Benzakry v. Patel
Decision Date | 05 April 2017 |
Docket Number | Appeal No. 3–16–0162 |
Citation | 77 N.E.3d 1116,2017 IL App (3d) 160162 |
Parties | Emil BENZAKRY and Emil and Son, LLC, Plaintiffs–Appellees and Cross–Appellants, v. Paresh PATEL and Kalpita Patel, Defendants–Appellants and Cross–Appellees. |
Court | United States Appellate Court of Illinois |
Alexander N. Loftus and Daniel J. Voelker, of Voelker Litigation Group, of Chicago, for appellants.
Dale G. Haake, of Katz Nowinski PC, of Moline, for appellees.
¶ 1 Plaintiff Emil Benzakry, through his company Emil & Son, LLC, entered into a purchase agreement with defendants Paresh and Kalpita Patel, through their company KAP Family Investments, LLC, to purchase a gas station in Rock Falls, Illinois. The gas station closed, and Benzakry sued for damages. A judgment was entered in favor of Benzakry. Defendants appealed, arguing (1) a claim for veil piercing cannot be tried before a jury, (2) the trial court abused its discretion by allowing the introduction of bank statements without proper foundation, (3) plaintiffs cannot prove fraud because Paresh did not proximately cause Benzakry's damages, (4) plaintiffs cannot prove fraud because Benzakry did not justifiably rely on Paresh's alleged misrepresentations, and (5) the corporate veil judgment against Kalpita was against the manifest weight of the evidence. Benzakry cross-appealed, arguing (1) the trial court's grant of defendant's motion for a directed verdict was error because plaintiffs are allowed to sue under the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act or Act) (815 ILCS 505/1 et seq. (West 2006)) and (2) the trial court's denial of plaintiffs' motion to amend a complaint to conform the pleadings to the proofs was error because there was evidence of a principal-agent relationship. We affirm in part and reverse in part, and the cause is remanded for further proceedings.
¶ 3 The following facts are undisputed. Plaintiff Benzakry owned multiple businesses in California throughout his career. In 2005, Benzakry sold his last business and started looking on LoopNet1 for investments to assist him with his living expenses during his retirement. Benzakry came across an advertisement on the LoopNet site that stated the following:
¶ 4 "K. Patel" was listed in the advertisement as the contact person for inquires, and after several months, Benzakry called the phone number listed. In January 2007, David Levin, a realtor, e-mailed Paresh the following information:
Paresh responded with Benzakry copied on the e-mail, stating:
Benzakry received a copy of the lease agreement between Singh & Singh, LLC, and KAP3 and of the Singhs' personal financial statements for his review. On January 12, 2007, Benzakry, through his company Emil & Son, entered into a purchase agreement and addendum for the Rock Falls gas station for $521,500. Benzakry was to receive $6000 per month in rent.
¶ 5 On January 24, Benzakry e-mailed Paresh with questions regarding the purchase of the gas station, and Paresh responded, providing his answers below Benzakry's questions:
¶ 6 On January 26, a second addendum to the purchase agreement was executed and included the enforcement of a personal guarantee agreement and security deposit of $12,000. The addendum also contained a clause that stated:
(Emphasis added.)
¶ 7 In February 2007, Benzakry and KAP closed on the gas station. At the time, a guaranty of lease agreement between KAP and Singh & Singh was signed. The agreement stated the following:
¶ 8 Benzakry received rent for the months of February to April but did not receive rent for the month of May. Benzakry called the station to address this issue, but no one answered. He called David Levin, who went to the gas station and discovered that it was closed. Levin sent pictures of the closed store to Benzakry that depicted an "Out of Gas" sign on the gas tanks and a "Sorry ... Closed" sign on the gas station door.
¶ 9 Singh & Singh entered into an agreement with Emil & Son to relinquish possession of the gas station for failure to pay rent. After relinquishment, Benzakry came to Rock Falls, Illinois, where he continued to operate the establishment as a gas station for about a year and a half, after which time Benzakry turned the establishment into a retail store.4 Ultimately, Whiteside County seized the store due to illegal actions of the store's manager.5
¶ 10 On August 28, 2007, Emil & Son filed a complaint against Singh & Singh, Christopher Singh, Anita Singh, and Jane Singh, claiming rent and damages. On April 6, 2009, Christopher and Anita Singh and Benzakry and Emil & Son entered into a consent judgment of nondischargability in the amount of $25,000.
¶ 11 In June 2009, Emil & Son filed an amended complaint adding KAP and Paresh as defendants, claiming breach of contract, deceptive practices, and common-law fraud. Discovery commenced, and the matter was set for trial on March 15, 2011.
¶ 12 Emil & Son filed a motion for default judgment against KAP in March 2011, which the trial court granted and ordered KAP to pay $577,307.45.
¶ 13 In February 2013, Emil & Son filed a third amended complaint adding Kalpita as a defendant, claiming breach of contract, deceptive practices, and common-law fraud. Another amended complaint was filed in July 2013, adding Benzakry as plaintiff.
¶ 14 At trial, Benzakry testified that the financial strength of the tenant was important in his determination to enter into the purchase agreement. Furthermore, he testified that after he received the Singh & Singh lease and was assured about the tenant's ability to pay rent by Paresh, Benzakry entered into the purchase agreement with KAP.
¶ 15 Paresh acknowledged that Benzakry was interested in a triple net lease and the financial strength of the tenant when Benzakry inquired about the gas station. He admitted that Christopher Singh had not operated the Rock Falls gas station since 2005, Paresh never owned a gas station in Chicago, and Paresh had not...
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