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The Eviction of a Night Club: Using Aggressive Lawyering, Creative Legal Theories and Impressive Evidence Results in Lease Surrender, Money Judgment and Payment of Legal Fees

Adam Leitman Bailey, P.C.’s client, a property owner, was plunged into a case involving a popular night club where two high profile murders occurred while the New York Giants were celebrating their Super Bowl victory and many professional basketball players celebrated the end of the basketball strike. The landlord hired Adam Leitman Bailey, P.C. to evict the tenant for violating the lease. The difficulty of the eviction case was that although the commercial lease banned the restaurant from running a night club, it was allowed to operate as a supper club. Whichever attorney representing the landlord or tenant that could prove one or the other would win the case.

Adam Leitman Bailey, P.C. began with issuing a notice to cure, alleging that the tenant defaulted under the lease agreement by running a nightclub at the leased premises well into the morning hours. While the lease agreement allowed a restaurant with dancing and music, the lease forbade and the tenant explicitly agreed not to run a nightclub. The notice to cure also cited the tenant’s acquiescence in fostering a “culture of lawlessness and violence.” In response to the notice to cure, the tenant sought a Yellowstone injunction, claiming they were instead running a restaurant with dancing and live music. At the initial court appearance, Adam Leitman Bailey, P.C. attorneys thought quickly on their feet and achieved a rare, if not subtle, victory. Instead of the judge simply granting a Yellowstone injunction and ordering the case to go through the discovery process, which could take years, Adam Leitman Bailey, P.C. attorneys secured an immediate framed issue hearing on whether the leased premises was being run as a nightclub or a supper club. This would potentially shave years off the length of the case and allow the landlord to quickly pursue its eviction case against the tenant.

In preparation for the framed issue hearing, Adam Leitman Bailey, P.C. attorneys conducted extensive and thorough investigation and trial preparation. Adam Leitman Bailey, P.C.’s extraordinary preparation tactics included

(i) postings on Facebook to recruit any patrons of the nightclub that would testify the tenant was running a nightclub and collected hours of video showing dancing and nightclub activities,(ii) quickly taking snapshots of the tenant’s website highlighting its self-promotion as a nightclub (before the tenant could change the website) and(iii) securing an entertainment leasing expert to testify the premises were being used as a nightclub.(iv) Adam Leitman Bailey, P.C. also submitted Freedom of Information Law requests to several governmental agencies to investigate the tenant’s operations.(v) The FOIL results revealed that the tenant was actually out of compliance with the appropriate governmental licenses, a tell-tale sign of a “culture of lawlessness”.

Approximately one month later, the hearing commenced.

Adam Leitman Bailey, P.C. attorneys cross-examined the tenants’ first witness, a manager at the nightclub, who attempted to convince the court the tenant was actually running a supper club, and not a night club. On cross-examination, however, Adam Leitman Bailey, P.C. attorneys managed to box the witness into admitting that approximately 70% to 80% of the nightclub’s sales came from the sale of liquor, a clear indication that this was not merely a restaurant with dancing, as the tenant claimed. Additionally, when pressed with the question on whether the nightclub was operating with the correct governmental licenses, the tenant’s attorneys jumped to their feet and objected to any continuance of the hearing. Clearly shocked and taken by surprise, the attorneys recognized the fact that they could not afford to have the tenant’s lack of compliance with governmental licensing requirements be read into the record of the proceeding.

The overwhelming evidence presented at the hearing led to Adam Leitman Bailey, P.C’s victory. The surrender of the lease occurred and the commercial tenant was on the hook for the entire rent owed while the space remained vacant.

In order to avoid the money judgment and in a last ditch effort to avoid paying the substantial amount of arrears now accumulated, the tenant fabricated a claim that the landlord was unreasonably withholding consent to an assignment of the lease.

Adam Leitman Bailey, P.C. knew that if it did not have the money deposited with the court it probably would never see the money. So it turned their request against them. Adam Leitman Bailey, P.C. brought a motion before the court asking the court to direct the tenant to tender all arrears to the client (which amounted to hundreds of thousands of dollars) prior to the court giving any consideration to the tenant’s claim of unreasonably withheld consent. The court agreed and directed the tenant to pay the arrears prior to any hearing on the withholding of consent. The court then warned the tenant that if its order was not complied with, it could consider issuing a judgment of possession forthwith without ever getting the merits of the assignment application. Once the tenant failed to pay the full arrears timely on two different dates, the judge folded the case and awarded not only possession of the restaurant/nightclub but all of the moneys deposited with the court.

The landlord obtained its space back that it could now use for its own business purposes and no longer had to fear that any other stabbings, shootings, or assaults would occur at the premises.

Adam Leitman Bailey and Colin E. Kaufman represented the client in this victory.

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