Case Number: BS172171 Hearing Date: June 18, 2019 Dept: 85

Casey Crow Casey Crow v. City of Long Beach, et al., BS 172171

Tentative decision on (1) motion to strike FAP: granted in part; (2) Elevated’s demurrer to FAP: sustained in part; (3) City’s demurrer to FAP: sustained

Defendants City of Long Beach (“City”) and Elevated Experience Inc. (“Elevated”), separately demur and Elevated separately moves to strike portions of the First Amended Petition (“FAP”) of Plaintiff Casey Crow Collective (“Casey Crow”).

The court has read and considered the moving papers, oppositions, and reply,[1] and renders the following tentative decision.

A. Statement of the Case

1. The Petition/Complaint

Petitioner/Plaintiff Casey Crow commenced this proceeding on January 18, 2018, asserting causes of action for (1) peremptory writ of mandate, (2) injunctive relief,[2] (3) declaratory relief, (4) intentional interference with prospective business advantage, and (5) violation of the unfair competition law (Bus. & Prof. Code §17200, et seq.). The operative pleading is the verified FAP filed on February 13, 2019, which alleges in pertinent part as follows.

Respondent/Defendant City of Long Beach (“City”) held a lottery (“Lottery”) on September 28, 2017 in which the winner was granted a license to operate a medical marijuana dispensary. Both Casey Crow and Elevated entered real property into the Lottery. Elevated’s real property located at 6150 Cherry Avenue, Long Beach, CA (“6150 Cherry”) was selected for licensure in the Lottery even though Elevated had asked the City for its removal from the Lottery.

The real property entered by Casey Crow was not selected but placed first on the wait list for a license. If 6150 Cherry is disqualified for licensure, then the property entered by Casey Crow will be eligible for licensure. Casey Crow appealed the City’s selection of the 6150 Cherry to the City Council, and its appeal was summarily rejected.

Crow Casey Crow requests a traditional writ of mandate directing the City to reverse its determination for licensing 6150 Cherry and proceed to Casey Crow as the applicant next in line for a license. Casey Crow contends that the City failed to comply with its legal ministerial duty set forth in Long Beach Municipal Code (“LBMC”) section 5.90.230 by granting a license to Elevated, which does not own or have possession over 6150 Cherry and because Elevated expressly asked that the 6150 Cherry be removed from Lottery selection.

2. Course of Proceedings

On January 3, 2019, the court granted Casey Crow’s motion to compel Elevated to attend a deposition and produce documents and to compel Elevated’s co-owner, Chris Francy (“Francy”), to appear for deposition and produce documents.

On January 29, 2019, Casey Crow moved for leave to file the FAP, which the court granted on February 5, 2019.

B. The Demurrers[3][4]

1. Applicable Law

Demurrers are permitted in administrative mandate proceedings. CCP §§1108, 1109. A demurrer tests the legal sufficiency of the pleading alone and will be sustained where the pleading is defective on its face.

Where pleadings are defective, a party may raise the defect by way of a demurrer or motion to strike or by motion for judgment on the pleadings. CCP §430.30(a); Coyne v. Krempels, (1950) 36 Cal.2d 257. The party against whom a complaint or cross-complaint has been filed may object by demurrer or answer to the pleading. CCP §430.10. A demurrer is timely filed within the 30-day period after service of the complaint. CCP § 430.40; Skrbina v. Fleming Companies, (1996) 45 Cal.App.4th 1353, 1364.

A demurrer may be asserted on any one or more of the following grounds: (a) The court has no jurisdiction of the subject of the cause of action alleged in the pleading; (b) The person who filed the pleading does not have legal capacity to sue; (c) There is another action pending between the same parties on the same cause of action; (d) There is a defect or misjoinder of parties; (e) The pleading does not state facts sufficient to constitute a cause of action; (f) The pleading is uncertain (“uncertain” includes ambiguous and unintelligible); (g) In an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct; (h) No certificate was filed as required by CCP §411.35 or (i) by §411.36. CCP §430.10. Accordingly, a demurrer tests the sufficiency of a pleading, and the grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters. CCP §430.30(a); Blank v. Kirwan, (1985) 39 Cal.3d 311, 318.

The face of the pleading includes attachments and incorporations by reference (Frantz v. Blackwell, (1987) 189 Cal.App.3d 91, 94); it does not include inadmissible hearsay. Day v. Sharp, (1975) 50 Cal.App.3d 904, 914.

The sole issue on demurrer for failure to state a cause of action is whether the facts pleaded, if true, would entitle the plaintiff to relief. Garcetti v. Superior Court, (1996) 49 Cal.App.4th 1533, 1547; Limandri v. Judkins, (1997) 52 Cal.App.4th 326, 339. The question of plaintiff’s ability to prove the allegations of the complaint or the possible difficulty in making such proof does not concern the reviewing court. Quelimane Co. v. Stewart Title Guaranty Co., (1998) 19 Cal.4th 26, 47. The ultimate facts alleged in the complaint must be deemed true, as well as all facts that may be implied or inferred from those expressly alleged. Marshall v. Gibson, Dunn & Crutcher, (1995) 37 Cal.App.4th 1397, 1403. Nevertheless, this rule does not apply to allegations expressing mere conclusions of law, or allegations contradicted by the exhibits to the complaint or by matters of which judicial notice may be taken. Vance v. Villa Park Mobilehome Estates, (1995) 36 Cal.App.4th 698, 709.

For all demurrers filed after January 1, 2016, the demurring party must meet and confer in person or by telephone with the party who filed the pleading for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer. CCP §430.31(a). As part of the meet and confer process, the demurring party must identify all of the specific causes of action that it believes are subject to demurrer and provide legal support for the claimed deficiencies. CCP §430.31(a)(1). The party who filed the pleading must in turn provide legal support for its position that the pleading is legally sufficient or, in the alternative, how the complaint, cross-complaint, or answer could be amended to cure any legal insufficiency. Id. The demurring party is responsible for filing and serving a declaration that the meet and confer requirement has been met. CCP §430.31(a)(3).

2. Elevated’s Demurrer

Elevated demurs to each of the FAP’s causes of actions on the grounds that (1) they do not state valid claims for relief and are impermissibly vague and uncertain, (2) are barred as a matter of law for failing to plead all of the necessary elements including a ministerial duty (as to the First and Second Causes of Action), the existence of an actual controversy (as to the Third Cause of Action), the existence of an economic relationship (as to the Fourth Cause of Action), and the existence of a wrongful act (as to the Fifth Cause of Action). Dem. at 5. Casey Crow opposes.

a. First Cause of Action for Mandamus

Elevated demurs to Casey Crow’s first cause of action for traditional mandamus on the grounds that the FAP fails to identify a ministerial duty and fails to identify any abuse of a discretion, Casey Crow lacks standing to pursue mandamus, and Casey Crow fails to show no adequate remedy at law. Dem. at 13-18.

i. Beneficial Interest

Elevated argues that Casey Crow lacks standing to pursue mandamus because it has failed to show that it is beneficially interested. Dem. at 17.

A petitioner may only obtain a writ of mandate if they have a special interest to be served or a particular right to be preserved or protected over and above the interest held in common with the public at large. The interest must be concrete and particularized and actual or imminent, not conjectural or hypothetical. SJJC Aviation Servs., LLC v. City of San Jose, (2017) 12 Cal.App.5th 1043, 1053.

Casey Crow’s claim is based on the City’s failure to remove Elevated from the Lottery process after Elevated withdrew its request to be removed. Elevated asserts that Casey Crow fails to allege a beneficial interest because the randomness of the Lottery means that Casey Crow cannot establish that the outcome would have favored Casey Crow if Elevated had been removed. Dem. at 17. Elevated also notes that it has not been issued a license, meaning that the issue is not ripe and the FAP fails to allege any legally protected interest that is concrete and particularized and actual or imminent. Dem. at 17.

Casey Crow asserts that, while Elevated’s argument might bear on the application withdrawal issue, it does not affect Casey Crow’s allegations of disqualification for submitted false Owner Authorization Forms and change of ownership. Casey Crow has demonstrated that it is “next in line” for licensure if Elevated is removed. Opp. at 15, 16-17. Elevated’s argument that the issue is not ripe is irrelevant that Elevated has not yet completed the licensure process. The City has already determined that Elevated qualifies for the license, so there is no issue of ripeness. Opp. at 17.

Casey Crow’s argument is persuasive. It has a beneficial interest in seeing Elevated disqualified so that it will be next in line. A lack of a beneficial interest on the application withdrawal issue does not undermine the entire cause of action.

ii. Adequate Remedy at Law

CCP section 1086 requires that a petitioner have no plain, speedy, or adequate remedy other than mandamus before pursuing a petition for mandamus.

Elevated alleges that the FAP improperly and incorrectly states that Casey Crow has no adequate remedy at law besides mandamus. Dem. at 18. Elevated notes that Casey Crow has two pending lawsuits against Elevated regarding the same conduct, and these pending lawsuits preclude Casey Crow from claiming it has no remedy other than mandamus. Dem. at 18; Reply at 4.

The short answer is that Casey Crow does not have any other lawsuit pending against the City for mandamus.

iii. Ministerial Duty/Abuse of Discretion

Elevated asserts that Casey Crow has not identified a ministerial duty that the City failed to perform, as is required in a mandamus action. Elevated Dem. at 13-14.

The duty sought to be compelled must usually be a ministerial duty. American Federation of State, County & Municipal Employees v. Metropolitan Water Dist., (2005) 126 Cal.App.4th 247, 261. A ministerial duty is an act that must be performed in a prescribed manner according to the mandate of legal authority without the exercise of discretion, judgment “or opinion concerning such act’s propriety or impropriety.” Kavanaugh v. West Sonoma Cnty. Union High School Dist., (2003) 29 Cal.4th 911, 916. “Where a statute or ordinance clearly defines the specific duties or course of conduct that a governing body must take, that course of conduct becomes mandatory and eliminates any element of discretion.” Rodriguez v. Solis, (1991) 1 Cal.App.4th 495, 504-05; see State Dept. of State Hospitals v. Super. Ct., (2015) 61 Cal.4th 339, 348-349.

Casey Crow contends that the FAP identifies three separate policies that the City violated: (1) requiring any application withdrawal or alteration in status to be requested in writing; (2) prohibiting any lessee applicant from obtaining a license if the City is advised the property owner does not consent to a medical marijuana business at the property; and (3) prohibiting any ownership changes of an applicant prior to license issuance. Opp. at 5-6, 14.

(a) Fraudulent Application

Casey Crow seeks to compel the City to disqualify 6250 Cherry on the basis that the Owner Authorization form signed and submitted with Elevated’s application for 6150 Cherry, submitted by the owner of 6150 Cherry, CSC Holdings LLC (“CSC”), was fraudulent and the City had a ministerial duty to discover as much under LBMC sections 5.90.230 and 5.90.210.

Elevated asserts that the LBMC provisions relied upon by Casey Crow do not identify a ministerial duty. Elevated Dem. at 14. Elevated notes that neither LBMC section 5.90.230 nor section 5.90.210 imposes a ministerial duty on the City. Dem. at 14-15. The former simply lists the items for an applicant to include in an application and the latter concerns violations by persons who are licensed or operating without a license. Opp. at 14. Elevated is not licensed; it remains an applicant. Id. Elevated argues that because LBMC section 5.90.230 and 5.90.210 do not impose any duty on the City, it cannot have abused its discretion by violating it. Dem. at 16.

Casey Crow argues that the law requires an agency to follow its own rules and regulations where they are valid and unambiguous. Gregory v. State Board of Control, (1999) 73 Cal.App.4th 584, 595; Galzinki v. Somers, (2016) 2 Cal.App.5th 1164, 1170-75. Opp. at 7. The FAP explicitly identifies the City’s pertinent policies and provides evidence that explain the policies and describe their sources. Elevated Dem. Opp. at 5-6. Casey Crow contends that the City’s policy is to never issue a license to an applicant leasing property where the property owner had advised that City that it prohibited operation of a medical marijuana business on the property. FAP ¶34. Opp. at 6. In violation of that policy, the City permitted Elevated to pursue a license even though CSC, the owner of 6150 Cherry, advised the City that it expressly prohibited Elevated from using the property for that purpose. Opp. at 6.

An agency’s ministerial duty is a duty stemming from a statute or ordinance that clearly defines the specific duties or course of conduct. Rodriguez v. Solis, supra, 1 Cal.App.4th 495 at 540-05. Whether a statute imposes a ministerial duty for which mandamus is available, or a mere obligation to perform a discretionary function, is a question of statutory interpretation. AIDS Healthcare Foundation v. Los Angeles County Dept. of Public Health, (2011) 197 Cal.App.4th 693, 701. An agency also can be compelled to follow its own rules where those rules are a matter of published procedure. Galzinski, supra, 2 Cal.App.5th at 1172 (written procedure for investigating complaints against employees published in brochure). But Casey Crow cites no case law that an agency has a ministerial duty based on an unwritten and unpublished policy or procedure. To conclude otherwise would undermine the requirement that an agency’s employees must have a clear and present ministerial duty without regard to their own judgment of the act’s propriety. See Kavanaugh v. West Sonoma County Union High School District, (2003) 29 Cal.4th 911, 916.

Casey Crow also argues that Elevated misinterprets and oversimplifies LBMC sections 5.90.230 and 5.90.210 in arguing that these provisions do not impose a ministerial duty on the City. Casey Crow argues that LBMC section 5.90.230 imposes a duty on the City to deny an application where the property owner falsely affirms its consent to the operation of a marijuana business. Opp. at 8. Casey Crow notes that both sections use the word “shall,” thereby invoking a mandatory duty.

According to Casey Crow, the two provisions create a clear discretionary duty for the City to confirm that the authorization forms are truthful. Opp. at 9. By requiring an applicant to sign a notarized Owner Authorization Form in which the property owner provided consent under penalty of perjury, the City had a discretionary duty to ensure the truthfulness of each statement on the form. Opp. at 10. The City violated this discretionary duty by failing to act when Elevated presented documents showing the falsity of its Owner Authorization Form – i.e., that CSC and Elevated lied about that consent to qualify 6150 Cherry for licensure. Elevated Dem. Opp. at 10-12.

Elevated does not dispute that LBMC section 5.90.230 mandates the submission of an authorization form, but argues that the provisions do not impose a duty on the City to investigate and confirm the validity of such forms. Elevated notes that Casey Crow does not dispute that the required form was submitted and no part of LBMC section 5.90.230 requires any further action on the City’s part. Elevated Reply at 3.

The court agrees. Elevated submitted an authorization form in compliance with LBMC section 5.90.230 and nothing in that provision requires the City to inquire into its validity. Rather, the City may rely on the truthfulness of the applicant.

Apart from ministerial duty, traditional mandamus relief is unavailable unless the petitioner can demonstrate an abuse of discretion. Mandamus will not lie to compel the exercise of a public agency’s discretion in a particular manner. American Federation of State, County and Municipal Employees v. Metropolitan Water District of Southern California, (2005) 126 Cal.App.4th 247, 261. Mandamus is only available to correct an abuse of discretion actually exercised. Manjares v. Newton, (1966) 64 Cal.2d 365, 370-71. An agency decision is an abuse of discretion if it is “arbitrary, capricious, entirely lacking in evidentiary support, unlawful, or procedurally unfair.” Kahn v. Los Angeles City Employees’ Retirement System, (2010) 187 Cal.App.4th 98, 106.

The FAP does not adequately allege an abuse of discretion by the City. That is, it does not allege that the City investigated Elevated’s authorization form and arbitrarily ignored the fact that Elevated lied about property owner consent. Rather, the FAP alleges that the City had documents in its files contradicting the owner authorization forms (FAP ¶30), and took the position that it would rely on the form under penalty of perjury and not investigate. FAP ¶32. As the city had no duty to investigate, this decision was not arbitrary and capricious.

(b) Withdrawal of 6150 Cherry

The FAP alleges that, while Elevated submitted an application for 6150 Cherry (and two other properties) in February 2017, Elevated withdrew the 6150 Cherry application six weeks before the Lottery. Elevated then informed the City that there was an error in the deletion of the 6150 Cherry application, which the City interpreted to mean that Elevated did not want 6150 removed. 6150 was selected as a Lottery winner on September 28, 2017. Casey Crow was not one of the first ten lottery balls selected, and the FAP alleges that it is next in line if 6150 is disqualified. The FAP asserts that the City failed to adhere to internal policies and procedures.

Elevated again argues that internal policies and procedures are an insufficient basis for a ministerial duty because such duties can only arise from statute or ordinance, not from an internal procedure under Kavanaugh, supra, 29 Cal.4th at 916. Dem. at 10-11, 15.

Casey Crow responds that Elevated is incorrect in asserting that a ministerial duty cannot arise from an internal procedure. Opp. at 7. The FAP alleges that the City had a policy requiring an applicant to submit a written request to withdraw or alter the status of its application and attaches supporting emails to prove it. FAP ¶¶ 12, 37. Opp. at 5.

As Elevated replies, a City policy requiring owners to submit application withdrawal requests in writing does not impose any duty on the City to act with respect to Elevated’s application. Reply at 1. A policy requiring that an application withdrawal must be made in writing has no bearing on the FAP’s mandamus claim. Elevated properly made its request in writing, but the City had no duty to accept the written application to withdraw.

(c) Change in Ownership

The FAP alleges that Elevated has changed ownership. Elevated’s application identified Christ Francy (“Francy”) and Aaron Herzberg (“Herzberg”) as 50/50 co-owners. The FAP alleges that, in early July 2018, Herzberg assigned his 50% interest to Francy. Herzberg denies that he did so, and rather in September 2018 he assigned his entire interest to Elliot Lewis, Casey Crow’s agent. Either way, the FAP alleges that either change in ownership violates LBMC section 5.90.150, which “permits changes of ownership of licensees under certain delineated conditions. See Dem. at 12-13.

Elevated points out that LBMC section 5.90.150 applies to licensees, not applicants. Elevated Dem. at 15. Casey Crow acknowledges this fact and argues that the clear intent of the drafters was to wholly prohibit applicants from changing ownership. Opp. at 13. The FAP alleges a City policy to that effect. FAP ¶¶ 43-44. Casey Crow asserts that the City initially did not allow applicants to change ownership, and then impermissibly violated the section by creating a form permitting changes applicant ownership. Opp. at 6, 14.

Casey Crow’s argument is spurious. LBMC section 5.90.150 does not apply to applicants, and Casey Crow acknowledges that the City’s current policy permits applicants to change ownership. The FAP fails to sufficiently allege that the City violated a ministerial duty with respect to a change in ownership.

iv. Conclusion

Casey Crow fails to show that the City failed to perform a ministerial duty or abused its discretion. The demurrer to the first cause of action for mandamus is sustained without leave to amend.

b. Second Cause of Action

Injunctive relief is not itself a cause of action and requires that a cause of action exist before such relief is granted. Injunctive relief cannot be issued if the underlying cause of action is not established. Shell Oil Co. v. Richter, (1942) 52 Cal.App.2d 164, 168; City of South Pasadena v. Department of Transportation, (1994) 29 Cal.App.4th 1280, 1293.

Elevated demurs to the FAP’s second cause of action for injunctive relief on the grounds that it is devoid of any specific detail and is thus impermissibly uncertain, ambiguous, and unintelligible. Dem. at 18. Specifically, the FAP fails to present details regarding the precise form of injunction sought, or the reasons why an injunction should be granted. Dem. at 18. Alternatively, Elevated argues that the claim for injunctive relief is derivative of the mandamus claim. Dem. at 18; Reply at 5.

Casey Crow does not address or dispute Elevated’s argument regarding its second cause of action, which is subsumed within the mandamus claim. Elevated’s demurrer to Casey Crow’s second cause of action is sustained without leave.

c. Third Cause of Action

A complaint for declaratory relief is sufficient if it sets forth facts showing the existence of an actual controversy relating to the legal rights and duties of the respective parties under a written instrument and requests that these rights and duties be adjudged by the court.” Wellenkamp v. Bank of America, (1978) 21 Cal.3d 943, 947. A court may refuse to grant such relief where its declaration or determination is not necessary or proper at the time under all the circumstances.” CCP §1061. For instance, the availability of another form of adequate relief justifies denial of declaratory relief; a declaratory relief action will not lie to determine issues raised in other causes of action before the court. C.J.L. Const., Inc. v. Universal Plumbing, (1993) 18 Cal.App.4th 376, 390. Moreover, declaratory relief is not appropriately addressed to past conduct. Roberts v. Los Angeles County Bar Assn., (2003) 105 Cal.App.4th 604, 618.

Elevated demurs to Casey Crow’s third cause of action for declaratory relief on the grounds that Casey Crow does not have standing to allege the claims on which declaratory relief claim is predicated. Dem. at 19. Elevated asserts that Casey Crow’s declaratory relief claim is predicated on past conduct: the City’s failure to remove Elevated from the lottery. Elevated argues that Casey Crow has not sufficiently alleged an actual controversy over whether it was entitled to remove another party’s Lottery application. Dem. at 19; Reply at 5. Elevated further contends that the matter is not ripe. Elevated has not yet been granted a license and if it is disqualified then the next applicant in line, Casey Crow allegedly will then be eligible. Dem. at 19.

Casey Crow correctly argues that its claim against Elevated is not based on past conduct, but rather a present controversy. The FAP seeks a judicial determination that Elevated should have been disqualified so that Casey Crow could step in as next in line under both change in ownership and fraudulent application theories. The City’s lack of a ministerial duty to investigate these issues does not undermine this controversy. Nor does Casey Crow’s inability to compel the City to disqualify Elevated and accept Casey Crow as next in line. Casey Crow may have a damages remedy based on a judicial determination that it should have been approved. As such, Casey Crow is not basing its claim on past conduct. See Opp. at 18.

Casey Crow further correctly argues that Elevated’s ripeness argument is irrelevant. Casey Crow’s claim is unrelated to whether Elevated will obtain the City’s approval for licensure, but rather challenges whether Elevated was even eligible for the process. As the City has already determined that Elevated was eligible, there is no ripeness issue. Opp. at 18.

The demurrer to the third cause of action is overruled.

3. Conclusion

Elevated’s demurrer is sustained without leave to amend for the mandamus and injunctive relief causes of action and is overruled as to the declaratory relief cause of action.[5]

3. City’s Demurrer

The City demurs to each of the FAP’s causes of actions on the grounds that they do not state facts sufficient to constitute a cause of action and are also impermissibly uncertain, ambiguous, and unintelligible. Dem. at 1.

a. First Cause of Action

The City demurs to the FAP’s first cause of action for mandamus on the ground that Casey Crow fails to show the City has a ministerial duty, traditional mandamus cannot be used to compel the exercise of discretion in a particular manner, and the FAP fails to establish that Casey Crow has a beneficial interest in mandamus relief. Dem. at 12-14.

The court has ruled on this same issue for Elevated’s demurrer, and the same ruling applies. The demurrer is sustained without leave to amend to the mandamus claim.

b. Second Cause of Action

The City demurs to the FAP’s second cause of action for injunctive relief on the grounds that Casey Crow fails to state a cause of action that supports such relief. Dem. at 14.

Again, injunctive relief is not itself a cause of action and requires that a cause of action exist before such relief is granted. Injunctive relief cannot be issued if the underlying cause of action is not established. Shell Oil Co. v. Richter, (1942) 52 Cal.App.2d 164, 168; City of South Pasadena v. Department of Transportation, (1994) 29 Cal.App.4th 1280, 1293.

As discussed ante, the FAP fails to assert with specificity a cause of action that justifies the issuance of injunctive relief. The City’s demurrer to the second cause of action is sustained without leave to amend.

c. Third Cause of Action

The City demurs to Casey Crow’s third cause of action for declaratory relief on the grounds that it is duplicative of the other cause of action in the FAP and fails to state a cause of action. The City additionally argues that declaratory relief is not appropriate addressed to past conduct. Dem. at 15.

Casey Crow asserts that the City’s argument against declaratory relief should fail for the same reasons that Elevated’s argument against the same should fail. Opp. at 18.

As discussed ante, Casey Crow is correct in asserting that it is not seeking relief for past conduct, and that its claims are ripe. However, the City also is correct in arguing that Casey Crow’s claims against the City is mostly duplicative of mandamus. The City has no ministerial duty to investigate Casey Crow’s change in ownership and fraudulent application theories. Nor does it have a duty to disqualify Elevated and approve Casey Crow as next in line. Casey Crow has no declaratory relief claim against the City.

The demurrer to the third cause of action against the City is sustained without leave.

3. Conclusion

The City’s demurrer is sustained without leave to amend as to all causes of action.

E. Motion to Strike

1. Applicable Law

Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part thereof. CCP §435(b)(1). The notice of motion to strike shall be given within the time allowed to plead, and if a demurrer is interposed, concurrently therewith, and shall be noticed for hearing and heard at the same time as the demurrer. CRC 3.1322(b). The notice of motion to strike a portion of a pleading shall quote in full the portions sought to be stricken except where the motion is to strike an entire paragraph, cause of action, count or defense. CRC 3.1322(a).

The grounds for a motion to strike shall appear on the face of the challenged pleading or form any matter of which the court is required to take judicial notice. CCP §437(a). Matter to be judicially noticed shall be specified in the notice of motion. CCP §437(b). The court then may strike out any irrelevant, false, or improper matter inserted in any pleading and strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. CCP §436. When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend. Perlman v. Municipal Court, (1979) 99 Cal. App. 3d 568, 575.

2. Statement of Facts

On February 5, 2019, counsel for Elevated, Vicki Nash (“Nash”), attended the hearing on Casey Crow’s ex parte Application For Order Shortening Time For Hearing On Motion For Leave To File Amended Petition. Nash Decl. ¶3. During the hearing, the court expressly stated that Casey Crow was to remove all argument from any amended petition and to plead exclusively ultimate alleged facts. Nash. Decl. ¶4.

The FAP does not comply with that instruction and a large portion of it consists of legal argument and conclusions. Nash contacted Casey Crow’s counsel regarding resolution of the FAP’s noncompliance issues, but the two were unable to agree on any resolution, leading to the filing of the instant motion. Nash Decl. ¶¶ 5-7, Ex. 1.

3. Analysis

Elevated moves to strike portions of the FAP as conclusory, argumentative, irrelevant, and/or improper. Elevated also moves to strike language identifying CSC Holdings, LLC (“CSC”) as a party, to strike the prayer for punitive damages for failure to state facts sufficient to support such recovery, and to strike the prayer for relief for attorney’s fees for failure to properly plead entitlement to the same.

a. Conclusory, Argumentative, or Irrelevant

Elevated moves to strike significant portions of the FAP on the grounds that Casey Crow’s arguments are irrelevant and improper under and in violation of a court order pursuant to CCP section 436. Mot. at 12.

CCP section 436 permits the court to strike out any irrelevant, false, or improper matter, as well as any part of any pleading not in conformity with an order of the court. Irrelevant matters are defined as those allegations that are not essential to the statement of a claim or that are neither pertinent nor supported by an otherwise sufficient claim. CCP §431.10(b).

Elevated asserts that on February 5, 2019 the court ordered Casey Crow to remove all argument from any amended petition and to plead only ultimate facts. Nash Decl. ¶3. Elevated argues that large portions of Casey Crow’s FAP have conclusory and argumentative language in violation of this instruction, which also is irrelevant or improper under CCP section 436. Mot. at 13, 17; Reply at 1.

Casey Crow asserts that the court made no such order, so Casey Crow therefore cannot be in violation of it. Opp. at 4. Casey Crow additionally argues that Elevated fails to provide any legal authority supporting its contention that content can be stricken for being conclusory or argumentative. Mot. Opp. at 5-7. Casey Crow also argues that all the items at issue are material to its mandamus claim and cannot be stricken pursuant to CCP section 431.10(a). Opp. at 5.

Whether or not the court ordered it, pleadings are supposed to plead ultimate facts, not argument. Conclusions from fact pled, however, are acceptable. The motion is granted as to the paragraphs and lines set forth in items 5-14, 17, and 19-20 of Elevated’s notice of motion.

b. Identification of CSC as a Party

Elevated moves to strike paragraph 7 of the FAP for identifying CSC as a party to the action. Elevated notes that Casey Crow dismissed CSC as a party with prejudice on September 5, 2018, making it improper to continue to identify CSC as a party. Elevated asserts the allegation is no longer relevant nor essential to the FAP’s claims. Mot. at 18.

Casey Crow does not dispute that CSC is no longer a party and does not oppose Elevated’s motion with respect to this portion of the FAP.

Elevated’s motion is granted with respect to portions identifying CSC as a party.

c. Prayer for Punitive Damages

Elevated moves to strike the FAP’s prayer for punitive damages for intentional interference with a business relationship, asserting that Casey Crow fails to show the requisite economic relationship or that Elevated’s actions were malicious. Mot. at 18-21.

This issue is subsumed within the fourth cause of action which will be addressed by the I/C court.

d. Prayer for Attorney’s Fees

Generally, each party in an action is to bear its own attorney’s fees in the absence of a special agreement, statutory provision, or exceptional circumstances. CCP §1021.

Elevated moves to strike the FAP’s prayer for attorney’s fees for failure to show any facts that demonstrate either a contractual or statutory right to such fees. Elevated argues that because Casey Crow fails to cite to any statute or law, it has not shown it is entitled to attorney’s fees and the relevant sections of the FAP should therefore be stricken. Mot. at 21.

Casey Crow states that it is currently unaware of any statutory basis for recovery of attorney’s fees on its mandamus claims and does not oppose that relevant portions be stricken. Mot. Opp. at 15-16.

Elevated’s motion is granted with respect to the prayer for attorney’s fees.

4. Conclusion

Elevated’s motion to strike is granted for the specified argumentative portions of the FAP, for the portions identifying CSC as a party, and for the prayer for attorney’s fees.

F. Conclusion

The demurrers are sustained without leave on the claims stated ante. The motion to strike also is granted in part. The remaining claims against Elevated (three, four, and five) are transferred to Department 1 for reassignment to an I/C court.

G. Supplemental Analysis of Casey Crow’s Offer of Proof[6]

At the hearing, the court gave Petitioner an opportunity to present evidence, as an offer of proof, that the City had an official policy set by a decision-maker creating a ministerial duty. Petitioner fails to present sufficient evidence to support an offer of proof that the City’s pertinent policies imposed a ministerial duty on it.

1. Withdrawal of the Application

At the demurrer hearing, the court held that the City’s policy requiring owners to submit application withdrawal requests in writing did not impose any duty on the City to act with respect to Elevated’s withdrawal application.

Casey Crow alleges that, while Elevated submitted an application for 6150 Cherry (and two other properties) in February 2017, Elevated wanted another nearby property (2119 Curry) controlled by its two owners (Francy and Herzberg) to win. Under the City’s buffer rules, the properties were too close together to both be selected. At Francy’s instruction, Chis McCarthy (“McCarthy”), then employed by an entity affiliated with Elevated, sent an email six weeks before the Lottery asking the City to pull 6150 Cherry from the Lottery. In response, the City stated that an “owner and principal” needed to provide a letter of withdrawal. Francy did so, stating that he wanted to withdraw his application for 6150 Cherry, but wanted to ensure that Elevated’s applications for 1718 Hayes and 4401 Los Coyotes were still active. Augustini Decl. Ex. A. The City then informed McCarthy that it would administratively close the account. Augustini Decl. Ex. B.

An administrative closure is the first step in the process of withdrawing an application. The City must also separately manually remove the property from the published list of Lottery applicants. The City never removed 6150 from the applicant list. Augustini Decl. Ex. C, p.60.

The reason why is that 24 hours after notification that the City would remove 6150 Cherry’s Lottery application, McCarthy sent City employee Emily Armstrong (“Armstrong”) an email stating that “it seems there was an error in the deletion of the 6150 Cherry application” because 1718 Hayes had received a point demotion. Augustini Decl. Ex. B. Segretti Decl. Ex. 2, p.63. Armstrong interpreted McCarthy’s email to mean that Elevated still wanted 1718 Hayes and 4401 Los Coyotes to be in the Lottery, but she did not interpret it to mean that 6150 Cherry should be deleted. Ex. 2, p.65.

Armstrong met with two other City employees and informed them that an applicant originally wanted to withdraw their application and now they want back in. She asked: How should we handle it? Ex. 2, p.66. Armstrong was asked if she had closed the 6150 Cherry account and she said she had not had time to do so. Ex. 2, p.66. Given that less than 24 hours had passed between Elevated’s withdrawal and the McCarthy email, she was instructed to keep the 6150 Cherry application open. Ex. 2, p.66.

Armstrong then received a phone call from McCarthy. Ex. 2, p.67. He was “freaking out” over 1718 Hayes in which Elevated was very invested. Ibid. Armstrong informed him that 1718 Hayes was a lost cause; it was out of the Lottery. Ibid. Based on his email and telephonic agreement, 6150 Cherry was placed back in the Lottery. Ibid. McCarthy said he would talk to the owners and get back to her if that was a problem. Ex. 2, pp. 67-69. He did not get back to her with any issues. Ibid. Although she required written authorization from an Elevated owner to withdraw, she did not require one to reinstate the application. Ex. 2, pp. 67-68.

Casey Crow asserts that the City’s had official policies regarding withdrawal or changes to licensee applications as follows: (1) only someone listed as an owner, or who possessed the official email address listed for the applicant, could (in writing) withdraw an application; and if such a request was made, the City would then close the account and withdraw the application; (2) no one other than an owner or listed authorized representative could make changes to an application; and (3) once an application was withdrawn, a new application signed by all owners was required to reinstate or revive the application. Pet. Supp. Br. at 3.

Casey Crow alleges that the City violated this policy because it did not comply with Francy’s withdrawal request for 6150 Cherry and instead did not withdraw the application based on the communications with McCarthy, whom the City admits was neither an owner nor authorized agent of Elevated. Pet. Supp. Br. at 3.

The evidence does not support an allegation that the City had a ministerial duty to process the 6150 Cherry withdrawal. Casey Crow’s assertion that the City had a policy that a new application signed by the owners is required to reinstate a withdrawn application is unsupported. The City only admitted that changes to an application were required to be made by an owner, business manager, or authorized representative. Augustini Ex. F, p.8. The City did not make any admission that it had any duty to act on a withdrawal application or that it could not exercise its discretion to permit reinstatement of a withdrawn application that had not yet been processed.

Similarly, Armstrong only confirmed that, to withdraw an application, the City required a statement from either the owner’s email address or a statement signed by the owner. At no point did she testify about a City duty to act on a withdrawal application or on the reinstatement of a withdrawn application.[7]

Casey Crow fails to provide sufficient evidence to support an offer of proof that the City had a ministerial duty to process Elevated’s 6150 withdrawal or not to permit reinstatement without a new application signed by the owner.

2. Owner Authorization Form

The court ruled at the demurrer hearing that the City had no ministerial duty under LBMC sections 5.90.230 and 5.90.210 to investigate whether the Owner Authorization Form signed by CSC and submitted by Elevated with its application for 6150 Cherry was fraudulent.

Casey Crow states that the undisputed facts show that CSC consistently stated that it would not permit Elevated to conduct any marijuana-related activity at the 6150 Cherry property so long as CSC owned it. Pet. Supp. Br. at 4. According to Casey Crow, the City’s policy is that it will never issue a license to an applicant when the owner of the property sought to be licensed had advised the City it did not consent to the operation of a medical marijuana business at the property. Pet. Supp. Br. at 5. Casey Crow restates its argument that the City violated this discretionary duty by failing to act when Casey Crow submitted evidence to the City that Elevated’s Owner Authorization Form was false. Ibid.

Casey Crow provides no evidence of a City policy requiring it to investigate a competitor’s allegations concerning an Owner Authorization Form. Resp. Supp. Br. at 3. The relevant interrogatory response from the City states: “[The City] has never nor will ever issue a medical marijuana dispensary license to an applicant who was leasing a property from a landowner who had advised [the City] that it prohibited the operation of a medical marijuana business on its property.” Augustini Decl. Ex. AA, p.19. The relevant statement from the City’s PMK, Ajay Kolluri (“Kolluri”), states: “[I]f [the applicant] no longer had the ability to operate a cannabis business from that location, they would not receive a license.” Augustini Decl. Ex. Y, p.80.

This evidence says nothing about a City policy to investigate applications – even license applications. The stated policy also has nothing to do with an application for a lottery in which the winning applicant does not necessarily receive a license. Assuming that an application is fraudulent, the City retains discretion not to issue a license to the winning lottery applicant or to revoke a license improvidently issued. See Resp. Supp. Br. at 3.

Casey Crow fails to provide sufficient evidence to support an offer of proof that the City had a ministerial duty under either LBMC 5.90.230 or a City policy to investigate to Elevated’s Ownership Authorization Form as fraudulent.

3. Change in Ownership

At the demurrer hearing, the court ruled that Casey Crow could not rely on LBMC section 5.90.150, which “permits changes of ownership of licensees” under certain delineated conditions. because the provision applies to licensees, not applicants. The court also noted that Casey Crow acknowledged that the City’s current policy permits applicants to change ownership.

Casey Crow alleges the change in ownership facts. Elevated’s application identified Christ Francy (“Francy”) and Aaron Herzberg (“Herzberg”) as 50/50 co-owners. Elevated claims that in early July 2018 Herzberg assigned his 50% interest to Francy. Herzberg denies that he did so, and he contends that in September 2018 he assigned his entire interest to Elliot Lewis, Casey Crow’s agent. Pet. Supp. Br. at 5.

Casey Crow argues that the clear intent of LBMC Chapter 5.90 is to prohibit applicants from changing ownership. Prior to the alleged assignment to Francy in 2018, the City’s official policy prohibited any change in ownership or the application would be denied. Pet. Supp. Br. at 6. After the alleged Francy assignment, the City modified its policy so that a change of ownership between existing owners is not disqualifying. The alleged assignment to Francy violated the former policy, and the assignment from Herzberg to third party Elliot Lewis still would violate the new City policy.

Armstrong testified that an applicant cannot change ownership during the application process; they have to be licensed to do so. Resp. Ex. 3, pp.40, 43; Ex. Y (Kollura Depo.) pp. 82, 123-24. Applicants have asked various questions about change of ownership, and Armstrong has informed them that they cannot change ownership during the application process. Augustini Ex. X. There is no process for an applicant to obtain permission to transfer or change ownership. Id., pp. 46-47. If an applicant were to try to submit a transfer of ownership application – which is only available to licensees — it would be rejected. Id., pp.44-45. The transfer could not take place, and the original application would be valid and would go forward. Id., p. 45.

The City has no process in place to deal with a change in ownership that occurs during the application process. Resp. Ex. 3, p.40. If the Herzberg to Francy transfer occurred, Armstrong would have to consult with the City Attorney, but without an application for permission to change ownership through the City’s process the City would not consider it a change of ownership. Id., p.46. Similarly, because the City does not have a process for applicants, she would not consider the Herzberg to Lewis assignment as a change in ownership. Id., pp.48-49. It did not “kick off any process” for her. Id., p. 49.

The evidence does not support Casey Crow’s position that the City had a policy that would impose a ministerial duty to deny Elevated’s application as a result of a change in ownership. Prior to its recent change of policy, the City did not permit a change in ownership for applicants, and an applicant had no ability to obtain City approval for an ownership transfer. If information submitted to the City showed that a transfer had occurred without City permission, it would not trigger any process because the City would not deem the change of ownership to be valid. Instead, the City would process the original application.

Thus, information submitted to the City about Elevated’s change in ownership would be disregarded and it would not affect Elevated’s placement in the Lottery. Its impact on Elevated’s ability to obtain a license now that it has won the Lottery remains to be determined. The City currently permits existing applicants to consolidate ownership shares among existing owners, meaning that the alleged in-house transfer of ownership between Francy and Herzberg would be expressly authorized. While the new policy would not permit the alleged transfer between Herzberg and Elliot, the parties’ dispute over which transfer occurred has not been resolved and any purported City duty is not ripe. Resp. Br. at 4.

Casey Crow fails to provide sufficient evidence to support as an offer of proof that the City had a ministerial duty under LBMC section 5.90.150 or a City policy regarding Elevated’s change of ownership.

4. Conclusion

Casey Crow’s offer of proof fails to present sufficient evidence that the City had a ministerial duty under policy set by a decision-maker.

Casey Crow asks that the demurrer not be sustained with prejudice on the change in ownership theory so that it can establish that the Herzberg/Lewis violated City policy, thereby disqualifying Elevated from licensure. Pet. Supp. Br. at 6. It is not clear how Casey Crow could prevail if the Herzberg/Lewis transaction is valid where Lewis is its agent. However, the parties have not briefed whether the City would retroactively apply its new policy to permit the Herzberg/Francy transfer. Therefore, one or both of these arguments eventually may be available to Casey Crow. The change in ownership theory will be dismissed without prejudice as not ripe. The demurrer is sustained without leave for the withdrawal of the application and Owner Authorization Form theories.

[1] The City failed to lodge with a courtesy copy of their demurrer in violation of the Presiding Judge’s First Amended General Order Re: Mandatory Electronic Filing. The City’s counsel is admonished to provide courtesy copies in all future filings.

The court has not read or considered any of the footnotes in the parties’ briefs, all of which violate the 12-point type requirement of CRC 2.104.

[2] Injunctive relief is a remedy, not a cause of action.

[3] Casey Crow requests judicial notice of: (1) Elevated’s demurrer to Casey Crow’s Second Amended Complaint in Case No. BC720859 (Ex. A), (2) Casey Crow’s opposition to Elevated’s Demurrer in Case No. BC720859 (Ex. B), (3) the final order denying Elevated’s demurrer in Case No. BC720859 (Ex. C). The requests are granted. Evid. Code §452(d).

[4] Elevated requests judicial notice of: (1) the court’s February 5, 2019 minute order regarding Casey Crow’s Ex Parte Application For Order Shortening Time For Hearing On Motion For Leave To File Amended Petition (Ex. 1), (2) The file-stamped copy of Casey Crow’s Request for Dismissal with prejudice of Defendant CSC Holdings, LLC, dated September 5, 2018 (Ex. 2), (3) The Second Amended Complaint in Casey Crow Casey Crow v. Elevated Experience, Inc., Chris Francy, CSC Holdings, LLC, LASC Case No. BC720859 (Ex. 3), (4) The Complaint in Elliot Lewis v. Elevated Experience, Inc., Chris Francy, LASC Case No. 19LBCV00020 (Ex. 4), (5) LBMC sections 5.90.150, 5.90.210, 5.90.230 and 5.90.270 (Ex. 5). There is no need to judicially notice documents from files in the instant action (Exs. 1, 2). The judge can always review those files. Elevated’s requests as to (3), (4), and (5) are granted. Evid. Code §452(b), (d).

The court overruled all of Casey Crow’s evidentiary objections to the Declaration of Vicki Nash.

[5] The court will not rule on Elevated’s demurrer to the fourth cause of action (intentional interference with prospective business advantage) and fifth cause of action (violation of Business & Professions Code section 17200), which will be heard by an I/C court. See Opp. at 4, n.1.

[6] Casey Crow failed to submit exhibit tabs for the 28 exhibits attached to the Declaration of Jeff Augustini, and its counsel is directed to provide exhibits for courtesy copies submitted in the future. Casey Crow’s motion to strike is denied.

[7] Respondents also correctly assert that Casey Crow lacks standing on this issue, a point acknowledged by both Casey Crow and the court in its demurrer ruling. Resp. Br. at 2. The randomness of the Lottery means that Casey Crow cannot establish that the outcome would have favored Casey Crow if Elevated had been removed.