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Shiv-Ram12/30/2003
s or safety-related problems occurring at the motel. He acknowledged that he was aware that while the motel had been "on the auction block" for some time preceding the execution of the February 25 purchase agreement and during the almost four months between that date and the June 13 closing, the condition of the motel had been allowed to "deteriorate greatly."
The purchase agreement granted Shiv-Ram the right to inspect each room in the motel during the four months preceding the closing, but Shiv-Ram made no effort to do so. Jay testified that he knew that the purchase agreement stipulated that Shiv-Ram was purchasing the property "as-is, where is," and he agreed that, accordingly, if the motel was "full of unsafe beds, that's the way you're buying it." Jay acknowledged that the purchase agreement declared that the seller made no warranties as to the "merchantability, suitability, or fitness for any particular use" of the motel; that Shiv-Ram had been given a sufficient opportunity to inspect the property and was relying solely on its own inspections and examinations of the property and its "own determination of the condition of the property"; and that the purchase agreement gave Shiv-Ram the right to inspect the property and to conduct its own engineering studies and reports, but that between February 25 and June 13 Shiv-Ram had conducted no such inspections or examinations. Jay explained that Shiv-Ram wanted a "seamless transition" in the ongoing operation of the motel, and did not want to shut down operations to conduct inspections and to make repairs.
The "Ramada Standards of Operation and Design Manual," which imposed requirements on franchisees of Ramada Franchise Systems, Inc. ("Ramada"), such as Shiv-Ram, a copy of which was available at the motel, required all room furnishings to be "in excellent physical condition." Jay acknowledged that a bed in the condition of the bed in Linda's room, as depicted by a photograph shown to him at trial, " ould be hazardous" and "dangerous." He was aware that a guest in a room at the motel would "have to negotiate around the bed ... to get about the room to get to either nightstand" and that "it was forseeable ... or it's obvious people would be walking around the bed in close proximity to the bed." He agreed that with a bedspread covering a projecting piece of the metal bed frame, the frame "could be" dangerous. He knew after the fact that there had been "a piece sticking out of the middle of [Linda's] bed." Had he inspected any of the records kept by the previous owners of the motel, he would have learned that those records clearly indicated a recurring problem with bed frames.
Under the purchase agreement, Shiv-Ram had access to all of the records maintained by AMA, including incident reports, which listed incidents or injuries that had taken place on the premises of the motel, and work orders that listed repairs that had been, or that needed to be, made. Jay stated at trial that there were boxes containing "hundreds" of documents to which Shiv-Ram had access and that, although he had had the opportunity to inspect those documents, he never did. Included in those documents were four incident reports made by AMA as a result of other patrons' of the motel striking their ankles on pieces of metal protruding from king-sized bed frames. Jay acknowledged that no incident report or work order was filed detailing Linda's injury and that no photographs were taken of the bed on which she was injured even though such measures should have been taken.
A month before the closing a Ramada representative conducted an inspection of the motel and provided Shiv-Ram with a punch list of what needed to be done to bring the motel within Ramada's
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