Grider v. Quinn
| Decision Date | 01 March 2022 |
| Docket Number | 37433-5-III |
| Parties | JOHANNA GRIDER, a single woman, Respondent, v. CHRISTOPHER QUINN, a married man; CHRISTIAN PANG, a single man; ALKALOID INC., a Washington corporation, AppellantsLUCID NORTH SPOKANE, LLC, a Washington Limited liability company, Defendant. |
| Court | Washington Court of Appeals |
UNPUBLISHED OPINION
Christopher Quinn, Christian Pang, and Johanna Grider formed a partnership to own and operate a marijuana retail sales outlet. The three placed Grider in control of daily operations. When Grider refused to use funds segregated for payment of sales taxes in order to purchase more product Quinn and Pang took aggressive and oppressive actions to terminate Grider's employment and thwart her ability to gain any profit from the business. The superior court granted Grider damages and other relief. We affirm most of the superior court's rulings.
Appellants Christopher Quinn, Christian Pang, and Alkaloid, Inc. do not challenge any trial court finding of fact. Therefore, we outline the facts primarily from the fifty-five pages of findings of fact.
The dispute on appeal concerns control of a marijuana retail business, which we often refer to as "the partnership" or the "marijuana retail store." Washington State legalized medical marijuana in 1998. In 2012, the State broadened the law to permit limited retail sales of recreational marijuana. The legislature appointed the Washington State Liquor and Cannabis Board (LCB) the task of allocating and granting licenses to sell recreational marijuana. The State refers to the licenses as "i502 licenses," based on the initiative number that legalized recreational marijuana. Only one with an i502 license may legally sell recreational marijuana.
The LCB, at the inception of legal recreational marijuana limited the issuances of i502 licenses. The LCB assigned applicants for a license a priority status based on meeting certain criteria. Because of the demand for i502 licenses only those applicants assigned a priority one status stood a chance of obtaining a license. The LCB granted priority one status applicants a provisional license that expired by a certain date if the applicant did not fulfill conditions.
Locating and securing an approved retail site to sell recreational marijuana under an i502 license loomed as the biggest stumbling block for most license applicants. Cities and counties imposed significant restrictions on the location of establishments within their respective jurisdictions in addition to curbs imposed by the LCB. For example, a city or county might allow only one store within a designated geographic boundary, and that one store would also need to conform to LCB regulations, such as a prohibition of an i502 store within a certain distance from a school, church, or another i502 store. Priority one applicants hurriedly attempted to acquire a suitable location. Some priority one applicants never secured a retail sales license from the LCB because of an inability to procure a permitted retail location.
On January 2, 2016 appellant Tacoman Christopher Quinn formed a corporation, Alkaloid, Inc., for the purpose of owning and operating a marijuana retail outlet. In March 2016, the LCB granted Alkaloid priority one status for an i502 marijuana recreational license.
As was typical for all prospective marijuana retailers, Alkaloid needed to procure an approved location for its i502 retail store before LCB would grant the final license. The LCB imposed a thirty-day deadline in garnering a retail location. Because the allotted licenses in counties near Quinn's home of Tacoma filled quickly, Quinn searched for a location in eastern Washington. According to Quinn, he engaged in a "race" with others to find a viable location.
Christopher Quinn lacked familiarity with eastern Washington. Consequently, he sought help finding a suitable location. Quinn also lacked funds to hire anyone to assist in finding a retail site, but he would offer the helper an interest in Alkaloid or the i502 license. A desperate Quinn met Christian Pang, when twenty-one days remained on the provisional i502 license. Pang wished to partner with different retailers because of his larger goal of introducing his Lucid brand of marijuana to numerous markets. Pang then had marijuana retail store license applications pending in New Jersey and Michigan.
Christopher Quinn offered Christian Pang seventy percent ownership in the i502 license pending for Alkaloid, Inc., if Pang located a retail site. Pang did not then know respondent JoHanna Grider. Dennis Turner, a mutual acquaintance of Pang and Grider, introduced the two to one another. Grider possessed years of experience in selling medical marijuana, in Elk, a bedroom community of Spokane. Grider knew of a potential retail location and desired to expand into the recreational marijuana market. Grider had already been approached for assistance by two other potential i502 licensees.
Johanna Grider introduced Christian Pang to a location in north Spokane, 11414 N. Newport Highway, and Pang approved of the site. Pang and Grider then negotiated her participation in the i502 license and the business based on the license. Grider only conversed with Pang because he represented to Grider that he held authority from Christopher Quinn to fragment his seventy percent ownership in the project to others. During trial, Pang and Grider testified that, throughout the negotiations, the two agreed that the ownership interest in the license would be split among Quinn, Pang, and Grider, since each partner contributed value to the i502 license. Pang provided his Lucid branding. Grider contributed the business location. Quinn supplied the i502 license.
Johanna Grider and Christian Pang recognized, during negotiations, Grider's bargaining power because the license application failed without a feasible location.
During negotiations, Grider's percentage of ownership in the i502 license varied from forty percent to sixty percent. Because Grider, unlike Pang and Quinn, resided in the Spokane region and would work at the marijuana retail store, Grider also negotiated for a salaried employment position. According to Grider, she and Pang eventually agreed that Grider would receive forty percent ownership of the license and a salaried position of $7, 500 per month. At trial, Pang conceded talking to Grider about a salary, but denied any agreement to pay $7, 500 per month.
Johanna Grider wished a writing memorializing the terms of her agreement with Christian Pang and Christopher Quinn before she procured the retail location. Accordingly, in a March 30, 2016 e-mail from Christian Pang to Grider, Pang summarized the terms of a "preliminary agreement" with Grider. The e-mail read, in part:
This is the preliminary agreement between Johanna Grider and Christian Pang and the 502 license applicants he represents. . . Johanna will assume 40% of the license and a salary position after acquiring the [i]502 retail license for her part in obtaining the premise [sic] and future works with the company.
Exhibit (Ex) at P-15 (emphasis added). The parties often referred to ownership interest in the i502 license, which we deem to be an ownership interest in a partnership that held the license.
On April 12, 2016, Pang sent a similar email to his attorney, Thor Hoyte, which message summarized the terms of the negotiated partnership agreement. The email declared:
Equity to be divided upon licensing 40% [f]or Johanna [sic] 55% between Endo, Inc. [Alkaloid, Inc.] and Lucid Management [Pang's company] 5% to be a finders [sic] fee goes to Dennis turner [sic].
Ex. P-21. Turner had introduced Pang to Grider.
Based on the e-mail representations, Johanna Grider procured the location at 11414 N. Newport Highway in Spokane and proceeded with renovations required by the LCB to operate a retail outlet. The premises had been a log home. The LCB would not issue the i502 license until an inspection of the store premises confirmed its compliance with LCB rules. Although the applicant need not conform to all rules by the time of inspection, the LCB required at a minimum that security and surveillance cameras be installed.
Johanna Grider assumed the responsibility of preparing the store premises, under time constraints, for the LCB inspection. Grider had only two weeks to install the security system, including cameras. A potential competing store one hundred yards away also hurried to procure a license.
During her reconstruction of the retail store premises, Johanna Grider requested, from Christian Pang, a more formal agreement. Accordingly, Pang drafted a Partnership Agreement. The agreement's opening declared:
The purpose of this contract is to form a partnership between Christopher Quinn of Endo Inc., Tacoma WA, Christian Pang of Lucid Management LLC Olympia WA, and Johanna Grider of JD's Collective Elk WA. After receiving the Washington state marijuana retail license at 11414 N. Newport Hwy. Spokane WA 99218[, ] Christopher Quinn agrees to partner with Pang of Lucid Management and Grider of JD's Collective for the purpose of owning the LCB issued marijuana license and operating a 502 marijuana retail store. For the contributions put forth by Pang and Grider in obtaining the 502 retail license[, ] Quinn agrees to give Pang 37% and Grider 33% ownership of the license.
Ex. P-1. Endo, Incorporated was a business name for Alkaloid Inc. Christopher Quinn initially wished to name the i502 store "Endo," before Pang convinced him to use the Lucid name. RP 746. Quinn and Pang signed the Partnership Agreement on April 23, 2016. Grider signed on April 27, 2016. According to Christian Pang, he drafted the partnership agreement to secure Grider's and his partial ownership interest in...
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