Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Reddy v. Patel

United States District Court, D. New Jersey

November 1, 2019

SANDADI V. REDDY, Plaintiff,
v.
ATUL K. PATEL, et al., Defendants.

          OPINION AND ORDER

          JAMES B. CLARK, III UNITED STATES MAGISTRATE JUDGE

         THIS MATTER comes before the Court on a motion by Defendant and Third-Party Plaintiff Ghanshyam Patel (“Sam”) to disqualify Archer & Greiner, P.C. (“Archer Law”) from the representation of Defendant Atul K. Patel (“Atul”) and Defendant Dharmendra Barot (“Barot”) (collectively herein “Defendants”) [Dkt. No. 40]. Additionally, Sam's motion requests that the Court restrain Defendants from using company assets to pay their attorneys [Dkt. No. 40]. Atul and Barot oppose Sam's motion [Dkt. No. 46]. For the reasons set forth below, Sam's motion [Dkt. No. 40] is DENIED.

         I. BACKGROUND

         Plaintiff Sandadi Reddy (“Plaintiff”) initiated this action against Defendants and Sam by filing a Verified Complaint in Supreme Court of the State of New York, Queens County, which was later removed to the Eastern District of New York pursuant to 28 U.S.C. § 1441 and subsequently transferred to this District [Dkt. Nos. 1, 5]. On January 31, 2019, Sam filed an Answer to the Amended Complaint, Cross-Claims and Third-Party Complaint asserting individual and derivative claims against Defendants, and also asserting cross-claims against East Hanover Hotel and Conference Hospitality LLC (“Hospitality”). See Dkt. No. 32. Sam's claims include breach of contract, membership oppression, breach of fiduciary duties and fraud regarding the ownership and management of the subject hotel business. Dkt. No. 32. On or about February 15, 2019, Hospitality filed its Answer to Sam's crossclaims, which denied all claims and stated that Sam “is not a member of Hospitality.” Dkt No. 36. On or about February 28, 2019, Defendants answered Sam's Crossclaims and Third-Party Complaint and denied all claims by Sam [Dkt. No. 38].

         Hotel Business Structure

         The ownership structure of the subject hotel business can be described as follows: Hospitality holds 100%-member interest in East Hanover Associates LLC (“EH Associates”), which owns the subject hotel and leases the subject hotel premises. See Dkt. No. 40-2 at p. 2; Dkt. No. 46-3, ¶ 3(a)-(b). In turn, East Hanover Hotel and Conference Management LLC (“Management”) held a fifty percent (50%) ownership interest in Hospitality. Dkt. No. 40-2 at p. 2; Dkt. No. 46-3, ¶ 3(c).[1] The parties do not dispute that initially Atul, Barot, and Sam each held 1/3 member interest in Management. Dkt. No. 40-2 at p. 2; Dkt. No. 46-3, ¶¶ 3(d), 4. It is Atul and Barot's position that Sam relinquished and surrendered his ownership interest in Management in 2015, and Management was later dissolved in or about August 2017 with Atul and Barot assuming its membership interest in equal shares. Dkt. No. 46-3, ¶ 3(d). Sam, however, contends that he was a member of Management at its dissolution and now holds an interest in EH Associates through Hospitality. Dkt. No. 40-2 at pp. 4-5.

         Archer Law's Representation of Hotel Business Entities and Individuals

         Within the subject hotel business, it is undisputed that Archer Law has represented certain entities and individuals as discussed herein.

         Archer Law's Representation of Hospitality

         Archer Law represented Hospitality in an eviction action filed on or about August 29, 2016 captioned Eric-Richard, LLC and East Hanover Ramada Addition v. East Hanover Hotel and Conference Hospitality, LLC d/b/a Fairbridge Inn, Superior Court of New Jersey, Law Division, Morris County, Special Part, Landlord/Tenant Division, No. LT-1957-16. Dkt. No. 46-3, ¶ 5. On or about December 9, 2016, the court granted Hospitality's motion to dismiss with respect to one claim, and the remainder of the action was resolved by way of a Stipulation of Dismissal and Stipulation of Settlement dated January 9, 2017. Dkt. No. 46-3, ¶¶ 6-7, Exs. F-H.

         Archer Law's Representation of EH Associates

         Archer Law represented EH Associates in a civil action filed on or about September 19, 2016 captioned AIMS Capital Investments, LLC v. EH Associates, LLC, Eric-Richard, LLC and East Hanover Ramada Addition, Superior Court of New Jersey, Chancery Division, Morris County, No. C-108-16. Dkt. No. 40-2 at p. 6 n.2; Dkt. No. 46-3, ¶ 8, Ex. I. AIMS Capital Investments, LLC later amended its complaint naming Atul and Barot as individual defendants. Dkt. No. 46-3, ¶ 12. On or about May 18, 2018, Archer Law withdrew from representation of EH Associates, but continued to represent Barot and Atul. Dkt. No. 46-3, ¶ 13, Ex. L. The lawsuit thereafter ended in a confidential settlement agreement with a Stipulation of Dismissal filed on or about June 19, 2018. Dkt. No. 46-3, ¶ 14, Ex. M.

         Archer Law's Involvement in the EHR10 Action

         On or about December 20, 2016, EHR10 and its members filed an action against Management, Atul, Barot and Sam captioned East Hanover Route 10 LLC, et al v. East Hanover Hotel and Conference Management, LLC, et al, Superior Court of New Jersey, Morris County, No. L-2787-16.[2] Dkt. No. 46-3, ¶ 17. On or about June 19, 2018, the parties entered into a confidential settlement agreement. Dkt. No. 46-3, ¶ 21, Ex. P. Archer Law did not enter an appearance in this action but states it did have limited involvement in negotiating the settlement agreement on behalf of Atul and Barot. Dkt. No. 46-3, ¶ 22. At the time of the settlement, it is Defendants' position that Management no longer existed as an entity and Sam had already relinquished his interest. Dkt. No. 46-3, ¶¶ 3(d), 22. As a ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.