Poodles, Inc. v. Kuhn CA1/1

I.

BACKGROUND

A. Factual Background In August 2012, Poodles leased from AAP two parcels of commercial property (property). The lease provided for an option to purchase the property “ ‘for the fair market value of the property at the time that Tenant exercises this option, and on such other mutually agreed terms.’ ” At the same time the lease was executed, PFI executed a “Purchase and Sale of Assets Agreement” with AAEH to purchase all tangible and intangible real and personal property of AAEH’s emergency veterinarian business, including in part, “All of the goodwill and going concern value of AAEH,” for $1.7 million (asset purchase agreement).1 PFI made an initial payment of $170,000 and executed a promissory note in the principal amount of $1.53 million (note). Williamson subsequently invested approximately $500,000 to improve the property, and informed AAP that Poodles wished to exercise its option to purchase the property. After the parties were unsuccessful in negotiating the purchase option, Poodles filed a lawsuit against AAP and 1333 Ninth Avenue LLC, a general partner of AAP, to compel the sale of the property (Poodles, Inc. v. All

Jill Williamson is the majority…