United States District Court, D. Colorado
LUX STERLING HOLDINGS, LLC, a Nevada Limited Liability Company, Plaintiff,
ANTHONY MANERBINO, an individual, DAWNA MANERBINO, an individual, PHILIP WHELAN, an individual, and CNW, LLC, a Colorado limited liability company, Defendants. ANTHONY MANERBINO, an individual, and CNW, LLC, a Colorado Limited Liability Company, Third-Party Plaintiffs,
PHIL NEUMAN, an individual, and COLIN C. CONNER II, an individual, Third-Party Defendants.
Kristen L. Mix United States Magistrate Judge.
matter is before the Court on Third-Party Defendants Phil Neuman
(“Neuman”) and Colin C. Conner II's
(“Conner”) Motion to Dismiss Third Party
Complaint [#59] (the “Motion”). Third-Party
Plaintiffs Anthony Manerbino (“Manerbino”) and
CNW, LLC (“CNW”) filed a Response [#60] in
opposition to the Motion. No. Reply was filed. The Court has
reviewed the briefs, the entire case file, and the applicable
law, and is sufficiently advised in the premises. For the
reasons set forth below, the Motion [#59] is GRANTED
in part and DENIED in part.
initiated this action by filing a Complaint [#2] in the
District of Nevada on June 3, 2016. The lawsuit was
transferred to this Court on March 29, 2017. See
[#1]. On June 28, 2017, Plaintiff filed the operative Second
Amended Complaint [#31], which includes two remaining claims
against Defendants: (1) Fraud-Misrepresentations of Operating
Expenses, and (2) Fraud-Misrepresentation of Compliance with
MEDRegulations. Second Am. Compl.
[#31] at 13-17; see also Order [#49] (dismissing
Count III). These claims arise from Plaintiff's
allegations that Defendants committed fraud during contract
negotiations regarding a joint medical marijuana venture
between the parties. Id. at 1-2 ¶ 1.
Plaintiff alleges that “[i]n reasonable reliance on
fraudulent misrepresentations and omissions, [Plaintiff]
entered into a joint venture governed by unenforceable
contracts with [D]efendants and incurred damages in excess of
$500, 000.” Id. Plaintiff and Defendants
entered into the agreement on September 14, 2015.
Id. at 7 ¶ 22. In short, Plaintiff asserts that
it invested in Defendants' medical marijuana business
because of Defendants' representations that: (1) the
business was in compliance with all MED regulations,
including not using pesticides during the marijuana
cultivation process; and (2) the business had a monthly
operating cost of only $10, 500. Id. at 3-8.
Plaintiff asserts that it learned that both representations
were false less than six months after executing the
agreement. Id. at 8-10.
April 8, 2018, Defendants filed the Answer and Third-Party
Complaint of Defendants Anthony Manerbino, Dawna Manerbino,
Philip Whelan and CNW, LLC (“Third-Party
Complaint”) [#50]. Third-Party Plaintiffs, consisting
of only Mr. Manerbino and CNW, assert that, over the course
of several months in 2015, they negotiated with Mr. Neuman
and Mr. Conner regarding the purchase of CNW. Third-Party
Compl. [#50] at 27-28 ¶¶ 9-10, 11. Mr.
Manerbino and CNW allege that during those negotiations, Mr.
Neuman and Mr. Conner made numerous attractive business
representations. Id. at 27-28 ¶¶ 10-11.
Ultimately, the parties agreed that Luxembourg Canna
Holdings, LLC (“LuxCanna”), an entity that Mr.
Neuman and Mr. Conner would form and control, would operate
CNW's marijuana business for two years and then purchase
CNW for $1.5M. Id. at 27-28 ¶ 11. Based on the
representations made during negotiations, Mr. Manerbino and
CNW decided to execute the LuxCanna Agreement and a separate
Operating Agreement (collectively, the “LuxCanna
Documents”). Id. at 28 ¶¶ 12-14. Mr.
Neuman and Mr. Conner controlled CNW's business
operations from the time of the execution of the LuxCanna
Documents through March 3, 2016. Id. at 27 ¶ 8;
id. at 29 ¶ 19.
Mr. Manerbino and CNW assert that Mr. Neuman and Mr. Conner
knowingly made false representations during their business
negotiations in order to induce them into executing the
LuxCanna Documents. Id. at 30 ¶¶ 21-22.
Mr. Manerbino and CNW allege that during the time that Mr.
Neuman and Mr. Conner controlled the company's
operations, CNW incurred substantial losses due to missing
and unaccounted for product, damage to vendor, patient, and
employee relationships, failure to pay sales taxes, closing
of the dispensary for three months, sale of product at less
than market value, and damage to and theft of company
property. Id. at 30 ¶ 24.
Manerbino and CNW assert two claims against Mr. Neuman and
Mr. Conner: (1) fraudulent inducement of contract, and (2)
civil theft as defined in Colo. Rev. Stat. § 18-4-401.
Third-Party Compl. [#50] at 30 ¶¶ 21-24;
id. at 31 ¶ 31. Mr. Manerbino and CNW seek
compensatory damages, treble damages, and attorneys' fees
and costs as a result of Mr. Neuman and Mr. Conner's
actions. Id. at 31-32.
Standard of Review
purpose of a motion to dismiss pursuant to Rule 12(b)(6) is
to test “the sufficiency of the allegations within the
four corners of the complaint after taking those allegations
as true.” Mobley v. McCormick, 40 F.3d 337,
340 (10th Cir. 1994); Fed.R.Civ.P. 12(b)(6) (stating that a
complaint may be dismissed for “failure to state a
claim upon which relief can be granted”). “The
court's function on a Rule 12(b)(6) motion is not to
weigh potential evidence that the parties might present at
trial, but to assess whether the plaintiff's complaint
alone is legally sufficient to state a claim for which relief
may be granted.” Sutton v. Utah State Sch. for the
Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999)
(citation omitted). To withstand a motion to dismiss pursuant
to Rule 12(b)(6), “a complaint must contain enough
allegations of fact to state a claim for relief that is
plausible on its face.” Robbins v. Oklahoma,
519 F.3d 1242, 1247 (10th Cir. 2008) (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007));
see also Shero v. City of Grove, Okla., 510 F.3d
1196, 1200 (10th Cir. 2007) (“The complaint must plead
sufficient facts, taken as true, to provide ‘plausible
grounds' that discovery will reveal evidence to support
the plaintiff's allegations.” (quoting
Twombly, 550 U.S. at 570)).
claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). “A pleading that offers labels and conclusions
or a formulaic recitation of the elements of a cause of
action will not do. Nor does a complaint suffice if it
tenders naked assertion[s] devoid of further factual
enhancement.” Id. (brackets in original;
internal quotation marks omitted).
survive a motion to dismiss pursuant to Rule 12(b)(6), the
factual allegations in the complaint “must be enough to
raise a right to relief above the speculative level.”
Christy Sports, LLC v. Deer Valley Resort Co., 555
F.3d 1188, 1191 (10th Cir. 2009). “[W]here the
well-pleaded facts do not permit the court to infer more than
the mere possibility of misconduct, ” a factual
allegation has been stated, “but it has not show[n][ ]
that the pleader is entitled to relief, ” as required
by Fed.R.Civ.P. 8(a). Iqbal, 556 U.S. at 679 (second
brackets added; citation and internal quotation marks