Inyo County Superior Court Judge Dean Stout replaced the recused Gerry Mohun to hear the case of Mammoth Lakes Tourism (MLT) vs. Dirk Winter.
The hearing took place on Thursday, March 21.
Recap: MLT gave Dirk Winter $300,000 to make improvements on the Woods Site in Mammoth Lakes. Winter then used that money as a down payment to buy the Woods Site (it was in escrow when MLT gave the money), turned around, and listed the property for roughly $2,000,000 more than he bought it.
MLT felt as though it had been scammed, so it sued. The claim of its suit states that because its money was taken fraudulently and used as down payment for the site, MLT should be given an ownership stake in the land.
MLT is represented by Tim Sanford. Winter is represented by David Poole. Poole argued that MLT knowingly gave the money to Winter for the down payment, and it is only now suing because Winter listed the property at such a great profit. There was much talk in the courtroom of this “secret agreement” between the two parties, which Poole idiomatically referred to as a “wink wink, nod nod agreement,” and Sanford pseudo-idiomatically referred to as a “winky winky agreement,” much to the discomfort of everyone in the room.
Sanford repeatedly stated that there was no evidence to back up this claim of a secret agreement. The evidence, primarily Winter’s sworn declaration, stated explicitly that the $300,000 was to be used only for improvements, and it was not.
MLT’s $300,000 was the only money that Winter used for the down payment on the land. It is suspicious that Winter took exactly the amount needed for his down payment, and Sanford considers this circumstantial evidence in MLT’s favor. This coincidental dollar amount could also back up Winter’s claim that MLT was in on the “secret agreement.”
It should also be made clear that MLT gave the $300,000 to Winter with no expectation of repayment as long as Winter abided by the contract. It was not a loan; it was a gift of public funds to a man to improve his private property. As a part of the contract, Winter guaranteed MLT that the site could be used for events for the next ten years. The question remains as to whether MLT gave this money knowing that Winter would use it for the down payment.
MLT claims ownership on the basis that this property belongs in a constructive trust. A constructive trust is a remedy for unjust enrichment, in this case, the fraudulent payment, wherein the wronged party receives the legal property gained through the unjust enrichment.
Judge Stout has 90 days to make his decision and recommended that the two parties consider a settlement. The next hearing will take place on May 6.