Plaintiff ARO, Inc. ("ARO") moves by OTSC for a Yellowstone injunction. Defendant Polish Army Veteran's Association of America, District No. 2, Inc. ("PAVA") opposes.

ARO is the net lessee of three of the four floors including performance space at 17 Irving Place, New York County, a building owned by PAVA. In 1997, the parties executed a 9-½ year lease including annual rent increases based on the Consumer Price Index ("CPI"). ATO in turn sublet the premises with PAVA's permission. The sublease allowed the subtenant to cure any default by ARO under the lease. Along with the lease and the sublease, the parties and the subtenant executed a Tripartite Agreement on November 19, 1997 requiring, among other things, that PAVA and ARO give the subtenant simultaneous notice of any notice by PAVA to ARO.

On November 1, 2004, PAVA sent a Notice of Default to ARO claiming that ARO failed to pay CPI adjustments from 1998 to the present and demanding $108,377 arrears within 10 days. PAVA also demanded copies of insurance policies and all subleases. ARO took no action and on December 10, 2004 PAVA served a Notice of Termination effective December 17, 2004. Indisputably, neither party sent either Notice to the subtenant. ARO filed the instant action on February 3, 2005.

There is no question that ARO meets three of the conditions for granting a Yellowstone injunction:

1)Plaintiff holds a valuable commercial lease.

2)Plaintiff has received a notice to cure.

3)Plaintiff is prepared to cure the alleged default without vacating the premises.

First Nat'l Stores, Inc. v. Yellowstone Shopping Ctr., Inc., 21 NY2d 630 (1968).

The parties, however, read the facts differently in regard to the fourth condition: Whether [*2]plaintiff requested injunctive relief prior to the lease termination. The Notice of Default gave ten days to cure the financial arrears and thirty days to cure other alleged deficiencies. The Notice of Termination was not served until thirty days had passed and still ARO waited until February 3, 2005 to commence this action by which time the lease had terminated and Yellowstone relief was no longer available according to PAVA.

ARO claims no valid cure period was established because there was no proper Notice of Default sent to tenant and subtenant simultaneously as required by the Tripartite Agreement. The subsequent Notice of Termination was thus invalid because it rested upon no default. ARO, therefore, asserts that its request for injunctive relief arose prior to lease termination. ARO claims it otherwise met its lease obligations paying all and more due PAVA which did not include CPI adjustments in any rent bills sent to ARO.

PAVA avers that the purpose of simultaneous notice was to protect the subtenant's property interest allowing the subtenant, if it chose, to act to keep the over lease in effect to avoid disruption to its own subtenancy. This did not provide ARO with a means to forestall meeting its lease obligations according to PAVA. ARO is not physically present in the building and lease termination poses no practical problem for it. In fact, PAVA and the subtenant have reached an understanding permitting the subtenant to remain in occupancy at least through the remainder of its sublease.

The Court finds that the purpose of simultaneous notice is not limited to protecting the rights of the subtenant. Action by the subtenant to cure default by ARO, as allowed by the sublease, obviously removes a threat to ARO's rights. Prompt notification to the subtenant of default is particularly valuable to ARO because it is not on the premises and may be unaware of conditions that the subtenant is literally in position to correct easily. In any case, there is no ambiguity about the terms of notice in the Tripartite Agreement and the Court has no reason to explore the underlying purpose of the clear language that the parties have chosen to be bound by.

Accordingly, the motion for a Yellowstone injunction is granted. The action will continue with a Preliminary Conference on Tuesday, April 12, 2005 at 3:00 PM in Room 304, 71 Thomas Street.

This constitutes the decision and order of the Court.

Dated: February 28, 2004

E N T E R :

__________________________

HAROLD B. BEELER, J.S.C.