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  • MOMIN, ZULFIQAR vs. DAFTARY, BIMAL BUSINESS DISSOLUTION document preview
  • MOMIN, ZULFIQAR vs. DAFTARY, BIMAL BUSINESS DISSOLUTION document preview
  • MOMIN, ZULFIQAR vs. DAFTARY, BIMAL BUSINESS DISSOLUTION document preview
  • MOMIN, ZULFIQAR vs. DAFTARY, BIMAL BUSINESS DISSOLUTION document preview
  • MOMIN, ZULFIQAR vs. DAFTARY, BIMAL BUSINESS DISSOLUTION document preview
  • MOMIN, ZULFIQAR vs. DAFTARY, BIMAL BUSINESS DISSOLUTION document preview
  • MOMIN, ZULFIQAR vs. DAFTARY, BIMAL BUSINESS DISSOLUTION document preview
  • MOMIN, ZULFIQAR vs. DAFTARY, BIMAL BUSINESS DISSOLUTION document preview
						
                                

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Zulfiqar Momin In the District Court of Plaintiff / Counter-Defendant Bimal Daftary, Harris County, Texas Goodmark Hotels, LLC, Goodmark Lodging, LLC, and Goodmark Properties, LLC Defendants /Counter-Plaintiffs. 164 Judicial District Defendants’ Motion for Partial Summary Judgment of interests in real property and hotel developments located in Seabrook and Columbus, Texas and real property lo- cated in Livingston, Texas. Defendants Bimal Daftary (“Daftary”) Goodmark Hotels, LLC (“GM Hotels”), Goodmark Lodging, LLC (“GM Lodging”), erties, LLC (“GM Properties”) are entitled to summary judgment on Zulfigar (“Jeff”) Momin’s claims he is entitled to an ownership interest in the real property located request to partition the properties, and request for damages on his unjust enrichment claim based on an ownership interest It is undisputed there is no written contract evidencing Jeff Momin’s alleged ownership interest in the properties as required by the statute of frauds; Defendants’ Motion for Partial Summary Judgment Page 1 of 10 006295\00002\1949018.1 Jeff Momin cannot recover the benefit of the bargain (ownership in the properties or damages based on ownership) on his unjust It is undisputed there is no signed writing evidencing Jeff Momin’s al- leged ownership interest in the properties. Therefore, Jeff Momin’s claims he is en- titled to an ownership interest in the properties or partition of the property are barred by the statute of frauds. Jeff Momin’s claim he is entitled to damages calcu- lated based on an ownership interest in the property is also precluded by the statute of frauds because he cannot recover th Facts This dispute involves 3 entities that own real property in Seabrook, Columbus, and Livingston Texas. GM Hotels, which owns the Seabrook property, and GM Lodging, which owns the Columbus property, each own and operate hotels Bimal Daftary and his wife, Nita Daftary, formed GM Hotels in 2004. Mr. and Mrs. Daftary are, and at all times have been, the sole members of GM Ho- In late-July 2004, GM Hotels purchased the real property and improvements, including a fully developed Best Western hotel, located at 2901 Nasa Parkway, Sea- brook, Texas 77586. Bimal and Nita Daftary formed GM Lodging in 2006. Mr. and Mrs. Daftary are, and at all times have been, the sole members of GM Lodging. In 2006, Exhibit A-1, GM Hotels Articles of Organization; Exhibit A, Declaration of Bimal Daftary. Exhibit A-2, Texas Secretary of State Records—GM Hotels; Exhibit A, Declaration of Bimal Dafta- Exhibit A-3, General Warranty Deed (Seabrook property); Exhibit A, Declaration of Bimal Daftary. Exhibit A-4, GM Lodging Articles of Organization; Exhibit A, Declaration of Bimal Daftary. Defendants’ Motion for Partial Summary Judgment Page 2 of 10 006295\00002\1949018.1 GM Lodging purchased the real property and improvements, including a fully de- veloped Holiday Inn hotel, located at Nita Daftary and her sister, Trisha Shah, formed GM Properties in In 2008, GM Properties purchased approximately 30 acres of unimproved land in Livingston, Texas. From 2008 through 2011, Ms. Daftary owned 75% of the membership units in Goodmark Properties and Ms. Shah owned 25%. In 2011, Ms. Daftary transferred her membership units to Bimal and Nita Daftary’s son, Mrunal B. Daftary. Also in 2011, Ms. Shah transferred half of her 25% ownership interest in Goodmark Properties to Vandana Mahidharia. It is undisputed there is no signed writing evidencing Jeff Momin’s al- leged ownership interest in GM Hotels, GM Lodging, GM Properties, or any of the real properties at issue in this lawsuit. Argument Jeff Momin asks this Court to find he owns 50% of the Seabrook and Columbus properties and 12.5% of the Livingston property pursuant to oral agree- ments that he would have an ownership interest in the properties. The statute of frauds precludes Jeff Momin’s enforcement of an oral agreement to convey owner- ship of these properties. Tex. Bus. & Com. Code § 26.01. The statute of frauds Exhibit A-5, Texas Secretary of State Records—GM Lodging; Exhibit A, Declaration of Bimal Daftary. Exhibit A-6, Special Warranty Deed (Columbus Property); Exhibit A, Declaration of Bimal Daftary. Exhibit A-7, GM Properties Certificate of Formation; Exhibit A, Declaration of Bimal Daftary. Exhibit A-8, Special Warranty Deed (Livingston Property), Exhibit A, Declaration of Bimal Dafta- Exhibit A, Declaration of Bimal Daftary; Exhibit B, Deposition of Jeff Momin at 78:7—11 (Seabrook property); 148:13-149:2 (Columbus property); 199:14—19 (Livingston property). Defendants’ Motion for Partial Summary Judgment Page 3 of 10 006295\00002\1949018.1 also precludes Jeff Momin from recovering damages based on his ownership interest in the property on any equitable or tort-based theory of recovery because such an award would frustrate the purpose of the statute of frauds. Haase v. Glazner, 62 S.W.3d 795, 799 (Tex. 2001). Defendants are entitled to partial summary judgment on their statute of frauds defense. breach of contract claim because he is not entitled to an ownership The statute of frauds bars enforcement of contracts involving the sale of real estate unless the contract is in writing and signed by the person to be charged with the agreement. Tex. Bus. & Com. Code § 26.01. The statute of frauds exists to prevent fraud and perjury in transactions involving the transfer of real es- Haase, 62 S.W.3d at 799. Whether a contract falls within the statute of frauds On his breach of contract cause of action, Jeff Momin claims the De- fendants entered into an oral agreement whereby each would own 50% of the Sea- brook and Columbus properties. As damages, Jeff Momin seeks to recover “one- half of the partners equity in the hotel Properties currently estimated to be Title to the Seabrook property is in GM Hotels and title to the Colum- bus property is in GM Lodging. Jeff Momin has no ownership interest in GM Hotels Plaintiff's First Amended Petition at | 24; Exhibit B, Deposition of Jeff Momin at 78:7-11 (Seabrook property); 148:13-149:2 (Columbus property); 199:14—19 (Livingston property). Jeff Momin does not include the Livingston property in his breach of contract claim, but the same principles of law would apply to any claim for breach of an oral agreement purportedly transferring ownership in the property. Defendants’ Motion for Partial Summary Judgment Page 4 of 10 006295\00002\1949018.1 or GM Lodging and title to the property has never been transferred in a signed writ- ing to Jeff Momin or the alleged partnership between Daftary and Momin. Rather, Jeff Momin admits his breach of contract claim is based on an oral agreement. Plaintiff's First Amended Petition at § 24; Exhibit B, Deposition of Jeff Momin at 78:7—-11 (Seabrook property); 148:13-149:2 (Columbus property). Because there is no signed writing transferring ownership of the properties to Jeff Momin or the alleged partnership, Jeff Momin’s claim for breach of contract is precluded by the statute of frauds. Tex. Bus. & Com. Code § 26.01; see also Carpenter v. , 391 S.W.3d 143, 153 (Tex. App.—Houston [1st Dist.] 2011, no pet.) (“The law is clear that an interest in real estate cannot become a partnership asset unless the agreement concerning the property is in writing the same as any other contract concerning land.”) (citing Pappas v. Gournaris, 311 S.W.2d 644, 645-47 (Tex. statute of frauds. Jeff Momin also requests a judicial partition of the Seabrook, Colum- bus, and Livingston properties Texas Property Code § 23.001 enables a “joint owner or claimant of re- al property or an interest in real property” to compel partition of the property Judicial partition is improper where the transfer of property to the owner or claimant is unenforceable. See Mathis v. Coker, No. 10-05-00437-CV, 2007 Tex. App. LEXIS 3611, at *10-18, (Tex. App. Waco May 9, 2007, no pet.). Jeff Defendants’ Motion for Partial Summary Judgment Page 5 of 10 006295\00002\1949018.1 Momin does not have a valid interest in the properties at issue because each alleged agreements conveying an interest in the properties is oral and, thus, precluded by the statute of frauds. Therefore, judicial partition is improper and the Defendants are entitled to summary judgment. Jeff Momin cannot recover the benefit of the bargain (ownership in the property or damages based on ownership) on his unjust enrich- Defendants are entitled to summary judgment on Jeff Momin’s unjust enrichment claim because he cannot recover damages based on the parties’ unen- forceable alleged oral agreement. As damages on his unjust enrichment claim, Jeff Momin seeks “the reasonable value of the benefit conferred on defendants which is in excess of $2,750,000.00.” Although he claims he conferred a benefit of more than $2,750,000.00 on Defendants, Jeff Momin’s claim for damages is plainly based on his allegation that he is entitled to 50% of the fair market value of the Seabrook, Columbus, and Livingston properties—Mr. Momin seeks to recover the benefit of Plaintiff's First Amended Petition at § 12 (alleging Jeff Momin’s “share of all the Properties is approximately $2,750,000” or 50% of the To recover benefit of the bargain damages on a claim for unjust en- richment, the plaintiff must show the underlying contract is enforceable. McMillan v. Hillman Intl Brands, LTD., No. 14-03-01392-CV, 2004 Tex. App. LEXIS 6738, at *9-10 (Tex. App.—Houston 14th Dist. July 27, 2004, pet. denied) (citing S.W.3d at 799-800); see also In re Estate of Wallace, No. 04-05-00567-CV, 2006 Tex. Defendants’ Motion for Partial Summary Judgment Page 6 of 10 006295\00002\1949018.1 App. LEXIS 10603, at *13-14 (Tex. App.—San Antonio December 13, 2006, no pet.) (“(U]njust enrichment does not provide for enforcement of the contract but rather, for restitution of the benefits unjustly conferred.”) (citation omitted); RDG Ltd. P’ship v. Gexa Corp., No. 14-04-00679-CV, 2005 Tex. App. LEXIS 3123, at *9-10 (Tex. App.—Houston [14th Dist.] April 26, 2005, no pet.) (noting “[u]Jnjust enrich- ment is not a distinct independent cause of action, but a theory of recovery” in which “the one who receives benefits unjustly should make restitution for those Burlington N. R.R. v. Sw. Elec. Power, 925 S.W.2d 92, 96-97 (Tex. App.— , 966 S.W.2d 467 (Tex. 1998) (noting the measure of damages for unjust enrichment is restitution, the purpose of which is to place the plaintiff in the position he occupied prior to his dealings with the defendant). The underlying oral agreement is unenforceable under the statute of frauds. Therefore, Jeff Momin is precluded from recovering benefit of the bargain damages on his claim for unjust contract in the analogous case of Haase v. Glazner , the plaintiff sued the defendant for breach of contract, fraud, fraudulent inducement, and unjust enrichment. . at 796. The plaintiff alleged he was entitled to recover benefit of the bargain damages and out-of-pocket damages. . The Court rendered a take-nothing judgment on the plaintiffs fraud and fraudu- lent inducement claims, noting the purpose of the statute of frauds—to prevent fraud and perjury in certain kinds of transactions by requiring them to be in writing and signed by the parties—is frustrated if a party can simply use a fraud claim to Defendants’ Motion for Partial Summary Judgment Page 7 of 10 006295\00002\1949018.1 enforce a contract the statute of frauds makes unenforceable. . at 799. The Court noted a party cannot obtain benefit of the bargain damages under another cause of action because it would effectively allow the plaintiff to enforce a contract that was Regardless of how the claim is pled, Jeff Momin’s unjust enrichment claim is, at least in part, a suit for benefit of the bargain damages for failure to per- form an oral contract for the sale of land. Like in , Jeff Momin’s indirect at- tempt to enforce an unenforceable contract is impermissible under Texas law. De- fendants are entitled to summary judgment on Jeff Momin’s request for benefit of Defendants are entitled to summary judgment on Jeff Momin’s claims for breach of contract and partition because the statute of frauds precludes Jeff Momin from asserting an ownership interest in the Seabrook, Columbus, or Living- ston properties. Defendants are also entitled to summary judgment on Jeff Momin’s claim he is entitled to benefit of the bargain damages on his unjust enrichment Defendants’ Motion for Partial Summary Judgment Page 8 of 10 006295\00002\1949018.1 Respectfully submitted, Kirby Grove 2925 Richmond Ave., 14th Floor and Kent A. Schaffer Texas Bar No. 17724300 kentschaffer@gmail.com JPMorgan Chase Bank Building 712 Main Street, Suite 2400 Houston, Texas 77002 Telephone: 713-228-8500 Facsimile: 713-228-0034 Goodmark Lodging, LLC, and Defendants’ Motion for Partial Summary Judgment Page 9 of 10 006295\00002\1949018.1 Certificate of Service Thereby certify that a true and correct copy of the foregoing was served upon all counsel of record in accordance with the Texas Rules of Civil Procedure, on cmarkland@marklandfirm.com Abel Manji 12603 Southwest Frwy, Suite 688 Stafford, Texas 77477 abelmanji@gmail.com Kent A. Schaffer Bires Schaffer & Deborde JPMorgan Chase Bank Building /s/ Lee A. Collins Lee A. Collins Defendants’ Motion for Partial Summary Judgment Page 10 of 10 006295\00002\1949018.1