The plaintiffs sold their fitness club franchise to the corporate defendant via an Asset Purchase Agreement (APA) without legal representation.
The corporate defendant took possession but failed to pay the purchase price, which involved assuming two small business loans, and failed to pay rent, causing the plaintiffs to default on their lease and incur a claw-back of deferred rent.
The plaintiffs brought a motion for summary judgment for the amounts owed and sought to pierce the corporate veil to hold the personal defendants liable.
The court granted summary judgment against the corporate defendant for the loan amounts and the foreseeable deferred rent claw-back, totaling $85,637.97.
However, the court ordered a mini-trial to determine liability for three months of rent and dismissed the claims against the personal defendants because the tort of conversion and breach of good faith were not pleaded, though leave to amend was granted.