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Patel v. Dhaduk

United States District Court, M.D. Pennsylvania

September 5, 2019

MUKESHKUMAR B. PATEL, Plaintiff,
v.
VITHALBHAI D. DHADUK, a/k/a VITHAL D. DHADUK, Defendant.

          MEMORANDUM

          A. Richard Caputo, United States District Judge.

         Presently before me is a Motion to Dismiss Defendant's Counterclaims filed by Plaintiff, Mukeshkumar B. Patel. (See Doc. 29). Patel filed suit against Defendant, Vithal D. Dhaduk to recover damages for an alleged breach of contract regarding the parties' “Memorandum of Understanding.” (See Doc. 29). Patel asserts that Dhaduk failed to pay him $9.45 million in exchange for Patel's exit from Somahlution (“Soma”) and Global Pharma Analytics, LLC (“GPA”) as soon as possible. (See Doc. 7). Dhaduk answered the complaint and filed five counterclaims against Patel: Fraud (Counterclaim I), Misrepresentation (Fraudulent Inducement) (Counterclaim II), Breach of Contract (Counterclaim III), Promissory Estoppel (Counterclaim IV), and Tortious Interference (Counterclaim V). (See Doc. 27). Because Dhaduk has not adequately plead counterclaims I, II, III and IV, Patel's motion to dismiss counterclaims I, II, III, and IV will be granted; however, counterclaim V will be dismissed without prejudice and Dhaduk will be given leave to amend.

         I. Background

         The facts from Dhaduk's Amended Answer with Affirmative Defenses and Counterclaims (Doc. 27), taken as true and viewed in the light most favorable to Dhaduk, are as follows:

         Dhaduk and Patel are part owners of a professional cricket team, the Kochi Tuskers Kerala (“Kochi”), which was a franchise in the Indian Professional League (“IPL”). (Doc. 27 at ¶ 2). In September 2011, the Board of Control for Cricket in India (“BCCI”) announced its decision to terminate the Kochi franchise, because Kochi allegedly breached its league agreement. (Id. at ¶ 4). Subsequently, litigation ensued regarding the BCCI's decision. (Id. at ¶ 6).

         In July 2015, an arbitration panel ruled in favor of Kochi and entered an arbitration award (“Arbitration Award”) of “at least $77 million before continuing interest and penalties.” (Id. at ¶ 6). When the Arbitration Award was announced, Patel told Dhaduk that they would receive approximately twenty-six percent (26.00%) of the arbitration award in proportion with their collective ownership interests in Kochi. (Id. at ¶ 7). Patel's representation lead Dhaduk to believe that Patel and Dhaduk would each receive thirteen percent (13.00%) of the total award, which amounted to “approximately $10 million.” (Id. at ¶ 8). Patel “was obligated to and agreed to” secure their interests in the Arbitration Award. He promised Dhaduk “that he had the ability to do, and would do, everything possible to force” a prompt payment. (Id. at ¶¶ 9-11).

         Notwithstanding Patel's “promises and representations” and unbeknownst to Dhaduk, the BCCI was not committed to paying the Arbitration Award immediately and appealed to the Bombay High Court. (Id. at ¶ 13). At this time, Patel “did nothing” to force the BCCI to pay the Arbitration Award as he had promised Dhaduk. (Id. at ¶ 15).

         These promises of an “impending $10 million payout” from the Arbitration Award were made when Patel started to solidify a “running ledger” of the parties' “various business dealings.” (Id. at ¶ 19). On July 16, 2015, Patel and Dhaduk entered into a written agreement, the “Memorandum of Understanding” (“MOU”), memorializing such business dealings. (See Doc. 7-1). Dhaduk explains that Patel's promise he was to receive at least $10 million from the Arbitration Award induced him to sign the MOU. (Id. at ¶ 20). The MOU discusses the Arbitration Award by specifically identifying the “IPL money” and “corroborates” that Patel promised that the parties' portion of the Arbitration Award would be “split 50/50." (Id. at ¶ 17). Dhaduk maintains that the MOU is not a “binding contract” but rather a “running ledger for the various business dealings loosely involving [Patel and Dhaduk].” (Id. at ¶¶ 18-19).

         On December 6, 2017, Patel initiated this action, attaching the MOU. (Doc. 1). On January 1, 2018, Patel filed an amended complaint, alleging that the MOU is “valid and enforceable.” (Doc. 7 at ¶ 19). The third paragraph of the MOU states, “[Dhaduk] will pay [Patel] USD 9.45 Million as soon as he can for exiting Soma/GPA.” (Id. at ¶ 3). Patel argues that Dhaduk breached the agreement when he failed to pay Patel $9.45 million “as soon as he [could]” for exiting Soma and GPA. (Doc. 7 at ¶ 20). Patel contends that he had exited Soma and GPA as of July 16, 2015. (Id. at ¶ 21). He further argues that Dhaduk has had the ability to pay him since July 16, 2015 as Patel certified to the U.S. Government, under penalty of perjury, within the last five years, that he has assets worth over $30 million, he derives an annual income of $2.5 million per year, and he owns stocks and bonds that have a market value of $22 million. (Id. at ¶¶ 13-14, 23).

         Under the MOU, Dhaduk claims that he was “due to get at least $10 million from the Arbitration Award” and “did not have to give any of it - let alone $9.45 million - to Mr. Patel on account of ‘exiting Soma/GPA.'” (Doc. 27 at ¶ 20). Dhaduk further explains that days before the parties signed the agreement they discussed over the phone that Patel's compensation for exiting Soma and GPA was limited to the success of those companies and not Dhaduk individually. (Id. at ¶¶ 21-22).

         When Patel filed this action, it became clear to Dhaduk that Patel “fraudulently induced” him to sign the MOU so that he could claim the MOU was a binding contract. (Id. at ¶ 28). Since the signing of the MOU, Patel has also derogated his duties of “good faith and fair dealing” by failing to enforce the Arbitration Award. (Id. at ¶ 23).

         In a separate matter, Dhaduk states that Patel convinced him to loan $1.1 million to NKD Maritime Limited, one of Patel's companies. (Id. at ¶ 30). In November 2017, Dhaduk inquired about NKD Maritime Limited's ability to pay this loan obligation. (Id. at ¶ 31). Patel, however, had informed the company that the MOU accounted for the $1.1 million loan and thus rendered the loan “null and void.” (Id. at ¶ 32). Accordingly, NKD Maritime Limited refused to repay Dhaduk. (Id. at ¶ 34).

         On June 9, 2019, Dhaduk filed an Amended Answer with Affirmative Defenses and Counterclaims. (See Doc. 27). Dhaduk alleges five counterclaims against Patel: Fraud (Counterclaim I), Misrepresentation (Fraudulent Inducement) (Counterclaim II), Breach of Contract (Counterclaim III), Promissory Estoppel (Counterclaim IV), and Tortious Interference (Count V). (See id.).

         This Motion has been fully briefed and is ripe for review.

         II. ...


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