A bitter legal battle unfolds as an investor accuses a hotel company of conspiracy and unjust enrichment. On November 10, 2022, Xinyao Zhou filed a complaint in the Yolo County Superior Court against Hotel Winters, LLC, alleging that the company and its associates conspired to diminish her ownership interest and profit share while enriching themselves.
The saga began in 2016 when Zhou invested $500,000 in Hotel Winters as a Class B member, entitling her to a 14.07% ownership stake and a fixed annual return. However, Zhou claims that by 2019, her equity share had mysteriously decreased. Despite reassurances from the company's accountant Mike Guynn that this was due to annual adjustments, Zhou remained skeptical. The situation escalated in January 2020 when she received an amended operating agreement demanding her immediate signature. Zhou alleges that new investors had secretly poured over $8 million into the project without members' approval, drastically altering the company's financial landscape.
Zhou's complaint lists multiple defendants including Michael Olivas, Ashok Patel, Ken Patel, David Fischbach, Ravi Mehta, and Guynn. She accuses them of breaching fiduciary duties and engaging in fraudulent activities such as issuing "sweat equity" and "developer’s fees" without proper authorization. According to Zhou, these actions violated the original operating agreement which required all Class B members' consent for significant financial changes.
Hotel Winters responded by filing demurrers on December 20, 2022, arguing that Zhou failed to comply with a mandatory mediation clause in the operating agreement before initiating legal action. They also contended that her allegations lacked sufficient factual basis to constitute causes of action for conspiracy or unjust enrichment. The trial court sided with Hotel Winters, sustaining their demurrers without leave to amend and subsequently granting their motion for dismissal with prejudice.
Zhou's appeal focuses on what she perceives as judicial errors and procedural missteps. She argues that both Hotel Winters and Olivas owed her fiduciary duties which they breached through their conspiratorial actions aimed at transferring ownership among themselves for personal gain. Despite acknowledging that unjust enrichment is not recognized as an independent cause of action under California law, she requested leave to amend her complaint to clarify her claims.
Plaintiff seeks judgment against Hotel Winters for breach of contract and fraud while also aiming to hold individual defendants accountable for their roles in the alleged conspiracy. She requests various forms of relief including compensatory damages for lost profits and equity shares.
Representing Hotel Winters are attorneys Alan Barmaper and Ravi Mehta; Judge Timothy Fall presided over the case until his recusal following Zhou's peremptory challenge under section 170.6 of the California Code of Civil Procedure. The case ID is C098326.