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Hossain v. JMU Properties, LLC

Court of Appeals of Columbia District

October 20, 2016

Abu Naser Hossain, et al, Appellants,
v.
JMU Properties, LLC, et al, Appellees.

          Argued March 24, 2016

         Appeal from the Superior Court of the District of Columbia Civil Division (CAB-8692-12) (Hon. Maurice A. Ross, Trial Judge)

          Brian P. Murphy for appellants.

          Alex Chanthunya for appellees. Before Fisher and Blackburne-Rigsby, Associate Judges, and King, Senior Judge.

          BEFORE: Fisher and Blackburne-Rigsby, Associate Judges; and King, Senior Judge.

         JUDGMENT

         This case came to be heard on the transcript of record and the briefs filed, and was argued by counsel. On consideration whereof, and as set forth in the opinion filed this date, it is now hereby

         ORDERED and ADJUDGED that the judgment is vacated and the case is remanded for further proceedings consistent with this opinion.

          OPINION

          Warren R. King, Senior Judge

         Following a bench trial, appellants Profound Radiance, Inc. ("PRI") and Abu Naser Hossain were found liable on a counter-claim and 3rd- party complaint for breaching a commercial lease, breaching a franchise agreement, and fraud, for which the trial court entered a $391, 640.82 judgment in appellees' favor. They now claim the trial court erred by denying their motion to enforce an arbitration clause in a franchise agreement between the parties, erroneously entering judgment on behalf of Mickey Sood ("Sood") and on behalf of a 3rd-party ("JMU Tax") not named in the original complaint, and entering judgment on behalf of a party ("JMU Properties") for damages under a franchise agreement to which it was not a party.

         We conclude that the trial court did not err in entering a judgment in appellee Mickey Sood's name because the circumstances surrounding both the lease and franchise agreement clearly show he was an intended 3rd-party beneficiary of both agreements. However, we also conclude that the judgment should be reformed consistent with the instructions set forth infra. We are also satisfied that the trial court did not err in issuing an order, based on waiver, denying appellants' motion to stay the proceedings and compel arbitration, which was entered after the evidentiary phase of the trial was completed and several months before the entry of judgment.[1]

         I.

         Mickey Sood is the president and managing member of the company known as JMU Properties, LLC ("JMU Properties") and the vice president and owner of a company known as JMU Tax & Preparation Services ("JMU Tax"). Abu Naser Hossain ("Hossain") is the President and owner of Profound Radiance, Inc. ("PRI"), a company that performs tax preparation services. On January 1, 2008, Hossain, in his capacity as owner of PRI, executed a five-year lease for the office space located at 1933 18th Street, N.W. ("18th Street office") with Sood, who signed as President of JMU Properties. On January 28, 2008, now acting as Vice President and owner of JMU Tax, Sood executed a franchise agreement with Hossain, who was again acting on behalf of PRI.

         PRI fell behind in its rent obligations under the lease, and stopped making payments in November 2011. By November 2012, PRI had failed to pay rent for twelve months. Acting on behalf of JMU Properties, Sood changed the locks at the 18th Street office. On November 14, 2012, PRI filed a wrongful eviction action against JMU Properties and Sood. In March 2013, JMU Properties and Sood filed a counter-claim against PRI ...


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