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United States District Court for the District of Colorado
January 24, 2022, Decided; January 24, 2022, Filed
Civil Action No. 20-cv-00942-MEH
Michael E. Hegarty, United States Magistrate [*2] Judge.
Before the Court are the Motion to Dismiss (ECF 215) by Defendants John Kaweske ("Kaweske") and entities related to him ("Kaweske Entities") and the Motion to Dismiss (ECF 216) by Defendants Welby Evangelista, North Star Holdings, LLC, and DJDW, LLC ("Evangelista Defendants"). The Motions are fully briefed, and the Court finds that oral argument will not materially assist in their adjudication. For the reasons that follow, the Motions are granted in part and denied in part.
I. Alleged Facts
For purposes of this ruling, the Court accepts as true the factual allegations—but not any legal conclusions, bare assertions, or conclusory allegations—that Plaintiffs raise in their Third Amended Complaint ("TAC"). ECF 206. See generally Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (accepting as true a plaintiff's factual allegations for purposes of Fed. R. Civ. P. 12(b)(6) analysis).
A. The Creation of the Clover Top Holdings, Inc. Investment Vehicle
Defendant John D. Kaweske ("Kaweske") is a citizen of Colorado. ECF 206 at ¶ 11. He was subject of four administrative proceedings and three lawsuits regarding inappropriate dealings with client funds or securities transactions. Id. at ¶ 48. He expended great effort to hide his identity and that history. [*3] Id. at ¶¶ 49-51. Defendant Christopher S. Peterson ("Peterson") is a citizen of either Colorado or Arizona. Id. at ¶ 12.
At issue in this lawsuit is Clover Top Holdings, Inc. which Kaweske, Peterson, and Peterson's wife incorporated in September 2015. Id. at ¶¶ 34. They were its majority owners and served as its officers. Id. at ¶¶ 34-36. Clover Top Holdings, Inc. is a Delaware corporation. Id. at ¶ 13. Its principal place of business was in Colorado (id.), although it was not registered to do business in Colorado until September 22, 2017 (id. at ¶¶ 52(a), 94). It no longer is an active corporation. Id. at ¶¶ 111-114.
Kaweske, Peterson, and Peterson's wife formed Clover Top Holdings, Inc. "to engage in all legal aspects of the cannabis business, beginning in Colorado and expanding elsewhere as the business grew and as state and federal laws changed across the country." Id. at ¶ 34. In October 2015, Clover Top Holdings, Inc. acquired TweedLeaf Delaware, which possessed the federal trademark and service mark registrations for the "TWEEDLEAF" word and drawing. Id. at ¶¶ 55-56.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2022 U.S. Dist. LEXIS 12459 *; 2022 WL 204606
SENSORIA, LLC, directly on its own behalf and derivatively on behalf of CLOVER TOP HOLDINGS, INC., a Delaware corporation; GORDON MORTON; ROGER AND ROBIN SMITH; DENNIS AND LAURA GRIMMER; GREENHOUSE 5, LLC; AARON GARRITY; GARRETT SCHIFFMAN; LANCE SCHIFFMAN; KENNETH D. HOUSE; and MARC LESSER, Plaintiffs, v. JOHN D. KAWESKE; CHRISTOPHER S. PETERSON; CLOVER TOP HOLDINGS, INC., a Delaware corporation; CLOVER TOP HOLDINGS, a Colorado corporation; AJC INDUSTRIES, LLC; DURANGO MANAGEMENT, LLC; SUNLIFE AG, LLC; MMJ 95, LLC; TWEEDLEAF LLC, a Colorado limited liability company; TWEEDLEAF, LLC, a Delaware limited liability company; LIFESTREAM HOLDINGS, LLC; ORDWAY FARMS, LLC; NORTH STAR HOLDINGS a/k/a NORTH STAR HOLDINGS, INC.; MANUEL WELBY EVANGELISTA a/k/a WELBY EVANGELISTA; DJDW, LLC; JW COLORADO, LLC; JW ORDWAY, LLC; JW TRINIDAD, LLC; BRIAN TANNENBAUM; TANNENBAUM & TROST, LLC, f/k/a TANNENBAUM, TROST & BURK, LLC; and DOES 1-100, Defendants.
Prior History: Sensoria, LLC v. Kaweske, 2020 U.S. Dist. LEXIS 249310, 2020 WL 8340146 (D. Colo., May 11, 2020)
Holdings, marijuana, cause of action, entity, illegality, Defendants', cannabis, enterprise, shares, investor, invest, profits, allegations, licenses, rescission, motion to dismiss, dispensary, lawsuit, redress, bought, federal law, solicitations, limitations, fraudulent, violations, damages, stock, affirmative defense, cultivation, conversion
Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Pleadings, Complaints, Requirements for Complaint, Criminal Law & Procedure, Criminal Offenses, Controlled Substances, Possession, Contracts Law, Defenses, Public Policy Violations, Illegal Bargains, Civil Rights Law, Protection of Rights, Section 1983 Actions, Scope, Remedies, Equitable Accountings, Grounds for Accountings, Governments, Courts, Judicial Precedent, Racketeering, Racketeer Influenced & Corrupt Organizations Act, Elements, Personal Property, Choses in Action, Elements, Causal Relationship, Antitrust & Trade Law, Racketeer Influenced & Corrupt Organizations, Claims, Fraud, Securities Law, RICO Actions, Elements of Proof, Definition of Racketeering Activity, Implied Private Rights of Action, Connection Requirement, Pattern, Continuity & Relationship Test, Private Actions, Constitutional Law, Case or Controversy, Standing, Particular Parties, Amendment of Pleadings, Leave of Court