After a lengthy trial spanning five months in Los Angeles Superior Court, a jury awarded a $7 billion verdict to four brothers who alleged their fifth sibling violated an oral family partnership agreement.
The verdict, rendered on Monday, marks the culmination of a lawsuit that began in February 2003. The siblings, all from India, initially disputed ownership and management of more than 170 apartment buildings comprising 17,000 units, primarily situated in California’s San Fernando Valley.
Oral Partnership Agreement Upheld
While one of the brothers was formally listed as the owner of the properties, his siblings contested this arrangement, alleging the existence of an oral partnership agreement. Haresh's defense posited that he was the sole proprietor of the real estate portfolio, refuting claims of a partnership agreement. However, the jury sided with the opposing brothers, awarding $2.5 billion in monetary damages and over $4.5 billion in property interests.
The Message
The verdict provides a great example of how the law can protect those who don’t properly formalize a business relationship. Illinois law, for example, recognizes oral partnerships and joint ventures when the arrangements and actions of the parties indicate that a partnership or joint venture exists. If you have a partnership or joint venture, you should formalize it by properly documenting the business relationships because these types of oral partnership and joint venture cases are typically expensive. However, if you didn’t, you can still exercise your rights in an oral partnership or joint venture.