Preview
FILED: NEW YORK COUNTY CLERK 12/11/2020 04:34 PM INDEX NO. 157631/2020
NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 12/11/2020
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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33/34 WEST OWNER LLC and SLG 315 WEST Index No.: 157631/2020
LLC,
Plaintiffs,
-against-
QUIK PARK TRUFFLES LLC, RL HOLDINGS II
LLC, RAFAEL LLOPIZ, “ABC CO.” and “XYZ
CORP.”,
Defendants.
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DEFENDANT RAFAEL LLOPIZ’S MEMORANDUM OF LAW
IN OPPOSITION TO PLAINTIFFS’ MOTION FOR USE AND
OCCUPANCY AND PRELIMINARY INJUNCTION
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TABLE OF CONTENTS
TABLE OF AUTHORITIES .......................................................................................................... ii
PRELIMINARY STATEMENT .....................................................................................................1
FACTS .............................................................................................................................................2
ARGUMENT ...................................................................................................................................4
A. Landlord Misapplies the Applicable Legal Standards ........................................................4
B. The OSC Should be Denied As It Seeks the Ultimate Relief in the Case ...........................6
C. Landlord Has Not Established a Likelihood of Success on the Merits................................7
D. Landlord Cannot Establish Irreparable Injury ....................................................................9
E. The Balance of the Equities on a Preliminary Injunction Favors Defendants ...................10
CONCLUSION ..............................................................................................................................11
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TABLE OF AUTHORITIES
CASES PAGE(s)
Cleo Realty Assocs., L.P. v. Papagiannakis,
151 A.D.3d 418 (1st Dep’t 2017) ............................................................................................... 9
Excelsior 57th Corp. v. Select Parking LLC,
Index No. 155922/2020 (Sup. Ct., N.Y. Cty. Aug. 21, 2020) (NYSCEF Dkt. No. 30) ......... 4, 5
EdCia Corp. v. McCormack,
44 A.D.3d 991 (2d Dep’t 2007) ............................................................................................ 5, 10
Eli Haddad Corp. v. Cal Redmond Studio,
102 A.D.2d 730 (1st Dep’t 1984) ............................................................................................... 4
Family Affair Haircutters, Inc. v. Detling,
110 A.D.2d 745 (2d Dep’t 1985) ................................................................................................ 8
Findlay House, Inc. v. Zhang Hongliu,
61 Misc. 3d 644 (N.Y. Civ. Ct. 2018)......................................................................................... 4
Furriers Joint Council of New York v. Indep. Fur Contractors Ass'n,
No. 8269/77, 1979 WL 33261 (Sup. Ct., N.Y. Cty. July 2, 1979) ......................................... 7, 8
Long Island Tr. Co. v. Int'l Inst. for Packaging Ed., Ltd.,
38 N.Y.2d 493 (1976) ................................................................................................................. 9
Mushlam, Inc. v. Nazor,
80 A.D.3d 471 (1st Dep’t 2011) ................................................................................................. 4
Park Towers South Co. LLC v. Columbus Circle Parking LLC,
Index No. 653757/2020 (Sup. Ct., N.Y. Cty. Dec. 3, 2020) (NYSCEF Dkt. No. 32) ................ 7
Reddy v. Mihos,
160 A.D.3d 510, leave to appeal denied, 32 N.Y.3d (1st Dep’t 2018) ....................................... 9
Sau Thi Ma v. Xaun T. Lien,
198 A.D.2d 186 (1st Dep’t 1993) ............................................................................................. 10
Second on Second Cafe, Inc. v. Hing Sing Trading, Inc.,
66 A.D.3d 255 (1st Dep’t 2009) ......................................................................................... 5, 6, 7
SHS Baisley, LLC v. Res Land, Inc.,
18 A.D.3d 727 (2d Dep’t 2005) .................................................................................................. 6
Spectrum Stamford, LLC v. 400 Atl. Title, LLC,
162 A.D.3d 615 (1st Dep’t 2018) ............................................................................................... 6
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CASES PAGE(s)
St. Paul Fire & Mar. Ins. Co. v. York Claims Serv.,
308 A.D.2d 347 (1st Dep’t 2003) ....................................................................................... 5, 6, 7
Wall St. Garage Parking Corp. v. New York Stock Exch., Inc.,
10 A.D.3d 223 (1st Dep’t 2004) ........................................................................................... 9, 10
Workbench, Inc. v. Syblin Realty Corp.,
140 A.D.2d 693 (2d Dep’t 1988) .............................................................................................. 10
STATUTES
CPLR 6301.............................................................................................................................. 2, 4, 5
CPLR 6311.................................................................................................................................. 2, 5
N.Y. Local. L. 1932-A (codified at N.Y.C. Admin. Code §22-1005) ............................................ 2
RPL §220 ........................................................................................................................................ 4
TREATISE
Vincent C. Alexander, Practice Commentaries, N.Y. C.P.L.R. 6301 (2020) ................................. 5
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Defendant Rafael Llopiz (“Llopiz”), by his attorneys, Pryor Cashman LLP, respectfully
submits this memorandum of law in opposition to the motion brought by order to show cause (the
“OSC”) of plaintiffs 33/34 West Owner LLC and SLG 315 West LLC (collectively, “Landlord”)
seeking a preliminary injunction against Llopiz granting Landlord: (i) an order for the immediate
payment of all alleged rent arrears in the amount of $1,127,247.28, or a bond in that amount; and
(ii) an order of ongoing use and occupancy payments in the amount of $203,166.66, the default
rental rate set forth the lease1. For the following reasons, Landlord’s OSC should be denied.
PRELIMINARY STATEMENT
Landlord prematurely and improperly seeks an award from this Court of all the relief to
which it claims to be entitled under a lease for a commercial parking garage premises located in
Landlord’s building in midtown Manhattan (the “Lease”). Landlord seeks from Tenant and the
other defendants, alleged guarantors of Tenant’s Lease obligations, a preliminary injunction
awarding Landlord – among other things – over $1 million in rent arrears that Landlord purports
have accrued during the height of the COVID-19 pandemic. Landlord also seeks an injunction
granting ongoing use and occupancy payments of double the monthly rent under the Lease, to
which it claims it is entitled due to Tenant’s purported uncured monetary default and Landlord’s
alleged subsequent termination of the Lease. Finally, Landlord seeks the issuance of an immediate
order of ejectment should Tenant fail to pay of the above.
The relief sought on this OSC is identical to the relief sought by Landlord in its first, second
and third causes of action in its Complaint. Under New York law, however, litigants may not be
1
Plaintiffs’ Order to Show Cause also seeks an immediate order of ejectment against defendant Quik Park Truffles
LLC (“Tenant”) in the event Tenant and the other defendants do not immediately pay the arrears, post an undertaking,
or fail to make any ongoing monthly installment of use and occupancy. As discussed herein, Llopiz has no knowledge
concerning the facts giving rise to the claims asserted in thisaction and, in any event, reliefon this branch of
Landlord’s motion is not sought against Llopiz.
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granted mandatory injunctions where the movant seeks, pendente lite, the ultimate relief in the
case. Further, Landlord has not (and cannot) establish that it has satisfied all the elements of a
preliminary injunction pursuant to CPLR 6301 and 6311—in fact, Landlord does not even cite to
those provisions in its OSC. Specifically, through its motion, Landlord explicitly seeks the
payment of money, which does not satisfy the requisite element of irreparable harm. Nor can
Landlord establish the likelihood of success on the merits, where defendants have raised
affirmative defenses as to the validity of the subject lease and the alleged existence of breaches.
To grant a preliminary injunction awarding Landlord everything it seeks in its Complaint before
any discovery at all has been taken and before the validity of Landlord’s claims can be evaluated
would operate especially to the prejudice of Llopiz, a personal guarantor who has had no
involvement with the premises, the Lease, or the parties for more than five years.2 Landlord’s
OSC should be denied.
FACTS
Landlord and Tenant entered the Lease on September 30, 2014, for a term of 10 years.
(Compl. ¶ 10.) In connection with the execution of the Lease, Defendant RL Holdings II, LLC
entered a limited corporate guaranty dated September 23, 2014 with Landlord, agreeing to
guarantee Tenant’s obligations under the Lease. Llopiz simultaneously entered a Good Guy
Guaranty with Landlord.
Llopiz is the former President and CEO of RL Holdings II, LLC, which operated numerous
“Quik Park” garages in the New York City area. (Llopiz Aff. ¶ 3.) For many years, in that
capacity, Llopiz entered personal and/or “good guy” guaranty agreements in connection with a
2
Indeed, underscoring the inequity of this result, the City of New York has, with respect to other businesses impacted
by the COVID-19 pandemic, suspended personal liability arising from guaranties of such businesses. See N.Y. Local.
L. 1932-A (codified at N.Y.C. Admin. Code §22-1005).
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number of underlying long-term garage leases throughout the region. In each case, the tenant
entity entering the lease was subject to Llopiz’s control. (Id. ¶ 4.) As is typical with “good guy”
guaranties, Llopiz could extinguish any personal liability by causing the tenant entity to vacate the
premises. (Id. ¶ 5.) He entered such a guaranty here on behalf of defendant Quik Park Truffles
LLC, the tenant entity on the lease in question. (Id. ¶ 6.)
In 2015, however, through a corporate transaction unrelated to this litigation, and not
involving either the landlord or tenant entities in this case, Llopiz sold his entire interest in the
Quik Park business to Citizens Icon Holdings LLC (“Citizens”). (Id. ¶ 7.) Llopiz has had no
ability to control the actions of the Tenant entity since 2015, such as causing Tenant to abide by
its obligations under the Lease. (Id. ¶ 8.) In fact, Llopiz has had no involvement at all with the
garage that is the subject of this litigation, nor with either the Landlord or Tenant in this case, since
2015.
As such, Llopiz has no way of knowing whether the default notice Landlord alleges to have
served upon Tenant was a valid and properly-served predicate notice sufficient to trigger the
default provisions under the Lease. Likewise, Llopiz has no way of knowing whether the
termination notice Landlord alleges to have served upon Tenant was a valid and properly-served
predicate notice sufficient to entitle Landlord to termination of the Lease. Accordingly, as the
parties have not yet had the benefit of any discovery whatsoever in this action to test and evaluate
the validity of Landlord’s claims, it is impossible to know whether any of the obligations in the
Good Guy Guaranty have even been triggered.
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ARGUMENT
A. Landlord Misapplies the Applicable Legal Standards
Landlord purports to seek relief pursuant to RPL §220 and CPLR 6301. In the first
instance, RPL § 220 by its own words governs an “action for use and occupation” (id.) (emphasis
added), yet Landlord’s only cause of action in this litigation for use and occupancy is against
nominal defendants that are not the subject of this motion. (See Compl. ¶¶47-49.) Contrary to
Landlord’s assertion, Section 220 permits, but does not mandate, use and occupancy payments.
See Findlay House, Inc. v. Zhang Hongliu, 61 Misc. 3d 644, 649 (N.Y. Civ. Ct. 2018) (declining
to grant Petitioner Mitchell-Lama housing corporation an award of back use and occupancy that
had accrued since the filing of the action). Further, where, as here, the amount of “reasonable . . .
use and occupation” is contested by the parties, “it is the landlord, not the tenant, who has the
burden of proving reasonable value of use and occupancy.” Mushlam, Inc. v. Nazor, 80 A.D.3d
471, 472 (1st Dep’t 2011) (citation omitted). The rent set forth in the lease is “probative,” but not
“conclusive” of the fair market value of the leasehold. Id. (reversing order directing payment of
use and occupancy where the amount sought by landlord was four times the amount set in the
lease), citing Eli Haddad Corp. v. Cal Redmond Studio, 102 A.D.2d 730, 731 (1st Dep’t 1984)
(granting use and occupancy payments where tenant sought simultaneously to have building
brought under the auspices of the Loft Law, and to avoid payment of rent as the building was
currently categorized as commercial space). Excelsior 57th Corp. v. Select Parking LLC, cited by
Landlord, is distinguishable primarily in that it was granted pre-answer on the tenant’s default.
Index No. 155922/2020 (Sup. Ct., N.Y. Cty. Aug. 21, 2020) (NYSCEF Dkt. No. 30). Here, all
Defendants have answered and asserted affirmative defenses to Landlord’s allegations of breach
of the Lease.
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Further, as set forth in Tenant’s verified answer, the COVID pandemic has “completely
frustrated . . . the very purpose” for which Tenant entered the lease (Answer, NYSCEF Dkt. No.
25, at ¶16), and thus Landlord’s demand for $203,166.66 per month in use and occupancy is not
“reasonable.” Nor has Landlord met its burden to establish the current fair market value of the
Premises, which are located in midtown Manhattan, since the onset of a global pandemic that has
decimated businesses located in that formerly busy commercial district.3
Landlord also seeks preliminary injunctive relief pursuant to CPLR 6301 and 6311,
although it does not cite those statutes anywhere in its papers. “It is well settled that in order to be
entitled to a preliminary injunction, a movant must clearly demonstrate (1) a likelihood of success
on the merits, (2) irreparable injury absent granting of the preliminary injunction, and (3) a
balancing of the equities in the movant's favor.” St. Paul Fire & Marine Ins. Co. v. York Claims
Serv., Inc., 308 A.D.2d 347, 348 (1st Dep’t 2003) (citation & quotations omitted). The movant
must meet demonstrate its entitlement by clear and convincing evidence. EdCia Corp. v.
McCormack, 44 A.D.3d 991, 993 (2d Dep’t 2007). Where the plaintiff seeks a mandatory
injunction compelling an affirmative act – rather than prohibiting an act – the movant risks altering
the status quo as opposed to preserving it, and further risks that the Court will grant the ultimate
relief sought in the case. See Vincent C. Alexander, Practice Commentaries, N.Y. C.P.L.R. 6301
(2020). As a result, the Court also requires plaintiffs seeking mandatory injunctions to demonstrate
that the mandatory injunction preserves the status quo. Id.; see also Second on Second Cafe, Inc.
v. Hing Sing Trading, Inc., 66 A.D.3d 255, 264 (1st Dep’t 2009) (vacating mandatory injunction
to install air conditioner on roof of landlord’s building).
3
See The Virus Turns Midtown Into a Ghost Town, Causing Economic Crisis, New York Times (July 26, 2020),
available at https://www.nytimes.com/2020/07/26/nyregion/nyc-coronavirus-time-life-building.html.
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For the following reasons, Landlord cannot satisfy the standard for the granting of
preliminary mandatory injunction.
B. The OSC Should be Denied As It Seeks the Ultimate Relief in the Case
Although styled as a motion seeking interim relief, Landlord effectively seeks the ultimate
relief on Plaintiffs’ first three causes of action: for a declaratory judgment that Tenant breached
the Lease, entitling Landlord to terminate the Lease as of the alleged Termination Date; for an
order of ejectment; for damages in the amount of alleged unpaid rent; and for a finding that
Landlord is entitled to pendente lite relief in the form of use and occupancy awarded pursuant to
the default rate provision in the Lease.
“It is well settled that the ordinary function of a preliminary injunction is not to determine
the ultimate rights of the parties, but to maintain the status quo until there can be a full hearing on
the merits. Spectrum Stamford, LLC v. 400 Atl. Title, LLC, 162 A.D.3d 615, 616 (1st Dep’t
2018). “A mandatory injunction should not be granted, absent extraordinary circumstances, where
the status quo would be disturbed and the plaintiff would receive the ultimate relief sought,
pendente lite.” Id. at 617, quoting St. Paul Fire & Mar. Ins. Co. v. York Claims Serv., 308 A.D.2d
347, 349 (1st Dep’t 2003) (reversing grant of preliminary injunction ordering defendant to transfer
disputed sum of money to plaintiff, where the ultimate relief sought in the case was the return of
the money); see also SHS Baisley, LLC v. Res Land, Inc., 18 A.D.3d 727, 728 (2d Dep’t 2005)
(reversing lower court’s grant of mandatory preliminary injunction compelling the defendant to
execute the documents for a building permit upon the condition that the plaintiff satisfy rent
arrears, finding that the injunction in effect granted the ultimate relief sought by plaintiff); Second
on Second, 66 A.D.3d at 264.
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New York Supreme Court, in considering the exact issue raised in this case, recently found
that a landlord was not entitled to a preliminary injunction for unpaid back rent and ongoing use
and occupancy, as that was the exact nature of the relief sought in the plaintiff’s complaint for
breach of the lease. See Park Towers South Co. LLC v. Columbus Circle Parking LLC, Index No.
653757/2020, at 1 (Sup. Ct., N.Y. Cty. Dec. 3, 2020) (NYSCEF Dkt. No. 32) (“In other words,
this is not in the nature of an interlocutory application for pendente lite provisional relief; but rather,
a reiteration of plaintiff’s first cause of action for breach of contract in which it is alleged that the
tenant’s ‘breach of the lease’ is ‘continuing each month that [the tenant] fails to pay rent or other
charges due under the lease.’”)
Because Landlord here in its motion merely “reiterat[es]” the ultimate relief sought in its
complaint, of both alleged rent arrears and ongoing use and occupancy payments, it is not entitled
to a mandatory injunction. See Park Towers South Co. LLC, Index No. 653757/2020, at 1; see
also St. Paul Fire, 308 A.D.2d at 349. It is likewise not entitled to interlocutory relief mirroring
the exact form of the ultimate relief it seeks in its second cause of action.
C. Landlord Has Not Established a Likelihood of Success on the Merits
Landlord has not, nor can it, establish a likelihood of success on the merits sufficient to
permit a preliminary injunction to issue for the payment of money, because Defendants have each
raised numerous affirmative defenses to the causes of action in Landlord’s unverified Complaint.
Courts will not find that a plaintiff has established the “heavy burden” of demonstrating its
likelihood of success on the merits where the “facts. .. are sharply disputed.” Furriers Joint
Council of New York v. Indep. Fur Contractors Ass'n, No. 8269/77, 1979 WL 33261, at *1 (Sup.
Ct., N.Y. Cty. July 2, 1979) (denying preliminary injunction) (“Resolution of disputed factual
issues as to whether the acts of the defendants constitute actionable tortious interference, or
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whether laches or waiver is applicable, will determine entitlement to ultimate injunctive relief.
This is best left to determination at a plenary trial.”); see also Family Affair Haircutters, Inc. v.
Detling, 110 A.D.2d 745, 747 (2d Dep’t 1985) (“Where the facts, as in the case at bar, are in sharp
dispute, a temporary injunction will not be granted.”) (citation omitted).
In support of its argument for likelihood of success, Landlord repeats the facts in its
unverified Complaint, without more. (OSC at 6-7.) Yet in their Verified Answer, defendant RL
Holdings II LLC ("RL Holdings II") and Tenant raise eleven affirmative defenses, including
defenses to the allegations that Tenant breached the Lease, such as frustration of purpose,
commercial impracticability, and Landlord’s failure to meet a condition precedent to bringing this
action. (See NYSCEF Dkt. No. 25 at ¶¶ 10-18, 25.) As such, the facts alleged by Landlord in
support of its claims that Tenant breached the Lease are “sharply disputed” by Tenant, and should
be resolved at trial. See Furriers Joint Council, 1979 WL 33261, at *1. As such, a preliminary
injunction should not be granted here. Id.; Family Affair, 110 A.D.2d at 747.
These sharp factual disputes also apply to Guarantor’s obligations. In the first instance, if
no rent arrears are owed by Tenant due to frustration of purpose or commercial impracticability,
Guarantor’s obligations have not yet been triggered. It follows that, if the Lease was not properly
terminated, the Default Rate for use and occupancy of twice the monthly rent under the Lease
certainly is not the correct measure of use and occupancy. Due to Guarantor’s lack of involvement
with this Lease in five years, he has no way of knowing whether either of those conditions are true,
and thus whether his obligations under the Personal Guaranty have been triggered.
Further, Guarantor has raised its own affirmative defenses pertaining to the applicability
of the Personal Guaranty, including lack of consideration and unenforceability. (See NYSCEF
Dkt. No. 24 ¶¶50-57.) Courts will not enforce personal guaranties where they are lacking in
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consideration. Reddy v. Mihos, 160 A.D.3d 510, 514, leave to appeal denied, 32 N.Y.3d (1st Dep’t
2018). Further, Courts will not enforce personal guaranties where there has not been compliance
with a condition precedent to the enforcement of the guaranty, such as the proper service of a
predicate notice on a tenant in an action to recover purported rent arrears. Long Island Tr. Co. v.
Int'l Inst. for Packaging Ed., Ltd., 38 N.Y.2d 493 (1976) (summary judgment to enforce personal
guarantees reversed where question of fact raised as to compliance with condition precedent); Cleo
Realty Assocs., L.P. v. Papagiannakis, 151 A.D.3d 418, 419 (1st Dep’t 2017) (questions of fact as
to whether predicate notices were properly served on tenant prevented summary judgment to
enforce personal guaranty). Guarantor cannot know whether Landlord’s alleged service of the
predicate notices here was proper, thus creating a factual dispute as to Landlord’s entitlement to
enforce the Personal Guaranty. Landlord cannot establish its likelihood of success on the merits
of its claims against Llopiz in the presence of affirmative defenses, and thus a preliminary
injunction should not be granted.
D. Landlord Cannot Establish Irreparable Injury
Landlord has not established by clear and convincing evidence that it will suffer irreparable
injury in the absence of an injunction, as it must to succeed on this OSC. The relief Landlord seeks
is purely monetary, as it seeks an order that Defendants shall pay:
(a) . . . all Fixed Rent, Additional Rent and holdover rent due under the Lease for the
period from and/or during April 1, 2020, through November 30, 2020, in the amount
of $1,127,247.28, or alternatively, to post an undertaking in the amount of
$1,127,247.28, without prejudice to the parties' rights and remedies; [and]
(b) . . . monthly use and occupancy pendente lite in the amount of $203,166.66 per month,
which represents the holdover rent set forth in the parties' terminated lease, without
prejudice to the parties' rights and remedies;
A party cannot demonstrate irreparable injury where the only harm it alleges is economic
loss, which is compensable by monetary damages. Wall St. Garage Parking Corp. v. New York
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Stock Exch., Inc., 10 A.D.3d 223, 228 (1st Dep’t 2004); EdCia Corp., 44 A.D.3d at 994. Here,
Landlord explicitly seeks the payment of money, which can clearly be satisfied by money
damages. Thus, it is irrefutable that Landlord cannot show that it will suffer any irreparable injury
absent an injunction.4
E. The Balance of the Equities on a Preliminary Injunction Favors Defendants
Finally, the balance of the equities in this case favors Defendants, especially Llopiz.
Should a preliminary injunction for the payment of all damages sought by Landlord in this case be
wrongfully granted against Llopiz, he may find himself personally liable and subject to contempt
if Tenant fails to pay, even though Llopiz has neither been involved with the garage at issue since
2015, nor exercised any control over the Tenant since that time. Landlord, on the other hand, has
not alleged any prejudice that will befall it if the total amount of damages is not awarded to
Landlord before the merits of itsclaims may be evaluated. As set forth above in §B, to grant
Landlord the ultimate relief in the case before any discovery has been taken or any evaluation of
the merits of Landlord’s claims has been done is inequitable. The preliminary injunction should
not be granted.
4
Landlord cites Workbench, Inc. v. Syblin Realty Corp., 140 A.D.2d 693, 697 (2d Dep’t 1988)
for the proposition that Owner’s risk “of losing its ability to meet its operating expenses and other
financial obligations with respect to the Premises . . . constitutes irreparable harm.” Workbench
states nothing of the sort. The case involved allegations that a signature on a lease was forged,
and the preliminary injunction was granted to prevent the landlord from selling or leasing the
premises while the validity of the signature was evaluated, as the “plaintiff ha[d] adduced sufficient
evidence indicating that the subject premises is uniquely suited to its needs in terms of size and
location.” Id. Landlord has not alleged any facts pertaining to the uniqueness of real property, a
quality that frequently renders real property susceptible to injunctive relief. Sau Thi Ma v. Xaun
T. Lien, 198 A.D.2d 186, 186 (1st Dep’t 1993) is likewise inapposite, as the Court found that
defendant had indicated his intent to dissipate the proceeds of a winning lottery ticket if not
restrained.
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CONCLUSION
Accordingly, for the foregoing reasons, Plaintiffs’ OSC should be denied.
Dated: New York, New York
December 11, 2020
PRYOR CASHMAN LLP
By: _______________________________
Eric D. Sherman
Marion R. Harris
7 Times Square
New York, New York 10036
esherman@pryorcashman.com
mharris@pryorcashman.com
Attorneys for Defendant Rafael Llopiz
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