Yellowstone Injunction Unavailable | Inmate Renounces Inheritance | Hotel Hair Policy

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No Yellowstone Injunction For Tenant’s Failure to Carry Insurance

No Yellowstone Injunction For Tenant’s Failure to Carry InsuranceIn 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 enant 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

Will Renunciation Prevents Crime Victim’s Son-of-Sam PayIn 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 drug-fueled 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.

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 §2-1.11. “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 enunciation 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 enunciation 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

Long Hair Policy Makes the Cut, If Even HandedRecently 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 he 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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