Filing # 137893017 E-Filed 11/04/2021 11:16:47 AM.
IN THE CIRCUIT COURT OF THE TWENTIETH JUDICIAL CIRCUIT IN AND FOR
COLLIER COUNTY, FLORIDA. CIVIL ACTION
ROCKY PATEL PREMIUM CIGARS, INC.,
Plaintiff,
Case No.: 2021-CA-1875
BRAD WARRINGTON,
Defendant.
AMENDED COMPLAINT
Plaintiffs, Rocky Patel Premium Cigars, Inc. (“Patel Cigars”) and Rakesh Patel
(“Rocky”), sue Defendant, Brad Warrington (“Warrington”), and show:
PARTIES, VENUE AND JURISDICTION
1. This is a claim for Declaratory Relief pursuant to Chapter 86, Florida Statutes, and
for the specific performance of a contract, making jurisdiction proper in this Court.
2. The amount in controversy exceeds $30,000, making jurisdiction proper in this
Court.
3. Venue is proper in Collier County, Florida, as the actions and alleged inactions
requiring Declaratory Relief occurred in Collier County, Florida.
4, Patel Cigars is a foreign corporation with its principal place of business located in
Collier County, Florida.
5. Warrington is a shareholder in Patel Cigars, and the Court has jurisdiction over
Warrington pursuant to Section 48.193, Florida Statutes.
6. Rocky isa shareholder of Patel Cigars and is its President.
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JER COUNTY, CRYSTAL K. KINZEL, CLERK, 11/04/2021 11:16:47 AM.7. Allconditions precedent to the filing of this action have been satisfied or have been
otherwise waived
8. Patel Cigars has retained the law firm of Coleman, Yovanovich & Koester, P.A., to
bring this action and must pay them a reasonable fee for their services.
9. Patel Cigars shall be entitled to recover its reasonable attorneys’ fees and costs
incurred in bringing this action.
GENERAL ALLEGATIONS PERTAINING TO DECLARATORY RELIEF
10. Patel Cigars conducts business in Florida.
11. Warrington owns a 6.05% interest in Patel Cigars.
12. Warrington has requested Patel Cigars’ financials and other Patel Cigars business
records.
13. Warrington claims that he has not been provided access to Patel Cigars’ business
records.
14, All of Patel Cigars’ business records requested by Warrington have been provided
to Warrington.
GENERAL ALLEGATIONS PERTAINING TO BREACH OF CONTRACT
15. Patel Cigars conducts business in Florida.
16. Rakesh Patel (“Rocky”) is a shareholder in Patel Cigars and is its President.
17. Inthe summer of 2020, Warrington notified Rocky that he wanted to be bought out
of Patel Cigars for $7 million. A true and correct copy of an email from Warrington to Rocky
dated July 13, 2020 is attached to this Amended Complaint as Exhibit 1.
18. Since that time, the parties have been negotiating a price for the purchase of
Warrington’s 6.05% interest in Patel Cigars
Page 2 of 1019. Rocky and Warrington are parties to a 1998 Buy-Sell Agreement (“Agreement”).
A true and correct copy of the Agreement is attached to this Amended Complaint as Exhibit 2.
20. Section 2.02 of the Agreement provides in relevant part that:
The Corporation shall have an option to purchase all or any part of the common
stock of the Stockholder desiring to sell at the lesser of the price (including the
terms) specified in the Section 2.01 Notice, or the price specified in Article 4 .
(emphasis added)
21. Article 4 of the Agreement provides a mechanism to determine the purchase price
of a stockholder selling its share of stock in the corporation.
22. Pursuant to Article 4 of the Agreement, both the corporation or the stockholder that
is purchasing the selling stockholder’s stock, and the selling stockholder, are to choose their own
independent appraisers that are accounting, investment banking, or business valuation firms.
23. Both appraisers selected by the parties are to separately and independently
determine the value of the shares being sold.
24. Ifthe valuation stated in the higher appraisal is no more than 110% of the valuation
in the lower appraisal, then the purchase price for the selling stockholder’s shares shall be the
average of the two appraisals,
25. If the valuation stated in the higher appraisal is more than 110% of the valuation
stated in the lower appraisal, then the two appraisers are to select a third appraiser to determine the
value of the shares being sold. The price of the shares being sold shall be the arithmetic average
of the two appraisals which are closest in amount, and the remaining appraisal is to be disregarded.
26. The appraisers are to act in good faith and independently of the other appraisers
and the parties.
27. Thenotice provided pursuant to Section 2.01 of the Agreement must be a bona fide
good faith offer,
Page 3 of 1028. Either the corporation or a stockholder in the corporation may purchase the selling
stockholder’s shares at the lesser of the price set forth in a Section 2.01 notice pursuant to a bona
‘fide purchase offer, or the price established under Article 4 of the Agreement.
29. In furtherance of his intent to purchase Warrington’s shares at the price set forth in
Article 4 of the Agreement, Rocky retained an appraiser to value the business and Warrington’s
shares,
30. On April 16, 2021, Rocky provided Warrington with a copy of an appraisal of the
company and a valuation of Warrington’s shares in the company (“Crain Appraisal”). A true
and correct copy of the Crain Appraisal is attached to this Amended Complaint as Exhibit 3.
31. Along with the Crain Appraisal, Rocky made Warrington a confidential offer that
well exceeded the value of Warrington’s shares in the Crain Appraisal (“Confidential Offer”).!
32. Warrington never responded to the Confidential Offer and never obtained an
independent appraiser to value the company.
33. On June 18, 2021, Warrington sent Patel Cigars an alleged Section 2.01 notice that
identified a special purpose vehicle, Whitefish Bay, and identified a purchase price of $7,590,000
for Warrington’s 6.05% interest in Patel Cigars (“Notice”). A true and correct copy of the Notice
is attached to this Amended Complaint as Exhibit 4.
34. The alleged offer for Warrington’s shares identified in the Notice is almost 4 times
the value of Warrington’s shares as determined by the Crain Appraisal
35. The alleged offer for Warrington’s minority interest in Patel Cigars is not bona fide
or made in good faith
' The Confidential Offer is not attached to this Amended Complaint as it was made as a privileged
settlement proposal under Section 90.408, Florida Statutes.
Page 4 of 1036. There is no support or valuation for the alleged offer identified in the Notice.
37. The alleged offer idemtified in the Notice is contingent upon completion of an
unspecified due diligence period.
38. The alleged Notice fails to identify all of the terms of the offer as is required by
Section 2.01 of the Agreement.
39. The alleged offer fails to properly identify, as required by Section 2.01 of the
Agreement, the party making the offer so that the company and the existing shareholders can
determine whether the alleged offer is legitimate.
40. The party making the offer is simply identified in the Notice as “Special Purpose
Vehicle (‘SPV’) Whitefish Bay. There is no indication as to whether this is a corporation, limited
liability company, or other type of entity. There is no indication as to where this entity is domiciled
or where it was created. There is no indication or way to determine who the owners, members, or
shareholders of this entity are.
41. On August 23, 2021, Warrington sent Rocky a letter indicating that since no one
had responded to his June 18, 2021 letter, he was moving forward with the sale of his shares to a
third-party purchaser and requesting certain documents to be provided. A true and correct copy of
the August 23, 2021 letter is attached to this Amended Complaint as Exhibit 5.
42. On September 1, 2021, Rocky responded to Warrington, letting him know that he
did not believe that a valid notice that complied with Section 2.01 of the Agreement had been
provided to the company (“September Response”). A true and correct copy of the September
Response is attached to this Amended Complaint as Exhibit 6.
43. The September Response further informs Warrington that Rocky does not believe
that the offer in the Notice was bona fide, and clearly confirms that Rocky always intended to
Page 5 of 10purchase Warrington’s shares in the company using the valuation provided in Article 4 of the
Agreement.
44. The offer in the Notice is defective and not made in good faith.
OU!
DECLARATORY JI
LEN’
45. Patel Cigars seeks a declaration from the Court pursuant to Chapter 86, Florida
Statutes, regarding its compliance with all requirement of Florida law, in particular, all of the
requirements of Section 607.1602, Florida Statutes.
46. Patel Cigars realleges paragraphs I through 14 above as though fully alleged herein.
47. — There is a bona fide dispute between Patel Cigars and Warrington as to Patel
Cigars’ compliance with Section 607.1602, Florida Statutes.
48. The bona fide dispute arises out of the provisions of Section 607.1602, Florida
Statutes, and Patel Cigars’ compliance with the same as it pertains to Warrington’s request for
information.
49, Patel Cigars is in doubt as to the existence or non-existence of some right, status,
immunity, power, or privilege. In particular, Patel Cigars is in doubt as to whether it has complied
with all ofits obligations to Warrington under Section 607.1602, Florida Statutes, and Florida law.
50. There is a bona fide, actual, and present practical need for the declaration from the
Court, as Warrington alleges that Patel Cigars has not complied with its obligations under Section
607.1602, Florida Statutes, and Florida law.
51. The declaration requested deals with present, ascertained or ascertainable state of
facts or present controversy as to a state of facts, namely whether Patel Cigars has complied with
its obligations under Section 607.1602, Florida Statutes, and Florida law.
Page 6 of 1052. Some immunity, power, privilege, or right of Patel Cigars is dependent upon the
s or the law applicable to the facts.
53. The persons before the Court have an actual, present, adverse, and antagonistic
interest in the subject matter, either in fact or in law.
54, The antagonistic and adverse interests are all before the Court by proper process.
55. Therelief sought is not merely the giving of legal advice by the Court or the answer
to a question propounded from curiosity.
WHEREFORE, Plaintiff, Rocky Pate! Premium Cigars, Inc. (“Patel Cigars”), hereby
requests the Court to: (i) declare that Patel Cigars has complied with its obligations to provide
information to Brad Warrington under Section 607.1602, Florida Statutes, and Florida law; (ii)
grant Patel Cigars its reasonable attorneys’ fees and costs incurred in bringing this action; and (iii)
grant Patel Cigars any further relief the Court deems just and appropriate.
COUNT Il - BREACH OF CONTRACT
56. Patel Cigars and Rocky sue Warrington for Breach of Contract, and seek the
specific performance of the purchase rights to Warrington’s shares found in the Agreement.
57. Patel Cigars and Rocky reassert each of the allegations contained in Paragraphs 1
through 9 and 15 through 44 above as though fully alleged herein.
58. Warrington and Rocky are parties to the Agreement and bound by the same.
59. Patel Cigars is an intended third-party beneficiary of the Agreement, in that an
option to purchase the stock of a selling shareholder is expressly granted to Patel Cigars under
Section 2.02 of the Agreement.
Page 7 of 1060. Warrington breached the Agreement by among other things, failing to provide Patel
Cigars with a bona fide firm offer for Warrington’s shares that complied with the requirements of
Section 2.01 of the Agreement.
61. Patel Cigars has been damaged as a result of Warrington’ breach of the Agreement.
62. Rocky has been damaged as a result of Warrington’s breach of the Agreement.
63. There is no adequate remedy at law that would compensate Patel Cigars and Rocky
for the damages that they have suffered.
64, The option in the Agreement granted to Patel Cigars and Rocky to purchase
Warrington’s shares of Patel Cigars is meant to preserve the closed nature of the corporation and
to prevent complete strangers from obtaining an interest in Patel
ars.
65. The option is unique, and specific performance requiring Warrington to comply
with the terms of the Agreement as it pertains to the sale of his shares to Patel Cigars and Rocky
is the only compensation that would adequately compensate Patel Cigars and Rocky.
WHEREFORE, Plaintifis, Rocky Patel Premium Cigars, Inc., and Rakesh Patel hereby
request the Court to: (i) hold that the Agreement is valid, enforceable, and binding on Warrington
and Rocky; (ii) hold that Patel Cigars is an intended third-party beneficiary of the Agreement; (iii)
hold that Warrington has breached the Contract by attempting to sell his stock to a third-party
without complying with the express provisions of the Agreement; (iv) Order specific performance
of the Agreement, requiring Warrington to sell his stock to Patel Cigars or Rocky pursuant to the
express terms of the Agreement; (v) grant Patel Cigars and Rocky their attorneys’ fees and costs
incurred in prosecuting this matter; and (vi) grant Patel Cigars and Rocky any further relief the
Court deems just and appropriate.
Page 8 of 10COUNT III — BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING
66. Patel Cigars and Rocky sue Warrington for the Breach of the Covenant of Good
Faith and Fair Dealing,
67. Patel Cigars and Rocky reassert each of the allegations contained in Paragraphs 1
through 9 and 15 through 44 above as though fully alleged herein.
68. Implied in every contract is a covenant of good faith and fair dealing. JF & LN,
LLC v, Royal Oldsmobile-GMC Trucks Co., 292 So. 3d 500 (Fla. 2nd DCA 2020).
69. The purpose of the covenant of good faith and fair dealing is to protect the
reasonable expectations of the contracting parties. Id.
70. The reasonable expectation of the contracting parties, as it relates to Section 2.01
of the Agreement, is for a stockholder that wishes to sell his shares in Patel Cigars to provide Patel
Cigars, and other stockholders, the opportunity to purchase the selling stockholder’s shares prior
to those being offered to strangers to Patel Cigars.
71. Patel Cigars is a closely held corporation and its stock is unique. As such, monetary
compensation would not be an adequate remedy to compensate Patel
1s and Rocky for the
opportunity to maintain the stock of Patel Cigars private and within the ownership of existing
stockholders.
72. Warrington provided Patel Cigars with a Notice containing an alleged offer for his
minority interest shares that is almost 4 times the valuation of the shares obtained by Rocky.
73. The Notice fails to properly identify the alleged purchaser of Warrington’s shares
so that Patel Cigars and Rocky are not able to determine the legitimacy of the alleged offer.
74, The alleged offer in the Notice was not provided in good faith.
Page 9 of 1075. Warrington breached the implied covenant of good faith and fair dealing by failing
to provide Patel Cigars with a bona fide offer for the shares of Patel Cigars that he wishes to sell.
76. Patel Cigars and Rocky have been damaged as a result of Warrington’s breach of
the implied covenant of good faith and fair dealing.
WHEREFORE, Plaintiffs, Rocky Patel Premium Cigars, Inc., and Rakesh Patel hereby
request the Court (o: (i) hold that the Notice was not provided to Patel Cigars in good faith; (ii)
hold that the Notice is a breach of the implied covenant of good faith and fair dealing; (iii) Order
the specific performance of Warrington’s obligations under the Agreement, namely that Patel
Cigars and Rocky will have the option of purchasing Warrington’s stock in Patel Cigars at the
price set forth in the Agreement; (iv) grant Patel Cigars and Rocky their attorneys’ fees and costs
incurred in prosecuting this matter; and (v) grant Patel Cigars and Rocky any further relief the
Court deems just and appropriate.
Dated: November 04, 2021
COLEMAN, YOVANOVICH & KOESTER, P.A.
yy: _/s/ Alex R. Figares
Alex R. Figares
Florida Bar No. 14305
4001 Tamiami Trail North, Suite 300
Naples, Florida 34103
239.435.3535,
Primary: afigares@cyklawfirm.com 239.435.1218 Facsimile
Secondary: eykservice@eyklawfirm.com Attorneys for Plaintiffs, Rocky Patel
Secondary: measwell@evklawfirm.com Premium Cigars, Inc. and Rakesh Patel
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