Judge: Stephen P. Pfahler, Case: 22CHCV00021, Date: 2022-10-12 Tentative Ruling

Case Number: 22CHCV00021    Hearing Date: October 12, 2022    Dept: F49

Dept. F-49

Date: 10-12-22 a/f 1-25-23 (9-15-22 ex parte order)

Case #22CHCV00021

Trial Date: Not Set

RELIEVED AS COUNSEL

MOVING PARTY: Defendant, Matthew Edwards

RESPONDING PARTY: Plaintiffs, Gustavo Valdivia, et al.

RELIEF REQUESTED

Motion to Be Relieved as Counsel of Record for Defendant Matthew Edwards

SUMMARY OF ACTION

Plaintiff Gustavo Valdivia alleges a 49% ownership stake in Baltoro Investment Group, LLC with Defendant Matthew Edwards holding the other 51% interest. The parties executed the Baltaro Operating Agreement on August 30, 2019 for the purpose of operating a licensed, retail cannabis business in the City of Los Angeles. According to Valdivia, the City of Los Angeles requires a 51% ownership interest by a member of the city operated Social Equity Program (SEP).

The application process requires payment of fees. Plaintiff alleges Defendant executed an “authorization” form thereby allowing Plaintiff to represent the business entity through the application and permitting process. On October 6, 2020, Valdivia paid $9,075 fee.

On October 25, 2020, Valdivia alleges that Edwards expressed an interest in operating an “illicit-market enterprise.” Valdivia declined this offer and expressed interest in continuing with the licensing process.

On January 22, 2021, Valdivia executed a lease for retail operations. Valdivia alleges Edwards approved all proposed improvements/build outs/design elements for the premises. After a series of delays, Defendant submitted the licensing paperwork to the City of Los Angeles.

On October 18, 2021, Valdivia submitted an application for inspection. On November 17, 2021, Defendant allegedly cancelled said inspection, thereby preventing the issuance of a temporary license. On November 18, 2021, Edwards submitted an application to remove Valdivia as an owner of the premises, which Valdivia contends violates the terms of the operating agreement.

On January 11, 2022, Valdivia filed a verified complaint for Breach of Contract, Breach of Implied Covenant of Good Faith and Fair Dealing, Negligence, Intentional Infliction of Emotional Distress, and Declaratory Relief. On February 4, 2022, the court granted Plaintiff’s ex parte application for a temporary restraining order enjoining any removal of “Plaintiff as a minority shareholder in Baltoro Investments Group LLC,” and to otherwise maintain the “status quo” for the entity.

On May 12, 2022, the court denied the motion for preliminary injunction. On the same date, the court sustained the demurrer of Matthew Edwards to the complaint. The motion to strike was determined moot. On June 10, 2022, Glas Tavo, LLC[1] and Gustavo Valdivia filed an unverified first amended complaint for Breach of Contract, Breach of Implied Covenant of Good Faith and Fair Dealing, Negligence, Intentional Infliction of Emotional Distress, and Declaratory Relief.

RULING: Granted.

Counsel for defendant Matthew Edwards moves to be relieved as counsel of record, due to the failure of defendant to “engage” with “new counsel.”

The motion is granted.

Order not effective until service on the client.

Moving Counsel to give notice.