United States District Court, S.D. California
ORDER: 1) GRANTING PLAINTIFF'S MOTION TO PROCEED
IN FORMA PAUPERIS 2) SUA SPONTE STAYING THE CASE PURSUANT TO
THE COLORADO RIVER DOCTRINE 3) DENYING EX PARTE MOTION FOR
TEMPORARY RESTARINING ORDER; AND 4) DENYING PLAINTIFF'S
MOTION FOR APPOINTMENT OF COUNSEL
GONZALO P. CURIEL, UNITED STATES DISTRICT JUDGE
February 9, 2018, Plaintiff Darryl Cotton
(“Plaintiff”), proceeding pro se, filed a
complaint against Defendants Larry Geraci, Rebecca Berry,
Gina Austin, Austin Legal Group, Michael Weinstein, Ferris
& Britton, and the City of San Diego
(“Defendants”) alleging eighteen causes of action
under federal and state law as well as declaratory and
injunctive relief. Plaintiff concurrently filed a motion for
leave to proceed in forma pauperis
(“IFP”) under 28 U.S.C. § 1915(a)
(“§ 1915(a)”). (Dkt. No. 2.) Furthermore,
Plaintiff filed an ex parte application for a temporary
restraining order (“TRO”), as well as a motion
for appointment of counsel. (Dkt. Nos. 3, 6.) Based on the
reasoning below, the Court GRANTS Plaintiff's motion to
proceed IFP, sua sponte STAYS the case pursuant to
the Colorado River doctrine, and DENIES
Plaintiff's ex parte motion for TRO and motion for
appointment of counsel as MOOT.
Motion to Proceed In Forma Pauperis
parties instituting any civil action, suit, or proceeding in
a district court of the United States, except an application
for writ of habeas corpus, must pay a filing fee of $400.
See 28 U.S.C. § 1914(a). An action may
proceed despite a plaintiff's failure to prepay the
entire fee only if he is granted leave to proceed IFP
pursuant to § 1915(a). See Andrews v.
Cervantes, 493 F.3d 1047, 1051 (9th Cir. 2007);
Rodriguez v. Cook, 169 F.3d 1176, 1177 (9th Cir.
1999). The plaintiff must submit an affidavit demonstrating
his inability to pay the filing fee, and the affidavit must
include a complete statement of the plaintiff's assets.
28 U.S.C. § 1915(a)(1). When a plaintiff moves to
proceed IFP, the court first “grants or denies IFP
status based on the plaintiff's financial resources alone
and then independently determines whether to dismiss the
complaint” pursuant to 28 U.S.C. § 1915(e)(2)
(“§ 1915(e)(2)”). Franklin v.
Murphy, 745 F.2d 1221, 1226 n.5 (9th Cir. 1984).
Plaintiff submitted a declaration reporting that he is
currently unemployed, and he receives $192 a month from
public assistance and $600 a month from “Recycled
Material Processing.” (Dkt. No. 2 at 2.) Plaintiff
declares that he has real estate valued at $400, 000 and a
car valued at $1, 400. (Id. at 3.) Plaintiff
reported no debts nor dependents. (Id. at 3.) He has
living expenses totaling $2, 935.00. (Id. at 4-5.)
consideration of Plaintiff's application, the Court finds
that Plaintiff has sufficiently demonstrated that he is
unable to pay the required filing fee and meets the §
1915(a) requirements to proceed IFP. Therefore, the Court
GRANTS Plaintiff's motion for leave to proceed IFP.
Sua Sponte Dismissal Pursuant to 28 U.S.C. §
complaint filed by any person proceeding IFP pursuant to
§ 1915(a) is subject to mandatory sua sponte
review and dismissal by the Court if it is “frivolous,
or malicious; fails to state a claim upon which relief may be
granted; or seeks monetary relief against a defendant immune
from such relief.” 28 U.S.C. § 1915(e)(2)(B);
Calhoun v. Stahl, 254 F.3d 845, 845 (9th Cir. 2001)
(“[T]he provisions of 28 U.S.C. § 1915(e)(2)(B)
are not limited to prisoners.”); Lopez v.
Smith, 203 F.3d 1122, 1126-27 (9th Cir. 2000). §
1915(e)(2) mandates that a court reviewing a complaint filed
pursuant to the IFP provisions of 28 U.S.C. § 1915 make
and rule on its own motion to dismiss before directing that
the complaint be served by the U.S. Marshal pursuant to
Federal Rule of Civil Procedures 4(c)(2). Lopez, 203
F.3d at 1127.
March 21, 2017, Defendant Larry Geraci filed a complaint
against Plaintiff Cotton in San Diego Superior Court alleging
breach of contract, breach of the covenant of good faith and
fair dealing, specific performance and declaratory relief.
(Dkt. No. 3-11, P's RJN, Ex. 2, State Court Compl.)
According to the state court complaint, the parties entered
into a written agreement for the purchase and sale of
Cotton's real property located 6176 Federal Boulevard,
San Diego, CA on November 2, 2016. (Id., Compl.
¶ 7.) A copy of the written agreement is attached as
exhibit A to the state court complaint. (Id., Ex.
A.) On that day, Geraci paid Cotton $10, 000 good faith
earnest money to be applied to the sales price of $800, 000
and to remain in effect until a conditional use permit
(“CUP”) is approved by the City of San Diego.
(Id. ¶ 8.) Geraci made efforts and spent money
to obtain a CUP which is a long and time-consuming process,
including hiring a consultant to coordinate the CUP efforts,
Defendant Rebecca Berry, as well as an architect.
(Id. ¶ 9.) The state court complaint claims
that Cotton has anticipatorily breached the contract stating
he will not perform according to the terms of the written
contract. (Id. ¶ 11.) Specifically, Geraci
alleges that Cotton “has stated that, contrary to the
written terms, the parties agreed to a down payment or
earnest money in the amount of $50, 000.00 and that he will
not perform unless GERACI makes a further down payment.
COTTON has also stated that, contrary to the written terms,
he is entitled to a 10% ownership interest in the PROPERTY
and that he will not perform unless GERACI transfers to him a
10% ownership interest. COTTON has also threatened to contact
the City of San Diego to sabotage the CUP process by
withdrawing his acknowledgment that GERACI has a right to
possession or control of the PROPERTY if GERACI will not
accede to his additional terms and conditions and, on March
21, 2017, COTTON made good on his threat when he contacted
the City of San Diego and attempted to withdraw the CUP
point, Cotton filed a cross-complaint against Geraci and
Rebecca Berry. (Dkt. No. 3-13, P's RJN, Ex. 5.) On
December 6, 2017, Cotton, with counsel, filed an ex parte
application for temporary restraining order and order to show
cause regarding preliminary injunction. (Dkt. No. 3-13,
P's RJN, Ex. 4.) It sought an injunction against Geraci
and Berry to recognize Cotton as a co-applicant on the CUP.
(Id. at 6.) On December 7, 2017, the Superior
Court denied the request for TRO and set a date for hearing
on preliminary injunction for January 25, 2018.
(Id., Ex. 6.) On December 12, 2017, the state court
denied Cotton's, now proceeding pro se, ex parte
application for reconsideration of the state court's
ruling on the TRO. (Id., Ex. 7.)
January 25, 2018, the state court held a hearing on
Cotton's writ of mandate and motion for preliminary
injunction, and Geraci and Berry's motion to compel
Cotton's deposition. (Id., Ex. 8.) In its brief
order, the state court noted no additional papers were filed,
and denied Cotton's writ of mandate and denied his motion
for a preliminary injunction, and granted Geraci and
Berry's motion to compel Cotton's deposition.
February 9, 2018, Plaintiff Cotton filed the instant
complaint alleging breach of contract of the agreement
between him and Geraci on November 2, 2016 as well as
seventeen causes of action. (Dkt. No. 1, Compl.) Cotton's
property at 6176 Federal Boulevard, San Diego, CA, qualifies
for a Conditional Use Permit (“CUP”) for the
establishment of a Medical Marijuana Consumer Collective
(“MMCC”) (Id. ¶ 2.) If the CUP is
approved, the value of the property will potentially be
greater than $100 million. (Id. ¶¶ 2, 3.)
On November 2, 2016, Cotton and Geraci orally agreed to terms
for the sale of Cotton's property. (Id. ¶
44.) The oral agreement contained condition precedents prior
to closing. (Id. ¶ 45.) The Agreement required
that Geraci provide a $50, 000 non-refundable deposit for
Cotton to keep if the CUP was not issued; a total purchase
price of $800, 000 if the CUP was issued; and a 10% equity
stake in the MMCC with a guaranteed monthly equity
distribution of $10, 000. (Id. ¶ 46.) According
to Cotton, Geraci provided Cotton with $10, 000 cash to be
applied toward the non-refundable deposit of $50, 000 and had
Cotton execute a document to record his receipt of the money
and promised to have his attorney, Gina Austin, ...