Maughan

I

INTRODUCTION

This is a dispute between a sister and brother over their respective holdings in a family run corporation. Royal Hospitality, Inc. (RHI), is an S corporation owned entirely by six siblings of the Correia family. 2 RHI’s sole business is the operation of a hotel in San Diego that had been previously owned and operated by plaintiff Maureen Correia Maughan (Maureen), her former husband Ben Maughan (Ben) and her parents Mary and Maurice E Correia (the Correias).

Defendant Maurice P. Correia (Maurice), Maureen’s brother, formed RHI for the specific purpose of purchasing the hotel after the Maughans and the Correias became delinquent on their loan payments and the bank foreclosed. After that purchase, Maureen and Maurice became enmeshed in a dispute regarding how ownership of RHI ultimately would be apportioned among them, their parents and their other siblings. Maurice maintained that he was initially, and for a period of several years would continue to be, the sole owner of RHI, but that after a certain period of time, Maureen and the other family members would be able to exchange the value of their capital contributions to RHI for equity in the company.…