Yellowstone Injunction Unavailable | Inmate Renounces

HMYLAW
Hamburger, Maxson, Yaffe & McNally, LLP
August 25, 2015
Original Content
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No Yellowstone Injunction For Tenant’s Failure to Carry Insurance
Will Renunciation Prevents Crime Victim’s Son-of-Sam Pay
Long Hair Policy Makes the Cut, If Even Handed
No Yellowstone Injunction For Tenant’s Failure to Carry Insurance
In NY Great Stone Inc. v. Two Fulton Square a “Yellowstone” injunction was denied to a tenant.
As the Court noted: “Yellowstone injunctions are
routinely granted to avoid forfeiture of a commercial
tenant’s interest prior to a determination of the merits.
A tenant must demonstrate the existence of a
commercial lease, receipt of a notice of default, a
timely application for a temporary restraining order
and the desire and ability to cure the alleged default.”
In prior newsletters, we explained that since the Court
of Appeals’ decision in First Nat’l Stores v. Yellowstone
Shopping Ctr., 21 N.Y.2d 630 (1968), tenants have
developed a practice of obtaining a stay of the cure
period before it expires to preserve a lease until the
merits of a dispute over the default notice may be
resolved in court. Effectively, tenants have learned from the mistake of the tenant in the case of
Yellowstone who commenced an action for declaratory judgment on the last day of the cure
period, but did not obtain a temporary restraining order. The Court of Appeals ultimately held
that in absence of the injunction, it was powerless to revive the expired lease. Significantly, the
courts have since granted such injunctive relief on less than the normal showing required for a
preliminary injunction because of the threat of a forfeiture of the valuable leasehold interest.
Thirty years later, the Court of Appeals revisited its Yellowstone decision in the case of Grabuard
Mollen Horowitz Pomeranz & Shapiro v. 600 Third Ave. Assocs., 93 N.Y.2d 508 (1999). In that case,
the Court of Appeals analyzed what it recognized was the seminal decision to a “new era of
commercial landlord-tenant law in New York State[,]” creating a “remedy for tenants when
confronted with a tangible threat of lease termination.”
Importantly, in reaffirming the standards which a party requesting the Yellowstone injunction
must demonstrate, the Court of Appeals re-enforced the restrictive nature of the common law
remedy that has evolved out of its original decision in Yellowstone, concluding that “[t]hese
standards reflect and reinforce the limited purpose of a Yellowstone injunction: to stop the
running of the applicable cure period.”
For example, it is a well-established tenet in Yellowstone applications that if the application is
made after the expiration of the cure period, and even before the expiration of subsequent notice
of termination of lease, a court is divested of any power to issue the injunction, regardless of the
merits of the tenant’s position on the default, because the court cannot “stop” what has already
run.
Here, in NY Great Stone Inc., the action arose out of a 10-day notice to cure dated November 21,
2014. The defaults in the notice pertained to the tenant’s “failure to conduct a hydrostatic
pressure test on the sprinkler system as a violation of Article 6 of the lease and a separate
violation of Article 8 of the lease and Article 6 of the rider for failure to obtain comprehensive
general liability insurance.”
The Court reasoned that “[e]ssential to obtaining a Yellowstone injunction is a demonstration
by movant that it desires and has the ability to cure the alleged default. *** In the instant case,
the subject lease and rider impose an obligation on the tenant to procure and maintain general
liability insurance from the commencement of the lease throughout the term of the tenancy that
names the landlord as an additional insured.” Although the tenant had annexed a Certificate
of Liability Insurance dated December 2, 2014 which provides coverage effective April 7, 2014
to April 7, 2015 and indicates defendant is an additional insured, the Landlord argued that the
failure to deliver actual insurance policies rather than a certificate is also a violation of the lease,
and that tenant’s submission is clearly inadequate to evidence the maintenance of insurance
coverage during the entire term of the lease which commenced on March 10, 2011.
The Court held that a “tenant’s failure to maintain insurance constitutes a material default of
the terms of the lease. *** A default of this type is incurable as a prospective insurance policy
does not protect a landlord against unknown claims that might arise during the period in which
no coverage existed. *** Although plaintiff points to that portion of the notice to cure which
directs it to obtain general public liability insurance, it does not alter the specific terms of the
lease which require insurance be maintained from the inception of its tenancy.”
Yellowstone relief was, therefore, unavailable to avoid forfeiture.
Will Renunciation Prevents Crime Victim’s Son-of-Sam Pay
In Estate of Grochocki, a Surrogate recently decided
that an inmate validly renounced his deceased
mother’s inheritance before claims for a share of her
estate were filed by the Office of Victim Services and
the father of the inmate’s victim. As a result, the
mother’s estate will go to the inmate’s friend rather
than to compensate the victims of his crime—a drugfueled fatal stabbing in 1993.
According to this recent decision, Deborah A.
Grochocki died September 10, 2014, leaving a Last
Will and Testament dated October 9, 2012, which
devises her entire estate to her son, John C. Greenleaf. The Will also provides that if Mr.
Greenleaf predeceases decedent, the estate will pass to decedent's friend, Cari Marie Slater, who
survived decedent and was also nominated as Executor in the Will.
The petition for the probate of the Will, filed September 22, 2014 by the named Executor, lists
Mr. Greenleaf as under disability, due to incarceration. Mr. Greenleaf is a convicted murderer
and has been incarcerated since long before the Will was prepared. On September 30, 2014,
the Court forwarded a letter to the New York State Office of Victim Services (“OVS”) advising it
of Mr. Greenleaf's status as a beneficiary, as required by SCPA §2222-a.
This law provides:
Where the legatee, distributee or beneficiary is an inmate serving a sentence of imprisonment
with the state department of corrections and community supervision or a prisoner confined
at a local correctional facility, the court shall give prompt written notice to the office of victim
services, and at the same time direct that no payment be made to such inmate or prisoner for
a period of thirty days following the date of entry of the order containing such direction.
According to the statute’s commentary, a crime victim has certain rights to recover damages
from the convicted criminal under Executive Law § 632-a (the “Son-of-Sam law”). Before 2001,
the relief offered by that statute was inadequate, particularly because victims could recover only
funds that were the product of the crime, such as royalties on a book made possible by the
criminal’s notoriety, but not the prisoner's funds from other sources. The legislature amended
the Son-of-Sam law to broaden the categories of criminals subject to these laws, to broaden the
categories of funds available for the victim, and to extend the statute of limitations for victims
to bring these actions. It simultaneously enacted this statute, which provides that if a prisoner
is a distributee or legatee of an estate, the court must promptly notify the Office of Victim
Services and direct that no payment be made to the prisoner for thirty days after the date of its
order containing that direction. The Son-of-Sam law requires the Office of Victim Services
(formerly “State Crime Victims Board,”) to notify the victim and authorizes it to apply for
additional provisional relief for the victim.
When Grochocki died on Sept. 20, 2014, Greenleaf renounced all but $7,500 of his mother’s
estate in papers filed on Nov. 24, 2014.
The Court recognized renunciation as valid. It noted that the renunciation was properly filed
within nine months of the decedent’s death, as required by Estates, Powers & Trusts Law §21.11. “A renunciation is a declination of a right or property bestowed by another, without the
disclaiming party ever coming legally into possession of that right or property. The right to
renounce has existed in New York in the common law for two centuries. *** The steps,
conditions and effects of a renunciation are now codified in EPTL §2-1.114.
“The elements of a statutory renunciation include: 1. a written renunciation of interest; 2. an
affidavit from the renouncing party that he has not and will not receive consideration for the
renunciation from a person whose interest is accelerated by the renunciation; 3. service of a
notice of renunciation upon the fiduciary or other individual/entity holding the assets to be
disclaimed, and upon the individual(s) whose interest is accelerated by virtue of the
renunciation. EPTL §2-1.11(c)(2). The renunciation and affidavit of no consideration are filed
in the Surrogate's Court, together with proof of service of the notice of renunciation upon the
proper persons. To satisfy the statute, all of these steps need to be taken within nine months of,
in this case, decedent's death. EPTL §§2-1.11(c)(2) and (b)(2)(A). A renunciation is irrevocable
and the effect of the renunciation is that the renouncing party is treated as if he had predeceased
the decedent, with respect to the interest(s) renounced. SCPA §§2-1.11(h) and (e).”
Broome County Surrogate said that while the “laudable” provisions of Executive Law §632-a
provide for crime victims to recover compensation from perpetrators, the Legislature has not
barred convicts from renouncing inheritances.
“The Legislature could choose to further expand Executive Law §632-a by restricting the rights
of a convicted person to disclaim [inheritances], but to date has not done so,” Guy wrote in
Matter of Grochocki, 2014-605. “The court must abide by the law as it currently exists, not as it
might wish it to be.”
Long Hair Policy Makes the Cut, If Even Handed
Recently in Viscecchia v. Alrose Allegria LLC, a federal
District Court upheld a claim of selective enforcement as
a form of gender discrimination, but dismissed a gender
discrimination claim under an employer’s grooming
policy.
Richard Viscecchia, Jr., who had long hair, was a line
cook at defendant’s hotel since June 2009. In 2012,
hotel management told him to cut his hair because it was
too long. On October 1, 2013, the hotel’s human
resources department issued a written warning that
Viscecchia had to cut his hair by October 15th in
accordance with the hotel’s hair policy. Viscechia was
fired on October 16th after failing to comply.
He brought a federal action alleging gender discrimination violating Title VII of the Civil
Rights Act and New York Human Rights Law (“NYHRL”), as well as federal and State claims
for retaliation for engaging in protected activities. On motion by the defendant, the District
Court only partly dismissed the lawsuit. It dismissed, as a matter of law, Viscecchia's claim that
the portion of defendant’s hair policy requiring only male employees to have short hair was
inherently discriminatory. As held by the Second Circuit, every other federal court of appeals
that has addressed the issue, and New York State courts, an employer does not violate Title VII
or the NYHRL by requiring short hair on men, but not on women, as part of an overall
grooming policy.
“In this case, the defendant’s hair policy ... clearly imposes grooming requirements on both
male and female employees. Male employees are required to have hair cut ‘above the shirt
collar’ and side burns less than ‘one inch in length and … neatly trimmed. *** Female
employees are also bound by the remaining provisions of the policy, including having hair
‘clean, trimmed, well brushed and neat at all times’ and the prohibition against ‘[e]xtreme
styles’ and against ‘flowers, colored ribbon's [sic], beaded, braided or streaked hair.’ ***
Female and male employees are similarly required to maintain their hair color ‘at neutral
tones.’ *** The Court notes that these portions of the policy apply to all employees, whether
male or female. Thus, it is clear that the hair length requirement is part of a comprehensive
personal grooming code regarding hair that is applicable to all employees.”
Because the law is clear that an employer can adopt sex-differentiated grooming policies that
require only male employees to have short hair, Viscecchia could not have had a good faith,
reasonable belief that such policy was discriminatory.
However, the Court further held that Viscecchia's claim that defendant selectively enforced its
hair policy against men while allowing women to violate the policy— by among other things
having streaked hair—absent enforcement stated a plausible claim of gender-based
discrimination violating Title VII and the NYHRL. “[T]hough hair length policies that
differentiate based on sex are permissible under Title VII, the grooming policies still must be
‘enforced even-handedly between men and women, even though the specific requirements
may differ.’ *** Courts have found that, even if a policy is facially non-discriminatory, if it is
not enforced uniformly across gender lines, a valid discrimination claim may exist.”
As for the retaliation claim, the Court recognized that “Title VII forbids an employer to
retaliate against an employee for, inter alia, complaining of employment discrimination
prohibited by Title VII.” “Further, Title VII protects not only those employees who opposed
employment practices made unlawful by the statute but also those who have ‘a good faith,
reasonable belief that the underlying challenged actions of the employer violated the law’ even
if those actions did not.”
The Court noted that the Amended Complaint alleged that Viscecchia “‘complained to
Defendant that their policy on hair length was unlawfully discriminatory towards men.’ He
does not state that his complaint to the employer was limited to one of ‘inherent
discrimination’ based upon hair length, as opposed to discrimination based upon selective
enforcement. In other words, it is plausible — depending upon the nature of the conversation
between plaintiff and the employer, and circumstances surrounding that conversation — that
plaintiff’s complaint about unlawful discrimination regarding the hair policy could have
included, or have been understood by the defendant to include, a complaint about selective
enforcement of the overall hair policy.”
In sum, the Amended Complaint gave defendant notice of the bases for plaintiff’s retaliation
claim and states a plausible claim for retaliation.
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