The Second Department recently released a decision which, if followed by commercial landlords, over time may signal the demise of Yellowstone proceedings. In 159 MP Corp. v. Redbridge Bedford, LLC, the Court (over a strong dissent) held that a written lease, negotiated at arm’s length by a commercial tenant, may include the waiver of a right to declaratory judgment relief – and held that such a waiver is not void and unenforceable as a matter of public policy.
A Yellowstone proceeding is, at its foundation, a declaratory judgment action. So, unless 159 MP Corp. is appealed to and reversed by the Court of Appeals, going forward commercial leases may include a waiver of the right to Yellowstone relief. Such a change would have dramatic procedural and evidentiary significance. In a classic Yellowstone proceeding, the commercial tenant is given the benefit of the doubt to maintain the status quo. Under 159 MP Corp., the historical assumptions and presumptions in favor of the tenant under the Yellowstone legal regime would no longer be available.