Zahdan v. Frontline Business Enterprise Inc.

2024 IL App (1st) 221351
CourtAppellate Court of Illinois
DecidedMarch 22, 2024
Docket1-22-1351
StatusPublished
Cited by5 cases

This text of 2024 IL App (1st) 221351 (Zahdan v. Frontline Business Enterprise Inc.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zahdan v. Frontline Business Enterprise Inc., 2024 IL App (1st) 221351 (Ill. Ct. App. 2024).

Opinion

2024 IL App (1st) 221351

SIXTH DIVISION March 22, 2024 Filing Date

No. 1-22-1351 ______________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT ______________________________________________________________________________

AHMAD ZAHDAN and AZ SPE, LLC, an Illinois ) Limited Liability Company, ) Appeal from the ) Circuit Court of Plaintiffs-Appellees, ) Cook County. ) v. ) No. 16 L 4450 ) FRONTLINE BUSINESS ENTERPRISE INC., an Illinois ) The Honorable Corporation, and SYED AHMED, ) Daniel J. Kubasiak, ) Judge, Presiding. Defendants-Appellants. )

JUSTICE ODEN JOHNSON delivered the judgment of the court, with opinion. Justices Hyman and C.A. Walker concurred in the judgment and opinion.

OPINION

¶1 Defendants Frontline Business Enterprise Inc. and Syed Ahmed appeal from an order of

the Cook County circuit court granting a motion for summary judgment in a breach of contract

action by plaintiffs, Ahmad Zahdan and AZ SPE, LLC. On appeal, defendants contend that the

circuit court erred in finding that they breached the real estate contract by breaching the fuel

supply management agreement (FSMA) because the FSMA was not incorporated into the real No. 1-22-1351

estate contract. Alternately, defendants contend that, (1) even if they breached the real estate

contract by breaching the FSMA, the circuit court abused its discretion in ordering rescission

and, (2) even if they breached the real estate contract, the circuit court erred in denying

defendants’ motion to reconsider when they presented evidence of unjust enrichment. For the

following reasons, we affirm.

¶2 I. BACKGROUND

¶3 The background information for this appeal comes from the circuit court’s written opinion

filed on May 27, 2022, granting summary judgment in favor of plaintiffs.

¶4 According to the complaint, plaintiffs became the owner of the gas station property located

at 225 North Western Avenue in Chicago. In February 2016, defendants desired to purchase

the property from plaintiffs, and as a result, AZ, Ahmed, and Ahmed’s future entity “Frontline”

negotiated an agreement under which defendants agreed to purchase the property from

plaintiffs. The sale was accomplished through a real estate sales contract dated February 29,

2016, in which Frontline purchased the property for $800,000. The contract also contained a

provision that stated as follows:

“Ahmed [sic] understands and acknowledges that this Agreement and the

consummation of this Agreement are subject to and conditioned upon Ahmad and AZ SPE

Affiliate entering into a fuel supply management agreement in substantially the form

attached hereto as Exhibit ‘I’ (the ‘Fuel Supply Management Agreement.’)”

The contract additionally provided that AZ could terminate the contract and regain possession

of the property in the event of a breach by defendants. The contract and the FSMA were

executed simultaneously.

-2- No. 1-22-1351

¶5 Under the FSMA, which provided for a 25-year term, all purchases of motor fuel by

defendants would be arranged by Zahdan at a rate of two cents over “rack,” which referred to

the price of gasoline sold by a refinery to a licensed fuel distributor and is used as the baseline

to set the price that the distributor charges to a retail gasoline station. After the closing, Zahdan

deeded the property to Frontline. Plaintiffs alleged that, at the time Ahmed signed the FSMA

for Frontline, he had no intention of ever buying fuel from or through Zahdan. Subsequent to

the closing, defendants never purchased any fuel from or through plaintiffs. Zahdan alleged

that, since the closing, he was “ready, willing and able” to perform the obligations he owed

under the FSMA. Plaintiffs alleged that defendants failed to perform under the FSMA and also

refused to vacate the property and to return it to plaintiffs’ ownership.

¶6 On May 3, 2016, plaintiffs filed a three-count complaint against defendants alleging breach

of contract, seeking specific performance and alternatively rescission. Plaintiffs subsequently

filed a first amended verified three-count complaint on September 8, 2017, alleging that

defendants breached the contract and FSMA by refusing to purchase petroleum products

through Zahdan. The amended complaint alleged breach of contract (count I) and sought

specific performance (count II) and alternatively rescission (count III). Defendants’ answer

and affirmative defenses asserted duress, unclean hands, unconscionability, impossibility and

impracticality, and illegality.

¶7 After discovery was completed, plaintiffs filed a motion for summary judgment on January

3, 2022, pursuant to section 2-1005 of the Code of Civil Procedure (Code) (735 ILCS 5/2-1005

(West 2020)). Plaintiffs argued that there were no genuine issues of fact that prevented entry

of judgment in their favor that defendants breached the contracts.

-3- No. 1-22-1351

¶8 In their motion for summary judgment, plaintiffs cited additional uncontested facts as

follows: Ahmed had been the operator of the gas station at the property since 2014, and his

original landlord was Harjinder Singh. Ahmed was a sophisticated businessman with an

accounting degree. He owned and operated two gas stations on land he owned, and he owned

and operated his own real estate company and was familiar with negotiating and reviewing real

estate contracts. Ahmed operated the gas station under Tawakul 786, Inc., and the gas sold by

the station was supplied by Singh’s entity under the Sandhu supply agreement.

¶9 On or about October 1, 2014, Ahmed, through a new entity named State Oil Petroleum,

Inc., entered into a 10-year fuel supply agreement with Gas Depot Oil Company (Gas Depot).

On April 24, 2015, pursuant to a consent judgment, plaintiffs became the owner of the property.

In February 2016, plaintiffs still owned the property, but Ahmed wanted to purchase it.

Defendants’ attorney negotiated the terms of the contract and FSMA with plaintiffs’ attorney,

Ahmed was aware that the FSMA was a condition of closing, and he and his attorney received

copies of the contract and FSMA before the closing. Prior to closing, defendants’ attorney

advised Ahmed that he had an existing fuel supply agreement with Gas Depot and warned that

he might have to choose between the existing agreement and the FSMA. Despite the existing

Gas Depot agreement, Ahmed personally negotiated with Zahdan about the terms of the

FSMA, including the price for each gallon of fuel. During the negotiation and closing of the

contract and FSMA, Ahmed told his attorney about perceived duress but admitted in his

deposition that he still closed anyway. Although Ahmed received a draft of the FSMA early in

the negotiation process, Ahmed never attempted to make the FSMA contingent on a release of

the Gas Depot agreement or some other arrangement, nor did he tell his attorney to advise

plaintiffs’ attorney about the issue. Nor did Ahmed ever tell Zahdan that he thought the terms

-4- No. 1-22-1351

of the FSMA were unfair. Defendants’ attorney was unaware of any threats by Zahdan to evict

Ahmed prior to the closing, he never sent plaintiffs’ attorney any e-mails claiming that

plaintiffs threatened to evict Ahmed, and he did not refuse to sign the FSMA on behalf of

defendants.

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2024 IL App (1st) 221351, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zahdan-v-frontline-business-enterprise-inc-illappct-2024.