LONE'S RT 92, INC. APPELLANT
DJ MART, LLC, AND DALJIT SINGH APPELLEES
FROM THE PULASKI COUNTY CIRCUIT COURT, SIXTH DIVISION [NO.
60CV-18-784] HONORABLE TIMOTHY DAVIS FOX, JUDGE
Davidson Law Firm, by: Stephen L. Gershner, for appellant.
WAYMOND M. BROWN, JUDGE.
appeals from the circuit court's order granting the
appellees' rescission counterclaim, thereby returning
to them their $96, 000 down payment for the subject property,
a gas station. On appeal, appellant argues that the circuit
court clearly erred in finding that it committed (1) fraud by
omission by failing to disclose (a) unpaid real estate taxes
and (b) the real status of the inoperability and disrepair of
the gas pumps, and (2) misrepresentation. Additionally, it
argues that it properly terminated the contract. We affirm.
August 30, 2017, appellee Daljit Singh met with Noor Ali as
representative for AAN, Inc. (AAN),  at the gas station to
discuss a potential sale or lease of the same. Singh and
Sohail Cheema-who was the assistant to appellant's owner,
Mohammad Lone, and the agent for appellant and AAN-met on
September 1, 2017. During that time they agreed to the
general terms of contract for the sale of the gas station.
Singh made an earnest money deposit in the amount of $16, 000
to appellant, through Cheema, at that meeting.
parties entered into a contract on September 8, 2017. The gas
station was purchased "as it is[.]" It was
purchased for $640, 000 with a down payment of $96,
acknowledged as having been received by appellant, thereby
leaving a balance of $544, 000 remaining. The remaining
balance was to be paid in installments of $4, 889.63 monthly
through October 1, 2032. One provision in the contract
The [appellees agree] to keep and maintain the premises and
the improvements thereon in a clear and orderly condition at
all times, free of waste or destruction, and to make all
necessary repairs thereon to keep the premises in a good and
habitable condition at all times during this contract. The
standard of maintenance to which the [appellees agree] to
maintain the premises is the highest state of repair, which
the same has been or may be at any time during the period of
provision on taxes stated that "[t]he Seller agrees to
pay all taxes that come from this contract date forward for
the year 2017 on the aforesaid property, and the Buyer agrees
that the Buyer will pay the taxes for all subsequent years
thereon." The contract's default provision stated
In the event that the Buyer should default in making the
payment or in keeping the covenants on Buyer's part to be
made and kept hereunder, and should a default in the making
of any payment continue for a period of thirty (30) days from
the date when such payment hereunder is due, the Seller may,
at Seller's option, declare this contract to be thereupon
terminated and forfeited by giving notice of Seller's
election so to do to the Buyer at Buyer's telephone book
or last known address. Thereupon, Buyer agrees that Buyer
will promptly and forthwith vacate the premises and return
possession thereof to the Seller without additional notice.
To accommodate the agreement herein made to that effect, the
Buyer hereby waives any and all notice to which Buyer may be
entitled under the Laws of the State of Arkansas as a
prerequisite to a suit against the Buyer for the unlawful
detention of the property. Upon such a default by the Buyer
and an election of the Seller to terminate this contract, the
amounts theretofore paid by the Buyer to the Seller shall be
retained by the Seller as liquidated damages for the breach
of this agreement by the Buyer and as a reasonable rental for
the property during the period of time when the same has been
occupied pursuant to this contract by the Buyer.
February 8, 2018, appellant filed a complaint in unlawful
detainer asserting that it received appellees' last
payment in November 2017, and that appellees had since
"unlawfully failed and refused to quit possession"
of the property despite being requested to do so. It also
asserted that appellees had failed to operate its business in
a proper manner. Accordingly, appellant sought monetary
damages in the form of payment of the monthly installments
for all months appellees remained in possession of the
property. Appellant also sought reimbursement of taxes it had
to pay on the property that it asserted appellees were
responsible for and a writ of possession.
appellees filed a counterclaim on March 16, 2018. The
following facts were asserted therein. At a September 2, 2017
visit to the gas station, Singh learned that gasoline was
unavailable for sale at the gas station because the gasoline
distributor had "cutoff gas distribution for
"several months due to various issues including the
condition of the gasoline storage tanks and gas pumps."
Singh "immediately" contacted appellant and
requested the return of his earnest money, but was assured by
Cheema that "all gasoline and equipment issues would be
addressed to Singh's satisfaction[;] Cheema would not
return the earnest money[.]" On September 7, 2017, Singh
met with Lone who verbally assured Singh that appellant would
install new gasoline tanks and pumps within two months.
Regarding operation of the gas station:
On October 8, 2017, [DJ Mart, ] LLC began operation and
management of the convenience store. The monthly payment from
LLC to [appellant] was made on October 4, 2017. LLC accepted
deliveries of gasoline from the Citgo petroleum supplier
although only one tank of the four on the property could hold
gasoline. LLC was waiting on the two-month period [appellant]
represented would be required in order to replace the damaged
or unserviceable equipment.
November 15, 2017, DJ Mart, LLC (DJ Mart), contacted Lone
concerning replacing and/or repairing the equipment, for
which DJ Mart had obtained an $85, 000 estimate.
Appellant, through Lone, denied having agreed to repair or
replace the equipment. Singh, on behalf of DJ Mart, demanded
that appellant "fulfill its contractual obligation to
provide tank replacement/repair and pump replacement."
Appellant refused. Singh, again on behalf of DJ Mart,
requested repayment of the $96, 000 down payment and
rescission of the contract; appellant refused.
on or about December 15, 2017, DJ Mart received notice that
the gas station was delinquent in payment of taxes for the
years 2013 through 2015, totaling $21, 507.24. The property
was scheduled to be sold at public auction on April 10, 2018.
Singh contacted Cheema regarding the notice and was advised
that appellant would pay the delinquency. Singh advised that
no further payments would be made until the delinquency was
paid, asserting that the delinquency was a default under the
contract. DJ Mart had already made its December payment by
the time it received the notice and appellant had cashed that
payment. No additional payments were made.
asserted that appellant "[at] no time" advised that
it intended to terminate the contract and appellees denied
that appellant ever made a demand that DJ Mart vacate the
property. Appellees filed an objection upon receipt of
appellant's complaint and deposited payment for ...