DEVANG V. PATEL and MA SADHI, LLC, Plaintiffs,
SHREE JI, LLC, JITENDRA R. MAGDALIA, and BHAVIN JITENDRA MAGDALIA, Defendants.
Submitted: July 12, 2013
Douglas A. Shachtman, Esq. The Shachtman Law Firm Attorney for Plaintiffs.
Michael I. Silverman, Esq. Silverman McDonald & Friedman Attorney for Defendants.
MEMORANDUM OPINION AND ORDER ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
Alex Smalls, Chief Judge.
This matter arises out of the sale of a liquor store business between the seller, Defendants, and buyer, Plaintiffs. On June 3, 2013, Defendants filed the instant Motion for Summary Judgment (the "Motion") pursuant to Court of Common Pleas Civil Rule 56. On June 13, 2013, Plaintiffs filed a response in opposition to the Motion.
A hearing on the Motion was held on July 12, 2013, and the Court heard oral argument from both parties. At the conclusion of the hearing, the Court reserved decision. For the reasons discussed herein, the Court, finds that issues of material fact exist. Accordingly, Defendants' Motion is DENIED.
Facts and Procedural History
On September 14, 2012, Plaintiffs, Devang V. Patel ("Pater7) and Ma Sadhi, LLC ("Ma Sadhi") (collectively, "Plaintiffs"), brought this action seeking Declaratory Judgment and for fraud against Defendants, Shree Ji, LLC ("Shree Ji"), Jitendra R. Magdalia ("Jitendra") and Bhavin Jitendra Magdalia ("Bhavin") (collectively, "Defendants"), for alleged misrepresentations made in the course of the sale of a liquor store from Defendants, to Plaintiffs. In the Complaint, Plaintiffs alleged the following: on September 10, 2011, Plaintiffs entered an agreement with Defendants (the "Agreement"), whereby Plaintiffs would purchase Peddler's Liquor Store ("Peddler") from Defendants, including fixtures, equipment, and inventory. The Agreement provided that the inventory included in the transaction was to be determined the day preceding the closing, and was to be paid for by Plaintiffs in accordance with terms of a promissory note.
Plaintiffs allege that prior to entering the Agreement, Defendants represented to Plaintiffs, on more than one occasion, that Peddler did not contain any "dead" inventory.Plaintiffs claim it relied on such assertions when it entered the Agreement. At the time of closing, on December 29, 2011, the inventory was valued at $133, 132.64, and a promissory note in that amount was executed, in accordance with the terms of the Agreement
Plaintiffs allege that, after operating Peddler for several months, it discovered $1, 130.72 worth of inventory had expired. Additionally, Plaintiffs observed that "much of the inventory" was not being purchased by customers, prompting Plaintiffs to analyze Peddler's records. Plaintiffs determined $22, 603.40 worth of inventory had been "dead over six months old." Plaintiffs maintain that, after deducting the expired and dead inventory, the value of the inventory was actually $109, 398.52; not $133, 132.64, as assessed prior to closing Plaintiffs request a declaratory judgment as to the value of the inventory, as well as compensatory and punitive damages for the alleged fraudulent misrepresentations made by Defendants regarding the inventory.
On November 15, 2012, Defendants filed an Answer and Counterclaim,  alleging Plaintiffs breached the Agreement by failing to pay interest and attorney's fees. Defendants request that the Court enter an order declaring the validity of the Agreement.
On April 8, 2013, Plaintiffs filed a response to Defendants' Counterclaim, in which Plaintiffs deny that it breached the contract by failing to pay interest and attorney's fees.
On June 3, 2013, Defendants filed the instant Motion for Summary Judgment pursuant to Court of Common Pleas Civil 'Rule 56(c). On June 13, 2013, Plaintiffs filed a response in opposition to Defendants' Motion for Summary Judgment On July 12, 2013, a hearing on the ...