New motel owners sue over franchise fees

The new owners of a motel are suing the previous owner because money escrowed to pay delinquent franchise fees was allegedly spent elsewhere.

Albert G. Redmond and Peter J. Sapio Jr. filed a lawsuit in the Galveston County District Court against O.M. Gayatri Corp. and Pramod T. Patel, citing misrepresentation.

The lawsuit states Redmond and Sapio bought property at 2806 Miller Ranch Road Pearland, from O.M. Gayatri Corp., which had purchased the property from Pearland-Miller Ranch Hotel L.L.C. The property included a franchised Comfort Suites motel operated under an agreement with Choice Hotels International, the complaint said.

The buyers retained $30,000 of the seller’s funds from the purchase in escrow to ensure delinquent franchise fees were paid. O.M. Gayatri Corp. showed the buyers a copy of a $25,000 check to Choice Hotels International and represented that the payment would satisfy all claims made against the property’s previous two owners, so the buyers released the $30,000, the suit states.

The buyers allege that they later found out the check was for a new franchise operation instead of paying the delinquent fees.

Since then, a court order rendered a judgment of $51,132 in favor of Choice Hotels International for unpaid fees, interest, liquidated damages, administrative expenses and an arbitrator’s fee.

Redmond and Sapio are seeking damages of $30,000 in actual damages, additional statutory damages, exemplary damages, interest and court costs.

They are being represented by Galveston attorney Thomas W. McQuage.

Galveston County District Court Case No. 14-CV-0350

 

This is a report on a civil lawsuit filed at the Galveston County District Court. The details in this report come from an original complaint filed by a plaintiff. Please note that a complaint represents an accusation by a private individual, not the government. It is not an indication of guilt, and it represents only one side of the story.