734-359-7018
Now Accepting New Clients!
Blog

CONTRACTS 12: The court held joint venture agreement was a valid oral agreement.

This action involves an alleged joint venture agreement between plaintiff, defendant, and non-party R with regard to commercial real property in Detroit.

Quitclaim Deed

Plaintiff learned from a friend that a large commercial property in Detroit was for sale for $20,000. According to plaintiff, he talked to defendant and R about purchasing the property and they discussed possible uses. Plaintiff considered leasing the property as a warehouse for his own business and they also discussed using it as a location for a medical-marijuana facility.

Plaintiff explained that the three of them decided to purchase the property and jointly operate or sell it for a profit. He contributed $5,000 toward the purchase price, and defendant and R each contributed $7,500. They were each to have a one third interest. Plaintiff testified that although he contributed less cash, he was to receive an equal share because he found the property. At the time of the purchase, the seller executed a quitclaim deed conveying the property to defendant only.

According to plaintiff, their plan was to have the property held by a new entity in which they would each have a one-third interest, but the entity had not been organized at the time the property was purchased, so the property was placed solely in defendant’s name, with the intent of transferring ownership to the new entity after it was formed. R later sold his interest to defendant, giving defendant a two-thirds interest.

Plaintiff explained that they wanted defendant involved in the project because he had experience rehabilitating and remodeling properties. Per plaintiff’s testimony, it was expected that defendant would initially assume the cost of securing and rehabilitating the property, but plaintiff acknowledged that he would remain liable for one-third of the expenses. Soon after the property was purchased, defendant performed work to secure, clean, and repair it. Defendant estimated that he spent about $30,000.

Operating Agreement

Plaintiff prepared documents, including a proposed operating agreement, for the formation of a new entity that would hold title to the property. However, defendant refused to sign the documents and the parties were unable to work out their differences.

Defendant denied that plaintiff ever acquired any interest in the property. According to defendant, plaintiff was only interested in a business that they might operate at the property, and it was contemplated that plaintiff would receive a one-third interest in that business entity, but not the property.

At the time of trial, defendant had located a buyer who was willing to purchase the property for $265,000.

Trial

The court found that the parties’ agreement included that defendant would have the deed in his name. The court did not award plaintiff an interest in the real property itself but ruled only that plaintiff had a one-third interest in the joint venture that pertained to the operation, development, or ultimate sale of the property.

The trial court found that the parties had formed an agreement for a joint venture to own the subject property and form a business. The court held that the joint venture agreement was valid as an oral agreement. The court found that upon a sale of the property, plaintiff was entitled to one-third of the net sales proceeds, less $30,000 in expenses already advanced by defendant.

Business Formation

Aldrich Legal Services lawyers serve clients throughout southeast Michigan who are interested in starting businesses. Our attorneys and staff can assist you with all legal work while you focus getting your business up and running.

Contact Aldrich Legal Services

Speak to a Pro: (734) 404-3000

Basic responsibilities of an executor

Originally posted on 01/11/2017 The emotional toils of dealing with the death of a loved one can be considerably difficult. Nevertheless, perseverance is paramount; especially if you are appointed to be an executor to one’s...

What you need to compliment your will

Originally posted on 02/08/2017 Making end-of-life plans usually end with a will, but they shouldn't. Some believe that simply having a will is enough. However, this post will briefly explain how having other estate planning...

The benefits of home health care providers

Originally posted on 03/22/2017 As we get older or suffer an injury, we need a little extra help. Home health care providers or caregivers can provide the assistance needed to handle your or your loved one's health and safety...

What to know about bail conditions

Originally posted on 03/06/2017 If you have been arrested and are being held on the suspicion that you have committed a particular crime, chances are that the only thing you are thinking about is getting out of jail as soon as possible and...

College students and estate planning

Originally posted on 12/16/2016 With college semesters starting up in Michigan, it may not be so easy to get college students to think responsibly. This time can be especially tough with the need of moving back to school and getting...

Three reasons to put a power of attorney in place

Originally posted on 11/08/2016 While no one wants to think of the unfortunate possibility of being incapacitated or of a time when we can't handle our own affairs, this circumstance is a real possibility. If something happens and this...

How to approach parents about estate planning

Originally posted on 12/09/2016 Family forms a strong foundation for many people's first and most intimate community. It is important to strengthen these first relationships so even uncommon questions become natural. For those...

PROBATE 44: Petition for Mental Health Treatment

Michigan’s Mental Health Code governs the civil admission and discharge procedures for a person with a mental illness. Specifically, MCL 330.1434 sets forth the procedure and content requirements for a petition for mental health treatment.

Should you get your criminal record expunged?

Originally posted on 04/12/2017 If you have been convicted of a crime, have served your sentence, and have followed all court recommendations, you should be able to put your past behind you and move on with life. Moving forward is critical...

Choosing the right executor for an estate

Originally posted on 05/28/2017 When people are thinking about planning their estate, they often think about trying to minimize the estate tax, keeping their will updated, and keeping items out of probate court; however, there is another...

Understanding how the Miranda warning works

Originally posted on 11/25/2016 Michigan residents who have seen television police shows or movies involving law enforcement have no doubt watched many dramatic scenes with officers quoting something to the effect of, "You have the...

Don't let a bad decision, unfair contract, or a messy divorce get in the way of a promising future!
Contact the experienced team at Aldrich Legal Services today to schedule your free initial
consultation
and secure reliable and trustworthy representation today!
Get the Help You Need From a Team You Can Truly Count On: (734) 404-3000
734-237-6482
734-366-4405