A contentious legal battle over attorney fees has emerged between an investor and a hotel development company, highlighting the complexities of contractual agreements and judicial proceedings. On July 18, 2024, Xinyao Zhou filed a complaint against Hotel Winters, LLC in the Court of Appeal of the State of California, Third Appellate District (Yolo), challenging an order granting attorney fees to Hotel Winters.
The dispute began when Zhou invested in Hotel Winters to fund the construction of a hotel and subsequently entered into a subscription agreement in 2016. This agreement bound her to the company's operating agreement, which included a clause entitling the prevailing party in any dispute to recover reasonable attorney fees. Zhou's complaint alleged conspiracy and unjust enrichment against Hotel Winters and its associates, accusing them of amending the operating agreement unlawfully to convert company equity for personal gain. However, after demurrers by Hotel Winters were sustained without leave to amend, her case was dismissed with prejudice.
Following this dismissal, Zhou moved to disqualify Judge Timothy Fall who had ruled in favor of Hotel Winters. Although Judge Fall granted her peremptory challenge under Code of Civil Procedure section 170.6, it was deemed untimely. Undeterred, Zhou appealed the judgment on April 14, 2023. Simultaneously, Hotel Winters sought $136,396.25 in attorney fees and costs under sections 1032 and 1033.5 as they were deemed the prevailing party according to their contract.
Zhou opposed this motion but agreed that the prevailing party should be entitled to costs under the 2016 operating agreement. She argued that Civil Code section 1717 governed such awards and contended that Hotel Winters breached their contract and was not lawfully represented by their counsel Ravi Mehta. Despite these arguments, Judge Stephen Mock tentatively ruled in favor of awarding reduced attorney fees due to excessive claims by Mehta but later increased his hourly rate from $325 to $450 after hearing further arguments.
In subsequent developments, Zhou filed motions questioning Judge Mock’s impartiality and seeking his recusal based on perceived unfair treatment during hearings. On July 19, Judge Mock disqualified himself under section 170.1 without providing detailed reasoning. The case then moved before Judge Samuel McAdam who denied Zhou’s motion to set aside the attorney fee award but stayed all proceedings pending her appeal.
Zhou’s persistence continued as she filed additional motions arguing that prior judgments were voidable due to judicial disqualifications; however, these were not upheld by subsequent rulings or appeals courts.
The Judges involved are Timothy Fall and Stephen Mock along with Ravi Mehta representing Hotel Winters, and the Case ID is C099278.