Lakshmi Grocery & Gas, Inc. v. Grjh, Inc.

138 A.D.3d 1290 (2016)

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Nature of the Case

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Facts

P is a corporation owned by third-party defendants, Ravinder Sharma, and Yosho Lakshmi. Sharma contacted James Metz, an officer of D with whom Sharma had previously had successful business dealings, to inquire about commercial opportunities in New York. Metz presented a gas station and convenience store owned by D that was available for lease. P agreed to take over the store and signed a combined lease and contractor agreement. Sharma testified that before he signed the contractor agreement, he repeatedly asked for the store's inside sales figures-that is, sales of such items as groceries, coffee, and cigarettes, which he testified are a critical factor in a convenience store's profitability. Metz responded with an email stating that the store's sales for August 2010 totaled approximately $22,000. After taking over the store, Sharma discovered sales records revealing that the true figure for August 2010 was approximately $15,500, an amount that he testified was too low to permit the successful operation of the store. P vacated the store and requested a refund of their initial payments, which D refused to pay. P sued for rescission based upon fraudulent inducement. P also pursued rescission based upon mutual mistake. Supreme Court found that a mutual mistake had occurred, awarded damages to P, rescinded the contract, and dismissed the third-party action. D appealed.