Lanning v. Kramer

NANSEE LANNING et al., Plaintiffs and Appellants, v. ANDREW KRAMER et al., Defendants and Respondents.

ANDREW KRAMER, Plaintiff and Appellant, v. GEORGE LANNING et al., Defendants and Respondents.

B227686

B231249

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION SEVEN

Filed: May 29, 2013

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County

Super. Ct. No. SC099461)

(Los Angeles County

Super. Ct. No. SC107434)

APPEALS from judgments of the Superior Court of Los Angeles County, Norman P. Tarle, Judge. Affirmed in part; reversed in part.

Silverman Sclar Shin & Byrne; Silverman, Shin, Byrne & Gilchrest and Robert M. Gilchrest for Nansee Lanning, Justin Lanning, George Lanning and The George and Nansee Lanning Revocable Trust.

Ferguson Case Orr Paterson, Wendy C. Lascher and John A. Hribar for Andrew Kramer, Matthew Kramer, Rosalinda Kramer, West Hollywood Center for Compassionate Healing, Inc. doing business as The Sunset Shop, Inc.

INTRODUCTION

We consider together two appeals from judgments in two trial court cases which share a common factual background and involve some of the same parties. The first, No. B227686, is from a 2010 judgment in Lanning v. Kramer, Los Angeles County Superior Court, No. SC099461. The plaintiffs are George Lanning (George L.), his wife Nansee Lanning (Nansee L.), their son Justin Lanning (Justin L.), collectively the Lannings, and The George and Nansee Lanning Revocable Trust, for which the trustees were George L. and Nansee L. The defendants are Andrew Kramer (Andrew K.), his mother Rosalinda Kramer (Rosalinda K.), his son Matthew Kramer (Matthew K.), collectively the Kramers, and his business, West Hollywood Center for Compassionate Healing, Inc. (WHCCH), doing business as The Sunset Shop, Inc.

The second appeal, No. B231249, is from a 2010 judgment in Kramer v. Lanning, Los Angeles County Superior Court, No. SC107434. The plaintiff is Andrew K. The defendants are George L., Nansee L., The Lanning Family Trust, George L. and Nansee L. as trustees, and The George and Nansee Lanning Revocable Trust, George L. and Nansee L. as trustees.¹

FACTUAL BACKGROUND²

The Lanning Trust owned the commercial building and other real property commonly known as the Sunset Building, at 8919-8923½ West Sunset Boulevard in West Hollywood. The building has commercial and residential units. In September 2006, George L. and Nansee L., as Trustees of the Lanning Trust, entered into a written lease with Andrew K. for a portion of the Sunset Building, specifically 8921, 8923 and 8923½ West Sunset Boulevard (Premises)³ for a medical marijuana dispensary known as The Sunset Shop (Dispensary).

In January 2007, Andrew K. and the Trust entered into an escrow agreement for Andrew K. to purchase the Sunset Building from the Lanning Trust. Andrew K. paid the Trust a $1 million deposit to be returned if the purchase did not close by a specified date. The Lanning Trust gave Andrew K. two promissory notes, one for $600,000 and another for $400,000, to secure repayment of the deposit to Andrew K. The purchase did not close, and the parties cancelled the agreement.

In September 2007, George L. sent Andrew K. a letter offering to purchase the Dispensary for a purchase price of $1,450,000 plus $300,000 for inventory. In November or December, Andrew K. and George L. with Nansee L. executed a term sheet entitled Deal Points as of 11/7 (Deal Points Memo). The Deal Points Memo included variousdollar amounts, descriptive phrases and dates, but no sentences or paragraphs tying them together.

In late December 2007, George L., Nansee L. and Justin L. took over operation of the Dispensary. They received all revenues from its operation. Andrew K. remained involved, and the Lannings paid him a consulting fee. On July 15, 2008, the Lannings met with Andrew K. and informed him the consulting arrangement was terminated.

On July 17, 2008, before the Lannings arrived to open the Dispensary for business, Andrew K. had the locks on the Premises changed, took over the Premises and had his mother, Rosalinda K., his son, Matthew K., and security personnel come to the Premises. The Lannings were not allowed to enter the Premises; they were confronted and warned to leave by members of the Kramer group. Justin L. called law enforcement for assistance. When the sheriff's deputies arrived, Rosalinda K. told the deputies that the Kramers had the right to be on the Premises and showed them a copy of the Lease. The deputies declined to take further action on the basis that the dispute was a civil matter. Members of the Kramer group entered the residence of George L. and took property the Lannings used in operating the Dispensary.

The Lannings initiated litigation against the Kramers as more fully explained below. The Kramers subsequently initiated action against them. As a result of a judgment of possession entered in favor of the Lannings in one of the actions, on June 8, 2009, the Lannings regained possession of the Premises and the Kramers and related business entities vacated the Premises.

PROCEDURAL BACKGROUND

The Lannings filed their complaint in Lanning v. Kramer (Super. Ct. L.A. County, 2010, No. SC099461) on August 19, 2008 (Main Action). On September 2, 2008, George L., as trustee for the Lanning Trust, filed an unlawful detainer action againstAndrew K. (Lanning v. Kramer (Super. Ct. L.A. County, 2009, No. 08U02832)) (UD Action).

The Lannings filed their Second Amended Complaint (SAC) in the Main Action on September 4, 2009. Three causes of action related to the Kramers' conduct in retaking and retaining possession of the Premises from July 18, 2008 to June 8, 2009: forcible entry and forcible detainer of the Premises (second), trespass (third), and intentional infliction of emotional distress (fourth). Five of the causes of action arose from the alleged agreement by Andrew K. to sell the Dispensary and its inventory to the Lannings (Sale Agreement). The causes of action alleged Andrew K.'s breach of the agreement to sell the Dispensary to the Lannings (first) and, for the period of forcible detainer, "intentional interference with contractual relations with the Sunset Shop's customers" (fifth), "conversion of the Sunset shop and all its inventory and business equipment" (sixth), "an accounting of the Sunset Shop's drug revenue" (seventh), and "a constructive trust of the Lannings' estimate of the profits of the marijuana dispensary" (eighth). The Lannings also alleged, for the duration of the detainer period, breach of an implied-in-fact lease agreement against Andrew K. for rent and damage to the Premises (ninth), and unjust enrichment from Andrew K.'s Dispensary operation during the forcible detainer period (tenth).

The Lannings requested relief as follows: a sum in excess of $13,500,000 in general damages, including, inter alia, revenues the Lannings lost from the sale of medical marijuana as the result of Andrew K.'s forcible detainer and revenues Andrew K. collected from the sales during forcible detainer, punitive damages for the intentional torts, and attorney's fees and costs.

In the UD Action, the trial court issued a judgment of possession to George L., as trustee of the Lanning Trust, in April 2009. The judgment was enforced and, on June 8, 2009, the Lannings took possession of the Premises from the Kramers.

In January 2010, Andrew K. filed a motion for summary judgment in the Main Action seeking dismissal of the SAC. The trial court granted the motion for summary judgment as to the first, fifth, sixth, seventh, and eighth causes of action.⁴

The trial court found that the alleged Sale Agreement was void, in that the terms were too uncertain and vague to be enforceable. The court continued that, even if the agreement were sufficiently certain, it would be unenforceable, in that it would be unlawful under the federal Controlled Substances Act (21 U.S.C. §§ 812, 841(a)(1), 844). The court found that the "performance of this agreement to buy/sell a marijuana dispensary and $300,000 worth of inventory . . . would require the transfer of possession of marijuana, a controlled substance . . . with the intent to distribute that" marijuana. The court noted that marijuana is identified as a "controlled substance" subject to the Act. (21 U.S.C. §§ 802(6), (16) & 812(c), Schedule I, (c)(10).) The court stated that California's "Proposition 215 does not conflict with the Controlled Substances Act because in passing Proposition 215, California has merely exercised its state powers not to punish certain marijuana offenses under state law when a doctor has recommended its use to treat a medical condition." If the dispensary sale transaction were legal under California law, according to the court, that "does not change the fact [that] under federal law, any person's knowing and intentional acts 'to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance' [such as marijuana] are unlawful. 21 USC § 841(a)(1); see also 21 USC [§] 844(a)."

The Lannings then filed a third amended complaint (TAC) pursuant to the trial court's grant of leave to amend, to add the Lanning Trust as a named plaintiff and remove the former first, fifth, sixth, seventh and eighth causes of action. The Lannings' remaining causes of action were for forcible entry and detainer (first), trespass (second),intentional infliction of emotional distress (third), breach of implied in fact contract (lease agreement) (fourth) and unjust enrichment (fifth). In paragraph 74, the Lannings expanded the list of ways Andrew K. had been unjustly enriched to include (a) money they paid Andrew K. prior...