'Yellowstone' Injunctions: Navigating the Wild West of Commercial Lease Disputes

The Yellowstone injunction is implicated in nearly every lease for commercial real property in the state of New York, yet most landlords and tenants do not know what it is or how it affects them. Below is a succinct overview of its implications so that commercial landlords and tenants can better navigate lease disputes.

Stopping the Clock on a Cure Period

Yellowstone injunctions take their name not from the popular neo-Western drama series but from the New York Court of Appeals case of First National Stores v. Yellowstone Shopping Center that created this limited-purpose injunction. In that case, the landlord and tenant disagreed about who was responsible for installing a sprinkler system, which the court ultimately decided was the tenant's responsibility. Although the tenant was able and willing to make the installation once the court said so, the tenant had not asked to pause the cure period, and the landlord had terminated the lease for default. New York's highest court decided it was not empowered to extend the tenant's deadline to cure its default and upheld the lease termination.