Rosenberg & Estis Obtains Contempt Finding Against Corporate Tenant That Failed To Pay Use And Occupancy
Supreme Court of the State of New York, County of New York, Decided: August 5, 2021
R&E Team: Warren A. Estis, Norman Flitt and Alex M. Estis
Rosenberg & Estis secured a major victory over a corporate tenant that defaulted in the payment of rent, commencing a lawsuit, in conjunction with a motion for a Yellowstone injunction, after receiving a notice of default from the landlord.
R&E represented 1001 Sixth Associates, ABS Partners Real Estate, LLC in the case. The court granted R&E’s contempt motion against the tenant and its motion for a money judgment for arrearages.
To avoid lease termination, Corporate Suites 12, LLC, sought and obtained a Yellowstone injunction that was conditioned on the tenant posting a bond to secure the tenant’s substantial arrearages. Separately, R&E independently secured an order requiring the tenant to continue to pay monthly use and occupancy during the pendency of the injunction.
The Court issued the Yellowstone injunction based on representations by the corporate tenant’s principal and its attorney that the tenant was ready, willing and able to meet its monetary obligations, and that the principal would go so far as to guaranty compliance. The Court relied on these representations in issuing the injunction.
The tenant first failed to post the required undertaking by the deadline imposed by the Court, which resulted in the landlord’s service of a notice of termination of lease. The tenant then failed to pay use and occupancy, which resulted in R&E filing a contempt motion against the tenant seeking, in addition to the contempt finding, a money judgment for the arrearages and a dismissal of the tenant’s complaint. The Court granted both requests.
The Court’s (Joel M. Cohen, Justice) decision, rendered on August 5, 2021, in “Corporate Suites 12, LLC v. 1001 Sixth Associates, ABS Partners Real Estate, LLC,” NY County Clerk’s Index No. 657315/2020, confirmed the Court’s reliance on the tenant’s representations as to its ability to comply with the conditions on which the Yellowstone motion was granted, including continuing to pay ongoing use and occupancy.
The Court also noted that the tenant simply violated the order without first moving to modify its requirements. This obvious disregard for the Court’s authority was yet another basis for the finding of civil contempt as against the corporate tenant. The Court also vacated the Yellowstone injunction, dismissed the tenant’s complaint and directed payment of the arrearages and ordered the settlement of an order, in which R&E intends to provide for the immediate issuance of a judgment of ejectment, thereby recovering possession.