This case was last updated from Los Angeles County Superior Courts on 07/02/2021 at 15:43:13 (UTC).

THE PACK COMPANY, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY VS SUBGALLAGHER INVESTMENT TRUST, WYOMING TRUST, ET AL.

Case Summary

On 01/23/2020 THE PACK COMPANY, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY filed a Property - Other Property Fraud lawsuit against SUBGALLAGHER INVESTMENT TRUST, WYOMING TRUST. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is GREGORY W. ALARCON. The case status is Disposed - Dismissed.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******3012

  • Filing Date:

    01/23/2020

  • Case Status:

    Disposed - Dismissed

  • Case Type:

    Property - Other Property Fraud

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

GREGORY W. ALARCON

 

Party Details

Plaintiff

THE PACK COMPANY LLC A CALIFORNIA LIMITED LIABILITY COMPANY

Defendants

ALPHA SURETY & INSURANCE BROKERAGE LLC

CASEY AN INDIVIDUAL MICHAEL A

SUBGALLAGHER INVESTMENT TRUST WYOMING TRUST

PATRICIA MOORE AS TRUSTEE OF SUBGALLAGHER INVESTMENT TRUST

SAKU CANNABIS INC. A CALIFORNIA CORPORATION

CONNORS NICOLE

Attorney/Law Firm Details

Plaintiff Attorneys

GREGORY KEITH

BRUM PATRICIA

Defendant Attorneys

HOLLAND ANNE L

HAYES GRIFFITH HENRI

THOMAS WENDY MAY

AHN JIHEE

 

Court Documents

Stipulation - No Order - STIPULATION - NO ORDER RE COURT RETAINING JURISDICTION AND DISMISS THE ACTION

6/29/2021: Stipulation - No Order - STIPULATION - NO ORDER RE COURT RETAINING JURISDICTION AND DISMISS THE ACTION

Notice of Change of Firm Name

1/25/2021: Notice of Change of Firm Name

Notice - NOTICE OF WITHDRAWAL OF OPPOSITION TO MOTION FOR LEAVE TO FILE CROSS-COMPLAINT

3/5/2021: Notice - NOTICE OF WITHDRAWAL OF OPPOSITION TO MOTION FOR LEAVE TO FILE CROSS-COMPLAINT

Request for Dismissal

3/12/2021: Request for Dismissal

Minute Order - MINUTE ORDER (HEARING ON DEMURRER - WITH MOTION TO STRIKE (CCP 430.10))

3/12/2021: Minute Order - MINUTE ORDER (HEARING ON DEMURRER - WITH MOTION TO STRIKE (CCP 430.10))

Notice of Rejection - Pleadings

4/5/2021: Notice of Rejection - Pleadings

Answer

4/8/2021: Answer

Order - ORDER RULING RE: MOTION FOR SUMMARY ADJUDICATION

11/24/2020: Order - ORDER RULING RE: MOTION FOR SUMMARY ADJUDICATION

Reply - REPLY RESPONSE TO PLAINTIFF THE PACK COMPANY, LLC'S SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION AND STATEMENT OF ADDITIONAL DISPUTED FACTS IN

10/2/2020: Reply - REPLY RESPONSE TO PLAINTIFF THE PACK COMPANY, LLC'S SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION AND STATEMENT OF ADDITIONAL DISPUTED FACTS IN

Demurrer - with Motion to Strike (CCP 430.10)

8/12/2020: Demurrer - with Motion to Strike (CCP 430.10)

Ex Parte Application - EX PARTE APPLICATION TO CONTINUE MSA

7/31/2020: Ex Parte Application - EX PARTE APPLICATION TO CONTINUE MSA

Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE)

7/23/2020: Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE)

Minute Order - MINUTE ORDER (COURT ORDER RE: COTNINUANCE)

6/8/2020: Minute Order - MINUTE ORDER (COURT ORDER RE: COTNINUANCE)

Minute Order - MINUTE ORDER (COURT ORDER RE: SETTING OF HEARING)

6/23/2020: Minute Order - MINUTE ORDER (COURT ORDER RE: SETTING OF HEARING)

Certificate of Mailing for - CERTIFICATE OF MAILING FOR (COURT ORDER RE: SETTING OF HEARING) OF 06/23/2020

6/23/2020: Certificate of Mailing for - CERTIFICATE OF MAILING FOR (COURT ORDER RE: SETTING OF HEARING) OF 06/23/2020

Case Management Statement

4/17/2020: Case Management Statement

Answer

4/3/2020: Answer

Declaration - DECLARATION DECLARATION OF MICHAEL A. CASEY

3/9/2020: Declaration - DECLARATION DECLARATION OF MICHAEL A. CASEY

67 More Documents Available

 

Docket Entries

  • 06/30/2021
  • Docketat 08:30 AM in Department 36, Gregory W. Alarcon, Presiding; Order to Show Cause Re: (staus of settlement) - Not Held - Vacated by Court

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  • 06/30/2021
  • Docketat 08:30 AM in Department 36, Gregory W. Alarcon, Presiding; Order to Show Cause Re: Dismissal (Settlement) - Not Held - Vacated by Court

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  • 06/29/2021
  • DocketStipulation - No Order (RE COURT RETAINING JURISDICTION AND DISMISS THE ACTION); Filed by The Pack Company, LLC, a California limited liability company (Plaintiff)

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  • 06/29/2021
  • DocketOrder (ON STIPULATION RE RETAINING JURISDICTION AND DISMISSING ACTION); Filed by The Pack Company, LLC, a California limited liability company (Plaintiff)

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  • 06/03/2021
  • Docketat 08:30 AM in Department 36, Gregory W. Alarcon, Presiding; Ex-Parte Proceedings (re to Retain Jurisdiction Per 664.6) - Not Held - Vacated by Court

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  • 05/28/2021
  • DocketEx Parte Application (Requesting the Court to Retain Jurisdiction Pursuant to Code of Civil Procedure Section 664.6); Filed by The Pack Company, LLC, a California limited liability company (Plaintiff)

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  • 05/18/2021
  • DocketNotice of Change of Address or Other Contact Information; Filed by Jihee Ahn (Attorney)

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  • 04/13/2021
  • Docketat 08:30 AM in Department 36, Gregory W. Alarcon, Presiding; Hearing on Motion to be Relieved as Counsel - Not Held - Taken Off Calendar by Party

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  • 04/08/2021
  • DocketAnswer; Filed by Saku Cannabis, Inc., a California corporation (Defendant); Nicole Connors (Defendant)

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  • 04/05/2021
  • DocketNotice of Rejection - Pleadings; Filed by Clerk

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86 More Docket Entries
  • 03/09/2020
  • DocketDeclaration (Declaration of Michael A. Casey); Filed by Michael A Casey, an individual (Defendant)

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  • 03/09/2020
  • DocketMotion to Quash Service of Summons; Filed by Michael A Casey, an individual (Defendant)

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  • 02/28/2020
  • DocketProof of Personal Service; Filed by The Pack Company, LLC, a California limited liability company (Plaintiff)

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  • 02/28/2020
  • DocketProof of Personal Service; Filed by The Pack Company, LLC, a California limited liability company (Plaintiff)

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  • 02/13/2020
  • DocketProof of Personal Service; Filed by The Pack Company, LLC, a California limited liability company (Plaintiff)

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  • 02/10/2020
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 01/23/2020
  • DocketComplaint; Filed by The Pack Company, LLC, a California limited liability company (Plaintiff)

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  • 01/23/2020
  • DocketCivil Case Cover Sheet; Filed by The Pack Company, LLC, a California limited liability company (Plaintiff)

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  • 01/23/2020
  • DocketNotice of Case Assignment - Unlimited Civil Case; Filed by Clerk

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  • 01/23/2020
  • DocketSummons (on Complaint); Filed by The Pack Company, LLC, a California limited liability company (Plaintiff)

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Tentative Rulings

Case Number: 20STCV03012    Hearing Date: March 12, 2021    Dept: 36

Superior Court of California

County of Los Angeles

Department 36

THE PACK COMPANY, LLC, a California limited liability company,

Plaintiff,

v.

SUBGALLAGHER INVESTMENT TRUST, a Wyoming trust, et al.,

Defendants.

Case No.: 20STCV03012

Hearing Date: 3/12/2021

[TENTATIVE] RULING RE: Defendant Alpha Surety & Insurance Brokerage, LLC’s Demurrer with Motion to Strike to Complaint

The demurrer is sustained with 20 days leave to amend.

The motion to strike is moot.

Request for Judicial Notice

Defendant requests judicial notice of the complaint in this action, and the declaration of specially appearing defendant Michael Case filed in support of his motion to quash service of summons and exhibits filed in support on March 9, 2020.

The first request is granted. (Evid. Code § 452(d).)

The second request is granted as to the existence of the document and denied as to the truth of its contents. (Evid. Code § 452(d).) The declaration filed by Mr. Casey is not a declaration filed on The Pack Company’s behalf that Alpha has shown is inconsistent with the allegations of the Complaint. “The court will take judicial notice of records such as admissions, answers to interrogatories, affidavits, and the like, when considering a demurrer, only where they contain statements of the plaintiff or his agent which are inconsistent with the allegations of the pleading before the court. The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of affidavits, declarations, depositions, and other such material which was filed on behalf of the adverse party and which purports to contradict the allegations and contentions of the plaintiff.” (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604–605.)

I. DEMURRER

 

 

Defendant Alpha Surety & Insurance Brokerage, LLC (“Alpha”) generally demurs to the third cause of action of Negligent Misrepresentation alleged against it on grounds that (1) the cause of action fails to allege the cause of action with particularity; (2) evidence subject to judicial notice provides that Alpha is not subject to liability; (3) Alpha did not have a duty to investigate Subgallagher Investment Trust and verify the asset verification letters or alleged lawsuits, and thus had reasonable grounds to rely on asset verification letters; and (4) the alleged misrepresentation is of future conduct, rather than a past or existing fact. (CCP § 430.10(e).)

The elements of negligent misrepresentation are (1) a misrepresentation of a past or existing material fact, (2) made without reasonable ground for believing it to be true, (3) made with the intent to induce another's reliance on the fact misrepresented, (4) ignorance of the truth and justifiable reliance on the misrepresentation, and (5) resulting damage. (Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th 1145, 1154.) “The tort of negligent misrepresentation is similar to fraud, except that it does not require scienter or an intent to defraud.” (Tenet Healthsystem Desert, Inc. v. Blue Cross of California (2016) 245 Cal.App.4th 821, 845.) Negligent misrepresentation must be pled with specificity. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.)

Plaintiff makes the following allegations against Alpha.

Plaintiff and Saku Cannabis, Inc. (“Saku”) on April 2, 2019, entered into a Membership Interest Purchase Agreement (“Purchase Agreement”), by which Plaintiff sold Saku its interests in a company holding several licenses for commercial cannabis activity in California. (Compl. ¶ 12.) On May 21, 2019, Saku issued Plaintiff a Promissory Note under which it agreed to make monthly payments. (Id. ¶ 16.) Plaintiff agreed to enter into the Purchase Agreement because Subgallagher Investment Trust (“SGIT”) issued a surety bond in Plaintiff’s favor guaranteeing Saku’s performance. (Id. ¶¶ 12, 17.)

Saku reached out to Alpha to purchase the surety bond, and Alpha reached out to NGIA, Inc. to identify a surety company. (Id. ¶¶ 10, 17.) Based on NGIA’s referral and endorsement, Alpha recommended SGIT as a guarantor. (Id. ¶ 17.)

On March 28, 2019, Plaintiff “requested and obtained assurances from Alpha Surety regarding SGIT’s financial condition.” (Id. ¶ 18.) Alpha knew Plaintiff relied on Alpha’s experience and knowledge to ensure the SGIT was solvent and capable of performing its obligations. (Id.) On March 28, 2019, Alpha provided Plaintiff with an April 4, 2018 asset verification letter signed by Defendant Casey, which stated that SGIT had over $350 million in assets and less than $30 million in bond guarantees. (Id. ¶ 19.)

On March 29, 2019, Plaintiff contacted Alpha with concerns about SGIT’s ability to perform and requested Alpha to obtain further information confirming SGIT’s solvency. (Id. ¶ 20.) Alpha “assured Pack Co.’s of SGIT’s ability to perform” by obtaining an updated asset verification letter from SGIT (“2019 Asset Verification Letter”) which stated SGIT had over $350 million in assets under his office’s sole control and less than $15 million in bond guarantees; and providing Plaintiff with explanation for Defendant Casey’s disciplinary action. (Id. ¶ 21, Exh. B.)

Plaintiff relied on Alpha’s experience in the industry and recommendation of SGIT and accepted SGIT as guarantor. (Id. ¶ 22.)

The cause of action alleges that Alpha on March 28, 2019 “represented to Pack Co. that SGIT was capable of acting as the guarantor of a bond in the amount of $250,000.00.” (Compl. ¶ 49.) Alpha “procured an asset verification letter from SGIT and forwarded the same to Pack Co. with the intent to induct Pack Co. to accept SGIT as a bond guarantor.” (Id.) Alpha’s representation regarding SGIT’s ability to act as a guarantor was not true. (Id. ¶ 50.) Plaintiff alleges Alpha did not conduct any investigation as to SGIT’s financial condition, in particular into its assets or two lawsuits filed in 2018 against SGIT. (Id. ¶ 51.) Plaintiff alleges Alpha intended Plaintiff to rely on Alpha’s representations so that Alpha could collect its fees. (Id. ¶ 52.)

The foregoing alleges that Alpha made a representation to Plaintiff on the facts of SGIT’s financial condition in the 2018 and 2019 asset verification letters, which represented the then-existing facts of SGIT’s assets and bond guarantees. The court thus does not find that the representations are non-actionable representations of future events. (See Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.) Alpha has not shown that the provision of a letter which allegedly is authored by another must be an “implied” assertion. Next, the asset verification letters themselves are not before the court and Alpha’s contest to their contents is extrinsic evidence to the court’s review on the face of the complaint and requests for judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.)

However, Plaintiff has not satisfied the heightened pleading standard to allege “the names of the persons who made the alleged fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (Tarmann v. State Farm Mutual Automobile Insurance Co. (1991) 2 Cal.App.4th 153, 157.) Plaintiff is required to allege whether the foregoing representations by provision of asset verification letters are the sole representations alleged, as well as the further requirements against the corporate defendants of the names who made the representations and authority to speak on behalf of the corporation.

Last, Alpha alleges that it had no duty to investigate SGIT’s assets and lawsuit. However, Alpha has not shown that the foregoing provides a complete defense to the negligent misrepresentation cause of action as a matter of law. Alpha’s reliance is placed first upon inapposite case law discussing a cause of action for negligent placement of insurance, not negligent misrepresentation. (See generally Wilson v. All Service Ins. Corp. (1979) 91 Cal.App.3d 793, 794.) Reliance is also placed on caselaw discussing the duties of a seller of real property to disclose matters to a buyer, finding no duty to investigate on the seller’s behalf under Civil Code, section 1102.5, which relates specifically to statutory disclosure requirements for real property, as well as common law duties to investigate. (See Shapiro v. Sutherland (1998) 64 Cal.App.4th 1534, 1546-48.) The court validated the grant of summary judgment on grounds that the seller’s belief about its representation was both honest and reasonable, which facts are beyond this court’s scope of review on demurrer.

Based on the foregoing, demurrer is sustained to the third cause of action, with 20 days leave to amend.

II. MOTION TO STRIKE

Alpha moves to strike the prayer for punitive damages in the prayer for relief (Compl. 12:15). As the court has sustained demurrer to each cause of action alleged against Alpha, the motion to strike punitive damages based on those sole cause of action alleged against it is moot.

Dated: ____________________________

Gregory Alarcon

Superior Court Judge

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