Jogani v. Jogani: A Massive Decision on Joint Ownership

underwood-jogani-v-jogani-joint-ownership-300x300Recently, a jury in the Los Angeles Superior Court awarded what may become one of the largest judgments in a real estate case that has ever been issued. Significantly, in addition to a damage award in the billions, the Court also found that the family members were also co-owners in 17,000 apartments across California. As a result, this consequential decision should be better understood for its potential implications for all co-ownership situations. 


This saga started in the late 1970s. The Jogani family, natives of Gujarat, India, built a fortune in the global diamond trade with offices in Europe, Africa, the Middle East, and North America. 

In 1979, at age 22, Shasikant Jogani (“Shashi”) moved to California, opened a branch of the gem business, and began investing in residential real estate. It was hugely successful. By 1989, he had acquired properties with a total value exceeding $375 million, with total equity of approximately $100 million. Then, things got rocky. 

In the late 1980s and early 1990s, a nationwide economic recession caused a “virtual depression” in the real estate industry. The equity in the real estate holdings fell from $100 million to a negative $50 million to $70 million. There were numerous lawsuits against him by tenants, creditors, employees, and an insurance company. Shashi faced defaults and foreclosures on these properties. The issue became worse after the 1994 Northridge Earthquake killed 16 people in one of his buildings. By 1998, many creditors obtained judgments against him. All of this lead Shashi to allegedly bring in his brothers as partners, Haresh Jogani, Rajesh Jogani, Chetan Jogani, and Shailesh Jogani in 1995. 

Under their agreement, Shashi transferred his interests in the troubled apartment properties for the partnership’s benefit, identify and acquire new properties for the partnership, and would manage the portfolio. Shashi would be paid minimal compensation and his brothers would have first call on all proceeds of the operation until their principal investment was repaid, plus a 12 percent per year return. Once the initial investment was repaid, then Shashi would become entitled to a “contingent promotional interest” consisting of half of all profits, proceeds, and the value of the partnership portfolio. In turn, the brothers agreed to provide capital to acquire the properties from Shashi, and to fund the acquisition of additional properties for the partnership’s portfolio. The real estate was nominally held by the Partnership Entities, such as J.K. Properties and H.K. Realty. 

For example, in 1996, Shashi was asked in a judgment debtor exam at the Los Angeles County Courthouse in the case known as Weyerhauser Financial Investments v. Jogani whether he was “currently a partner in any partnership.” He said he was a 1 percent limited partner in four or five limited partnerships, and identified each by name, but did not mention the Partnership with his brothers. When Shashi was asked “do you have any interest…in any companies that are owned directly or indirectly by Haresh Jogani,” Shashi answered, “absolutely not.” When asked, “do you have any interest in re-acquiring any of the properties that were purchased by any company that Mr. Haresh Jogani controls,” Shashi said, “no.” 

As another example, in May 1997, Shashi was asked in a judgment debtor exam at the Los Angeles County Courthouse in the case titled Cappucci v. Jogani to identify “any entity in which you’ve ever owned any interest.” He did not mention the partnership or the partnership entities. He specifically stated he did not have “any interest” in J.K. Properties or H.K. Realty. He testified that none of his family members owned any real property with him, nor did they own any real property with an entity in which he held an interest. When asked if he was party to “any kind” of contract or agreement, he answered, “No.” When asked “are you involved in any joint ventures,” he replied, “I wish, no.” 

Before the debtor exams, Shashi was advised by counsel that his interest in the Partnership had not “vested,” so “you don’t have a present ownership of anything.” Shashi said he believed that the questions were addressed to what he owned as of that time, and stated he did not believe the questions covered a future or contingent interest. But the attorney also said Shashi was a partner in the Partnership, a party to the partnership agreement, and had some control over when his partnership interest vested because he alone controlled the partnership investment strategy. (see Jogani v. Jogani (2006) 141 Cal.App.4th 148, 170.) 

Then, the family embarked on a buying spree that ultimately resulted in them owning about 17,000 apartment units. By 2002, the fair market value of the real estate portfolio exceeded $1 billion, with an equity of approximately $550 million, and generating approximately $2 million in net monthly income. By then, the brothers had been repaid about $70 million, representing their entire principal investment, plus the agreed interest on investment and about $4 million for taxes. At that point, Haresh (acting for the other brothers) removed Shashi from management and refused to honor his vested interest in the partnership or its properties. 

The Lawsuit

In 2003, Shashi filed this action against his brothers, the holding companies, and various other family members alleging causes of action for breach of contract, breach of fiduciary duty, fraud, conspiracy to commit fraud, dissolution of partnership, quantum meruit, unjust enrichment, and constructive trust. 

Later, however, Haresh allegedly “forcibly removed” his Shashi from managing the firm, refused to pay him, and argued that he could not prove any partnership without a written agreement. 

21 years late, after the 2003 lawsuit underwent 18 appeals, five judges in Los Angeles Superior Court, and a five month jury trial, the jury concluded that Shashi owns 50 percent of the real estate partnership, followed by 24 percent to Haresh, 10% to Rajesh, 9.5% to Shailesh and 6.5% to Chetan. The jury also awarded damages of $1.8 billion to Shashi. 


Assuming that the jury’s verdict holds, and is not itself the subject of further appeals that change the outcome, the family members would find themselves as co-owners in thousands of apartment units spread across California. 

In that situation, the law would expect the Parties—who just spent two decades vigorously suing each other and fighting amongst themselves—to amicably own and operate all of these real estate entities and their underlying properties. This does not appear to be a recipe for success. 

When the relationship breaks down in many real estate co-ownership situations, then the best solution may be a dissolution of the holding companies and a partition of the properties. Realistically, it appears that all would be better served by severing their interests from each other and going on their separate ways with their lives and fortunes. 

Underwood Law Firm Can Help

The Underwood Law Firm is California’s Premier Partition Lawyers and exists to provide the highest quality advice in the field of joint ownership disputes. If you find yourself in a difficult co-ownership situation, the Underwood Law Firm has experience partitioning multi-family, commercial, industrial, and residential real estate. If you would like to discuss your co-ownership situation, please do not hesitate to reach out to us to discuss further. 

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