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PATEL v. PATEL1/9/1998
Chiman Patel appeals a judgment in favor of his nephew, Bharat Patel, and Bharat's wife, Daksha Patel, for $85,908 in compensatory damages and $225,000 in punitive damages on their claim that Chiman fraudulently misrepresented the profitability of a motel they purchased from him in 1993. We affirm.
Bharat and Daksha Patel immigrated from India . After living a while in Atlanta, they returned to India for a time. Upon returning to America, they moved to Birmingham and worked for Bharat's uncle, Chiman Patel. They worked for him for approximately 3 years in an unrelated business before seeking his advice regarding purchasing a business of their own. Chiman Patel offered to sell them the Town Motel in Birmingham. He told them that he would sell the motel to them for $450,000 and the testimony at trial indicated that he also told them they could expect to earn $70,000 to $75,000 in profit per year from operating the motel. The plaintiffs said the uncle told them that the purchase price was discounted for them "because they were relatives," and they alleged that because of their culture they did not question Patel's representations to them.
The plaintiffs bought the motel from the uncle for $450,000. The purchase price was financed by loans secured by a first mortgage and also by a second mortgage held by the uncle. The uncle later foreclosed on the second mortgage, after the plaintiffs were unable to make their payments. Despite the representations made to Bharat and Daksha, the evidence at trial indicated that both before the sale to them and after he had taken back the motel through foreclosure of the second mortgage, Chiman Patel offered it for sale for $300,000. In addition thereto, the plaintiffs contend that the uncle did not inform them that the short-term rentals that made up much of the motel's income were illegal. Without the illegal income derived from the short-term rentals, the plaintiffs were unable to make all the mortgage payments on the motel.
Bharat and Daksha Patel sued the uncle, alleging fraud and breach of contract. The court directed a verdict on the breach of contract claim. The fraud claim was submitted to the jury, which awarded $85,908 in compensatory damages and $450,000 in punitive damages. Following a Hammond/Green Oil hearing, the punitive damages award was reduced to $225,000. The trial court's order requiring a remittitur of the punitive award stated:
"The plaintiffs, Bharat and Daksha Patel, brought this action against Bharat Patel's uncle, Chiman Patel. They alleged that Chiman Patel was guilty of fraud in connection with the sale of the Town Motel in Birmingham in 1993 and 1994. The disputed question of fact which was presented to the jury was whether Chiman Patel misrepresented the profitability of the motel to Bharat and Daksha Patel at the time of the sale and, if so, whether they reasonably relied on the misrepresentation to their detriment. The case was tried on August 6,7, and 8, 1996, resulting in a verdict in favor of the plaintiffs for $85,908 compensatory damages and $450,000 punitive damages.
". . . .
"On February 14, 1997, the Court heard arguments of counsel, received legal briefs and took testimony. The parties provided the Court with a transcript of the trial. The Court has carefully reviewed all of the submissions.
"The defendant contends that he should have a new trial because (1) the verdict was against the great weight of the evidence and (2) the jury's damages award was excessive. He argues, in the alternative, that the Court should grant a remittitur.
"This case was tried and submitted to the jury on the issue of fraud. At the close of the plaintiffs' case
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