Judge Stephen I. Goorvitch, Case Number: 21STCP01605, Date: 2024-07-10 Tentative Ruling

Judge: Stephen I. Goorvitch, Case: 21STCP01605, Date: 2024-07-10 Tentative Ruling

Case Number: 21STCP01605 Hearing Date: July 10, 2024 Dept: 82

Kathy Smith, et al., Case No. 21STCP01605

v. Hearing Date: July 10, 2024

Location: Stanley Mosk Courthouse

City of Los Angeles Department Department: 82

of Cannabis Regulation, et al. Judge: Stephen I. Goorvitch

[Tentative] Order Denying Petition for Writ of Mandate

[Tentative] Order Issuing Judgment in Favor of Respondents

and Against Petitioner on the Complaint for Declaratory Relief

NOTICE

The court posted this tentative order in advance of the hearing. The court provides notice: If Petitioner does not appear at the hearing, she shall waive the right to be heard and shall submit to entry of this tentative order as the final order in this case.

INTRODUCTION

Petitioners Kathy Smith and CaliRX Wellness Company (collectively, “Petitioners”) filed this petition for writ of mandate under Code of Civil Procedure section 1094.5 on May 17, 2021. Petitioners challenge a decision by the City of Los Angeles, Department of Cannabis Regulation (the “DCR”) denying a commercial cannabis license. Petitioners also seek a declaratory judgment against the City of Los Angeles, Office of Finance. The petition for writ of mandate is denied. The court issues a judgment in favor of Respondents, and against Petitioner, on the complaint for declaratory relief.

LEGAL STANDARD

Under Code of Civil Procedure section 1094.5(b), the pertinent issues are whether the respondent has proceeded without jurisdiction; whether there was a fair trial; and whether there was a prejudicial abuse of discretion. An abuse of discretion is established if the agency has not proceeded in the manner required by law; the decision is not supported by the findings; or the findings are not supported by the evidence. (Code Civ. Proc. § 1094.5(b).

DISCUSSION

A. The Company Cannot Proceed as a Self-Represented Party

CaliRX Wellness Company (the “Company”) was represented by counsel when this case was filed on May 17, 2021. On June 14, 2022, the original counsel for the Company filed a “Substitution of Attorney—Civil” form designating a new attorney, Ms. Ronda Nadine Baldwin-Kennedy. The form was signed by Petitioner Kathy Smith in her capacity as “CEO of CaliRX Wellness Co.”

Ms. Baldwin-Kennedy and Ms. Smith both appeared at the trial setting conference on December 7, 2022. Ms. Baldwin-Kennedy represented that she would not be representing Petitioners. The minute order does not indicate that Ms. Smith objected. Therefore, the court (Beckloff, J.) relieved Ms. Baldwin-Kennedy as counsel. The Company has not retained new counsel. Because the Company cannot appear as a self-represented party, the court denies the writ and issues a judgment in favor of Respondents on the complaint for declaratory relief.

B. Petitioners have not satisfied their burden under section 1094.5

An agency is presumed to have regularly performed its official duties. (Evid. Code § 664.) The petitioner seeking administrative mandamus has the burden of proof and must cite to the administrative record to support its contentions. (See Bixby v. Pierno (1971) 4 Cal. 3d 130, 143; Steele v. Los Angeles County Civil Service Commission, (1958) 166 Cal. App. 2d 129, 137; see also Alford v. Pierno (1972) 27 Cal.App.3d 682, 691 [“[T]he burden of proof falls upon the party attacking the administrative decision to demonstrate wherein the proceedings were unfair, in excess of jurisdiction or showed prejudicial abuse of discretion.”].) “[A] trial court must afford a strong presumption of correctness concerning the administrative findings.” (See Fukuda v. City of Angels (1999) 20 Cal. 4th 805, 817.) A reviewing court “will not act as counsel for either party … and will not assume the task of initiating and prosecuting a search of the record for any purpose of discovering errors not pointed out in the briefs.” (Fox v. Erickson (1950) 99 Cal.App.2d 740, 742.)

Accordingly, a memorandum of points and authorities is required for a noticed mandamus motion. (See Code Civ. Proc. § 1094; Cal. Rules of Court, rule 3.1113(a).) The absence of a memorandum is an admission that the motion is not meritorious and may be denied. (Cal. Rules of Court, rule 3.1113(a).) “The memorandum must contain a statement of facts, a concise statement of the law, evidence and arguments relied on, and a discussion of the statutes, cases, and textbooks cited in support of the position advanced.” (Cal. Rules of Court, rule 3.1113(b); Quantum Cooking Concepts, Inc. v. LV Associates, Inc. (2011) 197 Cal.App.4th 927, 934 [Cal. Rules of Court, rule 3.1113 “rests on a policy-based allocation of resources, preventing the trial court from being cast as a tacit advocate for the moving party's theories”].)

“In a section 1094.5 proceeding, it is the responsibility of the petitioner to produce a sufficient record of the administrative proceedings; ‘... otherwise the presumption of regularity will prevail, since the burden falls on the petitioner attacking the administrative decision to demonstrate to the trial court where the administrative proceedings were unfair, were in excess of jurisdiction, or showed’ prejudicial abuse of discretion.” (Elizabeth D. v. Zolin (1993) 21 Cal.App.4th 347, 354; see also Eureka Citizens for Responsible Government v. City of Eureka (2007) 147 Cal.App.4th 357, 366 [“Failure to provide an adequate record concerning an issue challenged on appeal requires that the issue be resolved against the appellants.”])

In this case, Petitioners have not filed an opening brief or lodged the administrative record. Petitioners have had ample time to do so. The petition was filed on May 17, 2021, and Respondents filed an answer on August 12, 2021. The trial setting conference was continued multiple times due to Petitioners’ failures to appear. Finally, at a trial setting conference on December 6, 2023, the court (Beckloff, J.) set trial for the current date: July 10, 2024. Petitioners never filed an opening brief or lodged the administrative record. Accordingly, Petitioners have not met their burden of proof under section 1094.5 to show a prejudicial abuse of discretion, a denial of a fair trial, or other reversible error in the administrative decision. Therefore, the petition for writ of mandate is denied.

C. Petitioners are not Entitled to Declaratory Relief

To the extent Petitioners challenge findings made in the administrative decision, their sole remedy is in administrative mandate. (See Rezai v. City of Tustin (1994) 26 Cal.App.4th 443, 448 [“An action for declaratory relief is not appropriate to review the validity of an administrative decision.”].) Therefore, the court issues a judgment in favor of Respondents on the complaint for declaratory relief.

D. Petitioners did not Name Necessary and Indispensable Parties

The declaratory relief action seeks a declaratory judgment that “BTRC number 0002350758-0001-8 should be assigned to CALIPRX and that BTRC number 0002350758-0001-8 does not belong to St. Andrews Green.” Petitioners allege that Arnold Abramyan fraudulently filed a Statement of Information with the California Secretary of State alleging that he was the Chairman of St. Andrews Green. (Pet. ¶¶ 22-23.) Petitioners also seek a declaration that “a new BTRC number 3047961-0001-9 was properly issued to [Arnold] Abramyan and St. Andrews Green, a Cooperative Corporation (Entity No. C4131658).” (Pet. ¶ 68.) Accordingly, St. Andrews Green and Abramyan are necessary and indispensable parties in whose absence a judicial declaration cannot issue. (See Code Civ. Proc. § 389; Oppo. 17-19.) Therefore, the court issues a judgment in favor of Respondents on the complaint for declaratory relief.

E. Res Judicata/Collateral Estoppel

Petitioners’ claims concerning the Business Tax Registration Certificate (“BTRC”) have already been litigated. The court grants Respondents’ request for judicial notice, per Evidence Code section 452(d). The court (Sotelo, J.) held a bench trial in St. Andrews Pharmacy LLC v. St. Andrews Green, et al., Case Number BC701226. Petitioner Kathy Smith was a party and was represented at trial by Albert Robles, Esq. (See RJN Exh. B at 1.) The case involved a single issue: The true holder of a 2007 Business Tax Registration Certificate issued by the City of Los Angeles for a marijuana business. (See ibid.) Judge Sotelo found as follows:

The initial BTRC issued to the “St. Andrews Green” on March 17, 1008, [sic] was identified as BTRC 0002262794-0002-8 (hereinafter “BTRC 794”). (See Trial Ex. 177.) According to the testimony of Brent Santos, shortly thereafter, BTRC 794 was somehow merged or was blended into BTRC number 0002350758-0001-9 [sic] (hereinafter “BTRC 758”).

(Ibid.) There was a typographical error in Judge Sotelo’s statement of decision, as the judgment makes clear the true number of BTRC 758 was 0002350758-0001-8, which is the same license number in the instant case. (See RJN Exh. C; see also Oppo. at 12 fn. 3.) Judge Sotelo found that Petitioner Kathy Smith fraudulently diverted BTRC 758 and found that she had no lawful claim to the license:

It is clear to the Court that as of 2013 when Smith was working to fraudulently divert BTRC 758, Smith had no interest in the Original St. Andrew’s Green or BTRC 758. . . . Smith’s statements in her bankruptcy schedules are completely inconsistent with her claim of a continuing ownership in the Original St. Andrew Green, including BTRC 758, after her bankruptcy discharge in 2009. Even if Smith held any such interest before, after the sale to Hakamian, Smith is judicially estopped to claim any further interest in the Original St. Andrew’s Green, or BTRC 758, after her bankruptcy discharge in 2009. Accordingly, the Court finds that Smith held NO INTEREST in the Original St. Andrew’s Green, or BTRC 758, after 2009. . . . The evidence reflects that Smith has an established pattern and practice of attempting to sell the “paperwork” on dispensaries that she does not own. . . . The Court further concludes that Smith knew she had no rights to the BTRC 758 REGISTRATION, and that her action in diverting BTRC 758 violate [sic] the provisions of Penal Code section 496, which entitles SAP to treble damages from Smith.

(RJN Exh. B at 7-9, citations omitted, emphasis in original.) Petitioner Kathy Smith cannot relitigate the dispositive issue in Case Number BC701226 in the instant case. Therefore, the court denies the petition for writ of mandate and issues a judgment in favor of Respondents on the complaint for declaratory relief.

F. The City’s Decision was Supported by Substantial Evidence

Finally, based upon the administrative record lodged by the City, it appears that the City’s decision was supported by substantial evidence. Therefore, even if the court reached the merits, the petition for writ of mandate would be denied.

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CONCLUSION AND ORDER

Based upon the foregoing, the court orders as follows:

1. The petition for writ of mandate is denied.

2. The court issues a judgment in favor of Respondents, and against Petitioner, on the complaint for declaratory judgment.

3. This signed order shall constitute the judgment in this case.

4. Respondents’ counsel shall provide notice and file proof of service with the court.

IT IS SO ORDERED.

Dated: July 10, 2024 ___________________________

Stephen I. Goorvitch

Superior Court Judge