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Left Coast Ventures Inc v. Brightstar LLC

United States District Court, W.D. Washington, Seattle

October 24, 2019

LEFT COAST VENTURES, INC., a Delaware corporation, Plaintiff,
v.
BRIGHTSTAR, LLC, a limited liability company organized under the laws of Colorado, Defendant.

          ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

          RICARDO S. MARTINEZ CHIEF UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION[1]

         This matter is before the Court on Defendant's Motion to Dismiss Plaintiff's First Amended Complaint. Dkt. #13. Plaintiff Left Coast Ventures, Inc., opposes the Motion. Dkt. #16. Both parties have requested oral argument, but the Court finds oral argument unnecessary to its resolution of this matter.[2] The Court grants Defendant's Motion.

         II. BACKGROUND

         Plaintiff's declaratory judgment and breach of contract action arises from Defendant's ultimate decision to not sell Plaintiff its interest in Native Roots, [3] a “Colorado-based cannabis retail chain.” Dkt. #9 at ¶ 1.

         The relevant history begins when Defendant offered to buy out Josh Ginsberg's (“Mr. Ginsberg”) membership interest in the Native Roots corporate entities pursuant to a provision in the relevant operating agreements. Id. at ¶¶ 11-12. This in turn gave Mr. Ginsberg an opportunity to buy out Defendant's membership, but he lacked the capital to do so and sought the financial assistance of Privateer Holdings, Inc. (“Privateer”). Id. at ¶¶ 11-15. Privateer investigated the situation, ultimately learning that Defendant planned to sell Native Roots after he obtained full ownership. Id. at ¶ 16. Privateer entered into a “Letter of Intent” with Defendant to buy all Defendant's interest in Native Roots following Defendant's consolidation of ownership. Id. at ¶¶ 17-18, p.13-21 (Ex. A). Defendant's consolidation of ownership was delayed longer than expected. Id. at ¶¶ 21-24. Defendant and Privateer continued to discuss the possibility of an agreement superseding the Letter of Intent but did not ultimately agree. Id. at ¶¶ 22-30. Privateer assigned its rights under the Letter of Intent to Plaintiff. Id. at 28.

         Plaintiff, as the assignee of Privateer, initiated this action to enforce the terms of the Letter of Intent, which it maintains is an enforceable contract. Id. Plaintiff pursues a declaratory judgment, specific performance, and money damages. Id. Defendant seeks dismissal of the action on the basis that no enforceable contract exists. Dkt. #13.

         III. DISCUSSION

         A. Legal Standard

         In considering a Federal Rule of Procedure 12(b)(6) motion, the court accepts all facts alleged in the complaint as true and makes all inferences in the light most favorable to the non-moving party. Baker v. Riverside Cnty. Office of Educ., 584 F.3d 821, 824 (9th Cir. 2009) (citations omitted). However, the court is not required to accept as true a “legal conclusion couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679 (citations omitted).

         A complaint must contain sufficient facts “to state a claim to relief that is plausible on its face.” Id. at 678. This requirement is met when the plaintiff “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The complaint need not include detailed allegations, but it must have “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. . . . Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556, 557). Absent facial plausibility, a plaintiff's claims must be dismissed.

         B. Plaintiff's Complaint Should Be Dismissed

         The parties' disagreement is over the legal effect of the Letter of Intent. Defendant maintains that the Letter of Intent was merely an unenforceable agreement to agree. Dkt. #13 at 5-8. Plaintiff maintains that it was a completed option contract giving Plaintiff a perpetual right to “complete the purchase subject to its due diligence.” Dkt. #16 at 1, 8-10. The Court addresses the arguments in turn.

         The parties agree that under Washington law, [4] “agreements to agree” are unenforceable. Dkt. #13 at 5; Dkt. #16 at 4. An agreement to agree is “an agreement to do something which requires a further meeting of the minds of the parties and without which it would not be complete.” Keystone Land & Dev. Co. v. Xerox Corp., 152 Wash.2d 171, 175, 94 P.3d 945, 948 (2004) (quoting Sandeman v. Sayres, 50 Wash.2d 539, 541-42, 314 P.2d 428, 430 (1957)) (quotation marks omitted). “An agreement to negotiate a contract in the future is nothing more than negotiations.” Johnson v. Star Iron & Steel Co., 9 Wash.App. 202, 206, 511 P.2d 1370, 1373 (1973) (citing Sandeman). Such a proposal can “ripen into a contract” only if it is “definite enough so that when it is ...


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