On August 25, 2022, Justice Ruchelsman of the Kings County Commercial Division issued a decision in 2875 W. 8th St. Assoc., L.P. v. Bonomo, 2022 NY Slip Op. 32932(U), holding that a lack of sufficient insurance was a curable default for the purposes of a Yellowstone injunction if the tenant could bond a potential claim or procure retroactive insurance coverage, explaining:
A Yellowstone injunction is a remedy whereby a tenant may obtain a stay tolling the cure period so that upon an adverse determination on the merits the tenant may cure the default and avoid a forfeiture, Thus, a tenant seeking a Yellowstone must demonstrate that: (1) it holds a commercial lease, (2) it has received from the landlord a notice of default, (3) its application for a temporary restraining order was made prior to expiration of the cure period and termination of the ;Lease, and (4) it has the desire and ability to cure the alleged default by any means short of vacating the premises.
. . .
It is true that in JT Queens Carwash Inc. the court held that the failure to maintain requisite insurance is an incurable default demanding a denial of a Yellowstone injunction. However, in Great Wall 384 Inc. v. 384 Grand Street Housing, the court held that a conditional Yellowstone was proper where the tenant offers the ability to protect the landlord for the period in default by either securing retroactive insurance or by posting a bond for the amount of the deficient insurance. Thus, a distinction must be drawn between situations where no insurance existed at all and situations where insurance existed but some deficiency likewise exists. Therefore, where a tenant agrees either to bond the defendant for losses incurred as a result of a purportedly insured claim or states that it can secure retroactive insurance to protect the landlord, a cure is possible.
Therefore, to forestall the further service of notices to cure based upon deficient insurance, the motion seeking a Yellowstone injunction is conditionally granted upon evidence presented to the court of either retroactive insurance or the posting of a bond protecting the landlord for any claims in excess of the coverage amounts.
(Internal quotations and citations omitted) (emphasis added).