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Adam Leitman Bailey, P.C. Wins Appeal for Hotel Developer; Demolition Termination Clause Not Tolled When Commercial Tenant Fails to Satisfy the Requirements for Obtaining a Preliminary Injunction

In this case, the landlord, in accordance with the lease, served the tenant with a 12-month notice of termination based upon the landlord’s intention to demolish the building. The tenant brought an action in the Supreme Court and moved for a preliminary injunction to halt the running of the notice. Among other things, the tenant claimed that the prior landlord had prematurely engaged in renovations and that waived the present landlord’s right to demolish and that the landlord (whose earlier alteration plans had been rejected by the Department of Buildings) did not have a good faith intention to demolish. The Supreme Court found that even if there was an issue about the landlord’s good faith, the tenant had still failed to show that it would be irreparably harmed because it could be compensated by money damages and that the equities did not balance in the tenant’s favor. Accordingly, the court denied the request for the preliminary injunction. The tenant appealed.

The Appellate Division unanimously affirmed the lower court. Adopting Adam Leitman Bailey, P.C.’s position in total, the Appellate Division wrote that “[e]ven if plaintiff could show that it was likely to succeed on the merits of its claim for declaratory relief, it failed to demonstrate that its potential damages are not compensable in money and capable of calculation, and thus, that it will suffer irreparable harm in the absence of the requested injunction. Plaintiff has also failed to show that the equities tip in its favor…[T]the 12-month period provided in the notice of terminition gives plaintiff ample time to ameliorate any ‘disruption and anxiety’ caused by plaintiff’s relocation.”

Adam Leitman Bailey and Jeffrey R. Metz represented the landlord in the lower court, and Jeffrey R. Metz and Dov Treiman represented the landlord before the Appellate Division.

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