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Patel v. United Inns, Inc.
Citations: 897 N.E.2d 945; 2008 Ind. App. LEXIS 2577; 2008 WL 5160163Docket: 06A04-0709-CV-501
Court: Indiana Court of Appeals; December 5, 2008; Indiana; State Appellate Court
In the case of Narendra Parbhubhai Patel v. United Inns, Inc., the Court of Appeals of Indiana addressed a dispute stemming from a real estate transaction. Patel was the second-highest bidder for a hotel owned by United Inns, Inc., with a contractual obligation to purchase if the highest bidder, Oceanic Hospitality, defaulted. When Oceanic failed to make an earnest money payment by the stipulated deadline, United declared it in default and accepted Patel's offer. However, Patel was unable to secure financing and did not close the deal by the required date. United claimed Patel's earnest money of $249,100 as liquidated damages. Following Patel's failure to close, United and Oceanic entered into a Resolution Agreement and an Assignment Agreement, allowing Oceanic's rights to purchase the hotel to be assigned to its affiliate, Jewel, Inc. This agreement included representations from Oceanic that the purchase contract was in full effect and that it was not in default. Jewel successfully purchased the hotel on the new closing date of November 29, 2004. United subsequently sued Patel for the earnest money, which the trial court awarded along with attorney fees. The appellate court upheld this decision, affirming Patel's breach of contract and the validity of the liquidated damages clause. A dissenting opinion argued for rehearing, contending that United's acceptance of the assignment and subsequent purchase by Jewel indicated a waiver of any default by Oceanic. The dissent expressed concern over the inequity of allowing United to retain Patel's earnest money while also benefiting from the sale to Jewel, suggesting that such acceptance constituted a waiver of the breach. The dissenting judge advocated for reversing the trial court's judgment in favor of United.