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Friedman v. Zahid Aslam, Bibee, LLC

Superior Court of Delaware, Kent

January 2, 2015

FAYE BIBEE FRIEDMAN, Plaintiff,
v.
ZAHID ASLAM, BIBEE, LLC, a Delaware Limited Liability Company and PHOENIX BEHAVIORAL HEALTH SERVICES, INC., a Delaware corporation, Defendants.

Submitted: October 24, 2014

Upon Plaintiff's Motion to Dismiss Counterclaim and Plaintiff's Motion to Dismiss Amended Counterclaim.

Stephen E. Smith, Esquire of Baird Mandalas Brockstedt, LLC, Dover, Delaware, attorney for Plaintiff.

James P. Hall, Esquire of Phillips Goldman & Spence, P.A., Wilmington, Delaware, former attorney for Defendants.

ORDER

WILLIAM L. WITHAM, JR. RESIDENT JUDGE.

Before this Court is the Plaintiff's Motion to Dismiss Defendants' Counterclaim and Plaintiff's Motion to Dismiss Defendants' Amended Countercl aim. Both parties failed to provide any legal authority to support their positions in the amended pleadings or motions. The Defendants failed to adhere to proper court procedure when filing its amended counterclaim with respect to proper deadlines. However, the Plaintiff filed a response to the improperly filed amended counterclaims, and did not claim any undue burden. As such, the Court will consider the motions.

An ancillary matter in this litigation is the representation of Zahid Aslam, as well as the other named Defendants, Bibee, LLC, and Phoenix Behavioral Health Services, Inc. Through the entirety of litigation and through the argument of the Plaintiff's motion to dismiss counterclaim, James P. Hall has represented the Defendants. On December 12, 2014, this Court heard his motion to withdraw as counsel due to differences between counsel and defendant. This Court granted the motion, and gave Defendants sixty (60) days to retain new counsel. To date the Defendants have not retained new counsel, however a substantial amount of time remains for them to do so. This matter, as presented, is nevertheless ripe for decision.

FACTUAL BACKGROUND

On April 23, 2014, Faye Bibee Friedman (hereinafter "Plaintiff") filed a complaint with the Court alleging claims against Zahid Aslam (hereinafter "Defendant" or "Aslam"), Bibee, LLC (hereinafter "Bibee"), and Phoenix Behavioral Health Services, Inc. (hereinafter "Phoenix Behavioral"). Plaintiff brings claims against Aslam, alleging that he is personally obligated to repay Plaintiff, and also that he breached the terms of the agreement with Bibee and Phoenix Behavioral. Plaintiff also alleges that Phoenix Behavioral breached an Unsecured Note, resulting in damages to Plaintiff. Lastly, Plaintiff asserts that Bibee's failure to make payments according to the terms of a Secured Note resulted in damages to Plaintiff, and that Defendant has been unjustly enriched by the acquisition of Bibee and Phoenix Behavioral, because Defendant has not adequately compensated Plaintiff.

On July 13, 2013, Defendant Zahid Aslam entered into a contract with Plaintiff and her husband for $550, 000 in exchange for 100% interest in Bibee. This required Defendant to assume a loan by TD Bank, to pay $25, 000 at closing, to pay $25, 000 on September 15, 2013, and to deliver a Secured Note to Plaintiff in the amount of $209, 000, payable over sixty months. Plaintiff states that the Defendant delivered a promissory note in the amount of $209, 000 to Plaintiff's husband. Defendant executed and delivered to Plaintiff a mortgage on land as security for the Promissory Note, recorded on May 16, 1983.

On July 13, 2013, Defendant Zahid Aslam entered into another contract with Plaintiff and Plaintiff's husband, where Defendant paid $175, 000 in exchange for 100% of shares of Phoenix Behavioral. This required Defendant to pay $25, 000 on November 25, 2013, to pay $25, 000 on January 15, 2014, and for Phoenix Behavioral to execute an unsecured note to Plaintiff's husband in amount of $125, 000, payable over 24 months.

In July of 2013, Plaintiff's husband passed away, leaving Plaintiff with sole interest in the previously mentioned instruments. Plaintiff alleges that Defendant: failed to make a $25, 000 payment due under the Bibee Contract, failed to make payments on the $209, 000 Secured Note, ceased making payments on the loan from TD bank in January of 2014, and failed to make any payments on the Phoenix Behavioral contract.

Plaintiff states that the agreed-to contract provides that if the full amount of each monthly payment is not paid on its due date, the Borrower is in default and the Note Holder may require payment immediately for both the Secured Note and the Unsecured Note. Further, the Note Holder may request all interest, with reasonable costs and expenses, including attorneys' fees. Plaintiff claims that she is owed the principal sum of $209, 000.00, interest charges of $7, 450.78, and late charges of $1, 465.36, for a total balance of $217, 916.14. This total is based on Defendant's default in payment of the Secured Note and Mortgage for Bibee. Plaintiff also asserts that she is owed the principal sum of $125, 000, interest charges of $4, 474.60, and late charges of $2, 127.04, for a total balance of $131, 601.64. This total is based on Defendant's default in payment of the Unsecured Note for Phoenix Behavioral. Lastly, Plaintiff states that Defendant and his entities have paid only $25, 000 of the $725, 000 negotiated sales price, and for this reason, was unjustly enriched.

On July 18, 2014, Defendant and his entities filed a counterclaim and soon thereafter, Plaintiff filed a motion to dismiss Defendants' counterclaim on August 12, 2014. Defendants filed a response to Plaintiff's motion ...


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