Court Temporarily Bars Landlord from Terminating Restaurant Lease

What Happened: An Italian restaurant tried to assign its lease to a steakhouse, but the landlord refused and served notice of termination. The tenant denied committing any lease violation and asked the court to issue a temporary injunction barring the landlord from terminating the lease until the merits of the case were decided.

Ruling: The New York court granted the temporary injunction.

Reasoning: Getting a court to grant a temporary injunction is difficult. To do it, the party seeking the injunction must first show that it has a probability of success on the merits. The court ruled that the tenant in this case was likely to win on the merits because it had the right to assign the lease to the steakhouse and the landlord’s refusal of the assignment was unreasonable. The lease gave the landlord the right to terminate upon 30 days’ notice for requesting an assignment unless the assignment was to “an ongoing business.” The transfer from Italian restaurant to steakhouse would probably involve changes in the restaurant’s name, menu, employees, and perhaps even physical appearance, the court acknowledged. But it was still an ongoing business. Nor would the assignment violate the tenant’s lease duty to “maintain the Premises throughout the Term of this Lease as dignified first-class restaurant/cafe, in a high grade and reputable manner and in a manner which shall not detract from the character, appearance or dignity of the Project.” After all, it wasn’t as though the restaurant was assigning the lease to a fast-food or non-restaurant business operation, the court reasoned.  

• Marina Caffe LLC, 2023 N.Y. Misc. LEXIS 9498, 2023 NY Slip Op 33655(U)