KHS Secures Overwhelming Victory Against All Odds
KHS’s Shahrokh Sheik prevailed in court trial on vitally important equitable claims for his client in connection with a breach of partnership lawsuit for the purchase of real property. In the case, KHS’s client purchased investment property and placed his partner’s name on the deed of title to help her qualify for a loan based on her promise to obtain a loan to pay for one-half; whereby, they would own and manage the investment as equal partners. The parties did not memorialize the partnership agreement in writing. Years later, the partner took possession of the property without consent, then refused to acknowledge the promise to pay for half and claimed full ownership through possession.
KHS’s client sued for breach of contract and fraud, as well as equitable claims for promissory estoppel and quiet title, among others. Defendant countersued for declaratory relief as to ownership of the property. After 18 months of litigation, the parties went to trial with the stacks against KHS’s client- namely, no written agreement, defendant’s name on the deed as joint tenant, defendant in possession for several years, and no mention of the promise to pay for half until 4.5 years after purchase of the property.
KHS succeeded in bifurcating the case to first try the equitable issues via court trial, and then the legal issues via jury trial. During the court trial, KHS succeeded in getting the countersuit dismissed. After the presentation of the evidence and closing arguments, the judge found there was an oral promise to pay for half of the property and ruled in favor of KHS’s client on all counts.
The court found that the claims fell within the exception to the statute of frauds requiring that agreements in real property be in writing, and that the claims were not barred by the statute of limitations. As such, the court ruled KHS’s client prevailed on its claims for Promissory Estoppel, Unjust Enrichment and Constructive Trust, and ordered defendant to relinquish possession and provide an Accounting of all funds unjustly retained.
More significant, the court ruled in favor of our client for its Quiet Title claim, thereby ordering the removal of defendant’s name from the deed. A claim for Quiet Title carries a higher burden of proof of clear and convincing evidence, and a finding of quiet title based on breach of an oral promise is rare in California case law.
Shahrokh and his team specialize in business and intellectual property litigation as well as outside corporate general counsel services for clients in a variety of industries including entertainment, cannabis, hospitality and more. For more information, contact Shahrokh Sheik at [email protected].