Modesto CA sued by owner after city condemns motel

The owners of the Budgetel Inn & Suites – the now-closed McHenry Avenue budget motel that had problems with drugs and prostitution but housed poor people – are suing Modesto, claiming the city violated their due process rights by imposing 100,000 dollars in civilian clothes. sanctions against them.

The lawyers of the Khatri Bros. filed a complaint on March 28 against Modesto before the Superior Court of Stanislas. The partnership wants a judgment declaring its rights violated, damages, attorney fees, the lifting of the action which resulted in the civil penalties and more time to deal with the “alleged nuisance conditions” of the company. motel.

The Stockton office of Downey Brand law firm represents the Khatris. Lawyers did not respond to a request for comment and Neal Khatri, one of the brothers, declined to comment.

Modesto City Attorney Adam Lindgren released this statement: “On initial examination, the city attorney’s office believes that it (the trial) significantly distorts the laws and facts. The city attorney expects to recommend to city council that the city actively defend itself and continue to seek implementation of the construction appeals commission recommendations, as ordered.

On February 28, Modesto officials asked the city’s Buildings Appeal Board to impose civil penalties and condemn the property as a public nuisance, which could be remedied through proper repair of the property. . Council members voted in favor of the city’s request.

City spokesman Thomas Reeves said in an email that city officials expected to meet with Budgetel owners on Wednesday to discuss “their intention and provide a repair schedule.”

Neal Khatri claimed that Modesto unfairly blamed the Khatri Bros. for Budgetel problems. He blamed the motel operator, United Resorts, who leased the property to the Khatri Bros., adding that as the owner his company was limited in what it could do.

But police chief Galen Carroll said the Khatri brothers refused to work with the city. Between January 1, 2017 and September 6, 2018, the property generated 732 calls to police and other agencies, resulting in arrests for drugs, prostitution and other activities.

A city inspection last April showed that 40 of the motel’s 99 rooms were occupied by long-time guests and six by daily customers. The rest was vacant, used for storage, or needed repair. Six rooms could not be verified.

United Resorts filed for Chapter 7 bankruptcy on January 25 and closed the motel the next day, leading to chaos as staff tried to force those who lived there to leave. Some did, but others stayed and continued to live there for several weeks.

Longtime guests told The Bee they paid $ 350 a week or more to live there. Some said they had no choice because evictions, bad credit and other issues had prevented them from renting an apartment.

The Khatri Bros. had paid people to leave, in some cases up to $ 800, according to documents filed with the lawsuit, and a family left the last room occupied on Wednesday. All bedrooms were put up on Thursday.

Modesto has issued what is known as a Notice and Order to United Resorts and Khatri Bros. in September, demanding that the Budgetel be brought into line with the city code. Problems included poor building maintenance and bedbugs and cockroaches. The city also wanted a plan that “would discourage all criminal and harmful behavior.”

Modesto then issued a notice and order in December about the lack of progress in resolving these issues before appearing before the Construction Appeals Board in February.

The lawsuit claims the Khatris relied on assurances from United Resort that the issues were resolved and took swift action after the bankruptcy to secure the property, including hiring security guards and boarding empty rooms.

The lawsuit says the Khatris did not gain full control of the property until the bankruptcy judge handed them over to them on February 26, which meant the Khatris lacked the capacity to resolve the issues. issues raised by the city earlier and that the city had violated their due. deal with rights by not giving them a reasonable period of time.

The lawsuit alleges that the Construction Appeals Board had no stake in what Neal and Johnny Khatri had to say and that the board is acting as a rubber stamp for what the city wants.


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