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ACU i ‘ CAUSE NO. 10-14506
DR. JOGINDER SINGH SONI,
Individually and Derivatively on behalf of
MEECHAM HOSPITALITY, L.L.C. and
DHILLON GROUP, L.L.C.,
Plaintiff,
v.
JAGMOHAN DHILLON, MEHUL
PATEL a/k/a MIKE PATEL, NEWCREST
HOTELS, LTD., PREMIUM HOTEL
MANAGEMENT, INC., HARMINDER
DHILLON, HARWANT DHILLON, and
BAWA DHILLON,
101 JUDICIAL DISTRICT
Defendants,
And
MEECHAM HOSPITALITY, L.L.C. and
DHILLON GROUP, L.L.C.,
Nominal Defendants
[Derivative Action]
DALLAS COUNTY, TEXAS
PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION
Individual and Derivative Plaintiff Dr. Joginder Singh Soni (“Dr. Soni”), suing on his
own behalf and on behalf of Meecham Hospitality, L.L.C., and Dhillon Group, L.L.C.
(“Meecham Hospitality” and “Dhillon Group,” respectively), files this, his Second Amended
Petition, Request for Temporary Restraining Order, and Request for Temporary Injunction,
against Defendants Jagmohan Dhillon (“Jagmohan”), Mchul Patel, a/k/a Mike Patel (“Mehul”),
Newcrest Hotels, Ltd. (“Newcrest”), Premium Hotel Management, Inc. (“Premium”), Harminder
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTIONDhillon (“Harminder”), Harwant Dhillon (“Harwant”), and Bawa Dhillon (“Bawa”) (collectively
referred to as “Defendants”) and respectfully shows as follows:
I. DISCOVERY CONTROL PLAN
1. Discovery shall be conducted under [evel 3, pursuant to the scheduling order
which has been entered in this case.
IL. INTRODUCTION
2. Dr. Soni has learned that the Defendants in this case have perpetrated a massive
fraud upon him. Defendants have used both religious and ethnic affiliations to con Dr. Soni into
paying over $2,000,000 for ownership interests in entities which allegedly own multi-million
dolar hotels in Sherman and Fort Worth, Texas.
3. As a result of this Court’s entry of an Order allowing for Expedited Discovery,
Dr. Soni has discovered that Defendants appear to be engaging in a scam in which they purchase
hotels from friends and affiliates at sclf-inflated prices, obtain investors, have the seller pay
hidden kickbacks to one of the Defendants, loot the hotels while they are supposed to be
operating them in a fiduciary capacity, and then let the loans on the hotels default, resulting in
the hotels returning to the ownership of their friends and affiliates.
4. Dr. Soni has also learned that he is not the only individual who has been taken
advantage of in this manner. There is another suit ongoing in California in which this very same
pattern of deception has been used by some of the same Defendants as in this case.
5. While Dr. Soni will ultimately request the Judge or jury award him rescission
and/or all of his damages, he previously obtained a Temporary Restraining Order from the Court
and secks a subsequent Temporary Injunction to prevent Defendants from further denuding these
entities and being able to fully complete their scheme.
PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE2il, PARTIES
6. Direct and Derivative Plaintiff Joginder Singh Soni is an individual who resides in
Turlock, California, who may be served by and through his attomey, Roger L. Mandel,
BECKHAM & MANDEL, 3400 Carlisle, Suite 550, Dallas, Texas 75220.
7. Nominal/Derivative Defendant Meecham Hospitality, L.L.C., is a Texas limited
liability company incorporated in Texas which may be served by and through its registered agent
for service of process, James S. Patterson, 15303 Dallas Parkway, Suite 700, Addison, Texas
75001. Meecham is a party to this lawsuit as a nominal Defendant only; Plaintiff does not seek
damages from Meecham Hospitality; rather Plaintiff seeks to vindicate the wrongs done to
Meecham Hospitality by Defendants.
8. Nominal/Derivative Defendant Dhillon Group, L.L.C., is a Texas limited liability
company incorporated in Texas which may be served by and through its registered agent for
service of process, Jagmohan Dhillon, 3400 Parkwood Ave., Frisco, Texas 75034. Dhillon
Group is a party to this lawsuit as a nominal Defendant only, Plaintiff does not seek damages
from Dhillon Group; rather Plaintiff secks to vindicate the wrongs done to Dhillon Group by
Defendants.
9. Defendant Jagmohan Dhillon is an individual who has appeared in this suit and
who may be served by and through his attomcy, Kelly Hollingsworth, Travis, Calhoun &
Conlon, 1000 Providence Towers E, 5001 Spring Valley Road, Dallas, Texas 75244.
10. Defendant Mchul Patel, a/k/a Mike Patel, is an individual who has appeared in
this suit and who may be served by and through his attorney, Thomas J. Colven, III, Colven &
Tran, P.C., 5420 LBJ Freeway, Suite 300, Dallas, Texas 75240.
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 311. Defendant Newcrest Hotels, Ltd., is a domestic limited partnership, duly formed
under the laws of the State of Texas with its principal place of business in Dallas County, Texas,
which has appeared in this suit and which may be served by and through its attorney, Thomas J.
Colven, III, 5420 LBJ Freeway, Suite 300, Dallas, Texas 75240.
12. Defendant Premium Hotel Management, Inc., is a domestic for-profit corporation,
duly formed under the laws of the State of Texas, which has appeared in this suit and which may
be served by and through its attomcy, Gerald P. Urbach, Hiersche, Hayward, Drakely, & Urbach,
P.C., 15303 Dallas Parkway, Suite 700, Addison, Texas 75001.
13. Defendant Harminder Dhillon is an individual who resides in Collin County,
Texas, at 5125 Brandywine Lane, Frisco, Texas 75034. This Defendant has been served with
process but has not yet appeared. If and when this Defendant appears, he will be served with this
pleading.
14. Defendant Harwant Dhillon is an individual who resides in Collin County, Texas,
at 5125 Brandywine Lane, Frisco, Texas 75034. This Defendant has been served with process
but has not yet appeared. If and when this Defendant appears, he will be served with this
pleading.
15. Defendant Bawa Dhillon is an individual who resides in Collin County, Texas, at
5125 Brandywine Lane, Frisco, Texas 75034. This Defendant has been served with process but
has not yet appeared. If and when this Defendant appears, he will be served with this pleading.
IV, JURISDICTION AND VENUE
16. This Court has jurisdiction over this action pursuant to TEX. CONST. ART. V. § 8,
because the matter in controversy exceeds the sum or value of the jurisdictional limits of the
Court exclusive of costs and interest. Further, this Court has jurisdiction over the Defendants as
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 4all of the Defendants are either Texas corporations or individuals who resided in the State of
Texas when one or more of Plaintiff's causes of action arose. Furthermore, each of the
individual Defendants committed a tort in whole or in part in the State of Texas, and personal
jurisdiction over each individual Defendant may properly be exercised by this Court pursuant to
TEXAS CIVil. PRACTICE AND REMEDIES CODE § 17.042(2).
17. Venue is proper in Dallas County, Texas, pursuant to Tex. Civ. Prac. & REM.
CODE §15.002 and §15.003, because at least one of the defendants resides in Dallas County,
Texas.
Vv. FACTS
Defendants target Dr. Soni.
18. Dr. Joginder Singh Soni is a cardiologist residing in Turlock, California. Dr. Soni
prides himself on not only being a doctor, but also on being a devout Sikh of Indian descent.
19. | Sometime between the summer or fall of 2005 and spring of 2006, Harwant
Dhilton (“Harwant”) introduced himself and two of his family members to Dr. Soni at a
restaurant in California. Following that meeting, a cordial relationship developed, and Dr. Soni
learned that Harwant was also a fellow Sikh of Indian descent.
20. As their friendship progressed over the next few months, Harwant invited Dr.
Soni to visit his home, and Dr. Soni accepted several invitations to visit with Harwant and his
family at their home.
21. Sometime in 2005 or 2006, Harwant contacted Dr. Soni, as he and his wife were
in need of a doctor. Dr. Soni provided Harwant medical services free of charge. Subsequently,
Dr. Soni also provided free medical services to other Dhillon family members, including
Harwant’s wife, brother, and children. As the relationship developed between Dr. Soni and
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGESHarwant, Harwant invited Dr. Soni to Harwant’s house in California on numerous occasions to
attend various social and religious ceremonies with Harwant and his family.
22. Over the period of the next few months, several members of the Dhillon family
became patients of Dr. Soni, all receiving their medical services tree of charge. During this time
period, Dr. Soni developed a friendship with Harwant’s two children, Jagmohan and Bawa, a/k/a
Bobby, Dhillon. Harwant lived in the same house as his children and, therefore, Dr. Soni would
visit with the entire Dhillon family at events and at their house. A relationship of trust and
confidence by Dr. Soni in the Dhillons resulted from the Dhillons’ cultivation of Dr. Soni.
Defendants commence their con with the Sherman Hotel.
23. In early 2007, Jagmohan, Harwant, and Bawa began discussing investment ideas
with Dr. Soni. Jagmohan, Harwant, and Bawa advised Dr. Soni that they worked with several
investors who owned and operated hotels throughout the United States.
24. Jagmohan, Harwant, and Bawa advised that they had ownership interests in many
hotels throughout the United States and that there were many different investors in each hotel.
25. Jagmohan introduced Dr. Soni to Suraj Pal Singh. Suraj Pal Singh is considered a
saint in the Sikh religion and his support carries much favor and respect. The saint Suraj Pal
advised Dr. Soni that the Dhillons were good people and that the Dhillons would do nothing to
harm Dr, Soni.
26. At one of the meetings at Harwant’s house, Jagmohan, Harwant, and Bawa
showed Dr. Soni a printout of documents related to a hotel located in Sherman, Texas. That
hotel is a Holiday Inn Express located at 2909 Michele, Sherman, Texas (the “Sherman Hotel”).
‘The printout showed that the Sherman Hotel was opcrating profitably. Jagmohan, Harwant, and
Bawa advised Dr. Soni that they had done the research and that the hotel was a good investment
PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 6opportunity with a good price. They stated that the Sherman hote! was highly profitable and that
it usually made several hundred thousand dollars a ycar.
27. They further advised Dr. Soni that the price of the Sherman Hotel was
$7,500,000, that the down payment would be $1.5 million and that it had an appraised value of
well over $7.5 million. They represented to Dr. Soni that they would form a new entity to
purchase the Sherman Hotel and that he could purchase a 1/3 interest in the new entity for
$500,000 (1/3 of the down payment).
28. Jagmohan stated that he would put up the other $500,000 for the down payment
and purchase 1/3 of the new entity and that a third investor would put up $500,000 of the down
payment and purchase the other 1/3 of the entity. Ata later date, Jagmohan stated that the third
investor had backed out and that Jagmohan would be putting in $1 million into the new entity in
return for a 2/3 ownership interest.
29. Jagmohan, Harwant, and Bawa stated that once the Sherman Hotel was
purchased, Jagmohan and his friends and family would operate the hotel at no cost to Dr. Soni.
They stated that they normally charged between $2,000-$3,000 a month for management
services.
30. Dr. Soni was initially hesitant to enter into the investment regarding the Sherman
hotel as he had no hotel investment experience. At a meeting with Jagmohan, Harwant, and
Bawa, they told Dr. Soni that he did not need to worry about his investment, and that he could
make up to a 25% return. They promised him that he would make at least a 15% return.
31. Harwant, Jagmohan, and Bawa said that they and their family would personally
guarantee the money and that should the investment not be profitable, they would sell land in
India to pay Dr. Soni back his investment and the promised returns.
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE?32. In furtherance of the trust and confidence Dr. Soni had for them, Jagmohan and
his family specifically stated that Dr. Soni was a close friend, like a family member, and they
guaranteed that Dr. Soni would never be harmed and that they would personally guarantee his
investment.
33. As further inducement to invest, Jagmohan and his family further represented that
in addition to running the hotel at no cost, Dr. Soni would be paid 1/3 of the profit every month
and that when the hotel sold, Dr. Soni would receive 1/3 of the sales proceeds.
34, Finally, to induce Dr. Soni to invest in the Sherman Hotel, Jagmohan Dhillon flew
Dr. Soni to Dallas and took him to mect the seller, Defendant Newcrest, which was represented
to be owned by a Patel family. Newcrest was represented at the meeting by Defendant Mehul
“Mike” Patel and several other Patels. At that meeting, Jagmohan Dhillon, Newcrest, Defendant
Mehul Patel, and the other Patels represented that the Sherman Hotel was a great investment
being sold at a great price of $7.5 million, that Jagmohan had already negotiated a low price, that
the hotel would attract good business because other hotels in the area were not classy, that Dr.
Soni should realize a 15%-20% return on his investment, and that Dr. Soni needed to move fast
because there were other investors interested in the hotel and that these other investors would
buy the hotel at the same price if he and Jagmohan Dhillon did not do so.
35. In reliance upon the various representations made by the Dhillons, Newcrest,
Mehul Patel, and the other Patels, Dr. Soni invested $527,000. On July 9, 2007, Dr. Soni signed
documentation indicating that he was becoming a 1/3 member in Dhillon Group, a pre-existing
Texas limited liability company.
36. Jagmohan advised that Dhillon Group was entering into an arm’s length
transaction at a good price for the purchase of the hotel in Sherman, Texas, from Newcrest
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 8Hotels, Ltd. The sale from Newcrest Hotels, Ltd., to Dhillon Group apparently closed on August
29, 2007.
Defendants continue the con - The Fort Worth Hotel.
37. In late 2007, Jagmohan, Harwant, and Bawa approached Dr. Soni with a second
investment opportunity.
38. Jagmohan, along with Harwant and Bawa, met with Dr. Soni and discussed his
potential investment in a Fort Worth hotel. The Fort Worth Hotel was located at 4635 Gemini
Place, Fort Worth, Texas 76106 (“Fort Worth Hotel”).
39. | Jagmohan and his family represented that the Fort Worth Hotel was a good
investment and that, once again, they would personally guarantee the return of Dr. Soni’s
investment in this hotel.
40. Subsequently, Dr. Soni met with Jagmohan. Jagmohan advised that the purchase
price of the Fort Worth Hotel was $15,000,000 and that he wanted Dr. Soni to be a 50/50 partner.
Jagmohan advised that the down payment for the Fort Worth Hotel was $3,000,000 and that he
needed Dr. Soni to provide $1,500,000 for the initial down payment.
41. Dr. Soni stated that he did not have this money readily available. Jagmohan
advised that he had a banker that would make a loan to Dr. Soni for this investment. Dr. Soni
met with that banker who said she could not help. Jagmohan then suggested to Dr. Soni that he
obtain a loan from State Bank of India, where Dr. Soni already banked, collateralized by his
business assets and his home.
42. As part of the high-pressure sales tactics used upon Dr. Soni, and taking
advantage of the trust and confidence already reposed by Dr. Soni in them, Jagmohan, Harwant,
and Bawa met with him multiple times and made the same representations regarding Dr. Soni’s
PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 9investments that they had made regarding the Sherman Hotel investment. Jagmohan and his
family members guaranteed that they would sell lands in India if necessary to pay back Dr.
Soni’s investment and that he could have their house if he did not receive back his investment.
43. They further promised that they would make payments to Dr. Soni for any interest
which he had to pay on the loan which was taken out by Dr. Soni. They even promised to make
payments for the loss of investment that would result from Dr. Soni not being able to use these
monies for other investment opportunities.
44. Jagmohan represented that he had negotiated a very good price with the sellers of
the Fort Worth Hotel. Jagmohan called the representative of Defendant Premium, Amrit Patel,
while Dr. Soni was in Jagmohan’s home, and Amrit Patel explained to Dr. Soni that the Fort
Worth Hotel was under construction, that Dr. Soni should come and see it and that the hotel was
being sold at a great price and would be very profitable.
45. As a result of all of the tactics and pressure, Dr. Soni agreed to meet with the
potential seller, Defendant Premium, as he had done in connection with the Sherman Hotel. Dr.
Soni was flown to Dallas by Jagmohan, and they met with representatives of Defendant
Premium, Amrit Patel and other Patels. At the meeting, Jagmohan, Harwant, and Amrit Patel,
representing Defendant Premium, gave Dr. Soni a tour of the Fort Worth Hotel which was still
under construction. Jagmohan and Harwant introduced Dr. Soni to Premium and Amrit Patel as
their partner in buying the Fort Worth Hotel. Amrit Patel told Dr. Soni that $15 million for the
Fort Worth Hotel was a very good price, as Jagmohan had already negotiated down the price.
46. He further stated that the hotel would have a very high occupancy rate, 80% or
greater, that the average room rate would be approximately $100 a night and that the buyers
would see a retum of at least 20% on their investment. He represented that a lot of railroad, oil,
PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 10and gas businesses in the area held a lot of conferences which would contribute to occupancy and
the hotel’s proximity to the airport would generate guest traffic as well. He claimed that an
adjacent hotel was doing great business and that the new hotel would be far superior to that hotel.
He further represented that the hotel would be completely finished when operations started in
July or August of 2008. Harwant and Jagmohan Dhillon also verbally agreed with all of these
statements and said they would hire the manager from the neighboring hotel and obtain much of
that hotel’s business.
47. After the meeting with these Patels and the Dhillons, Jagmohan contacted Dr.
Soni and advised that he needed Dr. Soni to make a decision immediately as Premium had
another interested investor.
48. Several months before closing, Jagmohan advised Dr. Soni that he needed
$200,000 of Dr. Soni’s portion of the down payment and that he would put it in his account and
pay it at closing on Dr. Soni’s behalf.
49. Approximately 2 days before the closing, Jagmohan called Dr. Soni and advised
that there were problems and that there were additional closing costs of approximately $232,000,
and he said that if Dr. Soni would put in an additional $116,000, Jagmohan would match the
amount to cover the additional closing costs.
50. At that time, Jagmohan stated that he and his family would pay back the entire
Fort Worth Hotel investment in one year, including the interest incurred by Dr. Soni.
51. Specifically, Jagmohan stated that they would make monthly payments of
$125,000 to $130,000 to pay back Dr. Soni’s investment.
52. Asa result of all the representations made to him by the Dhillons, Premium, and
the Patels, Dr. Soni contributed almost $1.6 million towards the purchase of the Fort Worth
PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 11Hotel. In return, he received a 50% interest in and became a member of Meecham Hospitality, a
pre-existing Texas limited liability company. The sale of the hotel from Premium Hotel
Management, Inc., to Meecham Hospitality apparently took place on July 2, 2008.
The truth comes to light.
53. As discovery in this case has shown, on July 20, 2007, after the purchase of the
Sherman Hotel was consummated, Newcrest (at Mehul Patel’s direction) paid a kickback of
$200,000 directly to Dhillon Management Inc. (an entity owned by Jagmohan). Discovery has
shown that this payment was made without Dr. Soni’s knowledge, was not shown on the closing
statements, and was termed a “price reduction” by both Mehul and Jagmohan.
54. It is also believed, based on discovery in this case, that payments claimed to be
made outside of closing by Jagmohan to Newerest may never have actually been made. Dr. Soni
believes that this is cerily similar to the actions by Jagmohan and Mchul in the California suit
where Jagmohan supposedly paid $350,000 to Mehul outside of closing and Dr. Soni
understands that Mehul has now admitted in deposition testimony that in fact he never collected
those monies.
55. Dr. Soni has subsequently learned that Jagmohan did not put $1,000,000 towards
his 2/3 of the down payment for the Sherman Hotel. The copy of the Sherman Hotel tax return
for 2007 obtained by Dr. Soni shows contributed capital of only about $690,000 instead of $1.5
million (Dr. Soni’s investment of $500,000 and Jagmohan Dhitlon’s investment of $1,000,000).
56. Dr. Soni has also learned that the Sherman Hotel is suffering from severe
financial problems and that it is at risk of going back to the company from which the Sherman
Hotel was purchased.
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 1257. Dr. Soni has further learned that the Sherman Hotel was originally priced around
$5 million and that the inflated $7.5 million purchase price was concocted by Jagmohan Dhillon,
Newcrest and Mehul to defraud Dr. Soni.
58. The copy of the Dhillon Group tax return for 2008 obtained by Dr. Soni shows no
beginning contributed capital balance, leaving the initial capital contribution to the Sherman
Hotel unaccounted for.
59. It is also believed that as part of the scheme which Jagmohan and the other
Defendants have perpetrated, that Jagmohan may have used some of Dr. Soni’s investment
money to purchase an interest in another hotel.
60. Discovery in this case has revealed that in 2009 Jagmohan refinanced the debt on
the Sherman Hotel without Dr. Soni’s knowledge. Dr. Soni understands that it appears that
during this refinance, Jagmohan had a lien of $700,000 placed on the property and used funds
from closing to pay the lien oft. Dr. Soni also understands that the lien and subsequent $700,000
was given to Shawnee Hospitality LLC, an entity in which Jagmohan owns an ownership
interest.
61. Discovery in this case has further revealed that Premium paid a $1,000,000
kickback to or for the benefit of Jagmohan in connection with the sale of the Fort Worth Hotel.
62. Dr. Soni has obtained tax returns for Meecham Hospitality that show that
Jagmohan may have contributed none of the $1.5 million he was supposed to contribute toward
the purchase of the Fort Worth Hotel or only $400,000 of that amount.
63. Dr. Soni has learned that the Fort Worth Hotel is in danger of foreclosure and that
after purchasing the hotel, Bobby Patel, son of the seller Amrit Patel, participated in the
PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 13management of the hotel. When Dr Soni told Jagmohan that he would like to have a CPA visit
the hotel to examine the books, he was refused.
64. Dr Soni received a letter from City Bank of Texas, the lender on the purchase,
stating that the Fort Worth Hotel’s bank accounts were being monitored. After receiving this
letter, Dr. Soni undertook an investigation and now believes that both of these investments result
from a scheme intended to defraud Dr. Soni.
65. He has also learned that the price paid for the Fort Worth Hotel was so high that
the rates that can be charged for its rooms made it very difficult, if not impossible, for the hotel
to be profitable. To make things worse, he has also learned that the top floor cannot even be
rented because it lacks basic supplies and furnishings.
66. Dr. Soni has learned that Jagmohan and various family members as well as some
Patels are involved in a similar suit in California in which investors are claiming that they were
defrauded in the very same manner involving the alleged purchase and operation of various
hotels in the United States. See Exhibit A, Complaint.
67. Dr. Soni has been advised that Jagmohan and his family incur significant
expenses at the hotels but do not pay for any of those expenses.
68. Further, Dr. Soni is concerned about the operation of the hotels as Dr. Soni has
not received the monies which were promised by Jagmohan and his family members.
69. Dr. Soni believes that Jagmohan and his family members are wasting the hotels’
asscts.
70. Dr. Soni is certain that Jagmohan has not complied with his duties of disclosure,
as Jagmohan has essentially cut Dr. Soni off from any and all financial information relating to
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 14either of the two hotels. Hundreds of phone calls by Dr. Soni to Jagmohan and the other
Dhillons have gone unreturned.
71, Discovery in this case has revealed that, at the direction of and under the control
of Jagmohan Dhillon, Meecham Hospitality is overpaying management fees, making various
payments to and on behalf of Dhillon family members, making car payments on behalf of
Jagmohan, transferring funds from Meecham Hospitality to entities owned by the Dhillon family
members, making suspicious charitable donations to members of the Dhillon family or to “cash,”
making numerous questionable reimbursements for travel and other expenses that do not appear
to be legitimate, and paying a large percentage of expenditures in manners which do not reveal
the recipients - ATM/debit card transactions, wire transfers, cash withdrawals and checks made
payable to cash.
72. Discovery in this case has revealed that, at the direction of and under the control
of Jagmohan Dhillon, Dhillon Group likewise has been overpaying management fees, making
various payments to and on behalf of Dhillon family members, transferring funds from Dhillon
Group to entities owned by the Dhillon or Patel family members, making suspicious charitable
donations to “Dhillon Management, Inc.,” and making numerous questionable reimbursements
for travel and other expenses that do not appear to be legitimate.
73. Discovery in this case has also revealed that on or about October 2, 2009, Dhillon
Group gave a Deed of Trust on the Sherman Hotel to secure personal debt of Jagmohan Dhillon
in the original principal amount of $245,000.00. Additionally, discovery has revealed that on or
about October 2, 2009, Dhillon Group gave a Deed of Trust on the Sherman Hotel to secure
personal debt of Jagmohan Dhillon and two individuals who are not members of Dhillon Group
in the origina! principal amount of $410,000.00.
PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 1574. Dr. Soni believes that both investments are part of an overall pattern and scheme
by the Dhillons and the Patels to dupe unsuspecting individuals into paying millions of dollars
for investments which they later leam have far less value than represented and, in fact, are
fraught with material misrepresentations and fraud. Dr. Soni also believes that many material
representations made by the Dhillons, Newcrest, Premium, and the Patels regarding the hotels
were false and the promises by the Dhillons as to how they would operate the hotels and would
guarantee Dr. Soni’s investments using their personal investments were made with the intent not
to honor those promises. Additionally, Dr. Soni believes that the Dhillons, Newcrest, Premium,
Mchul Patel, and the other Patels failed to disclose material facts, disclosure of which was
necessary to kcep the affirmative misrepresentation which they made from being misleading.
Furthermore, Dr. Soni believes that Jagmohan is cngaged in a pattern of gross mismanagement
and misconduct with respect to Meecham Hospitality and Dhillon Group.
VI. CAUSES OF ACTION
A. Fraud in the Inducement by all Defendants
75. Dr. Soni incorporates by reference paragraphs 1-74 above.
76. Dr. Soni made an investment in the Sherman Hote! in exchange for a 1/3 interest
in Dhillon Group, and he made an investment in the Fort Worth Hotel in exchange for a 50%
interest in Meecham Hospitality. Dr. Soni was induced to make these investments and become a
member of Meecham Hospitality and Dhillon Group by Defendants’ material false
representations, including, but not limited to: (1) the value of the Sherman Hotel exceeding $7.5
million; (2) the purchase prices of the hotels and the negotiations for the prices of those hotels;
(3) the expected conditions of the Fort Worth Hotel upon opening; (4) how the hotels would be
operated by the Dhillons; (5) Dr. Soni’s expected returns and guaranteed minimum 15% return
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 16on his investments; (6) that the Dhillons' would personally guarantee the investments and would
sell their land in India to pay Dr. Soni and give him their California home if the investments
were not profitable; (7) that the Dhillons would make payments to Dr. Soni for any interest he
had to pay on the loan Dr. Soni took out to invest in the Fort Worth Hotel, and that they would
make payments for the loss of investment that would result from Dr. Soni’s not being able to use
the funds invested in the Forth Worth Hotel; and (8) the Dhillons would pay back the entire Fort
Worth Hotel investment in one year, including interest, by making monthly payments of
$125,000 to $130,000.
77. When Defendants made the representations with respect to the Sherman and Fort
Worth Hotels, they knew they were false or they made them recklessly, as positive assertions,
and without knowledge of their truth, and they made them with the intent that Dr. Soni would
rely and act upon them. Dr. Soni reasonably relied upon the representations, and the
representations entitle him to rescission and proximately caused him direct and
special/consequential damages as described below.
B. Fraud by the Dhillon Defendants by False Promises of Future Performance
78. Dr. Soni incorporates by reference paragraphs 1-77 above.
79. Defendants Jagmohan, Harminder, Harwant and Bawa Dhillons’ promises of
future performance as described above, including, but not limited to, (1) that they would
guarantee that Dr. Soni would make at least a 15% retum on the Sherman Hotel; (2) that their
family would sell its land in India if Dr. Soni’s investments were not profitable; (3) that they
would personally guarantee Dr. Soni’s investments; (4) that Dr. Soni could have the Dhillons’
house if Dr. Soni didn’t get his investments back; (5) that they would charge no management fee
for managing the Sherman Hotel; (6) that they would pay back Dr. Soni’s entire investment in
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 17e ®
the Fort Worth Hotel with interest in one year; and (7) they would operate the hotels with Dr.
Soni’s best interest in mind, were made with no intention of performance on the part of the
Dhillons. As described above, these false promises made by the Dhillons were material and
induced Dr. Soni into investing in the hotels as well as allowing certain Defendants to operate
the hotels. When the Dhillons made these promises, they knew they had no intention of fulfilling
them, and they made them with the intent that Dr. Soni would rely and act upon them. Dr. Soni
reasonably relied upon these promises, and the promises entitle him to rescission and
proximately caused him the direct and special/consequential damages described below.
Cc Fraud by Nondisclosure by all Defendants
80. Dr. Soni incorporates by reference paragraphs 1-79 above.
81. Defendants had a duty to disclose material facts when they made representations
to Dr. Soni, as described above, which created substantially false impressions of the investment
transactions. As described above, Defendants failed to disclose numerous material facts,
including, but not limited to, the relationships between the Defendants, the true financial and
physical conditions of the hotels and the Dhillons’ intent to loot the hotels at Dr. Soni’s expense,
which created substantially false impressions of the investment opportunitics for Dr. Soni.
Defendants had a duty to disclose the whole truth when they voluntarily disclosed some
information. Defendants failed to disclose material facts to Dr. Soni when they had a duty to
disclose those facts. Defendants knew Dr. Soni was ignorant of these facts and that he did not
have an equal opportunity to discover them, and Defendants were deliberately silent when they
had a duty to speak. By failing to disclose those facts, Defendants intended to induce Dr. Soni
into investing in the hotels as well as allowing certain Defendants to operate the hotels. Dr. Soni
PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 18justifiably relied on the nondisclosures, which entitle him to rescission and proximately caused
him direct and special/consequential damages as described below.
D. Rescission and Fraud Damages
82. Dr. Soni is entitled to rescission in at least the amount of $2,304,527.80 or has
suffered damages in at least the amount of $2,304,527.80 as a proximate result of his investments
in the Sherman Hotel and the Fort Worth Hotel.
83. Direct damages for fraud can be based on either the benefit of the bargain
measure or the out of pocket measure. The benefit of the bargain measure of direct damages is
the difference in value between Dr. Soni’s investments (his interests in Meecham and Dhillon
Group) as represented by Defendants and their actual values. Given the representations set forth
above, the values and the prices of the hotels and the supposedly guaranteed minimum return of
15%, the value of Dr. Soni’s investments as represented exceeds the amount of money he
initially paid for them, $2,103,832, but is no less than that amount. Given the Dhillon
Defendants’ intent to loot the hotels, the actual value of Dr. Soni’s investments was $0.00. Thus,
his direct benefit of the bargain damages are at least $2,103,832. The out of pocket measure of
direct damages is the amount actually paid by Dr. Soni, $2,103.832, less the value of his
investments, $0.00, making his direct out of pocket damages at least $2,103.832.
1. The Sherman Hotel-Rescission or Direct Damages
84. Asof the date of this Petition, Dr. Soni has invested a total of at least $527,832.00
in the Sherman Hotel.
85. | On May 29, 2007, Dr. Soni wired $250,000.00 to Fidelity National Title Agency,
Inc., the escrow agent for the Sherman Hotel. Sce Exhibit B, Account Statement showing a wire
transfer on May 29, 2007 to Fidelity National Title Agency, Inc.
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 1986. On July 6, 2007, Dr. Soni paid Defendant Jagmohan Dhillon $250,000.00. See
Exhibit C, Check No. 018414073.
87. On September 15, 2007, Dr. Soni paid Defendant Jagmohan Dhillon $27,832.00.
See Exhibit D, Check No. 1198.
Rescission or Total Direct Damages from the Sherman Hotel — at least $527,832.00
2. The Fort Worth Hotel-Rescission or Direct Damages
88. Dr. Soni has invested at least $1,576,000.00 in the Fort Worth Hotel.
89. On January 24, 2008, Dr. Soni paid Defendant Jagmohan Dhillon $200,000.00.
See Exhibit E, Check No. 1261.
90. On May 14, 2008, Dr. Soni wired $1,100,000.00 to the account of Jagmohan
Dillon. Sce Exhibit F, Account Statement showing a wire transfer from Dr. Soni’s account on
May 14, 2008, in the amount of $1,100,000.00.
91. On July 7, 2008, Dr. Soni wired $145,000.00 to Fidelity Title Company, the
escrow agent for the Fort Worth Hotel. Sce Exhibit F, Account Statement showing a wire
transfer from Dr. Soni’s account on July 7, 2008, in the amount of $145,000.00 to Fidelity Title
Company.
92. On August 13, 2008, Dr. Soni paid Defendant Jagmohan Dhillon $116,000.00.
See Exhibit G, Check No. 1394.
93. On October 9, 2008, Dr. Soni paid Defendant Jagmohan Dhillon $15,000.00. See
Exhibit H, Check No. 1430.
Rescission or Total Direct Damages from the Fort Worth Hotel — at least $1,576,000.00
3. Rescission or Special/Consequentia! Damages
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 2094. Dr. Soni is additionally entitled to rescission in the amount of or has suffered
special or consequential damages in at least the amount of $434,649.87 as a proximate result of
his investments in the Fort Worth Hotel and the Sherman Hotel.
95. On October 29, 2007, Dr. Soni took out a loan from the State Bank of India to
obtain funds to use in purchasing the Fort Worth Hotel (hereinafter “Loan”) for the principal
amount of $1,500,000.00. See Exhibit J, Loan Document dated October 29, 2007. On the same
date, Dr. Soni executed a promissory note for the principal amount. See Exhibit K, Promissory
Note dated October 29, 2007. On August 19, 2010, the loan was extended to September 2, 2011
(hereinafter “Extension”). See Exhibit L, Sanction/Renewal of Unsecured Line of Credit dated
August 19, 2010.
96. On October 29, 2007, Dr. Soni was charged a processing fee of $15,000.00, a
documentation fee of $1,000.00, and a miscellaneous fee of $500.00, in connection with the
Loan. See Exhibit M, Letter from State Bank of India to Dr. Soni regarding loan information.
97. The Loan and Extension provided that Dr. Soni would be charged a fixed interest
rate of 7.00% interest. The Extension provided for a maturity date of September 2, 2011. See
Exhibits J and L.
98. The interest that has been applied to the Loan on a year-by-year basis is as
follows:
2007: $1,229.25
2008: $70,306.88
2009: $105,754.75
2010: $86,391.81 (through October 2010). See Exhibit M.
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 2199. In total, Dr. Soni has paid $263,682.69 in interest payments through October
2010. See Exhibit M.
100. Dr. Soni will pay $98,000 in future interest payments over the remaining life of
the loan. See Exhibit L, Extension, and Exhibit N, Transaction Inquiry, showing loan balance.
101. Furthermore, due to Defendants’ fraud and various other breaches, Dr. Soni was
forced to incur $56,467.18 in expenses in investigating Defendants’ activities to uncover the
extent of the abuse. See Exhibit O, Parco invoice.
102. Dr. Soni’s additional rescission or special or consequential damages total at least
$434,649.87.
Rescission or Total Special or Consequential Damages — at least $434,649.87
4. Potential Offsets
103. Defendant Jagmohan Dhillon has made payments to Dr. Soni in the amount of
$233,954.00. The payments stopped being made in February 2010. See Exhibit 1, payment
receipts from Jagmohan Dhillon. This amount accounts for returned checks.
104. Dr. Soni is unable to determine which payments made by Defendant Jagmohan
Dhillon were made for the Sherman Hotel and which were made for the Fort Worth Hotel.
Total Offsets — at most $233,954.00
E. Negligent Misrepresentation
105. Dr. Soni incorporates by reference paragraphs 1-104 above.
106. In the alternative, it is clear from the facts stated above that Defendants made
numerous representations to Dr. Soni in the course of their business and/or in transactions in
which they had pecuniary interests. Defendants made these representations and supplied false
information for the guidance of Dr. Soni. Defendants did not exercise reasonable care and
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 22competence in obtaining or communicating the information. Dr. Soni justifiably relied on the
representations, and Defendants’ negligent misrepresentations proximately caused Dr. Soni
direct damages under the out of pockct measure and special/conscquential damages totaling
$2,304,527.80 as described in Paragraphs 82-104 above.
F. Breach of Fiduciary Duties Owed to Dr. Soni
107. Dr. Soni incorporates by reference paragraphs 1-106 above.
108. Dr. Soni is a 50% member of Meecham Hospitality. Allegedly, the other
members of Meecham Hospitality are Jagmohan Dhillon and Harwant Dhillon, cach of whom
owns 25%. Allegedly, Meecham Hospitality purchased the hotel in Fort Worth, Texas, from
Premium Hotel Management, Inc., in an arm’s length transaction. This purchase was entirely
controlled by Jagmohan Dhillon and certain other Defendants.
109. Jagmohan is the managing member of Meccham Hospitality, and as the managing
member, Jagmohan owes the fiduciary duties of loyalty, care, and obedience to Dr. Soni as a
matter of law. The facts illustrate that Jagmohan has serially violated these fiduciary duties
owed to Dr. Soni, including, by way of example:
© cutting Dr. Soni off from any and all financial information relating to the Fort Worth
Hotel;
© overpaying management fees;
¢ making various improper payments to and on behalf of Dhillon family members and
others including mortgage and car payments;
¢ improperly transferring funds from Mcecham Hospitality to and for the benefit of entities
owned by Dhillon and Patel family members;
¢ making numerous questionable reimbursements for travel and other expenses that do not
appear to be legitimate; and
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 23© payment of a large percentage of expenditures by methods which do not reveal their
recipients - ATM/debit card transactions, wire transfers, cash withdrawals and checks
made payable to cash.
110. Additionally, Dr. Soni is a 33 1/3 membership interest holder in Dhillon Group.
The other member of Dhillon Group is Jagmohan, who owns a 66 2/3 membership interest.
111. Allegedly, Dhillon Group purchased the hotel in Sherman, Texas, from Newcrest
Hotels, Ltd., in an arm’s length transaction. This purchase of the hotel was entirely controlled by
Jagmohan Dhillon and certain Defendants.
112. Jagmohan is the managing member and majority member of Dhillon Group, and
as the managing member, Jagmohan owes the fiduciary duties of loyalty, care, and obedience to
Dr. Soni as a matter of law. The facts illustrate that Jagmohan has serially violated these
fiduciary duties owed to Dr. Soni, including, by way of cxample:
© cutting Dr. Soni off from any and all financial information relating to the Sherman Hotel,
© overpaying management fees;
¢ making various improper payments to and on behalf of Dhillon family members and
others, including mortgage and car payments,
¢ improperly transferring funds from Dhillon Group to and making payments for the
benefit of entities owned by Dhillon family members;
¢ making numerous questionable reimbursements for travel and other expenses that do not
appear to be legitimate; and
¢ giving two Deeds of Trust on the Sherman Hotel to secure personal debt of Jagmohan
and two other individuals who are not members of Dhillon Group (see Exhibits P and Q).
113. Additionally, Dr. Soni and Jagmohan have an informal fiduciary relationship
based on their social and persona! relationship which pre-existed each of the Fort Worth Hotel
and Sherman Hotel transactions which was based on and involved a high degree of trust and
confidence. As stated above, Jagmohan developed a longstanding friendship with Dr. Soni and
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 24cultivated Dr. Soni’s trust in Jagmohan by targeting and manipulating Dr. Soni’s religious
affiliation and creating the impression that Dr. Soni was part of the Dhillon “family.” Dr. Soni
was justified in placing confidence in the belief that Jagmohan would act in Dr. Soni’s best
interest based on Jagmohan’s campaign, spanning many months, to guide and advise Dr. Soni,
both professionally and personally.
114. Because an informal fiduciary relationship exists between Jagmohan and Dr.
Soni, Jagmohan owes the fiduciary duties of loyalty, care, and obedience to Dr. Soni in
connection with both hotels. The facts illustrate that Jagmohan has violated the fiduciary duties
owed to Dr. Soni, including, by way of example, those violations listed in Paragraphs 104 and
107.
115. Finally, Jagmohan is operating the Fort Worth and the Sherman Hotels. As
operator of the hotels, he owes fiduciary duties to the other members of the ownership entities.
116. The facts above illustrate that Jagmohan has been self-dealing and ignoring the
duties owed to Dr. Soni and, thus, breached his fiduciary duties owed to Dr. Soni. These
breaches have proximately damaged Dr. Soni.
117. In addition to the breaches of fiduciary duty by Jagmohan in the management and
operation of the hotels, Jagmohan committed breaches of fiduciary duty in connection with the
purchase and refinance of the Sherman Hotel and the purchase of the Fort Worth Hotel by
causing entities in which he had an interest to take kickbacks and by causing Dhillon Group to
pay off an illegitimate lien.
118. Dr. Soni seeks his proportionate share as a member of Meecham Hospitality and
Dhillon Group, respectively, of the funds misappropriated or misused by Jagmohan and the other
Dhillon Defendants and of the profits which would have been earned by Meecham Hospitality
PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 25and Dhillon Group had Jagmohan Dhillon upheld his fiduciary duties and operated the hotels in a
reasonably prudent manner. The amount of such damages cannot be calculated until further
discovery has occurred. Dr. Soni also seeks his proportionate share as a member of Meecham
Hospitality and Dhillon Group, respectively, of the kickback paid in connection with the sale of
the Fort Worth Hotel and the kickback and illegitimate lien payoff paid in connection with the
sale and refinance of the Sherman Hotel.
G. Breach of Fiduciary Duties owed to Meecham Hospitality
119. Dr. Soni incorporates by reference paragraphs 1-118 above.
120. Jagmohan is the managing member of Meecham Hospitality, and as the managing
member, Jagmohan owes the fiduciary duties of loyalty, care, and obedience to Meecham
Hospitality as a matter of law. Jagmohan has violated these fiduciary duties owed to Meecham
Hospitality as laid out above in Section F.
121. Jagmohan’s breaches have proximately damaged Meecham Hospitality.
Meccham Hospitality seeks recovery of all funds misappropriated or misused by Jagmohan and
the other Dhillon Defendants and of the profits which it would have earned had Jagmohan
Dhillon upheld his fiduciary duties and operated the hotels in a reasonably prudent manner. The
amount of such damages cannot be calculated until further discovery has occurred. Meccham
also seeks recovery of the kickback paid in connection with the sale of the Fort Worth Hotel.
H. Breach of Fiduciary Duties owed to Dhillon Group
122. Dr. Soni incorporates by reference paragraphs 1-121 above.
123. Jagmohan is the managing member of Dhillon Group, and as the managing
member, Jagmohan owes the fiduciary duties of loyalty, care, and obedience to Dhillon Group as
PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY
RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 26a matter of law. The facts illustrate that Jagmohan has violated these fiduciary duties owed to
Dhillon Group as laid out above in Section F.
124. Jagmohan’s breaches have proximately damaged the Dhillon Group. Dhillon
Group seeks recovery of all funds misappropriated or misused by Jagmohan and the other
Dhillon Defendants and of the profits which it would have earned had Jagmohan Dhillon upheld
his fiduciary duties and operated the hotels in a reasonably prudent manner. The amount of such
damages cannot be calculated until further discovery has occurred. Dhillon Group also secks
recovery of the kickback paid in connection with the sale of the Sherman Hotel and the
illegitimate lien payoff made in connection with the refinancing of the Sherman Hotel.
I, Aiding and Abetting Breach Fiduciary Duty
125. Dr. Soni incorporates by reference paragraphs 1-124 above.
126. Defendants have all participated in this scheme. Defendants were well aware of
the fiduciary o
Preview
ACU i ‘ CAUSE NO. 10-14506 DR. JOGINDER SINGH SONI, Individually and Derivatively on behalf of MEECHAM HOSPITALITY, L.L.C. and DHILLON GROUP, L.L.C., Plaintiff, v. JAGMOHAN DHILLON, MEHUL PATEL a/k/a MIKE PATEL, NEWCREST HOTELS, LTD., PREMIUM HOTEL MANAGEMENT, INC., HARMINDER DHILLON, HARWANT DHILLON, and BAWA DHILLON, 101 JUDICIAL DISTRICT Defendants, And MEECHAM HOSPITALITY, L.L.C. and DHILLON GROUP, L.L.C., Nominal Defendants [Derivative Action] DALLAS COUNTY, TEXAS PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION Individual and Derivative Plaintiff Dr. Joginder Singh Soni (“Dr. Soni”), suing on his own behalf and on behalf of Meecham Hospitality, L.L.C., and Dhillon Group, L.L.C. (“Meecham Hospitality” and “Dhillon Group,” respectively), files this, his Second Amended Petition, Request for Temporary Restraining Order, and Request for Temporary Injunction, against Defendants Jagmohan Dhillon (“Jagmohan”), Mchul Patel, a/k/a Mike Patel (“Mehul”), Newcrest Hotels, Ltd. (“Newcrest”), Premium Hotel Management, Inc. (“Premium”), Harminder PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTIONDhillon (“Harminder”), Harwant Dhillon (“Harwant”), and Bawa Dhillon (“Bawa”) (collectively referred to as “Defendants”) and respectfully shows as follows: I. DISCOVERY CONTROL PLAN 1. Discovery shall be conducted under [evel 3, pursuant to the scheduling order which has been entered in this case. IL. INTRODUCTION 2. Dr. Soni has learned that the Defendants in this case have perpetrated a massive fraud upon him. Defendants have used both religious and ethnic affiliations to con Dr. Soni into paying over $2,000,000 for ownership interests in entities which allegedly own multi-million dolar hotels in Sherman and Fort Worth, Texas. 3. As a result of this Court’s entry of an Order allowing for Expedited Discovery, Dr. Soni has discovered that Defendants appear to be engaging in a scam in which they purchase hotels from friends and affiliates at sclf-inflated prices, obtain investors, have the seller pay hidden kickbacks to one of the Defendants, loot the hotels while they are supposed to be operating them in a fiduciary capacity, and then let the loans on the hotels default, resulting in the hotels returning to the ownership of their friends and affiliates. 4. Dr. Soni has also learned that he is not the only individual who has been taken advantage of in this manner. There is another suit ongoing in California in which this very same pattern of deception has been used by some of the same Defendants as in this case. 5. While Dr. Soni will ultimately request the Judge or jury award him rescission and/or all of his damages, he previously obtained a Temporary Restraining Order from the Court and secks a subsequent Temporary Injunction to prevent Defendants from further denuding these entities and being able to fully complete their scheme. PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE2il, PARTIES 6. Direct and Derivative Plaintiff Joginder Singh Soni is an individual who resides in Turlock, California, who may be served by and through his attomey, Roger L. Mandel, BECKHAM & MANDEL, 3400 Carlisle, Suite 550, Dallas, Texas 75220. 7. Nominal/Derivative Defendant Meecham Hospitality, L.L.C., is a Texas limited liability company incorporated in Texas which may be served by and through its registered agent for service of process, James S. Patterson, 15303 Dallas Parkway, Suite 700, Addison, Texas 75001. Meecham is a party to this lawsuit as a nominal Defendant only; Plaintiff does not seek damages from Meecham Hospitality; rather Plaintiff seeks to vindicate the wrongs done to Meecham Hospitality by Defendants. 8. Nominal/Derivative Defendant Dhillon Group, L.L.C., is a Texas limited liability company incorporated in Texas which may be served by and through its registered agent for service of process, Jagmohan Dhillon, 3400 Parkwood Ave., Frisco, Texas 75034. Dhillon Group is a party to this lawsuit as a nominal Defendant only, Plaintiff does not seek damages from Dhillon Group; rather Plaintiff secks to vindicate the wrongs done to Dhillon Group by Defendants. 9. Defendant Jagmohan Dhillon is an individual who has appeared in this suit and who may be served by and through his attomcy, Kelly Hollingsworth, Travis, Calhoun & Conlon, 1000 Providence Towers E, 5001 Spring Valley Road, Dallas, Texas 75244. 10. Defendant Mchul Patel, a/k/a Mike Patel, is an individual who has appeared in this suit and who may be served by and through his attorney, Thomas J. Colven, III, Colven & Tran, P.C., 5420 LBJ Freeway, Suite 300, Dallas, Texas 75240. PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 311. Defendant Newcrest Hotels, Ltd., is a domestic limited partnership, duly formed under the laws of the State of Texas with its principal place of business in Dallas County, Texas, which has appeared in this suit and which may be served by and through its attorney, Thomas J. Colven, III, 5420 LBJ Freeway, Suite 300, Dallas, Texas 75240. 12. Defendant Premium Hotel Management, Inc., is a domestic for-profit corporation, duly formed under the laws of the State of Texas, which has appeared in this suit and which may be served by and through its attomcy, Gerald P. Urbach, Hiersche, Hayward, Drakely, & Urbach, P.C., 15303 Dallas Parkway, Suite 700, Addison, Texas 75001. 13. Defendant Harminder Dhillon is an individual who resides in Collin County, Texas, at 5125 Brandywine Lane, Frisco, Texas 75034. This Defendant has been served with process but has not yet appeared. If and when this Defendant appears, he will be served with this pleading. 14. Defendant Harwant Dhillon is an individual who resides in Collin County, Texas, at 5125 Brandywine Lane, Frisco, Texas 75034. This Defendant has been served with process but has not yet appeared. If and when this Defendant appears, he will be served with this pleading. 15. Defendant Bawa Dhillon is an individual who resides in Collin County, Texas, at 5125 Brandywine Lane, Frisco, Texas 75034. This Defendant has been served with process but has not yet appeared. If and when this Defendant appears, he will be served with this pleading. IV, JURISDICTION AND VENUE 16. This Court has jurisdiction over this action pursuant to TEX. CONST. ART. V. § 8, because the matter in controversy exceeds the sum or value of the jurisdictional limits of the Court exclusive of costs and interest. Further, this Court has jurisdiction over the Defendants as PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 4all of the Defendants are either Texas corporations or individuals who resided in the State of Texas when one or more of Plaintiff's causes of action arose. Furthermore, each of the individual Defendants committed a tort in whole or in part in the State of Texas, and personal jurisdiction over each individual Defendant may properly be exercised by this Court pursuant to TEXAS CIVil. PRACTICE AND REMEDIES CODE § 17.042(2). 17. Venue is proper in Dallas County, Texas, pursuant to Tex. Civ. Prac. & REM. CODE §15.002 and §15.003, because at least one of the defendants resides in Dallas County, Texas. Vv. FACTS Defendants target Dr. Soni. 18. Dr. Joginder Singh Soni is a cardiologist residing in Turlock, California. Dr. Soni prides himself on not only being a doctor, but also on being a devout Sikh of Indian descent. 19. | Sometime between the summer or fall of 2005 and spring of 2006, Harwant Dhilton (“Harwant”) introduced himself and two of his family members to Dr. Soni at a restaurant in California. Following that meeting, a cordial relationship developed, and Dr. Soni learned that Harwant was also a fellow Sikh of Indian descent. 20. As their friendship progressed over the next few months, Harwant invited Dr. Soni to visit his home, and Dr. Soni accepted several invitations to visit with Harwant and his family at their home. 21. Sometime in 2005 or 2006, Harwant contacted Dr. Soni, as he and his wife were in need of a doctor. Dr. Soni provided Harwant medical services free of charge. Subsequently, Dr. Soni also provided free medical services to other Dhillon family members, including Harwant’s wife, brother, and children. As the relationship developed between Dr. Soni and PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGESHarwant, Harwant invited Dr. Soni to Harwant’s house in California on numerous occasions to attend various social and religious ceremonies with Harwant and his family. 22. Over the period of the next few months, several members of the Dhillon family became patients of Dr. Soni, all receiving their medical services tree of charge. During this time period, Dr. Soni developed a friendship with Harwant’s two children, Jagmohan and Bawa, a/k/a Bobby, Dhillon. Harwant lived in the same house as his children and, therefore, Dr. Soni would visit with the entire Dhillon family at events and at their house. A relationship of trust and confidence by Dr. Soni in the Dhillons resulted from the Dhillons’ cultivation of Dr. Soni. Defendants commence their con with the Sherman Hotel. 23. In early 2007, Jagmohan, Harwant, and Bawa began discussing investment ideas with Dr. Soni. Jagmohan, Harwant, and Bawa advised Dr. Soni that they worked with several investors who owned and operated hotels throughout the United States. 24. Jagmohan, Harwant, and Bawa advised that they had ownership interests in many hotels throughout the United States and that there were many different investors in each hotel. 25. Jagmohan introduced Dr. Soni to Suraj Pal Singh. Suraj Pal Singh is considered a saint in the Sikh religion and his support carries much favor and respect. The saint Suraj Pal advised Dr. Soni that the Dhillons were good people and that the Dhillons would do nothing to harm Dr, Soni. 26. At one of the meetings at Harwant’s house, Jagmohan, Harwant, and Bawa showed Dr. Soni a printout of documents related to a hotel located in Sherman, Texas. That hotel is a Holiday Inn Express located at 2909 Michele, Sherman, Texas (the “Sherman Hotel”). ‘The printout showed that the Sherman Hotel was opcrating profitably. Jagmohan, Harwant, and Bawa advised Dr. Soni that they had done the research and that the hotel was a good investment PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 6opportunity with a good price. They stated that the Sherman hote! was highly profitable and that it usually made several hundred thousand dollars a ycar. 27. They further advised Dr. Soni that the price of the Sherman Hotel was $7,500,000, that the down payment would be $1.5 million and that it had an appraised value of well over $7.5 million. They represented to Dr. Soni that they would form a new entity to purchase the Sherman Hotel and that he could purchase a 1/3 interest in the new entity for $500,000 (1/3 of the down payment). 28. Jagmohan stated that he would put up the other $500,000 for the down payment and purchase 1/3 of the new entity and that a third investor would put up $500,000 of the down payment and purchase the other 1/3 of the entity. Ata later date, Jagmohan stated that the third investor had backed out and that Jagmohan would be putting in $1 million into the new entity in return for a 2/3 ownership interest. 29. Jagmohan, Harwant, and Bawa stated that once the Sherman Hotel was purchased, Jagmohan and his friends and family would operate the hotel at no cost to Dr. Soni. They stated that they normally charged between $2,000-$3,000 a month for management services. 30. Dr. Soni was initially hesitant to enter into the investment regarding the Sherman hotel as he had no hotel investment experience. At a meeting with Jagmohan, Harwant, and Bawa, they told Dr. Soni that he did not need to worry about his investment, and that he could make up to a 25% return. They promised him that he would make at least a 15% return. 31. Harwant, Jagmohan, and Bawa said that they and their family would personally guarantee the money and that should the investment not be profitable, they would sell land in India to pay Dr. Soni back his investment and the promised returns. PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE?32. In furtherance of the trust and confidence Dr. Soni had for them, Jagmohan and his family specifically stated that Dr. Soni was a close friend, like a family member, and they guaranteed that Dr. Soni would never be harmed and that they would personally guarantee his investment. 33. As further inducement to invest, Jagmohan and his family further represented that in addition to running the hotel at no cost, Dr. Soni would be paid 1/3 of the profit every month and that when the hotel sold, Dr. Soni would receive 1/3 of the sales proceeds. 34, Finally, to induce Dr. Soni to invest in the Sherman Hotel, Jagmohan Dhillon flew Dr. Soni to Dallas and took him to mect the seller, Defendant Newcrest, which was represented to be owned by a Patel family. Newcrest was represented at the meeting by Defendant Mehul “Mike” Patel and several other Patels. At that meeting, Jagmohan Dhillon, Newcrest, Defendant Mehul Patel, and the other Patels represented that the Sherman Hotel was a great investment being sold at a great price of $7.5 million, that Jagmohan had already negotiated a low price, that the hotel would attract good business because other hotels in the area were not classy, that Dr. Soni should realize a 15%-20% return on his investment, and that Dr. Soni needed to move fast because there were other investors interested in the hotel and that these other investors would buy the hotel at the same price if he and Jagmohan Dhillon did not do so. 35. In reliance upon the various representations made by the Dhillons, Newcrest, Mehul Patel, and the other Patels, Dr. Soni invested $527,000. On July 9, 2007, Dr. Soni signed documentation indicating that he was becoming a 1/3 member in Dhillon Group, a pre-existing Texas limited liability company. 36. Jagmohan advised that Dhillon Group was entering into an arm’s length transaction at a good price for the purchase of the hotel in Sherman, Texas, from Newcrest PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 8Hotels, Ltd. The sale from Newcrest Hotels, Ltd., to Dhillon Group apparently closed on August 29, 2007. Defendants continue the con - The Fort Worth Hotel. 37. In late 2007, Jagmohan, Harwant, and Bawa approached Dr. Soni with a second investment opportunity. 38. Jagmohan, along with Harwant and Bawa, met with Dr. Soni and discussed his potential investment in a Fort Worth hotel. The Fort Worth Hotel was located at 4635 Gemini Place, Fort Worth, Texas 76106 (“Fort Worth Hotel”). 39. | Jagmohan and his family represented that the Fort Worth Hotel was a good investment and that, once again, they would personally guarantee the return of Dr. Soni’s investment in this hotel. 40. Subsequently, Dr. Soni met with Jagmohan. Jagmohan advised that the purchase price of the Fort Worth Hotel was $15,000,000 and that he wanted Dr. Soni to be a 50/50 partner. Jagmohan advised that the down payment for the Fort Worth Hotel was $3,000,000 and that he needed Dr. Soni to provide $1,500,000 for the initial down payment. 41. Dr. Soni stated that he did not have this money readily available. Jagmohan advised that he had a banker that would make a loan to Dr. Soni for this investment. Dr. Soni met with that banker who said she could not help. Jagmohan then suggested to Dr. Soni that he obtain a loan from State Bank of India, where Dr. Soni already banked, collateralized by his business assets and his home. 42. As part of the high-pressure sales tactics used upon Dr. Soni, and taking advantage of the trust and confidence already reposed by Dr. Soni in them, Jagmohan, Harwant, and Bawa met with him multiple times and made the same representations regarding Dr. Soni’s PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 9investments that they had made regarding the Sherman Hotel investment. Jagmohan and his family members guaranteed that they would sell lands in India if necessary to pay back Dr. Soni’s investment and that he could have their house if he did not receive back his investment. 43. They further promised that they would make payments to Dr. Soni for any interest which he had to pay on the loan which was taken out by Dr. Soni. They even promised to make payments for the loss of investment that would result from Dr. Soni not being able to use these monies for other investment opportunities. 44. Jagmohan represented that he had negotiated a very good price with the sellers of the Fort Worth Hotel. Jagmohan called the representative of Defendant Premium, Amrit Patel, while Dr. Soni was in Jagmohan’s home, and Amrit Patel explained to Dr. Soni that the Fort Worth Hotel was under construction, that Dr. Soni should come and see it and that the hotel was being sold at a great price and would be very profitable. 45. As a result of all of the tactics and pressure, Dr. Soni agreed to meet with the potential seller, Defendant Premium, as he had done in connection with the Sherman Hotel. Dr. Soni was flown to Dallas by Jagmohan, and they met with representatives of Defendant Premium, Amrit Patel and other Patels. At the meeting, Jagmohan, Harwant, and Amrit Patel, representing Defendant Premium, gave Dr. Soni a tour of the Fort Worth Hotel which was still under construction. Jagmohan and Harwant introduced Dr. Soni to Premium and Amrit Patel as their partner in buying the Fort Worth Hotel. Amrit Patel told Dr. Soni that $15 million for the Fort Worth Hotel was a very good price, as Jagmohan had already negotiated down the price. 46. He further stated that the hotel would have a very high occupancy rate, 80% or greater, that the average room rate would be approximately $100 a night and that the buyers would see a retum of at least 20% on their investment. He represented that a lot of railroad, oil, PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 10and gas businesses in the area held a lot of conferences which would contribute to occupancy and the hotel’s proximity to the airport would generate guest traffic as well. He claimed that an adjacent hotel was doing great business and that the new hotel would be far superior to that hotel. He further represented that the hotel would be completely finished when operations started in July or August of 2008. Harwant and Jagmohan Dhillon also verbally agreed with all of these statements and said they would hire the manager from the neighboring hotel and obtain much of that hotel’s business. 47. After the meeting with these Patels and the Dhillons, Jagmohan contacted Dr. Soni and advised that he needed Dr. Soni to make a decision immediately as Premium had another interested investor. 48. Several months before closing, Jagmohan advised Dr. Soni that he needed $200,000 of Dr. Soni’s portion of the down payment and that he would put it in his account and pay it at closing on Dr. Soni’s behalf. 49. Approximately 2 days before the closing, Jagmohan called Dr. Soni and advised that there were problems and that there were additional closing costs of approximately $232,000, and he said that if Dr. Soni would put in an additional $116,000, Jagmohan would match the amount to cover the additional closing costs. 50. At that time, Jagmohan stated that he and his family would pay back the entire Fort Worth Hotel investment in one year, including the interest incurred by Dr. Soni. 51. Specifically, Jagmohan stated that they would make monthly payments of $125,000 to $130,000 to pay back Dr. Soni’s investment. 52. Asa result of all the representations made to him by the Dhillons, Premium, and the Patels, Dr. Soni contributed almost $1.6 million towards the purchase of the Fort Worth PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 11Hotel. In return, he received a 50% interest in and became a member of Meecham Hospitality, a pre-existing Texas limited liability company. The sale of the hotel from Premium Hotel Management, Inc., to Meecham Hospitality apparently took place on July 2, 2008. The truth comes to light. 53. As discovery in this case has shown, on July 20, 2007, after the purchase of the Sherman Hotel was consummated, Newcrest (at Mehul Patel’s direction) paid a kickback of $200,000 directly to Dhillon Management Inc. (an entity owned by Jagmohan). Discovery has shown that this payment was made without Dr. Soni’s knowledge, was not shown on the closing statements, and was termed a “price reduction” by both Mehul and Jagmohan. 54. It is also believed, based on discovery in this case, that payments claimed to be made outside of closing by Jagmohan to Newerest may never have actually been made. Dr. Soni believes that this is cerily similar to the actions by Jagmohan and Mchul in the California suit where Jagmohan supposedly paid $350,000 to Mehul outside of closing and Dr. Soni understands that Mehul has now admitted in deposition testimony that in fact he never collected those monies. 55. Dr. Soni has subsequently learned that Jagmohan did not put $1,000,000 towards his 2/3 of the down payment for the Sherman Hotel. The copy of the Sherman Hotel tax return for 2007 obtained by Dr. Soni shows contributed capital of only about $690,000 instead of $1.5 million (Dr. Soni’s investment of $500,000 and Jagmohan Dhitlon’s investment of $1,000,000). 56. Dr. Soni has also learned that the Sherman Hotel is suffering from severe financial problems and that it is at risk of going back to the company from which the Sherman Hotel was purchased. PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 1257. Dr. Soni has further learned that the Sherman Hotel was originally priced around $5 million and that the inflated $7.5 million purchase price was concocted by Jagmohan Dhillon, Newcrest and Mehul to defraud Dr. Soni. 58. The copy of the Dhillon Group tax return for 2008 obtained by Dr. Soni shows no beginning contributed capital balance, leaving the initial capital contribution to the Sherman Hotel unaccounted for. 59. It is also believed that as part of the scheme which Jagmohan and the other Defendants have perpetrated, that Jagmohan may have used some of Dr. Soni’s investment money to purchase an interest in another hotel. 60. Discovery in this case has revealed that in 2009 Jagmohan refinanced the debt on the Sherman Hotel without Dr. Soni’s knowledge. Dr. Soni understands that it appears that during this refinance, Jagmohan had a lien of $700,000 placed on the property and used funds from closing to pay the lien oft. Dr. Soni also understands that the lien and subsequent $700,000 was given to Shawnee Hospitality LLC, an entity in which Jagmohan owns an ownership interest. 61. Discovery in this case has further revealed that Premium paid a $1,000,000 kickback to or for the benefit of Jagmohan in connection with the sale of the Fort Worth Hotel. 62. Dr. Soni has obtained tax returns for Meecham Hospitality that show that Jagmohan may have contributed none of the $1.5 million he was supposed to contribute toward the purchase of the Fort Worth Hotel or only $400,000 of that amount. 63. Dr. Soni has learned that the Fort Worth Hotel is in danger of foreclosure and that after purchasing the hotel, Bobby Patel, son of the seller Amrit Patel, participated in the PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 13management of the hotel. When Dr Soni told Jagmohan that he would like to have a CPA visit the hotel to examine the books, he was refused. 64. Dr Soni received a letter from City Bank of Texas, the lender on the purchase, stating that the Fort Worth Hotel’s bank accounts were being monitored. After receiving this letter, Dr. Soni undertook an investigation and now believes that both of these investments result from a scheme intended to defraud Dr. Soni. 65. He has also learned that the price paid for the Fort Worth Hotel was so high that the rates that can be charged for its rooms made it very difficult, if not impossible, for the hotel to be profitable. To make things worse, he has also learned that the top floor cannot even be rented because it lacks basic supplies and furnishings. 66. Dr. Soni has learned that Jagmohan and various family members as well as some Patels are involved in a similar suit in California in which investors are claiming that they were defrauded in the very same manner involving the alleged purchase and operation of various hotels in the United States. See Exhibit A, Complaint. 67. Dr. Soni has been advised that Jagmohan and his family incur significant expenses at the hotels but do not pay for any of those expenses. 68. Further, Dr. Soni is concerned about the operation of the hotels as Dr. Soni has not received the monies which were promised by Jagmohan and his family members. 69. Dr. Soni believes that Jagmohan and his family members are wasting the hotels’ asscts. 70. Dr. Soni is certain that Jagmohan has not complied with his duties of disclosure, as Jagmohan has essentially cut Dr. Soni off from any and all financial information relating to PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 14either of the two hotels. Hundreds of phone calls by Dr. Soni to Jagmohan and the other Dhillons have gone unreturned. 71, Discovery in this case has revealed that, at the direction of and under the control of Jagmohan Dhillon, Meecham Hospitality is overpaying management fees, making various payments to and on behalf of Dhillon family members, making car payments on behalf of Jagmohan, transferring funds from Meecham Hospitality to entities owned by the Dhillon family members, making suspicious charitable donations to members of the Dhillon family or to “cash,” making numerous questionable reimbursements for travel and other expenses that do not appear to be legitimate, and paying a large percentage of expenditures in manners which do not reveal the recipients - ATM/debit card transactions, wire transfers, cash withdrawals and checks made payable to cash. 72. Discovery in this case has revealed that, at the direction of and under the control of Jagmohan Dhillon, Dhillon Group likewise has been overpaying management fees, making various payments to and on behalf of Dhillon family members, transferring funds from Dhillon Group to entities owned by the Dhillon or Patel family members, making suspicious charitable donations to “Dhillon Management, Inc.,” and making numerous questionable reimbursements for travel and other expenses that do not appear to be legitimate. 73. Discovery in this case has also revealed that on or about October 2, 2009, Dhillon Group gave a Deed of Trust on the Sherman Hotel to secure personal debt of Jagmohan Dhillon in the original principal amount of $245,000.00. Additionally, discovery has revealed that on or about October 2, 2009, Dhillon Group gave a Deed of Trust on the Sherman Hotel to secure personal debt of Jagmohan Dhillon and two individuals who are not members of Dhillon Group in the origina! principal amount of $410,000.00. PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 1574. Dr. Soni believes that both investments are part of an overall pattern and scheme by the Dhillons and the Patels to dupe unsuspecting individuals into paying millions of dollars for investments which they later leam have far less value than represented and, in fact, are fraught with material misrepresentations and fraud. Dr. Soni also believes that many material representations made by the Dhillons, Newcrest, Premium, and the Patels regarding the hotels were false and the promises by the Dhillons as to how they would operate the hotels and would guarantee Dr. Soni’s investments using their personal investments were made with the intent not to honor those promises. Additionally, Dr. Soni believes that the Dhillons, Newcrest, Premium, Mchul Patel, and the other Patels failed to disclose material facts, disclosure of which was necessary to kcep the affirmative misrepresentation which they made from being misleading. Furthermore, Dr. Soni believes that Jagmohan is cngaged in a pattern of gross mismanagement and misconduct with respect to Meecham Hospitality and Dhillon Group. VI. CAUSES OF ACTION A. Fraud in the Inducement by all Defendants 75. Dr. Soni incorporates by reference paragraphs 1-74 above. 76. Dr. Soni made an investment in the Sherman Hote! in exchange for a 1/3 interest in Dhillon Group, and he made an investment in the Fort Worth Hotel in exchange for a 50% interest in Meecham Hospitality. Dr. Soni was induced to make these investments and become a member of Meecham Hospitality and Dhillon Group by Defendants’ material false representations, including, but not limited to: (1) the value of the Sherman Hotel exceeding $7.5 million; (2) the purchase prices of the hotels and the negotiations for the prices of those hotels; (3) the expected conditions of the Fort Worth Hotel upon opening; (4) how the hotels would be operated by the Dhillons; (5) Dr. Soni’s expected returns and guaranteed minimum 15% return PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 16on his investments; (6) that the Dhillons' would personally guarantee the investments and would sell their land in India to pay Dr. Soni and give him their California home if the investments were not profitable; (7) that the Dhillons would make payments to Dr. Soni for any interest he had to pay on the loan Dr. Soni took out to invest in the Fort Worth Hotel, and that they would make payments for the loss of investment that would result from Dr. Soni’s not being able to use the funds invested in the Forth Worth Hotel; and (8) the Dhillons would pay back the entire Fort Worth Hotel investment in one year, including interest, by making monthly payments of $125,000 to $130,000. 77. When Defendants made the representations with respect to the Sherman and Fort Worth Hotels, they knew they were false or they made them recklessly, as positive assertions, and without knowledge of their truth, and they made them with the intent that Dr. Soni would rely and act upon them. Dr. Soni reasonably relied upon the representations, and the representations entitle him to rescission and proximately caused him direct and special/consequential damages as described below. B. Fraud by the Dhillon Defendants by False Promises of Future Performance 78. Dr. Soni incorporates by reference paragraphs 1-77 above. 79. Defendants Jagmohan, Harminder, Harwant and Bawa Dhillons’ promises of future performance as described above, including, but not limited to, (1) that they would guarantee that Dr. Soni would make at least a 15% retum on the Sherman Hotel; (2) that their family would sell its land in India if Dr. Soni’s investments were not profitable; (3) that they would personally guarantee Dr. Soni’s investments; (4) that Dr. Soni could have the Dhillons’ house if Dr. Soni didn’t get his investments back; (5) that they would charge no management fee for managing the Sherman Hotel; (6) that they would pay back Dr. Soni’s entire investment in PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 17e ® the Fort Worth Hotel with interest in one year; and (7) they would operate the hotels with Dr. Soni’s best interest in mind, were made with no intention of performance on the part of the Dhillons. As described above, these false promises made by the Dhillons were material and induced Dr. Soni into investing in the hotels as well as allowing certain Defendants to operate the hotels. When the Dhillons made these promises, they knew they had no intention of fulfilling them, and they made them with the intent that Dr. Soni would rely and act upon them. Dr. Soni reasonably relied upon these promises, and the promises entitle him to rescission and proximately caused him the direct and special/consequential damages described below. Cc Fraud by Nondisclosure by all Defendants 80. Dr. Soni incorporates by reference paragraphs 1-79 above. 81. Defendants had a duty to disclose material facts when they made representations to Dr. Soni, as described above, which created substantially false impressions of the investment transactions. As described above, Defendants failed to disclose numerous material facts, including, but not limited to, the relationships between the Defendants, the true financial and physical conditions of the hotels and the Dhillons’ intent to loot the hotels at Dr. Soni’s expense, which created substantially false impressions of the investment opportunitics for Dr. Soni. Defendants had a duty to disclose the whole truth when they voluntarily disclosed some information. Defendants failed to disclose material facts to Dr. Soni when they had a duty to disclose those facts. Defendants knew Dr. Soni was ignorant of these facts and that he did not have an equal opportunity to discover them, and Defendants were deliberately silent when they had a duty to speak. By failing to disclose those facts, Defendants intended to induce Dr. Soni into investing in the hotels as well as allowing certain Defendants to operate the hotels. Dr. Soni PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 18justifiably relied on the nondisclosures, which entitle him to rescission and proximately caused him direct and special/consequential damages as described below. D. Rescission and Fraud Damages 82. Dr. Soni is entitled to rescission in at least the amount of $2,304,527.80 or has suffered damages in at least the amount of $2,304,527.80 as a proximate result of his investments in the Sherman Hotel and the Fort Worth Hotel. 83. Direct damages for fraud can be based on either the benefit of the bargain measure or the out of pocket measure. The benefit of the bargain measure of direct damages is the difference in value between Dr. Soni’s investments (his interests in Meecham and Dhillon Group) as represented by Defendants and their actual values. Given the representations set forth above, the values and the prices of the hotels and the supposedly guaranteed minimum return of 15%, the value of Dr. Soni’s investments as represented exceeds the amount of money he initially paid for them, $2,103,832, but is no less than that amount. Given the Dhillon Defendants’ intent to loot the hotels, the actual value of Dr. Soni’s investments was $0.00. Thus, his direct benefit of the bargain damages are at least $2,103,832. The out of pocket measure of direct damages is the amount actually paid by Dr. Soni, $2,103.832, less the value of his investments, $0.00, making his direct out of pocket damages at least $2,103.832. 1. The Sherman Hotel-Rescission or Direct Damages 84. Asof the date of this Petition, Dr. Soni has invested a total of at least $527,832.00 in the Sherman Hotel. 85. | On May 29, 2007, Dr. Soni wired $250,000.00 to Fidelity National Title Agency, Inc., the escrow agent for the Sherman Hotel. Sce Exhibit B, Account Statement showing a wire transfer on May 29, 2007 to Fidelity National Title Agency, Inc. PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 1986. On July 6, 2007, Dr. Soni paid Defendant Jagmohan Dhillon $250,000.00. See Exhibit C, Check No. 018414073. 87. On September 15, 2007, Dr. Soni paid Defendant Jagmohan Dhillon $27,832.00. See Exhibit D, Check No. 1198. Rescission or Total Direct Damages from the Sherman Hotel — at least $527,832.00 2. The Fort Worth Hotel-Rescission or Direct Damages 88. Dr. Soni has invested at least $1,576,000.00 in the Fort Worth Hotel. 89. On January 24, 2008, Dr. Soni paid Defendant Jagmohan Dhillon $200,000.00. See Exhibit E, Check No. 1261. 90. On May 14, 2008, Dr. Soni wired $1,100,000.00 to the account of Jagmohan Dillon. Sce Exhibit F, Account Statement showing a wire transfer from Dr. Soni’s account on May 14, 2008, in the amount of $1,100,000.00. 91. On July 7, 2008, Dr. Soni wired $145,000.00 to Fidelity Title Company, the escrow agent for the Fort Worth Hotel. Sce Exhibit F, Account Statement showing a wire transfer from Dr. Soni’s account on July 7, 2008, in the amount of $145,000.00 to Fidelity Title Company. 92. On August 13, 2008, Dr. Soni paid Defendant Jagmohan Dhillon $116,000.00. See Exhibit G, Check No. 1394. 93. On October 9, 2008, Dr. Soni paid Defendant Jagmohan Dhillon $15,000.00. See Exhibit H, Check No. 1430. Rescission or Total Direct Damages from the Fort Worth Hotel — at least $1,576,000.00 3. Rescission or Special/Consequentia! Damages PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 2094. Dr. Soni is additionally entitled to rescission in the amount of or has suffered special or consequential damages in at least the amount of $434,649.87 as a proximate result of his investments in the Fort Worth Hotel and the Sherman Hotel. 95. On October 29, 2007, Dr. Soni took out a loan from the State Bank of India to obtain funds to use in purchasing the Fort Worth Hotel (hereinafter “Loan”) for the principal amount of $1,500,000.00. See Exhibit J, Loan Document dated October 29, 2007. On the same date, Dr. Soni executed a promissory note for the principal amount. See Exhibit K, Promissory Note dated October 29, 2007. On August 19, 2010, the loan was extended to September 2, 2011 (hereinafter “Extension”). See Exhibit L, Sanction/Renewal of Unsecured Line of Credit dated August 19, 2010. 96. On October 29, 2007, Dr. Soni was charged a processing fee of $15,000.00, a documentation fee of $1,000.00, and a miscellaneous fee of $500.00, in connection with the Loan. See Exhibit M, Letter from State Bank of India to Dr. Soni regarding loan information. 97. The Loan and Extension provided that Dr. Soni would be charged a fixed interest rate of 7.00% interest. The Extension provided for a maturity date of September 2, 2011. See Exhibits J and L. 98. The interest that has been applied to the Loan on a year-by-year basis is as follows: 2007: $1,229.25 2008: $70,306.88 2009: $105,754.75 2010: $86,391.81 (through October 2010). See Exhibit M. PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 2199. In total, Dr. Soni has paid $263,682.69 in interest payments through October 2010. See Exhibit M. 100. Dr. Soni will pay $98,000 in future interest payments over the remaining life of the loan. See Exhibit L, Extension, and Exhibit N, Transaction Inquiry, showing loan balance. 101. Furthermore, due to Defendants’ fraud and various other breaches, Dr. Soni was forced to incur $56,467.18 in expenses in investigating Defendants’ activities to uncover the extent of the abuse. See Exhibit O, Parco invoice. 102. Dr. Soni’s additional rescission or special or consequential damages total at least $434,649.87. Rescission or Total Special or Consequential Damages — at least $434,649.87 4. Potential Offsets 103. Defendant Jagmohan Dhillon has made payments to Dr. Soni in the amount of $233,954.00. The payments stopped being made in February 2010. See Exhibit 1, payment receipts from Jagmohan Dhillon. This amount accounts for returned checks. 104. Dr. Soni is unable to determine which payments made by Defendant Jagmohan Dhillon were made for the Sherman Hotel and which were made for the Fort Worth Hotel. Total Offsets — at most $233,954.00 E. Negligent Misrepresentation 105. Dr. Soni incorporates by reference paragraphs 1-104 above. 106. In the alternative, it is clear from the facts stated above that Defendants made numerous representations to Dr. Soni in the course of their business and/or in transactions in which they had pecuniary interests. Defendants made these representations and supplied false information for the guidance of Dr. Soni. Defendants did not exercise reasonable care and PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 22competence in obtaining or communicating the information. Dr. Soni justifiably relied on the representations, and Defendants’ negligent misrepresentations proximately caused Dr. Soni direct damages under the out of pockct measure and special/conscquential damages totaling $2,304,527.80 as described in Paragraphs 82-104 above. F. Breach of Fiduciary Duties Owed to Dr. Soni 107. Dr. Soni incorporates by reference paragraphs 1-106 above. 108. Dr. Soni is a 50% member of Meecham Hospitality. Allegedly, the other members of Meecham Hospitality are Jagmohan Dhillon and Harwant Dhillon, cach of whom owns 25%. Allegedly, Meecham Hospitality purchased the hotel in Fort Worth, Texas, from Premium Hotel Management, Inc., in an arm’s length transaction. This purchase was entirely controlled by Jagmohan Dhillon and certain other Defendants. 109. Jagmohan is the managing member of Meccham Hospitality, and as the managing member, Jagmohan owes the fiduciary duties of loyalty, care, and obedience to Dr. Soni as a matter of law. The facts illustrate that Jagmohan has serially violated these fiduciary duties owed to Dr. Soni, including, by way of example: © cutting Dr. Soni off from any and all financial information relating to the Fort Worth Hotel; © overpaying management fees; ¢ making various improper payments to and on behalf of Dhillon family members and others including mortgage and car payments; ¢ improperly transferring funds from Mcecham Hospitality to and for the benefit of entities owned by Dhillon and Patel family members; ¢ making numerous questionable reimbursements for travel and other expenses that do not appear to be legitimate; and PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 23© payment of a large percentage of expenditures by methods which do not reveal their recipients - ATM/debit card transactions, wire transfers, cash withdrawals and checks made payable to cash. 110. Additionally, Dr. Soni is a 33 1/3 membership interest holder in Dhillon Group. The other member of Dhillon Group is Jagmohan, who owns a 66 2/3 membership interest. 111. Allegedly, Dhillon Group purchased the hotel in Sherman, Texas, from Newcrest Hotels, Ltd., in an arm’s length transaction. This purchase of the hotel was entirely controlled by Jagmohan Dhillon and certain Defendants. 112. Jagmohan is the managing member and majority member of Dhillon Group, and as the managing member, Jagmohan owes the fiduciary duties of loyalty, care, and obedience to Dr. Soni as a matter of law. The facts illustrate that Jagmohan has serially violated these fiduciary duties owed to Dr. Soni, including, by way of cxample: © cutting Dr. Soni off from any and all financial information relating to the Sherman Hotel, © overpaying management fees; ¢ making various improper payments to and on behalf of Dhillon family members and others, including mortgage and car payments, ¢ improperly transferring funds from Dhillon Group to and making payments for the benefit of entities owned by Dhillon family members; ¢ making numerous questionable reimbursements for travel and other expenses that do not appear to be legitimate; and ¢ giving two Deeds of Trust on the Sherman Hotel to secure personal debt of Jagmohan and two other individuals who are not members of Dhillon Group (see Exhibits P and Q). 113. Additionally, Dr. Soni and Jagmohan have an informal fiduciary relationship based on their social and persona! relationship which pre-existed each of the Fort Worth Hotel and Sherman Hotel transactions which was based on and involved a high degree of trust and confidence. As stated above, Jagmohan developed a longstanding friendship with Dr. Soni and PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 24cultivated Dr. Soni’s trust in Jagmohan by targeting and manipulating Dr. Soni’s religious affiliation and creating the impression that Dr. Soni was part of the Dhillon “family.” Dr. Soni was justified in placing confidence in the belief that Jagmohan would act in Dr. Soni’s best interest based on Jagmohan’s campaign, spanning many months, to guide and advise Dr. Soni, both professionally and personally. 114. Because an informal fiduciary relationship exists between Jagmohan and Dr. Soni, Jagmohan owes the fiduciary duties of loyalty, care, and obedience to Dr. Soni in connection with both hotels. The facts illustrate that Jagmohan has violated the fiduciary duties owed to Dr. Soni, including, by way of example, those violations listed in Paragraphs 104 and 107. 115. Finally, Jagmohan is operating the Fort Worth and the Sherman Hotels. As operator of the hotels, he owes fiduciary duties to the other members of the ownership entities. 116. The facts above illustrate that Jagmohan has been self-dealing and ignoring the duties owed to Dr. Soni and, thus, breached his fiduciary duties owed to Dr. Soni. These breaches have proximately damaged Dr. Soni. 117. In addition to the breaches of fiduciary duty by Jagmohan in the management and operation of the hotels, Jagmohan committed breaches of fiduciary duty in connection with the purchase and refinance of the Sherman Hotel and the purchase of the Fort Worth Hotel by causing entities in which he had an interest to take kickbacks and by causing Dhillon Group to pay off an illegitimate lien. 118. Dr. Soni seeks his proportionate share as a member of Meecham Hospitality and Dhillon Group, respectively, of the funds misappropriated or misused by Jagmohan and the other Dhillon Defendants and of the profits which would have been earned by Meecham Hospitality PLAINTIFF'S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 25and Dhillon Group had Jagmohan Dhillon upheld his fiduciary duties and operated the hotels in a reasonably prudent manner. The amount of such damages cannot be calculated until further discovery has occurred. Dr. Soni also seeks his proportionate share as a member of Meecham Hospitality and Dhillon Group, respectively, of the kickback paid in connection with the sale of the Fort Worth Hotel and the kickback and illegitimate lien payoff paid in connection with the sale and refinance of the Sherman Hotel. G. Breach of Fiduciary Duties owed to Meecham Hospitality 119. Dr. Soni incorporates by reference paragraphs 1-118 above. 120. Jagmohan is the managing member of Meecham Hospitality, and as the managing member, Jagmohan owes the fiduciary duties of loyalty, care, and obedience to Meecham Hospitality as a matter of law. Jagmohan has violated these fiduciary duties owed to Meecham Hospitality as laid out above in Section F. 121. Jagmohan’s breaches have proximately damaged Meecham Hospitality. Meccham Hospitality seeks recovery of all funds misappropriated or misused by Jagmohan and the other Dhillon Defendants and of the profits which it would have earned had Jagmohan Dhillon upheld his fiduciary duties and operated the hotels in a reasonably prudent manner. The amount of such damages cannot be calculated until further discovery has occurred. Meccham also seeks recovery of the kickback paid in connection with the sale of the Fort Worth Hotel. H. Breach of Fiduciary Duties owed to Dhillon Group 122. Dr. Soni incorporates by reference paragraphs 1-121 above. 123. Jagmohan is the managing member of Dhillon Group, and as the managing member, Jagmohan owes the fiduciary duties of loyalty, care, and obedience to Dhillon Group as PLAINTIFF’S SECOND AMENDED PETITION, REQUEST FOR TEMPORARY RESTRAINING ORDER AND REQUEST FOR TEMPORARY INJUNCTION PAGE 26a matter of law. The facts illustrate that Jagmohan has violated these fiduciary duties owed to Dhillon Group as laid out above in Section F. 124. Jagmohan’s breaches have proximately damaged the Dhillon Group. Dhillon Group seeks recovery of all funds misappropriated or misused by Jagmohan and the other Dhillon Defendants and of the profits which it would have earned had Jagmohan Dhillon upheld his fiduciary duties and operated the hotels in a reasonably prudent manner. The amount of such damages cannot be calculated until further discovery has occurred. Dhillon Group also secks recovery of the kickback paid in connection with the sale of the Sherman Hotel and the illegitimate lien payoff made in connection with the refinancing of the Sherman Hotel. I, Aiding and Abetting Breach Fiduciary Duty 125. Dr. Soni incorporates by reference paragraphs 1-124 above. 126. Defendants have all participated in this scheme. Defendants were well aware of the fiduciary o