Case Number: BC545502    Hearing Date: August 22, 2014    Dept: 58

JUDGE ROLF M. TREU
DEPARTMENT 58
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Hearing Date: Friday, August 22, 2014
Calendar No: 7
Case Name: Jukic v. Coultrock Enterprises, Inc., et al.
Case No.: BC545502
Motion: Demurrer
Moving Party: Defendant Coultrock Enterprises, Inc. dba LAX Compassionate Caregivers and Adam James Coulter
Opposing Party: Plaintiff Boris Tommy Jukic
Notice: OK

Tentative Ruling: Demurrer is sustained and overruled in part. Plaintiff is granted 15 days leave to amend.
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On 5/23/14, Plaintiff Boris Tommy Jukic filed this action against Defendants Coultrok Enterpises, Inc. dba LAX Compassionate Caregivers; Ethello Hall; Kevin Sperry; Glen Wang; and Adam James Coulter arising out of Plaintiff’s purchase of an interest in LAX which is a non-profit mutual benefit corporation operating a medical marijuana collective dispensary.

Factual Allegations of the Complaint –
LAX operates a medical marijuana collective dispensary and is required to be operated as a non-profit mutual benefit corporation. ¶¶ 1-2. The individual defendants participate in the management and operation of LAX. ¶ 2. On 10/14/13, Plaintiff entered into agreements to purchase an interest in LAX (¶ 6), paying approximately $180,000 (¶ 10). However, to operate as a medical marijuana collective dispensary, LAX cannot be operated for a profit and cannot have investors or shareholders. ¶ 7. The individual defendants are intentionally operating LAX as a profit making operation. ¶ 25.

Plaintiff asserts causes of action for (1) rescission, (2) fraud, (3) money had and received, (4) declaratory relief and receivership, (5) accounting, and (6) injunctive relief.

Demurrer –
LAX and Counter (“Moving Defendants’) demurs to the Complaint.

1. Lawful Contracts
Moving Defendants argue that the contracts are not unlawful, asserting that the attached contracts (Complaint Exs. A-C) do not support the operation of LAX for profit. This improperly attempts to present an evidentiary argument or otherwise dispute the factual allegations of the Complaint at the pleading stage as to whether LAX is operating for profit (see People v. Jackson (2012) 210 Cal.App.4th 525, 538-39). The demurrer is overruled on this ground.

2. Remedies
Moving Defendants correctly note that the following claims are not causes of action but are remedies: rescission (Nakash v. Superior Court (1987) 196 Cal.App.3d 59, 70), injunctive relied (McDowell v. Watson (1997) 59 Cal.App.4th 1155, 1159), and the appointment of a receiver (Gold v. Gold Realty Co. (2003) 114 Cal.App.4th 791, 807). The demurrer is sustained as to these causes of action with leave to amend to assert the remedies as appropriate.

3. Fraud
Moving Defendants argue that Plaintiff fails to allege facts with particularity to support fraud. See, e.g., Wald v. Truspeed Motorcars, LLC (2010) 184 Cal.App.4th 378, 393-94. The Court agrees. Plaintiff’s fraud claim is based on promises made in the attached agreements (Complaint ¶ 15, Exs. A-C) concerning paying Plaintiff a profit and LAX being a non-profit mutual benefit corporation (id. ¶ 16). However, no facts are alleged to support the circumstances that these promises were made: notably, none of these promises are stated in the attached agreements. The demurrer is sustained as to Plaintiff’s fraud claim.

4. Accounting
Moving Defendants argue that Plaintiff fails to allege facts that require an accounting of some balance owed to Plaintiff (see, e.g., Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179), asserting that Plaintiff’s has specifically alleged the amount he is alleged owed (see, e.g., Complaint ¶ 17). However, this mischaracterizes Plaintiff’s accounting claim which appears to be a derivative claim brought on behalf of LAX for money received by Defendants in violation of the Medical Marijuana Program Act, labor laws, and tax laws. Complaint ¶¶ 32-34. Therefore, Moving Defendants’ demurrer is overruled as to the accounting claim.

5. Declaratory Relief
Moving Defendants argue that the claim for declaratory relief is duplicative of other claims. The Court disagrees. The various remedies asserted by Plaintiff, to which Moving Defendants have demurred on the ground that they are not causes of action, could be appropriately asserted in the declaratory relief claim such that the declaratory relief claim is not duplicative of Plaintiff’s other claims. Therefore, the demurrer is overruled as to the declaratory relief claim.