repaired before LIP A could approve any alterations. Plaintiff contends that Weingarten orally agreed to make the needed changes, but then failed to do so. Plaintiff then made certain temporar changes, approved by LIP A with the consent of the defendant, to permit the store to open. However, he claims that his operations are limited as a result, causing a loss of profit, and the electrcity he does receive cuts out periodically, displeasing his customers. Plaintiff also claims that the Vilage East Rockaway, where the building is situated, has cited the defendant for violations, and concludes that defendant had misrepresented the state of the electrical service before the lease was signed. The defendant, by Weingarten, denies all of the above and, in addition, asserts financial losses flowing from the service modifications made by the tenant, in that it has been unable to rent the warehouse and adjacent store because they are adversely affected by the plaintiffs alterations. He also states that the landlord wil do whatever is required by any regulatory agency to remedy the electrical situation, including the tenant's temporar service alterations, which it contends it has been told is the most significant hazard. Key to this application, however, is the landlord's claim, made by Weingarten, that the temporary service draws from an adjacent warehouse area in the building because it would otherwise exceed the electrical capacity of the tenant's premises, and was done without the landlord' s consent. Accordingly, he claims a violation of paragraph 12, reproduced above, which is cited in the five-day notice. However, plaintiff has produced in reply a letter from FCP dated December 8, 2003, signed by one Andrew B. Weingaren on its behalf. This states, among other things, that "we have been more than wiling to allow you to tap off our warehouse meter until a permanent connection to the new service is made. It thus would appear that, despite the defendant's curent position, the parties were attempting to resolve the electrcal service issue by making the necessary changes to the wiring so that the tenant would not "overload such installations" under paragraph 12 of the lease. In addition, the Court notes that the landlord contends that the building has 220 Amp, three phase service
DIESEL v FORD INDEX #2102/04 1''- which service the tenant claims it needed to operate fully, and was assured existed prior to execution of the lease. However, the landlord also asserts that it never represented to the tenant that it would be available to it, the tenant. The affidavit of Dr. Spencer Madsen, a representative of the company that sold the tenant its tanning beds, indicates that durng a telephone conference with DelGiorno and Weingaren he was told that "the premises" had this service. This indicates that while defendant may be able to claim that it never directly promised the tenant that it had access to this service (as it was the building itself, as opposed to the tenant's space, that had it), tenant can produce some proof that a reasonably prudent tenant would have believed that it had been told it would have the power it needed to operate, and was induced to sign the lease based on such assurances. Under these circumstances, the Court finds that the tenant has made the necessar showings to obtain a Yellowstone injunction to the extent it addresses an attempt to terminate the lease based on a violation of paragraph 12 (see, 225 E. 3(/h St. Garage Corp. v 221 E. 3(/h Owners Corp., 211 AD2d 420). However, the plaintiff does not directly deny the missing and late payments referred to in the five-day notice or deny that the landlord is entitled thereto. It does claim that it never received a tax bil, and wil pay upon its receipt. Notwithstanding its conclusions about the electrcal service, the Court reminds plaintiff that terms of the lease must always be obeyed even where a Yellowstone injunction is issued, and payment of rent is not suspended (see, Graubard Mollen Horowitz Pomeranz Shapiro v 600 Third Avenue Assocs., 93 NY2d 508 515). Accordingly, the motion is granted to the extent that the period for the plaintiff to cure any alleged default under paragraph 12 of the lease is tolled until such time as this Court determines, or the parties otherwise agree what the nature of the cure should be and which par should pay, or what percentage of such cost each should bear. The period to cure any payments owed under the lease as asserted in the notice is tolled as well, but only for 20 days from the date of this order, and the landlord may thereafter seek any appropriate remedy available to it under the lease. Further, as the landlord complains of significant financial losses (albeit without documentary proof) and more important, has demonstrated that payments to it under the lease have not been made timely, the tenant must post a bond in the amount of $100 000 within twenty (20) days of the date hereof, or the motion is denied in its entirety and any temporary stay is vacated at the end of that period. Counsel for the parties are to appear for a conference before the undersigned on Friday, July 9, at 9:30 a. Date: June 24. 2004 ls.
-".&...- DIESEL v FORD INDEX #2102/04 Electrc Curent: Tenant covenants and agrees that all times its use of electrc curent shall not exceed the capacity of existing feeders to the building or the risers or wiring installation and Tenant may not use any electrcal equipment which, in Owner s opinion, reasonably exercised, wil overload such installations or intptfptp W'ith thp l1,"p t1,ptpof hv ot1,pt tpnl'ntc nf t1,p hnilrtino- T1,p,.1,,,nn-p "t "n" t;1'/3 n f't1,,:,.1,...,.t,,.. " b8...- "'&'''-'''' 0- -.. '-.L...L- ""''''''"''''''.1 V.. electrc service shall in no wise make Owner liable or responsible to Tenant, for any loss, damages or expenses which Tenant may sustain. Plaintiff s President, Ralph DelGiorno, alleges in his affdavit that the plaintiff, which maintains a "tanning salon" at the premises, was not in violation ofthis provision. He claims that shortly after he signed the lease in April of 2003 he arranged for a representative of the Long Island Power Authority ("LIP A") to approve work by electricians he had hired to set up wiring for the store. However, he asserts that the LIP A representative, in the presence of Leonard Weingaren, the President of defendant FCP, indicated that the wiring coming into the building itself had to be repaired before LIP A could approve any alterations. Plaintiff contends that Weingarten orally agreed to make the needed changes, but then failed to do so. Plaintiff then made certain temporary changes, approved by LIP A with the consent of the defendant, to permit the store to open. However, he claims that his operations are limited as a result, causing a loss of profit, and the electrcity he does receive cuts out periodically, displeasing his customers. Plaintiff also claims that the Vilage of East Rockaway, where the building is situated, has cited the defendant for violations, and concludes that defendant had misrepresented the state of the electrical service before the lease was signed. The defendant, by Weingaren, denies all of the above and, in addition, asserts financial losses flowing from the service modifications made by the tenant, in that it has been unable to rent the warehouse and adjacent store because they are adversely affected by the plaintiffs alterations. He also states that the landlord wil do whatever is required by any regulatory agency to remedy the electrcal situation, including the tenant' s temporary service alterations, which it contends it has been told is the most significant hazard. Key to this application, however, is the landlord's claim, made by Weingaren, that the temporar service draws from an adjacent warehouse area in the building because it would otherwise exceed the electrical capacity of the tenant' s premises, and was done without the landlord' s consent. Accordingly, he claims a violation of paragraph 12, reproduced above, which is cited in the five-day notice. However, plaintiff has produced in reply a letter from FCP dated December 8, 2003, signed by one Andrew B. Weingarten on its behalf. This states, among other things, that "we have been more than wiling to allow you to tap off our warehouse meter until a permanent connection to the new service is made. It thus would appear that, despite the defendant's current position, the parties were attempting to resolve the electrical service issue by making the necessary changes to the wiring so that the tenant would not "overload such installations" under paragraph 12 of the lease. In addition, the Court notes that the landlord contends that the building has 220 Amp, three phase service
DIESEL v FORD INDEX #2102/04 which service the tenant claims it needed to operate fully, and was assured existed prior to execution of the lease. However, the landlord also asserts that it never represented to the tenant that it would be available to it, the tenant. Thf' ffi(bvit ClfT1r nf'nf'f'r M r1c;pn rpnrpcp,.t ti"p nft1,p f'nmn""''' t1,,,t cnlrt t1,p tp,.,,,.t it" t",.,.;,.n- h..rt" ;" rt;,.",t",,, r ---- -.....--..-... r- -..--...-..., -.t-"- that during a telephone conference with DelGiorno and Weingarten he was told that "the premises" had this service. This indicates that while defendant may be able to claim that it never directly promised the tenant that it had access to this service (as it was the building itself, as opposed to the tenant's space, that had it), tenant can produce some proof that a reasonably prudent tenant would have believed that it had been told it would have the power it needed to operate, and was induced to sign the lease based on such assurances. Under these circumstances, the Court finds that the tenant has made the necessary showings to obtain a Yellowstone injunction to the extent it addresses an attempt to terminate the lease based on a violation of paragraph 12 (see, 225 E. 36 St. Garage Corp. v 221 E. 3(/h Owners Corp., 211 AD2d 420). However, the plaintiff does not directly deny the missing and late payments referred to in the five-day notice or deny that the landlord is entitled thereto. It does claim that it never received a tax bil, and wil pay upon its receipt. Notwithstanding its conclusions about the electrcal service, the Cour reminds plaintiffthat terms of the lease must always be obeyed even where a Yellowstone injunction is issued, and payment of rent is not suspended (see, Graubard Mollen Horowitz Pomeranz Shapiro v 600 Third Avenue Assocs. 93 NY2d 508, 515). Accordingly, the motion is granted to the extent that the period for the plaintiff to cure any alleged default under paragraph 12 of the lease is tolled until such time as this Cour determines, or the parties otherwise agree what the nature of the cure should be and which part should pay, or what percentage of such cost each should bear. The period to cure any payments owed under the lease as asserted in the notice is tolled as well, but only for 20 days from the date of this order, and the landlord may thereafter seek any appropriate remedy available to it under the lease. Further, as the landlord complains of significant financial losses (albeit without documentary proof) and more important, has demonstrated that payments to it under the lease have not been made timely, the tenant must post a bond in the amount of $100 000 within twenty (20) days of the date hereof, or the motion is denied in its entirety and any temporary stay is vacated at the end of that period. Counsel for the parties are to appear for a conference before the undersigned on Friday, July 9, at 9:30 a. ENTSRiiD Date: June 24. 2004 JUN 2 8 COUHlY CL,iJf5 '1 'I' OFFICE