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Sajid v. Ijaz

United States District Court, E.D. Pennsylvania

August 12, 2019

MUHAMMAD SAJID, Plaintiff,
v.
MOHAMMAD IJAZ AND SHAISTA IJAZ, Defendants.

          MEMORANDUM OPINION

          WENDY BEETLESTONE, J.

         Muhammad Sajid (“Plaintiff”) asserts that Mohammad and Shaista Ijaz (collectively “Defendants”) agreed to sell him their gas station; accepted his payment for the gas station; but subsequently claimed the agreement only entailed allowing Plaintiff to run the gas station as an independent contractor. Plaintiff also asserts that when the parties' relationship fell apart, Defendants ordered Plaintiff off the property and did not return Plaintiff's payment.

         Following a bench trial, the Court makes the following findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a).

         I. FINDINGS OF FACT[1]

         A. The Sale

         In August 2016, Defendant Mohammad Ijaz placed an advertisement in the Urdu Times, a weekly Urdu-language community newspaper, listing an “urgent sale” of a gas station in West Chester, Pennsylvania. The advertisement did not list a price. The gas station was owned by Mr. Ijaz's wife, Defendant Shaista Ijaz. Defendants did not own the land on which the gas station was located; they leased it from a third-party landlord on a five-year term (with the option for two additional 5-year extensions). Defendants' lease agreement allowed them to sublease the property only with the landlord's consent-they came to understand at some point that their landlord was unwilling to assent to any sublease of the property. Defendants have owned, operated, or managed between 10 and 15 separate gas stations.

         Plaintiff Muhammad Sajid saw the Urdu Times advertisement sometime in mid-August 2016. At the time he saw the advertisement, he was working as a limousine driver in New York. He had held that job for thirty years, owned his own car and the car's taxi medallion, and possessed a commercial license. He worked 16-17 hours per day, seven days per week, and typically brought in between $1, 000 and $1, 200 per week. In 2016, as work slowed, he began looking for another business to own. Although he had no connection to Pennsylvania and did not know anyone there, after consulting with his family, Plaintiff called the number listed on the advertisement.

         During that first conversation, Mr. Ijaz indicated he would prefer to meet in person so that Plaintiff and his family could inspect the gas station. So they - Plaintiff and his family - visited Defendants at the gas station sometime in late August or early September 2016. During that first visit, Mr. Ijaz represented that Plaintiff could buy the gas station (including the gas currently in the ground), attached convenience store, inventory, and equipment for $50, 000. Eventually this sum became $45, 000, although the process by which that happened is unclear. Plaintiff then consulted with additional family members, including his brother, whom Plaintiff asked to lend him money for the purchase. Plaintiff's brother agreed.

         On September 4, 2016, Plaintiff and his family again visited the gas station and Defendants. During that meeting, Mr. Ijaz showed Plaintiff what were understood to be receipts from the previous year's sales, which indicated convenience store revenue ranging from $1, 200 to $1, 400 per day. Mr. Ijaz also represented to Plaintiff that he typically sold almost 3, 000 gallons of gasoline per day, and that he made 40 cents per gallon in profit on gasoline sales (for a total, presumably, of close to $1, 200 per day in profit from gasoline sales). Defendants did not inform Plaintiff that the business itself was owned by Mrs. Ijaz, not Mr. Ijaz. They also did not inform Plaintiff that, according to the terms of Defendants' lease agreement with their landlord, Defendants' ability to transfer the business to Plaintiff was contingent upon their landlord agreeing to a sublease.

         Once Plaintiff agreed to purchase the gas station, Mr. Ijaz told him that, for various reasons-including the desire to avoid certain tax burdens-Mr. Ijaz wanted him to send the purchase money to two of Mr. Ijaz's nephews living in Pakistan, in the form of Pakistani rupees. Mr. Ijaz provided Plaintiff with their names and contact information. At Mr. Ijaz's request, Plaintiff then had his brother make three separate wire transfers to Mr. Ijaz's nephews, over the course of about a week-he sent one nephew a payment of about $6, 000, and he sent the other nephew two payments of about $19, 000 and $16, 000. Plaintiff also paid Mr. Ijaz $5, 000 in cash, in United States dollars. While the sum of Plaintiff's payments appears to be $46, 000, he believes that when the exchange rate is factored in, the total amount is closer to $45, 000.[2]

         Plaintiff incurred a number of costs in moving to Pennsylvania and attempting to acquire Defendants' business. With the help of Mr. Ijaz and Mr. Ijaz's accountant, Plaintiff filed in Pennsylvania to incorporate his new business. Plaintiff paid Mr. Ijaz $550 for his assistance. Plaintiff also sold his limousine and taxi medallion for $7, 000 and $3, 000 respectively.[3] Additionally, Plaintiff rented a home in Pennsylvania for $750 per month having put down a security deposit in mid-September.

         On September 16, Plaintiff and Mr. Ijaz met at the gas station. That day, Mr. Ijaz informed Plaintiff that, contrary to the representations Mr. Ijaz made during their first conversation, the convenience store inventory and gas in the tanks as of that day had not been included in the payment Plaintiff made for the gas station-rather, to purchase those items, Plaintiff would need to pay an additional $42, 000. Plaintiff asserts that, despite having been misled, he would have been willing to pay the additional $42, 000 if it meant that he would take ownership of the gas station and all of its gas and inventory. Plaintiff and Mr. Ijaz agreed that Plaintiff would pay the $42, 000 on September 23.[4]

         Mr. Ijaz then handed Plaintiff the keys to the gas station, and informed Plaintiff that Mr. Ijaz's attorney was preparing a written contract that would memorialize the sale of the gas station. Mr. Ijaz then left the gas station.

         B. Plaintiff Operates the Gas Station

         Plaintiff operated the gas station from September 16 through September 22. During that time, his daily revenue from the convenience store was between $130 and $150 per day and he sold gas for about $2, 500 over the course of the week. Several events of note occurred during this period.

         First, at some point Plaintiff realized that Mr. Ijaz had not changed the bank account linked to the gas pumps, so whenever a customer paid for gas by credit card, the payment was placed in Mr. Ijaz's account, not Plaintiff's. Plaintiff asked Mr. Ijaz to change the account, and Mr. Ijaz agreed but said that it would take a few days; the account was never changed.[5]Eventually, Plaintiff placed a “cash only” sign on the gas pump.

         Second, Plaintiff recognized that the convenience store was largely unstocked. He therefore purchased a variety of inventory to refill the shelves, which cost him approximately $4, 000.[6]

         Third, on September 19, Mr. Ijaz provided Plaintiff with what Mr. Ijaz represented to be the written memorialization of their agreement. The written agreement-which the parties refer to as the “management agreement”-stated that Plaintiff would have no ownership interest in the gas station, and that Plaintiff would instead serve as an independent contractor. The management agreement was not indefinite (as Plaintiff had previously understood his ownership interest in the gas station would be), but rather would end on a fixed date. Moreover, the management agreement gave either party the unilateral right to terminate the written agreement without cause (with 90 days' notice). Plaintiff did not sign the agreement.[7]

         Fourth, on September 22, at 9:00 pm Plaintiff called Mr. Ijaz and indicated that the language of the agreement needed to be changed. Mr. Ijaz told Plaintiff he could not talk because it was too late in the evening.

         C. Mr. Ijaz Ejects Plaintiff from the Gas Station

         On the morning of September 23, when Plaintiff arrived at the gas station, to Plaintiff's surprise, Mr. Ijaz was already there. Most of Plaintiff's personal belongings were on the floor. But the cash Plaintiff had been storing at the convenience store was missing: $3, 500 from sales for the week, and $7, 000 that Plaintiff had brought with him at the beginning of the week from the sale of his limousine. Plaintiffs business receipts were also missing.[8] Plaintiff began to call the police, but Mr. Ijaz asked him not to do so. Mr. Ijaz told Plaintiff that he no longer wanted to sell Plaintiff the gas station, but that he would return all of Plaintiff's money within two days. In the end, however, Mr. Ijaz did not return any of the money that Plaintiff had paid him, did not return any of the money that had been stored in the office the previous night, and did not allow Plaintiff to take his inventory with him. Eventually Mr. Ijaz asked Plaintiff to leave the gas station. Plaintiff complied, and did not return.[9]

         D. The Aftermath

         Two days after Mr. Ijaz reoccupied the gas station and Plaintiff left, Plaintiff called Mr. Ijaz repeatedly, but Mr. Ijaz did not answer the phone. Plaintiff and Mr. Ijaz then exchanged numerous text messages. Plaintiff stated he had been promised repayment within two days and had not received it, and he told Mr. Ijaz that he would come to the gas station the next day to pick up the money. Mr. Ijaz responded requesting Plaintiff stop contacting him, telling him not to come to the gas station, and warning that he would call the police if Plaintiff pursued the matter further. Plaintiff continued to demand his money back, growing increasingly agitated. Mr. Ijaz continued threatening to call the police. After Plaintiff left, he was without a job for two months. He eventually bought a new car for $35, 000 and began driving again. He has not been able to purchase another medallion. Plaintiff has not been able to pay back his brother for the initial loan made to purchase the gas station.[10]

         In October 2016, after all of the events described above, Mr. Ijaz placed the same ad in the Urdu Times that had initially piqued Plaintiff's attention.

         II. PROCEDURAL HISTORY

         Plaintiff filed suit against Defendants on May 4, 2018. An Amended Complaint was filed in August 3, 2018, which Defendants answered shortly thereafter. The parties stipulated to waiver of a jury trial, and a bench trial was held on May 6, 2019. Plaintiff then submitted proposed findings of fact and conclusions of law; Defendants responded, and Plaintiff replied.

         III. DISCUSSION

         Plaintiff asserts five counts against Defendants: fraud; breach of contract; unjust enrichment, minimum wage and overtime violations under the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq.; and violations of Pennsylvania's Wage Payment and Collection Law, 43 Pa. C.S.A. § 260.9a(b).

         Before each count is addressed, however, a preliminary note is in order. Although Plaintiff has brought these counts against both Mr. Ijaz and Mrs. Ijaz, the evidence entered at trial describes only conduct engaged in by Mr. Ijaz. Because no facts have been found relating to Mrs. Ijaz's conduct, and because no legal argument has been made that she should be responsible for her husband's conduct, she cannot be found liable for any legal violations. See Connolly v Oquendo, 2013 WL 4051320, at *4 (E.D. Pa. Aug. 9, 2013). Therefore, the following discussion relates only to Mr. Ijaz's liability.

         A. Fraud

         To prove fraud in Pennsylvania, Plaintiff must establish the following elements: “(1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the ...


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