United States District Court, E.D. Pennsylvania
R. Padova, J.
has brought the instant action seeking the return of $600,
000.00 that he paid to Defendant as a deposit for the
purchase of a delicatessen located in Norristown,
Pennsylvania. Defendant has moved to dismiss the Amended
Complaint pursuant to Federal Rule of Civil Procedure
12(b)(1) for lack of subject matter jurisdiction and,
alternatively, to dismiss five of the six claims for relief
asserted in the Amended Complaint pursuant to Federal Rule of
Civil Procedure 12(b)(6) for failure to state a claim upon
which relief can be granted. For the following reasons, the
Motion is granted in part and denied in part.
Amended Complaint alleges the following facts. On March 14,
2018, Defendant Narendra Patel entered into an Agreement of
Sale (the “Agreement”) with Plaintiff Hitesh
Patel, JSN Venture, LLC (“JSN”), and JSN-PA
Venture, LLC (“JSN-PA”) (collectively the
“Buyers”) for the sale of Fern Rock Market and
Deli (the “Deli”). (Am. Compl. ¶ 5; Ex.
While the Agreement sets forth a sales price of $365, 000.00,
Plaintiff and Defendant agreed to a sales price of $650,
000.00. (Id. ¶¶ 7-8.) The Agreement
also provided that the sale of the Deli would occur on or
before May 1, 2018. (Id. ¶ 10; Agreement, Am.
Compl. Ex. A, Art. XVII.) Plaintiff agreed to pay $600,
000.00 to Defendant prior to closing and to provide a
promissory note of $50, 000.00 to Defendant at closing. (Am.
Compl. ¶ 11.) Plaintiff paid Defendant by way of six
$100, 000.00 checks drawn from Plaintiff's personal bank
accounts between February 28, 2018 and March 24, 2018.
(Id. ¶¶ 12-13; Ex. B.) Defendant deposited
all six of Plaintiff's $100, 000.00 checks into an
account at KeyBank. (Id. ¶ 14.)
XII of the Agreement required Defendant to obtain a
certificate of occupancy for the property in which the Deli
is located (the “Property”). (Agreement Art.
XII.) Article XII also states that, “[i]f the Seller is
unable to [obtain] a certificate permitting occupancy of the
Property, then this Agreement shall be null and void and the
Buyers shall receive the return of any deposits.”
(Id.) Defendant failed to make certain repairs to
the Property that the Borough of Norristown required him to
make before it would issue the certificate of
occupancy. (Am. Compl. ¶¶ 18-19.) Defendant
did not obtain a certificate of occupancy for the Property,
rendering the Agreement null and void under Article XII.
(Agreement Art. XII; Am. Compl. ¶¶ 22-23, 25.)
appeared at the office of Defendant's attorney on May 1,
2018 for the closing but the closing did not occur because
Defendant had not obtained the certificate of occupancy for
the Property. (Am. Compl. ¶ 26.) (Id.)
Plaintiff demanded the return of the $600, 000.00 he had paid
to Defendant. (Id. ¶ 27.) However, Defendant
has failed and refused to return any of the money Plaintiff
paid him. (Id. ¶ 28.) Moreover, Defendant has
already used $126, 065.21 of the $600, 000.00 deposit to
satisfy a mortgage on the Property. (Id. ¶ 31.)
On May 9, 2018, this Court entered a Temporary Restraining
Order requiring that $475, 000.00, which is the remainder of
the $600, 000.00 deposit, be held in escrow by
Defendant's attorney. (Id. ¶ 33.)
JSN nor JSN-PA, the other buyers identified in the Agreement,
paid any of the $600, 000.00 to Defendant. (Id.
¶ 30.) Both of these entities have authorized and
consented to Defendant's return of Plaintiff's entire
$600, 000.00 payment to Plaintiff and have disclaimed any
interest in that amount. (Id. ¶ 35.)
Amended Complaint asserts six claims for relief. Count I
asserts a claim for unjust enrichment and a constructive
trust. Count II asserts a claim for conversion. Count III
asserts a claim for money had and received. Count IV asks the
Court to enter a declaratory judgment, declaring the
Agreement null and void and ordering the return of the $600,
000.00 deposit paid to Defendant. Count V asserts a claim for
breach of contract. Count VI asks the Court for a temporary
restraining order prohibiting Defendant from dissipating,
depleting, transferring, hiding, or otherwise taking action
with respect to the $600, 000.00 that Plaintiff paid him and
for a preliminary injunction requiring Defendant to pay the
$600, 000.00 into a fund in the Court until this matter is
moves to dismiss the Amended Complaint on the ground that
Plaintiff has failed to join an indispensable party whose
joinder in this case will destroy our subject matter
jurisdiction. Defendant also moves, in the alternative, to
dismiss Counts I-IV and VI of the Amended Complaint on the
ground that none of these Counts state claims upon which
relief can be granted. We first address Defendant's
argument that Plaintiff has failed to join an indispensable
FAILURE TO JOIN AN INDISPENSABLE PARTY
has moved to dismiss this action for failure to join JSN-PA
as a plaintiff pursuant to Federal Rule of Civil Procedure
19. Defendant contends that JSN-PA is an indispensable party
in accordance with Rule 19 and that its joinder as a
plaintiff would destroy our diversity jurisdiction. While
Defendant has cast this portion of his Motion as a motion to
dismiss for lack of subject matter jurisdiction pursuant to
Federal Rule of Civil Procedure 12(b)(1), such a motion is
properly brought pursuant to Rule 12(b)(7), which provides
that a party may bring a motion to dismiss for “failure
to join a party under Rule 19.” Fed.R.Civ.P. 12(b)(7).
moving party bears the burden of showing that the absent
party is a required party and thus dismissal is proper under
Rule 12(b)(7).” Advanced Fluid Sys., Inc. v.
Huber, Civ. A. No. 13-3087, 2014 WL 1808652, at *6 (M.D.
Pa. May 7, 2014) (citing Disabled in Action of Pa. v. Se.
Pa. Transp. Auth., 635 F.3d 87, 97 (3d Cir. 2011)).
“In reviewing a motion made under Rule 12(b)(7), the
court must accept the allegations in the complaint as true
and draw all reasonable inferences in favor of the non-moving
party.” Cummings v. Allstate Ins. Co., Civ. A.
No. 11-2691, 2011 WL 6779321, at *3 (E.D. Pa. Dec. 27, 2011))
(citing Pittsburgh Logistics Sys., Inc. v. C.R.England,
Inc., 669 F.Supp.2d 613, 618 (W.D. Pa. 2009)). See
also U.S. Tech Sols., Inc. v. eTeam, Inc., Civ. A. No.
17-1107, 2017 WL 3535022, at *2 (D.N.J. Aug. 16, 2017)
(citation omitted). “[T]he court may also consider
relevant evidence outside the pleadings.”
Advanced Fluid Sys., 2014 WL 1808652, at *6
(citing Polygon U.S. Corp. v. Diversified Info.
Techs., Civ. A. No. 12-923, 2012 WL 5379168, at *4 (M.D.
Pa. Oct. 31, 2012)).
Rule 19 governs the required joinder of parties and provides
A person who is subject to service of process and whose
joinder will not deprive the court of subject-matter
jurisdiction must be joined as a party if:
(A) in that person's absence, the court cannot accord
complete relief among existing parties; or (B) that person
claims an interest relating to the subject of the action and
is so situated that disposing ...