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

Supreme Court of New York, Appellate Division
30 N.Y.S.3d 743 (2016)


Facts

Ravinder Sharma and Yosho Lakshmi (plaintiffs) owned Lakshmi Grocery & Gas Inc. (plaintiff). GRJH, Inc. (defendant) was run by James and Alicia Metz. Having successfully dealt with the Metzses on prior business matters, the parties entered negotiations to lease a gas station and convenience store. In response to numerous requests from Sharma, Alicia Metz emailed that the convenience store had made $22,000 in inside sales for the prior month, August of that year. However, Alicia had actually sent the figures from the prior August and mistakenly labeled them as that year’s sales. The actual sales from August of that year were only $15,500. Sharma claimed that he also asked to look at the store’s sales records directly, but Alicia had denied access to the records, only allowing Sharma to visit the store as an anonymous customer. Alicia denied that Sharma had ever requested the sale records, but she confirmed that it was their policy to prevent potential new lessors from talking to employees to avoid unrest until the deal was complete. Relying on the parties’ prior dealings and the representation about $22,000 in inside sales just the month before, Sharma agreed to the lease. After the deal, Sharma learned about the actual sales figures. Sharma contended that he never would have entered the lease if he had known the true number. Unable to reach an agreement about modifying the lease, Sharma and Lakshmi vacated the store and sued to rescind the contract. The trial court found that there was a substantial mutual mistake about the inside-sales number and rescinded the lease contract, awarding damages to Sharma and Lakshmi as part of the rescission. GRJH appealed.

Rule of Law

Issue

Holding and Reasoning (Garry, J.)

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