Lucien Padawer v. Ronen Yur et al. (2012)

MEMORANDUM OF DECISION

This case commenced trial before the undersigned on February 17, 2012.   The trial continued each day, including the 23rd of February, when it concluded.

The operative complaint is the “Second Revised Complaint” dated March 18, 2011.   The “answer, special defenses and counterclaim” are dated August 16, 2011.

The evidence disclosed that plaintiff, a resident of Fort Collins, Colorado, originally purchased a half interest in a business located at 1130 Chapel Street in New Haven.   He soon thereafter acquired the other half of the business for a total cost of $50,000.   The business was a specialty store for women and its inventory consisted of women's clothes and jewelry.   The plaintiff acquired title to the store in early 2007.   Padawer continued to run the business through 2007, 2008 and into January 2009.   Thereafter plaintiff desired to sell the business because it had resulted in extended separation periods from his family in Colorado.   It was at this time that the defendant Ronen Yur came upon the scene.   Yur expressed an interest in purchasing the store.

The plaintiff, pro se, took a trip to California with Yur introducing him to his suppliers of merchandise and placing orders for Yur in order to build up an inventory of merchandise for the store.   The defendants, however, throughout the trial claimed that he never consented to purchase the store.   The exhibits reflect that all attempts by plaintiff to obtain defendant's signature on a contract were rebuffed.   Defendant's answer is consistent with the claim at trial that defendants Yurway Design, LLC and Ronen Yur “deny that the defendant Ronen Yur agreed to purchase anything from the plaintiff.”

The defendants' second special defense claims that the “plaintiff repudiated and renounced his obligation and thereafter rescinded the agreement ․ and so notified the defendants.”   The evidence disclosed that the plaintiff broke off negotiations with the defendant when it became clear to the plaintiff that the defendant would not sign the contract which required the defendant to pay $50,000 for the purchase of the business.

The defendants have failed to offer proof to satisfy their special defenses and their counterclaim in which they claim that the plaintiff “significantly overstated the gross revenues of the retail store.”   The court disagrees.   The evidence disclosed that the plaintiff advised the defendant Yur that in 2007 the store did more than $400,000 of business.   Thereafter the store did less business.   Both parties should take notice of the fact that economic conditions hampered business beginning in 2008 and are continuing to improve thereafter to date.   The court does not find that the plaintiff misrepresented yearly sales as claimed by the defendants in the negotiations of the parties.

Although defendant Yur was steadfast in his refusal to execute any contract of sale presented to him, plaintiff Padawer refused to believe that his pursuit of this potential buyer would be futile.   Plaintiff's Exhibit 21 illustrates that on March 1, 2009 Yale University and both plaintiff Padawer and defendant Ronen Yur, executed an “Assignment, Assumption and Amendment of Lease Guaranty Agreements” which substituted Yurway Designs, LLC and Ronen Yur as new tenants of the store at 1130 Chapel Street.   Exhibit A–1 entitled “Lease Guarantee” is signed by “Ronen Yur” alone.

Following the assignment of lease above, the defendant Ronen Yur took over the store and has remained in charge of the business ever since.   This was accomplished without compensating in any way the plaintiff whose business was taken from him without a contract of sale being executed.

Plaintiff's Exhibit 13 entitled “Business and Asset Purchase Agreement Draft,” is a 13–page unsigned agreement in which on page 2 clearly sets out the purchase price:

Purchase Price.   The purchase price for the Purchased Assets shall be Fifty Thousand and 00/100 ($50,000) dollars.   The Purchase Price shall be allocated as follows:

$ for fixtures and equipment $3,000.

$ for inventory $10,000.

$ for Goodwill $37,000.

Page 13 of Exhibit 13 is entitled “Exhibit A List of Purchased Assets” and states:  “Sellers rights, if any to the trade name “Clare Jones.”   The LLC itself is not included in the sale of business assets.”   It then lists the above prices, but each price bears the initials RY/ which indicates to the court that the defendant Ronen Yur was aware of the cost of purchasing the business assets and ascribed his initials next to each item.

Both plaintiff Padawer and defendant Yur claim to be in need of money at the present time.   The court received no evidence substantiating these claims.   The court, therefore, cannot consider the financial condition of either party in rendering its decision and would not in any event.

Judgment may enter in favor of the plaintiff Lucian Padawer to recover of the defendants Ronen Yur and Yurway Designs, LLC the sum of $44,000 crediting the defendants with a partial payment of inventory sold pursuant to Plaintiff's Exhibit 28.   Defendants have the option, should it be required, to pay said judgment at the rate of $2,000.00 per month and to continue making said payments until said judgment is paid in full.

David W. Skolnick

Judge Trial Referee

Skolnick, David W., J.T.R.