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Hanson v. Hanson

United States District Court, S.D. California

February 14, 2014

THEO HANSON, Plaintiff,
MARK HANSON, et al., Defendants.


MICHAEL M. ANELLO, District Judge.

Plaintiff Theo Hanson has filed a pro se complaint against Defendant Mark Hanson, [1] Heartland Coalition, Inc., Alan Cassell, Chris Kleber, James Gormican, and Rock West Composites, Inc. (collectively "Defendants"), alleging tortious fraud and deceit, violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1962 et. seq, and conversion. Concurrently, Plaintiff moves for a temporary restraining order ("TRO"). For the reasons stated below, the Court DENIES Plaintiff's motion.


Plaintiff, an individual, is a citizen of Chicago, Illinois.

Defendant Mark Hanson is an individual and resident of San Diego, California. He also serves as the director of Defendant Heartland Coalition, Inc. ("Heartland Coalition") and Defendant United Green Industries ("UGI"). Heartland is a California non-profit corporation with its principal place of business in the Southern District of California. UGI is a California for-profit corporation with its principal place of business in the Southern District of California.

Defendants Alan Cassell and James P. Gormican are both individuals. They also serves as directors and/or officers of Heartland Coalition and UGI. Defendant Chris Kleber is an individual.

Defendant Rock West Companies, Inc. ("Rock West"), is a California corporation with its principal place of business in the Southern District of California. Defendant Gormican is the principal of Rock West.

Plaintiff contends that he owns 25% of stock in UGI. Defendants Mark Hanson and Alan Cassell also own 25% each of stock in UGI. Plaintiff also owns various items of personal property valued at more than $15, 000. Plaintiff maintains that his personal property is located in the UGI offices.

On January 16, 2014, Defendant Hanson proposed an attempted asset sale of UGI to Rock West for $300, 000. Plaintiff contends this sale was not reasonable because UGI's asserts were valued at $500, 000. Plaintiff alleges that the remaining directors and shareholders immediately rejected the proposed sale. Additionally, Plaintiff submitted a written letter of objection and protest in response to the proposed sale, which he sent to the remaining directors and proposed buyer.

On January 24, 2014, Defendant Hanson unilaterally sold UGI asserts to another buyer, Defendants Cassell and Kleber, for the same price. Plaintiff contends that the three Defendants knew that Defendant Hanson did not have the authority to do so. On January 27, 2014, Defendant Hanson resold the same property, UGI, to Defendants Gormican and Rock West under the same terms that had previously been rejected. Plaintiff contends that Defendant Gormican knew that Defendant Hanson lacked the authority to do so.

Plaintiff contends that Defendant Hanson notified him of the sale and then locked UGI's offices, stole Plaintiff's personal property, and threatened to steal Plaintiff's remaining property if Plaintiff was not out of the building before the new buyer moves in on Sunday, February 16, 2014. Plaintiff contends that he was never presented with any valid notice ordering him to vacate UGI's premises.

Plaintiff now moves for a TRO compelling Defendants to return Plaintiff's personal property and to cease and enjoin the transfer of corporate assets to third parties. Plaintiff contends that he will suffer irreparable harm absent a TRO because Defendants have threatened to steal and destroy more of Plaintiff's property on Sunday, February 16, 2014 if Plaintiff does not move out of his business location.


A. Temporary Restraining Order

The standard for a TRO is the same as for a preliminary injunction. See Stuhlbarg Int'l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 839 n. 7 (9th Cir. 2001). "A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest." Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008)

In the Ninth Circuit, courts may apply a sliding scale approach in which "elements of the preliminary injunction test are balanced, so that a stronger showing of one element may offset a weaker showing of another." Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011). For example, "a stronger showing of irreparable harm to plaintiff might offset a lesser showing of likelihood of success on the merits." Id. Additionally, a "preliminary injunction is appropriate when a plaintiff demonstrates... that serious questions going to the merits were raised and the balance of hardships tips sharply in the plaintiff's favor." Id. at 1134-35 (citing Lands Council v. McNair, 537 F.3d 981, 987 (9th Cir. 2008)).

Importantly, courts may deny a preliminary injunction solely on ground that the plaintiff failed to raise even "serious questions" as to the merits. See Guzman v. Shewry, 552 F.3d 941, 948 (9th Cir. 2009).

B. Standards Applicable to Pro Se Litigants

Generally, courts must broadly construe pleadings filed by pro se litigants, affording pro se plaintiffs any benefit of the doubt. See Erickson v. Pardus, 551 U.S. 89, 94 (2007); Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002).


A. Likelihood of Success on the Merits [3]

In his complaint, Plaintiff brings three causes of action for (1) fraud and deceit; (2) RICO violations; and (3) conversion. Plaintiff does not indicate which cause of action is the basis for his motion for a TRO. As such, the Court considers the likelihood of success on the merits for each cause of action in turn.

1. Fraud or Deceit

Under California law, a claim for fraud has five elements: (1) misrepresentation (a false representation, concealment, or nondisclosure), (2) knowledge of the falsity of the misrepresentation, (3) intent to induce reliance on the misrepresentation, (4) justifiable reliance, and (5) resulting damage. Small v. Fritz Cos., Inc., 30 Cal.4th 167, 132 Cal.Rptr.2d 490, 65 P.3d 1255, 1258 (Cal. 2003). Thus, to make a showing of likelihood of success on the merits, Plaintiff must satisfy each of the five elements.

Here, even relying on Plaintiff's allegations in the complaint alone and construing them liberally as the Court must for pro se plaintiffs, Plaintiff has not shown a likelihood of success on the merits of his claim for fraud. For example, Plaintiff has not demonstrated the first element-a misrepresentation. Although Plaintiff states generally that "defendants made several misrepresentation to the plaintiff with regard to important facts, " and claims that these representations were false, he does not indicate what the representations were, what important facts they related to, or how they were false. See Compl. ¶ 25. These allegations are insufficient to show that Plaintiff will likely succeed on the merits of his claim for fraud.


A RICO claim requires the plaintiff to demonstrate: (1) conduct (2) of an enterprise (3) through a pattern, i.e., at least two acts that are sufficiently related, (4) of racketeering activity." See Miller v. Glen & Helen Aircraft, Inc., 777 F.2d 496, 498 (9th Cir. 1985) (citing Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479 (1985)). To demonstrate the existence of an enterprise, the plaintiff must allege an entity "associated together for a common purpose of engaging in a course of conduct." Croteau v. Nat'l Better Living Ass'n, Inc., 290 F.R.D. 521, 533 (D. Mont. 2013) (quoting U.S. v. Turkette, 452 U.S. 576, 583 (1981)). This requires "evidence of an ongoing organization, formal or informal, ... function[ing] as a continuing unit." Id.

Again, Plaintiff has not demonstrated a likelihood of success on the merits as to his RICO claim. Plaintiff alleges that "[t]he predicate acts which constitute this pattern of racketeering activity were part of a scheme to swindle the plaintiff and others similarly situated by stealing and selling property that was not their to sell or buy." Compl. ¶ 32. Plaintiff, however, has not sufficiently identified the precise conduct at issue, or alleged any facts to support the existence of an enterprise. Although Plaintiff claims that "the defendants used the Unites States Postal Service, caused items to be delivered by commerical interstate carrier, " Plaintiff does not identify which items or how or when Defendants purportedly mailed. Accordingly, even construing this allegation liberally, the Court finds that Plaintiff has not demonstrated a likelihood of success of the merits as to his RICO claim.

3. Conversion

Under California law, the elements of a conversion claim are (1) plaintiff's ownership or right to possession of the property at the time of the conversion; (2) defendants' conversion by a wrongful act or dispossession of plaintiff's property rights; and (3) damages. Hartford Financial Corp. v. Burns, 96 Cal.App.3d591, 598, 158 Cal.Rptr. 169 (1979); see also Miles, Inc. v. Scripps Clinic & Research Found, 810 F.Supp. 1091, 1094 (S.D. Cal. 1993).

Here, Plaintiff claims that he has personal property in the UGI office that Defendant has threatened to steal if Plaintiff was not out of the building before the new buyer is scheduled to move in. Apart from these bare-bone allegations, Plaintiff has not identified the property at issue or how Defendant purportedly converted or dispossessed Plaintiff of this property. Even construing his allegations liberally, Plaintiff has not demonstrated a likelihood of success on the merits of his conversion claim.

As explained above, Plaintiff has not demonstrated a likelihood of success on the merits of his claims. As such, the Court will deny Plaintiff's motion for a TRO. See Guzman v. Shewry, 552 F.3d 941, 948 (9th Cir. 2009) ("[A]t an irreducible minimum, the moving party must demonstrate a fair chance of success on the merits, or questions serious enough to require litigation.").

B. Irreparable harm in the Absence of a TRO

Even if Plaintiff had demonstrated a likelihood of success, Plaintiff has not shown that he will likely suffer irreparable harm absent a TRO. "Under Winter, plaintiffs must establish that irreparable harm is likely, not just possible, in order to obtain a preliminary injunction." Cottrell, 632 F.3d at 1131 (citing Winter, 555 U.S. at 21) (emphasis in original). Here, Plaintiff argues that he will be immediately and irreparably harmed by Defendants' actions because Defendants are attempting to evict Plaintiff from his former place of business before he can remove his remaining personal property from the premises. Plaintiff estimates the value of said personal property to be $15, 000.00. This type of alleged irreparable injury constitutes monetary harm. The fact that adequate compensatory damages will ultimately be available in the ordinary course of litigation weighs heavily against a claim of "irreparable harm." Sampson v. Murray, 415 U.S. 61, 90 (1974). "[M]onetary harm is usually not enough to constitute irreparable harm." Los Angeles Memorial Coliseum Comm' v. NFL, 634 F.2d 1197, 1202 (9th Cir. 1980).


Based on the foregoing, the Court DENIES Plaintiff's motion for a Temporary Restraining Order.


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