In joint real estate ventures, all partners are presumed to be equal unless agreed otherwise. All parties should have equal decision-making power, share equally in gains and losses, and possess equal interests in the subject property. Cooperation among the partners is essential to the success of the venture. Each person must enter into the transaction with an open mind towards other partner’s ideas and business tactics. However, when one person uses the other partners for his own personal gain, litigation usually follows. This was the unfortunate situation in the following case.
The defendant, Mr. Paul Barranco, wanted to purchase three apartment complexes in Baton Rouge, LA as investment properties. After failing to obtain financing on his own, he enlisted the help of Plaintiffs, Mr. Brignac and Mr. Godchaux. The three parties formed God-Brig-Bar, LLC. Plaintiffs sent their tax information to Mr. Barranco for the purposes of obtaining financing. Mr. Barranco advised Plaintiffs that he was selling another apartment complex located on Ned Drive in Baton Rouge and that the proceeds from that sale may be used as a down-payment on the three apartment complexes. Each Plaintiff gave a check to Mr. Barranco for their one-third deposit amount on the three complexes in the amount of $10,000.00 each.
Mr. Barranco deposited the funds and advised Plaintiffs that Palisades Properties expressed interest in acquiring the purchase agreements to the three properties. The sale of the three complexes to Palisades Properties would yield $1,132,000.00 in profits to be split three ways. Mr. Barranco drafted and signed a letter of intent in his name only to Palisades Properties, stating that he would sell it the three purchase agreements, one for each complex. Plaintiffs advised Mr. Barranco that they wanted the letter of intent changed to include all of their names. Mr. Barranco refused to do so and asserted that it might scare off the potential buyer since they were already nervous about such a large investment.