Thattayathu v. Trikha

33 Pa. D. & C.5th 347
CourtPennsylvania Court of Common Pleas, Lackawanna County
DecidedOctober 1, 2013
DocketNo. 12 CV 3208
StatusPublished
Cited by1 cases

This text of 33 Pa. D. & C.5th 347 (Thattayathu v. Trikha) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Lackawanna County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thattayathu v. Trikha, 33 Pa. D. & C.5th 347 (Pa. Super. Ct. 2013).

Opinion

NEALON, J.,

Plaintiff contributed $65,000.00 to a closely held cooperation that was formed to acquire a gas station and convenient store business, and after that proffered purchase proved to be unsuccessful, plaintiff sued the corporation’s majority shareholders and the intended seller for compensatory and punitive damages. The jury found the majority shareholders liable for breach of contract and awarded $40,000.00 in damages against them, and further awarded $125,000.00 in compensatory damages against the seller on an unjust enrichment theory. The jury did not find the seller liable in tort, nor did it award punitive damages against any defendant. The seller filed a post-trial motion seeking judgment in his favor on the unjust enrichment claim, and alternatively requesting either a new trial on damages or a remittitur of the award against him to $25,000.00. Plaintiff filed his own post-trial motion seeking to recover pre-verdict interest and post-verdict interest on the jury awards.

Since the trial record contains sufficient evidence that no express contract existed between plaintiff and the seller, that plaintiff delivered funds directly to the seller, and that the seller accepted and retained those funds under circumstances where it would be inequitable for the seller to keep that money, the seller’s motion for judgment notwithstanding the verdict will be denied. However, once the jury found the majority shareholders liable for $40,000.00 and concluded that the seller had not committed a tort and was not liable for punitive damages, the maximum amount of compensatory damages that the jury could award against the seller was [350]*350$25,000.00. Therefore, the seller’s motion for remittitur will be granted and plaintiff will be afforded the option of accepting a remitted award of $25,000.00 against the seller or submitting to a new trial on damages against the seller only. Additionally, plaintiff’s post-trial motion for pre-verdict and post-verdict interest on his compensatory damages awards will be granted.

I. FACTUAL BACKGROUND

This litigation arises out of an ill-fated attempt by plaintiff, Joy Thattayathu (“Thattayathu”), and defendants, Sogi Kallickal (“Kallickal”) and Mathew Mani (“Mani”), to purchase a gas station and convenient store business from defendant, Manmohan Trikha (“Trikha”), and in the process, to secure a long-term lease of real estate located at 300 Meadow Avenue, Scranton. In 2009, Trikha owned and operated six gas stations and convenient stores in the Lackawanna County, including a gas station and convenient store at 300 Meadow Avenue. (Transcript of proceedings (“T.P.”) on4/16/13 atpp. 183, 206, 220, 233; T.P. 4/17/13 at p. 146). The land at 300 Meadow Avenue was owned by Lake Street Acquisition Corp., and Trikha’s wholly owned company, defendant, Subh-Laxmi Corp (“Subh-Laxmi”), leased that property from Lake Street Acquisition Corp., and operated its gas station and convenient store at that site. (T.P. 4/17/13 atpp. 122-124, 139).

In late 2009, Mani approached Trikha regarding the possible purchase of the gas station and convenient store business, and the concomitant procurement of a long term lease of the land, at 300 Meadow Avenue. (Id. at pp. 120, 124-125). Mani indicated that he was soliciting potential investors to raise the necessary funds for such [351]*351a transaction, and Trikha and Mani eventually agreed to a purchase price of $290,000.00, with $150,000.00 of that amount being “owner financed” by Trikha. {Id. at pp. 116-117, 125-126, 132). Mani discussed this prospective transaction with Kallickal who, in turn, contacted his cousin, Thattayathu, to solicit his investment in a newly formed company which would purchase Trikha’s business and acquire a twenty year lease to operate that business at the 300 Meadow Avenue location. (T.P. 4/16/13 at pp. 3, 7-8, 19-20; T. P. 4/17/13 at pp. 20-21).

To that end, Kallickal, Mani, Thattayathu and Jose Makil formed JMJMS, Inc. (“JMJMS”), with Thattayathu and Jose Makil each acquiring two hundred (200) shares of stock and Kallickal and Mani each obtaining two hundred fifty five (255) shares of stock in JMJMS. (T.P. 4/15/13 at pp. 158-159; T.P. 4/16/13 at pp. 27-28, 62, 144-145). Kallickal served as the president, secretaiy and treasurer of JMJMS. (T.P. 4/16/13 at pp. 25-26). In addition to borrowing smaller sums of money from friends to generate the funds to purchase Trikha’s business and to obtain a long term lease of 300 Meadow Avenue, Kallickal and Manu advised Thattayathu to contribute $65,000.00 toward that venture. (T.P. 4/15/13 at pp. 203-204; T.P. 4/16/13 at pp. 9, 41-42). Kallickal and Mani each agreed to contribute $75,000.00, and continued to borrow funds from friends in order to raise that $150,000.00. (T.P. 4/16/13 at pp. 35-38, 166-167).

It is undisputed that in early 2010, Thattayathu contributed $65,000.00 in the following four payments: $10,000.00 to Mani; $25,000.00 to Trikha; $5,000.00 to Mani; and $25,000.00 to Kallickal. (T.P. 4/15/13 at pp. 120-121, 130-131, 136, 195-197; T.P. 4/16/13 at pp. 16-[352]*35217, 34, 58-59, 65, 132; T.P. 4/17/13 atpp. 12-14, 24, 31, 38, 93-94). Kallickal and Mani provided Trikha with $50,000.00 in funds that they had borrowed from friends, and when coupled with Thattayathu’s $25,000.00 payment to Trikha, delivered $75,000.00 in total funds to Trikha.1 (T.P. 4/15/13 atpp. 125, 129, 133, 136; T.P. 4/16/13 atpp. 16-17,128-129,178,184,197-198; T.P. 4/17/13 atpp. 69-60). In exchange for the payment of that amount, Trikha’s company, Subh-Laxmi, agreed to enter into a twenty year lease agreement with Kallickal’s company, 5’s, Inc. (“5’s”), which, in turn, would sub lease the property to JMJMS so that the gas station and convenient store could be operated there. (T.P. 4/15/13 atpp. 138-140, 157, 160-162, 165,198-199; T.P. 4/16/13 atpp. 64, 80-81,139-140, 143-144, 146-149, 163; T.P. 4/17/13 atpp. 80-81).

Unbeknownst to Thattayathu, Kallickal and Mani had used the $40,000.00 that they had received from Thattayathu to repay those individuals that had loaned them money to form JMJMS, but who had not received shares of stock in JMJMS. (T.P. 4/16/13 at pp. 10, 12, 17-18, 25, 33, 60-61, 89, 99-100, 165-166). Additionally, Kallickal and Mani discovered in February 2010 that the property owner, Lake Street Acquisition Corp., had defaulted on its mortgage with Fidelity Deposit and Discount Bank, and that a Sheriff’s Sale of the property had been scheduled for June 1, 2010. (T.P. 4/15/13 at pp. 140-144, 166, 170). JMJMS and Trikha attempted to negotiate and consummate a temporary lease of Trikha’s business for the period from March 15, 2010, to May 31, [353]*3532010, but were unable to reach an agreement. (T.P. 4/15/13 atpp. 140-144, 150, 166, 173).

Due to their concerns that Trikha and Subh-Laxmi would be unable to transfer a twenty year lease for the Meadow Avenue real estate if that property was sold to a third party at the scheduled Sheriff’s Sale, Thattayathu, Kallickal and Mani agreed that Trikha would utilize the funds that he had received from those JMJMS shareholders in order to purchase the property at the Sheriff’s Sale. (T.P. 4/15/13 at pp. 146-147, 149, 192-195; T.P. 4/16/13 at pp. 20-21, 24-25, 89-90, 187-188; T.P. 4/17/13 at 112-113). Trikha agreed that if he was not the successful bidder for 300 Meadow Avenue at the Sheriffs Sale, he would refund the $75,000.00 to JMJMS and its shareholders. (T.P. 4/15/13 atpp. 144,149,192-195; T.P. 4/16/13 atpp. 20-21,24-25, 89-90; T.P. 4/17/13 atpp. 113-114).

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Bluebook (online)
33 Pa. D. & C.5th 347, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thattayathu-v-trikha-pactcompllackaw-2013.