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UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

BAYMONT FRANCHISE SYSTEMS INC., 

successor in interest to AMERIHOST 

FRANCHISE SYSTEMS, INC., a Delaware 

Corporation,

Plaintiff,

v.

GITA R. RAJ, an individual; and FALGUNI 

D. PATEL, an individual, 

Defendants.

Civ. No. 11-3777 (WJM)

OPINION

WILLIAM J. MARTINI, U.S.D.J.:

Plaintiff Baymont Franchise Systems, Inc., successor in interest to Amerihost 

Franchise Systems, Inc. (herein after referred to solely as “Plaintiff”), brings this action 

against Defendants/Guarantors Gita R. Raj and Falguni D. Patel, seeking a judgment 

against Defendants for monies owed pursuant to a franchise agreement. This matter 

comes before the Court on Plaintiff’s motion for summary judgment. The motion is 

unopposed. There was no oral argument. Fed. R. Civ. P. 78(b). For the reasons set forth 

below, Plaintiff’s motion for summary judgment is GRANTED.

I. BACKGROUND

The following facts are undisputed.1

 Plaintiff is a franchisor of a guest lodging

facility franchise system. Laxmee, Inc. (“Laxmee”) is one of Plaintiff’s former 

franchisees. 

The Terms of the Franchise Agreement

On or about May 22, 2006, Plaintiff and Laxmee signed a franchise agreement

under which Laxmee, Inc. would operate a 60-room guest lodging facility in Batesville, 

 1 Defendants, pro se, each filed four-page Answers to the Complaint. (ECF Nos. 8 and 12). 

However, neither Defendant has filed opposition to the instant motion or provided any other 

information to the Court. If the non-moving party fails to oppose the motion for summary 

judgment by written objection, memorandum, affidavits and other evidence, the Court “will 

accept as true all material facts set forth by the moving party with appropriate record support.” 

Anchorage Assocs. v. Virgin Islands Bd. of Tax Review, 922 F.2d 168, 175 (3d Cir. 1990).

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Mississippi for a term of twenty years (the “Franchise Agreement”). (Aff. of Valerie 

Capers, Ex. A, ¶ 8, ECF No. 18-4.) 

Under the terms of the Franchise Agreement, Laxmee agreed to make certain 

periodic payments to Plaintiff for royalties, service assessments, taxes, interest, 

reservation system users fees, annual conference fees, and other miscellaneous fees, plus 

interest on any unpaid amounts (collectively, “Recurring Fees”). (Id. at ¶ 7.) Laxmee’s

failure to make timely payment of Recurring Fees would put Laxmee in default of its 

obligations under the Franchise Agreement, as would any bankruptcy filing by Laxmee 

that was not dismissed within sixty days after the initial filing (“Default”). (Id. at ¶¶ 

11.1, 11.2.) Such Default, if uncured, would give Plaintiff cause to terminate the 

Franchise Agreement (Id.) 

Pursuant to section 12.1 of the Franchise Agreement, Laxmee agreed that in event 

of termination of the Franchise Agreement for cause, Laxmee would pay Plaintiff 

liquidated damages in the amount of $2,000.00 for each guest room in the Batesville 

facility, plus interest, as well as an additional liquidated damages sum of $2,500.00. (Id. 

at Ex. A, ¶¶ 7.1, 11.1; Ex. C, ¶ 13.1.) 

Finally, under the terms of the Franchise Agreement, Laxmee agreed that in the 

event the parties litigated disputes arising from the Franchise Agreement, the nonprevailing party would “pay all costs and expenses, including reasonable attorneys’ fees, 

incurred by the prevailing party to enforce this [Franchise] Agreement or collect amounts 

owed under this [Franchise] Agreement.” (Id. at Ex. A, ¶ 17.4.) 

Defendants Guaranteed Laxmee’s Obligations under the Franchise Agreement

Defendants Gita R. Raj and Falguni D. Patel were principals of Laxmee, Inc. and

guaranteed Laxmee’s obligations under the Franchise Agreement. (Id. at Ex. D.) Thus,

in the event Laxmee defaulted on its obligations under the Franchise Agreement, 

Defendants agreed that they would “immediately make each payment and perform or 

cause [Laxmee] to perform, each unpaid or unperformed obligation of [Laxmee] under 

the [Franchise] Agreement.” (Id.)

Laxmee failed to timely pay Recurring Fees due to Plaintiff, and on February 10, 

2010, Laxmee filed for Chapter 11 Bankruptcy. In response, by letter dated July 28, 

2010, Plaintiff terminated the Franchise Agreement, effective as of July 20, 2010. (Id. at 

Ex. F.) 

On June 30, 2011, Plaintiff commenced this action, seeking to recover from 

Defendants monies which are owed to it by Laxmee. On August 13, 2012, Plaintiff filed 

the present motion for summary judgment, seeking judgment in the amount of 

$380,837.52, which includes Recurring Fees, liquidated damages, interest, attorneys’ 

fees, and costs. Defendants were served with the motion, but have not filed any 

opposition.

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II. LEGAL STANDARD

Summary judgment is appropriate “if the pleadings, the discovery [including, 

depositions, answers to interrogatories, and admissions on file] and disclosure materials 

on file, and any affidavits show that there is no genuine issue as to any material fact and 

that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56; see also 

Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Turner v. Schering-Plough Corp., 

901 F.2d 335, 340 (3d Cir. 1990). A factual dispute is genuine if a reasonable jury could 

find for the non-moving party, and is material if it will affect the outcome of the trial 

under governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 

(1986). The Court considers all evidence and inferences drawn therefrom in the light 

most favorable to the non-moving party. Andreoli v. Gates, 482 F.2d 641, 647 (3d Cir. 

2007). 

III. DISCUSSION

Plaintiff seeks summary judgment on its claim that Laxmee breached the 

Franchise Agreement, and that Defendants are liable for Laxmee’s obligations under that 

agreement. To prove a claim for breach of contract, a plaintiff must demonstrate the 

existence of a valid contract; that the defendant failed to perform under the contract; and 

that plaintiff sustained damages as a result. Red Roof Franchising, LLC v. Patel, 877 F. 

Supp. 2d 124, 132 (D.N.J. June 28, 2012) (citing Murphy v. Implicito, 392 N.J.Super. 

245, 265 (App. Div. 2007). 

In this matter, there is no dispute that the Franchise Agreement is a valid contract. 

There is also no dispute that Laxmee failed to meet its obligations to make certain 

payments under the terms of that agreement and that Plaintiff sustained damages as a 

result of Laxmee’s non-payments. Furthermore, it is undisputed that when Defendants —

as principals of Laxmee — signed the Franchise Agreement, they also executed a 

Guaranty under which they agreed to “make . . . each unpaid or unperformed [payment] 

obligation of [Laxmee] under the Agreement.” On the basis of the unequivocal language 

in the Guaranty, the Court finds that Defendants are liable for any unpaid amounts 

Laxmee owes to Plaintiff stemming from its breaches of the Franchise Agreement. See 

Red Roof Franchising, 877 F. Supp. at 135 (D.N.J. 2012) (same). Thus, the only issue 

left for the Court to address is the amount which Plaintiff is owed. 

Presently, Plaintiff asserts that on the basis of the undisputed facts, it is entitled to 

recover recurring fees and liquidated damages from Defendants totaling $365,677.15. 

The Court finds that Plaintiff has provided appropriate record support – including the 

Franchise Agreement itself – demonstrating that it is entitled to that amount. See 

Ramada Worldwide Inc. v. Courtney Hotels USA, LLC, CIV. 11-896 WHW, 2012 WL 

924385 (D.N.J. Mar. 19, 2012) (granting Plaintiff’s requests for recurring fees and 

liquidated damages owed under a franchise agreement where the liquidated damages 

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were for an agreed upon amount and the recurring fees could be computed by formulas 

specified in the franchise agreement).

Plaintiff also seeks to recover attorneys’ fees and costs from Defendants totaling 

$15,160.38. It is undisputed that under section 17.4 of the Franchise Agreement, Plaintiff

– as the prevailing party – is entitled to recover “all costs and expenses, including 

reasonable attorneys’ fees [to] collect amounts owed under this [Franchise] Agreement.” 

Plaintiff has provided an itemized billing statement in support of that request. (Aff. of 

Valerie Capers, Ex. O, ECF No. 18-4.) And based on the record support provided by 

Plaintiff, the Court finds that an award of that amount is appropriate at this time. See, 

e.g., Howard Johnson Intern., Inc. v. Patel, No. 11-918, 2011 WL 2148575, at *3 (D.N.J. 

May 31, 2011) (awarding attorneys’ fees based on similar contractual language and 

similar supporting documentation); Ramada Worldwide, Inc., 2012 WL 924385, at *7

(D.N.J. Mar. 19, 2012) (same). See also Fed. R. Civ. P. 54(d)(1) (“costs – other than 

attorney's fees – should be allowed to the prevailing party.”) 

In sum, based on the undisputed facts, the Court finds the following: first, that 

Laxmee breached the terms of the Franchise Agreement; second, that Plaintiff is entitled 

to a judgment against Defendants, as Laxmee’s guarantors, in the amount of $380,837.53

stemming from Laxmee’s breaches.

IV. CONCLUSION

For the reasons stated above, Plaintiff’s motion for summary judgment is 

GRANTED. Judgment is entered in the amount of $380,837.53. An appropriate order 

follows.

 

 /s/William J. Martini 

 WILLIAM J. MARTINI, U.S.D.J.

Date: January 22, 2013

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