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EMPIRE MGT. v. NOSTRAND REALTY
Factual and Procedural Background
This appeal arises from an action seeking recovery for damage to property. The plaintiff, 2339 Empire Management, LLC, appeals from a Supreme Court order dated April 7, 2008, which denied, without prejudice, the plaintiff’s motion to direct the discharge of an undertaking given prior to the granting of a temporary restraining order. The undertaking was required by the court before issuing the temporary restraining order in this matter.
Legal Issues Presented
- Whether the plaintiff’s undertaking given prior to the granting of a temporary restraining order should be discharged before a final determination on the plaintiff’s entitlement to injunctive relief.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| CPLR 6313(a), 6313(c) | Allows a temporary restraining order without notice if immediate and irreparable injury is shown; permits court to require an undertaking before granting such order. | Outlined the statutory basis for requiring the plaintiff to give an undertaking prior to a temporary restraining order. |
| CPLR 6312(b) | Requires plaintiff to give an undertaking before a preliminary injunction; obligates plaintiff to pay damages if injunction is wrongly granted. | Established the nature and purpose of the undertaking as security for damages caused by injunctive relief. |
| CPLR 6315 | Provides that damages from preliminary injunctions or temporary restraining orders may be ascertained upon motion. | Supported the procedural mechanism for assessing damages related to the undertaking. |
| Honeywell, Inc. v Technical Bldg. Servs., 103 AD2d 433 | Recognizes the undertaking as the basis for damages to the defendant. | Used to emphasize that discharging the undertaking without resolving liability is improper. |
| Schenectady Chems. v Flacke, 113 AD2d 168 | Discharging a plaintiff’s undertaking without deciding liability on the undertaking is an error. | Key precedent supporting the Supreme Court’s refusal to discharge the undertaking without a final determination. |
| J. A. Preston Corp. v Fabrication Enters., 68 NY2d 397 | Supports the principle that undertakings cannot be discharged prematurely. | Reinforced the court’s decision to deny discharge without prejudice pending final determination. |
| Straisa Realty Corp. v Woodbury Assoc., 185 AD2d 96 | Addresses procedural requirements related to injunction undertakings. | Further supported the procedural posture requiring denial without prejudice. |
| Blueberries Gourmet v Aris Realty Corp., 255 AD2d 348 | Discusses undertakings and injunctive relief procedures. | Used as additional support for the court’s ruling. |
| Matter of Gandolfo v White, 224 AD2d 526 | Relates to procedural aspects of injunction undertakings. | Supported the court’s approach to denying discharge without prejudice. |
| Margolies v Encounter, Inc., 42 NY2d 475 | Addresses ascertainment of damages from injunctions. | Referenced for procedural guidance on damages related to injunction undertakings. |
| Hathorn v Natural Carbonic Gas Co., 163 App Div 768 | Procedural principles concerning injunction undertakings. | Referenced to support the court’s reasoning. |
Court's Reasoning and Analysis
The court analyzed statutory provisions governing temporary restraining orders and preliminary injunctions, specifically CPLR 6313 and 6312, which authorize the court to require a plaintiff to post an undertaking as security for damages potentially suffered by the defendant. The undertaking serves as a financial guarantee to compensate the defendant if the injunction is later found to have been improperly granted. The court emphasized established case law, notably Schenectady Chems. v Flacke, which holds that discharging a plaintiff’s undertaking before a final determination of the plaintiff’s entitlement to injunctive relief is erroneous. Because the record contained no final determination on whether the plaintiff was entitled to injunctive relief, the Supreme Court correctly denied the plaintiff’s motion to discharge the undertaking without prejudice, preserving the defendant’s right to recover damages if warranted.
Holding and Implications
The order of the Supreme Court, Kings County, denying without prejudice the plaintiff’s motion to discharge the undertaking, is affirmed.
The direct effect of this decision is that the plaintiff remains obligated under the undertaking until a final determination is made regarding entitlement to injunctive relief. The ruling preserves the defendant’s protection against damages caused by the injunction and does not set new precedent beyond affirming established principles governing injunction undertakings.
Ordered that the order is affirmed insofar as appealed from, with costs.
"If, on a motion for a preliminary injunction, the plaintiff shall show that immediate and irreparable injury, loss or damages will result unless the defendant is restrained before a hearing can be had, a temporary restraining order may be granted without notice" (CPLR 6313 [a]). "Prior to the granting of a temporary restraining order the court may, in its discretion, require the plaintiff to give an undertaking in an amount to be fixed by the court, containing terms similar to those set forth in subdivision (b) of rule 6312" (CPLR 6313 [c]; see Siegel, NY Prac § 330, at 529 [4th ed]). CPLR 6312 (b) provides in pertinent part that "prior to the granting of a preliminary injunction, the plaintiff shall give an undertaking in an amount to be fixed by the court [and] the plaintiff, if it is finally determined that he or she was not entitled to an injunction, will pay to the defendant all damages and costs which may be sustained by reason of the injunction" (CPLR 6312 [b]). "The damages sustained by reason of a preliminary injunction or temporary restraining order may be ascertained upon motion on such notice to all interested persons as the court shall direct" (CPLR 6315; see Margolies v Encounter, Inc., 42 NY2d 475, 477).
"Since the undertaking is [a defendant's] basis for damages ( cf. Honeywell, Inc. v Technical Bldg. Servs., 103 AD2d 433), discharging [a] plaintiffs undertaking without deciding the issue of [the] plaintiffs liability upon the undertaking [is] Serror" ( Schenectady Chems. v Flacke, 113 AD2d 168, 171; see Weinstein-Korn-Miller, NY Civ Prac ¶ 6312.04).
As there is nothing in the record to indicate that there has been a final determination as to whether the plaintiff was entitled to injunctive relief, the Supreme Court properly denied, without prejudice, that branch of the plaintiffs motion which was to direct the discharge of the undertaking ( see J. A. Preston Corp. v Fabrication Enters., 68 NY2d 397, 406; Straisa Realty Corp. v Woodbury Assoc., 185 AD2d 96, 100; Schenectady Chems. v Flacke, 113 AD2d at 171; see also Blueberries Gourmet v Aris Realty Corp., 255 AD2d 348, 350-351; Matter of Gandolfo v White, 224 AD2d 526, 528; cf. Margolies v Encounter, Inc., 42 NY2d at 479; Hathorn v Natural Carbonic Gas Co., 163 App Div 768, 772).
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