Security National Guaranty Inc. v. Makhijani et al.

Even in the cutthroat, complex world of commercial real estate transactions, the deal engineered by Newport Beach businessman Mahender Makhijani stood out. According to allegations detailed at trial by lead plaintiff attorney Kyle A. Withers of Lubin Olson & Niewiadomski LLP, Makhijani and his Evariste Group LLC diverted a $37 million loan to pay off existing debts and defrauded partners in a hotel development of 40 acres of oceanfront property on the Monterey Peninsula.

Withers' task was to explain the convoluted maneuvers to an Orange County jury on behalf of his developer client, Security National Guaranty Inc., that had originally developed the Monterey property. Security National Guaranty Inc. v. Makhijani et al., 30-2023-01347034 (O.C. Super. Ct., filed Sept. 1, 2023).

Kyle A. Withers

The additional defendants included financiers Gerald Marcil and Andrew Stupin. Their lead defense attorney Scott J. Leipzig did not return a message seeking comment.

Following a two-month trial that began in August 2025, the jurors took two days to decide to award Withers' client $9.25 million in compensatory damages. The panel then needed only another two hours to decide on punitives totaling $37 million. A $37 million loan credit awarded by the jury brought the total verdict to $83.25 million.

Ian E. Browning

"The jurors heard two stories from us, one of embezzlement and another of breach of fiduciary duty," Withers said. "Mr. Makhijani secretly created a joint venture with a Chicago firm to take over the development and cut out our client. We were shocked when we learned of it during discovery."

Jurors were also stunned when Withers showed them a video deposition in which Makhijani was clearly happy to explain how he would maneuver to wipe out Security National's ownership interests. "You could hear gasps from the jury," Withers said. "I was thrilled."

When the defendants' counsel brought Makhijani into the courtroom and put him on the witness stand, Withers also made points on cross-examination. "At one point, the judge excused the jury so he could admonish counsel that Mr. Makhijani was being argumentative and not answering questions," Withers said.

Gabriel A. Peixoto

The jury found Makhijani and Evariste liable for breach of fiduciary duty, conspiracy to commit breach of fiduciary duty, and aiding and abetting breach of fiduciary duty.

The defendants included Nano Banc, which had made a large loan to fund the venture. In the end, the jury found that although bank shareholders and borrowers were involved, Nano itself was not liable. Ann Marie Mortimer of Hunton Andrews Kurth LLP, who defended Nano Banc, said, "The defense showed that the loan was vetted and approved through Nano Banc's ordinary underwriting, compliance and regulatory processes, and that its officers reasonably believed the proceeds would be used for legitimate joint-venture purposes."

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"We went to trial with a lean team--two attorneys most days, three only occasionally--against eight to ten lawyers from two major law firms on other side every day. This verdict highlights Lubin Olson's ability to compete at the highest levels through focus, preparation, and efficiency. Effective trial work isn't about overwhelming a courtroom with numbers; it's about clarity, credibility, and execution. Smart, efficient trial teams can and do deliver exceptional results for our clients."