v. )media.oregonlive.com/marijuana/other/2016/01/15/randyquastsuit.pdf · 1/15/2016 · 4 Plaintiff, Randall R. Quast ("Quast"), is an individual who is now, and at all 5 relevant

--I

I

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

IN THE CIRCUIT COURT OF THE STATE OF OREGON

MULTNOMAH COUNTY

Randall R. Quast, an individual; and ) MQH, LLC, an Oregon limited ) liability company, )

) Plaintiffs, )

) v. )

) Steven Travis Maurer, aka Travis ) Maurer, an individual; Leah Janet ) Maurer, an individual; LJM, ) Fremont LLC, an Oregon limited ) liability company, )

) Defendants. )

) )

Case No.

COMPLAINT 1. Breach of Contract by L.

Maurer. 2. Breach of Contract by T.

Maurer. 3. Declaratory Relief and

Permanent Injunction. 4. Breach of Fiduciary Duty. 5. Unlawful Conversion. 6. Declaratory Relief for

Constructive Trust. 7. Defamation - Libel. 8. Defamation- Slander. 9. Fraud- Intentional

Misrepresentation 10. Negligent Misrepresentation. 11. Negligence.

NOT SUBJECT TO MANDATORY ARBITRATION Prayer Amount: $1,000,000.00 ORS 21.160(l)(c)

Page 1 - COMPLAINT

Swider Haver LLP 621 S.W. Morriso·n, Suite 1420

Portland, OR 97205 Telephone: (503) 226-8122 • Fax: (503) 273-8842

[email protected] ·

1/15/2016 11:50:03 AM16CV01064

1 Plaintiffs allege as follows:

2 SUMMARYOFFACTS

3 1.

4 Plaintiff, Randall R. Quast ("Quast"), is an individual who is now, and at all

5 relevant times has been, residing in the County ofMultnomah, State of Oregon.

6 2.

7 Plaintiff, MQH, LLC ("MQH") is an Oregon limited liability company, formed

8 on March 13, 2015, with its primary place of business in the County ofMultnomah,

9 State of Oregon. Quast a fifty percent (50%) owner and member ofMQH.

10 3.

11 Defendant, Steven Travis Maurer aka Travis Maurer ("T. Maurer"), is an

12 individual who is now, and at all relevant times has been, residing in the County of

13 Multnomah, State of Oregon.

14 4.

15 Defendant, Leah Janet Maurer ("L. Maurer"), is an individual who is now, and

16 at all relevant times has been, residing in the County ofMultnomah, State of Oregon.

17 Collectively, T. Maurer and L. Maurer are referred to as "The Maurers."

18 5.

19 LJM Fremont, LLC ("LJM") is an Oregon limited liability company, formed on

20 August 7, 2014, with its primary place of business in the County ofMultnomah, State

21 of Oregon.

22 6.

23 Plaintiff will amend this complaint to add additional defendant's true names

24 and capacities when ascertained. Plaintiff is informed and believes that other

25 defendants acted as an agent or co-conspirator with the named defendants and were a

26 proximate cause ofPlaintiffs damages as herein alleged when acting in such capacity.

Page 2 -COMPLAINT ( I

Swider Haver LLP 621 S.W. Morrison, Suite 1420


[email protected]

1 7.

2 Plaintiff is informed and believes that each defendant whether specifically

3 named or to be named and added by amendment in the future, acted in his, her or its

4 own right and as the alter ego, agent, employee, servant and/or co-conspirator of each

5 of the other defendants as to each of the matters alleged and set forth herein. Each

6 such defendant was at all times acting within the course, scope and purpose of such

7 agency, employment, service and/or conspiracy; or alternatively, if the acts of each

8 such defendant were not authorized at the time, such acts were subsequently ratified

9 by the appropriate principal and each of the other defendants, or as the alter ego of

10 each of the other defendants as set forth herein.

11 8.

'12 In early 2015, Quast moved to Portland, Oregon. Quast did not have any

13 family in the Portland area. In early 2015, The Maurers befriended Quast. The

14 Maurers invited Quast to their home and many events.

15 9.

16 In early 2015, The Maurers asked Quast ifhe would invest in legal marijuana

17 dispensary and grow operation businesses. The Maurers, individually and

18 collectively, represented to Quast that they had entered into leases with Oxbow

19 Enterprises LLC ("Oxbow") to rent buildings to operate a legal medical marijuana

20 dispensary, and a legal marijuana grow operation under the name ofLJM Fremont,

21 LLC, an Oregon limited liability company ("LJM"). The Maurers represented to

22 Quast that they had extensive experience in operating marijuana dispensary arid grow

23 businesses, Quast's money would only be used to set up and operate these businesses,

24 and the Maurers would assign their interest in the company set up to operate these

25 businesses (MQH was formed later) to Quast so Quast's investment would be secured

26 until repaid out of the dispensary and grow operation.

Page 3 - COMPLAINT



[email protected]

1 10.

2 In February 2015, Quast agreed to invest funds in a legal marijuana dispensary

3 and grow operation business. In exchange for Quast financing the investment, The

4 Maurers agreed with Quast to the following terms and conditions, which would govern

5 their business: The Maurers would: (A) obtain an attorney to act for the new

6 investment entity, the attorney would create a new limited liability company to be

7 known as MQH, LLC ("MQH", which stands for Maurer Quast Holding), which

8 would hold all the assets of the investment; (B) only use Quast's funds to build out a

9 legal marijuana dispensary retail store and a legal marijuana grow operation

10 warehouse; (C) assign all their interest in MQH to Quast until Quast's cash investment

11 to start the dispensary and grow operation was repaid; (D) L. Maurer would obtain all

12 licenses and permits to operate the dispensary and grow operation, and act as the

13 Person Responsible For Facility ("PRF"); and (E) contribute to MQH all of The

14 Maurer's interest in the businesses known as (1) TWB, LLC, an Oregon limited

15 liability company, aka "The Weed Blog" (website at www.theweedblog.com)

16 ("TWB"), (2) LJM Fremont, LLC ("LJM"), which held the leases for the dispensary

17 and grow operation and owned by The Maurers, and (3) the text code "420420" ("Text

18 Code").

19 11.

20 In February 2015, T. Maurer told Quast that as a result ofhis work on Oregon

21 Ballot Measure 91, he (T. Maurer) owed money to others and so ownership ofMQH

22 would be held in L. Maurer's name. T. Maurer then asked Quast to loan him

23 sufficient funds to pay all his debts so "he could concentrate on operating the

24 dispensary and grow operation." T. Maurer told Quast that his debts totaled

25 $85,000.00, and if Quast loaned him $85,000.00, then The Maurers would assign all

26 their interest in MQH and all its assets to Quast to secure repayment of the personal

Page 4- COMPLAINT


Portland, OR 97205 Telephone: (503) 226-8!22 • Fax: (503) 273-8842

[email protected]

-I

1 loan, as well as Quast's investment. Quast agreed and loaned The Maurers $85,000.00.

2 In late March, T. Maurer disclosed that he owed an additional $70,570.00, and asked

3 Quast to loan him $70,570.00 to pay these debts, which T. Maurer stated would be

4 repaid through the MQH investment and secured by The Maurers' assignment of their

5 interest in MQH. Quast agreed and paid $70,570.00 forT. Maurer's additional debts

6 through the MQH bank account. The total personal loan made to The Maurers is

7 $155,570.00.

8 12.

9 On or about March 13, 2015, The Maurers and Quast retained attorney Dave

1 o Kopilak ("Kopilak"), a shareholder in the Emerge Law Group law firm ("Emerge"), to

11 act as the attorney for MQH. On or about March 13, 2015, Kopilak formed MQH as

12 an Oregon limited liability company. Kopilak is listedas the "Organizer" ofMQH;

13 Emerge's address is listed on the Articles of Organization to receive all notices for

14 MQH; and Kopilak and Emerge are listed with the Oregon Secretary of State as the

15 "Registered Agent" for MQH.

16 13.

17 On or about March 13, 2015, L. Maurer and Quast were at Wells Fargo Bank

18 ("WFB") attempting to open a bank account for MQH, when the WFB requested an

19 operating agreement for MQH. L. Maurer and Quast called Kopilak and requested an

20 operating agreement. Kopilak then prepared and provided to L. Maurer and Quast a

· 21 one page operating agreement for MQH, listing L. Maurer and Quast as the only

22 members ofMQH; the operating agreement does not state any other provisions for

23 management of the limited liability company.

24 14.

25 On March 13, 2015, L. Maurer and Quast opened the MQH bank account at

26 WFB and filled out the signature cards stating that only L. Maurer and Quast were ·

Page 5- COMPLAINT



[email protected]

1 authorized to sign cheques on the account. WFB had a duty to make sure that only

2 cheques that were signed by and matched the signatures of L. Maurer and Quast would

3 clear the MQH bank account at WFB. WFB failed to cheque signatures on bank

4 cheques drawn on the MQH account and cashed many cheques that were signed by T.

5 Maurer.

6 15.

7 On March 13, 2015, Quast made his first deposit, in the amount of ,

8 $150,000.00, into the MQH bank account at WFB.

9 16.

10 On or about March 19, 2015, T. Maurer and Quast met with Kopilak in his

11 office at Emerge. During the meeting, Kopilak outlined the structure ofMQH as the

12 holding company for all assets, which were to include the dispensary, grow operation,

13 LJM (property leases), TWB, and Text Code.

14 17.

15 On or about March 19, 20 15, Kopilak requested a payment from Quast to pay

16 for legal services provided by Emerge through March 19, 20 15, which amount

17 included past debts owed by T. Maurer and for work to form MQH. Quast understood

18 that at least some part of the payment to Emerge was to retain Kopilak and Emerge as

19 the attorneys for MQH. As a result, Quast wrote a cheque to "Emerge Law Group" for

20 $26,820.00 and gave it Kopilak. The cheque was thereafter deposited by Emerge.

21 Kopilak conditioned his representation ofMQH on Quast paying T. Maurer's past

22 attorney fees bills owed to Kopilak and his law firms, all in conspiracy with The

23 Maurers to take advantage of unsuspecting investors such as Quast.

24 18.

25 As of March 13, 2015, Kopilak and Emerge also represented LJM and STM

26 Leasing, LLC ("STM"- a company owded by Steven Travis Maurer), which is

Page 6 - COMPLAINT



[email protected]

1 another entity owned and controlled by The Maurers. As of March 13,2015, and by

2 no later than March 19, 2015, Kopilak knew or should have known that he and his law

3 firm represented MQH, The Maurers, LJM and STM, which have real or potential

4 conflicts with each other. Kopilak has never disclosed the real or potential conflict by

5 personally representing The Maurers, LJM, STM, and also MQH and its members,

6 which included Quast, or presented or obtained a waiver of conflict from MQH, Quast,

7 STM, LJM, and The Maurers.

8 19.

9 Quast is informed and believes that at the time Kopilak undertook to represent

1 o MQH, Kopilak was aware of other entities, claims and judgments against The

11 Maurers, and that The Maurers owed a substantial amount of money to the law firms

12 that Kopilak was or had been associated, both Emerge at:td Kopilak's prior law firm

13 Schwabe, Williamson and Wyatt. Kopilak helped The Maurers find investors for

14 various businesses after which Kopilak failed to prepare proper documents to protect

15 members' rights; thus resulting in providing for The Maurers to take money from

16 investors under false pretenses. Kopilak was aware ofT. Maurer's relationship with

17 TWB, but never prepared the documentation to transfer T. Maurer's interest to MQH.

18 Kopilak was aware of the The Maurers' relationship to LJM, but never prepared the

19 documentation to transfer T. Maurer's interest to MQH.

20 20.

21 On April23, 2015, T. Maurer signed and gave a MQH bank cheque to Jeff

22 White for $25,000.00 to buy five percent (5%) of White's interest in TWB. T. Maurer

23 wrote and signed the cheque in front of Mr. White. T. Maurerwas not authorized to

24 have the MQH cheque book, sign cheques or purchase an in TWB from White

25 using MQH funds.

26 II

Page 7- COMPLAINT



[email protected]

1 21.

2 On April27, 2015, The Maurers purchased an insurance policy to cover the

3 dispensary using funds from the MQH bank account. The policy is in the name of

4 LJM. Quast has requested that the insurance, lease and LJM entity be transferred to

5 MQH as agreed; The Maurers have refused.

6 22.

7 On July 10, 2015, T. Maurer sent pictures of tall marijuana plants to Quast,

8 telling Quast that the pictures were of plants growing in the grow operation. Quast is

9 informed and believes that the pictures T. Maurer sent to Quast on July 10, 2015, were

10 of plants grown by others and not owned by MQH, which T. Maurer had

11 misrepresented as being grown and owned by MQH.

12 23.

13 On July, 15, 2015, T. Maurer sent pictures of boxes of marijuana plant seeds he

14 had purchased with $8,900.00 in MQH funds. T. Maurer represented to Quast that the

15 seeds would be used to expand the grow operation in the warehouse. Quast is

16 informed and believes that the marijuana seeds T. Maurer purchased, which he sent a

17 picture to Quast on July 15, 2015, were sold by T. Maurer and T. Maurer kept the

18 money.

19 24.

20 Between March 2015 and September 2015, The Maurers represented to Quast

21 that they were building out the dispensary, had started the grow operation in a

22 warehouse leased from Oxbow, and were getting ready to open the dispensary, but

23 needed more money. Between March 2015 and September 2015, The Maurers

24 continued to request more money from Quast be deposited into the MQH bank

25 account, stating the expenses were necessary to open and operate the dispensary and

26 grow operation businesses.

· Page 8 -COMPLAINT

Swider Haver LLP 621 S.\V. Morrison, Suite 1420


[email protected]

I -I

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

25.

As a result of The Maurers' collective representations, Quast made direct

deposits into the MQH bank account at WFB in the following amounts on the dates: a. March 13, 2015 $150,000.00 b. April2, 2105 $20,000.00 c. April29, 2015 $150,000.00 d. June 5, 2015 $100,000.00 e. June 22, 2015 $40,000.00 f. July 6, 2015 $125,000.00 g. July17,2015 $20,000.00 h. August 4, 2015 $50,000.00 1. August 6, 2015 $50,000.00 J. August 27, 2015 $50,000.00 k. September 30, 2015 - $550.00 1. October 5, 2015 $125.00

Total: $755,675.00

In addition, on September 17, 2015, Quast paid the contractor that was building

out the dispensary his final bill of$11,654.55 by certified bank cheque, with funds

from his personal account. The additional loans made toT. Maurer that total

$70,570.00 were paid out of the MQH bank account; therefore, Quast contributed as

his investment in MQH, all of which was to be used to build out the dispensary and

grow operation, a total of$696,759.55 ($755,675.00 + $11,654.55 = $767,329.55-

$70,570.00 = $696,759.55).

26.

By late September 2015, the dispensary had not opened and Quast began to

question when the dispensary would open and where his money had been spent. T.

Maurer responded by telling Quast that the dispensary was built but could not open

until they grew sufficient product (marijuana) to sell. Quast then contacted Oxbow

and went to the address of the grow warehouse; where he found that the grow

warehouse was empty. Upon further investigation, Quast found out that The Maurers

. had never rented the warehouse from Oxbow and no marijuana plants had ever been

Page 9- COMPLAINT



[email protected]

1 planted or were growing anywhere.

2 27.

3 In September 2015, Quast told T. Maurer that he was required to transfer the

4 interest in TWB to MQH, and ifT. Maurer failed to have the interest transferred, then

5 Quast would contact the owners of the TWB, Christopher Young and Jeffery White, to

6 obtain the interest. Quast contacted Messrs. Young and White; however, initially,

7 Messrs. Young and White would not communicate with Quast. Upon investigation,

8 Quast was informed by Messrs. Young and White that T. Maurer orally told them that

9 they should not do any business with Quast because Quast was a pedophile and

1 o Chimo, aka, a child molester or pedophile. In one email by T. Maurer to Messrs.

11 Young and White, dated September 22, 2015, T. Maurer states: Quast "is a fucked up

12 drunk that likes little kids." Quast is not a pedophile and has never been accused of

13 being a pedophile. Quast is informed and believes that T. Maurer has defamed Quast

14 for the purpose of obtaining leverage· over Quast.

15 28.

16 In September 2015, Quast began to investigate the MQH bank account at WFB.

17 Upon review of the MQH, Quast determined and is informed and believes that T.

18 Maurer had signed cheques and forged L. Maurer's signature to cheques, that both The

19 Maurers transferred money from the MQH bank account to their personal bank

20 accounts, and used the MQH bank account to pay their personal expenses. T. Maurer

21 was not authorized to sign cheques in the MQH bankaccount at WFB. L. Maurer was

22 not authorized to give access to the MQH bank account toT. Maurer, allow T. Maurer

23 to write or sign cheques on the MQH bank account, give money toT. Maurer, or pay

24 The Maurers' personal expenses out of the MQH bank account. WFB cashed the

25 cheques written by T. Maurer without checking to see if the cheques matched the

26 signature card it had on file. WFB had a duty to make sure that only cheques that

Page 10- COMPLAINT



[email protected]

I _)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16 . 17

18

19

20

21

22

23

24

25

26

were signed by and matched the signatures of L. Maurer and Quast would clear the

MQH bank account at WFB. On information and belief, WFB failed to check any of

the cheques draw on the MQH bank account to determine if the signer was authorized

to sign cheques.

29.

L. Maurer, as a member ofMQH, maintained complete control over MQH bank

accounts and provided T. Maurer access to the bank account cheque book, in violation

of her agreement with Quast. As a result of L. Maurer's unauthorized actions, she has

made T. Maurer an ex post facto member or manager ofMQH without the authority or

permission ofMQH or Quast.

30.

Upon an accounting, Quast has determined and is informed and believes that

The Maurers have taken and used for their personal use, without authorization or

permission, from the MQH bank account, and not used to build the dispensary or grow

operation (the only MQH business) the sum of$340,274.94. An example of The

Mamers paying money to themselves, or for their benefit, include payments of

$143,000.00 to STM, between May 1, 2015 and September 14, 2015. STM has

nothing to do with the build out of the dispensary or the grow operation, and did not

provide any services to or have an agreement with MQH to provide goods or services.

31.

Of the $696,759.55 that Quast invested into MQH to build out the dispensary

and grow operation, The Mamers took $340,274.94 to pay their personal expenses and

debts; therefore, a total of$356,484.61 was properly used to build out the dispensary.

The grow operation was never built.

32.

Quast has demanded repayment from The Mamers of the personal loan in the

Page 11 -COMPLAINT



andrea@swiderhave·r.com

1 amount of$155,570.00, and repayment of the funds The Maurers improperly took to

2 pay their personal debts in the amount of$340,274.94, which total $512,054.61.

3 Quast has also demanded that The Maurers complete the transfer of all rights to LJM,

4 TWB and the Text Code to MQH, and either complete the assignment of their interest

5 in MQH to Quast as security for the debt, or transfer their interest in MQH to Quast

6 since they have no reasonable means of payment. The Maurers have stated to Quast

7 they do not have the money as they spent it and have not reasonable means of

8 repayment. The Maurers have refused to transfer LJM, TWB or the Text Code to

9 MQH, and refused to complete the assignment of all rights in MQH to Quast.

10 33.

11 In December 2015, Quast was informed and believes and thereon alleges that T.

12 Maurer had been improperly taking money from TWB to pay the lease payments to

13 Oxbow for the LJM lease for the dispensary.

14 34.

15 During January through October, 2015, defendants knowingly and willfully

16 agreed and conspired among themselves to damage plaintiffs by depriving them of the

17 benefits of the contract to form MQH and to start and operate the dispensary and grow

18 operation businesses, and to repay the loans. Pursuant to such conspiracy and in

19 furtherance of the agreement alleged herein, defendants engaged in the wrongful acts

20 and misconduct as set forth herein.

21 FIRST CLAIM FOR RELIEF

22 Breach of Contract by L. Maurer

23 35.

24 Plaintiff realleges and incorporates by reference paragraphs 1 through 34

25 above.

26 II

Page 12 -COMPLAINT



[email protected]

1 36.

2 L. Maurer made an agreement with Quast to use all funds in the MQH bank

3 account only to build the dispensary and grow operation, to contribute the assets of

4 LJM, the TWB and Text Code to MQH, and to assign all her rights, title and interest in

5 MQH to Quast until the personal loan was repaid and Quast received back his

6 investment. As a member and manager of the limited liability company, L. Maurer

7 owes MQH and its members a fiduciary duty of care to not take or use company funds

8 for personal use.

9 37.

10 L. Maurer has breached, and continues to breach her agreement with Quast, and

11 her fiduciary duties by:

12 a. Allowing T. Maurer to gain access to and write cheques from the MQH

13 bank account at WFB;

14 b. Writing cheques drawn in the MQH bank account to pay her personal

15 expenses;

16 c. Misrepresenting the fact that leases had been signed for a grow

17 warehouse operation;

18 d. Failing to transfer the LJM and leasehold interest held thereby to MQH;

19 e. Failing to transfer the TWB interest to MQH;

20 f. Failing to assign her interest in MQH to Quast as security for personal

21 loans and Quast's investment; and

22 g. Failing to monitor the MQH account to see when T. Maurer was

23 spending MQH funds on personal items.

24 38.

25 As a direct and_proximate result ofL. Maurer's unauthorized use ofMQH

26 property, MQH's bank accounts have been depleted leaving insufficient funds and

Page 13 -COMPLAINT



[email protected]

1 leaving MQH unable to cover its operating expenses. In addition, as a direct and

2 proximate result ofL. Maurer's other breaches, including her failure to perform her

3 fiduciary duties and act in the best interests ofMQH, MQH has suffered significant

4 losses in not being able to open to the public resulting in the loss of revenue from

5 sales.

6 39.

7 Based on the foregoing, plaintiff has been damaged in an amount which will be

8 determined upon proof but which is no less than $500,000.00.

9 40.

10 Had Kopilak prepared a proper operating agreement for MQH, and looked out

11 for the entity's and member's best interests, the operating agreement would have

12 provided for recovery of costs and attorneys' fees incurred as a result ofL. Maurer's

13 breach of the operating agreement. As such of the negligence of another, plaintiff is

14 further entitled to their attorney's fees and costs.

15 SECOND CLAIM FOR RELIEF

16 Breach of Contract by T. Maurer

17 41.


19 above.

20 42.

21 T. Maurer made an agreement with Quast to borrow $155,570.00 from Quast,

22 to use all funds in the MQH bank account (except for the additional $70,570.00 which

23 Quast agreed to loan The Maurers) only to build the dispensary and grow operation, to

24 contribute the assets ofLJM, the TWB and Text Code to MQH, and to assign all his

25 rights, title and interest in MQH to Quast until the personal loan was repaid and Quast

26 received back his investment.

Page 14- COMPLAINT



[email protected]

1 43.

2 T. Maurer has breached, and continues to breach his agreement with Quast, and

3 his fiduciary duties by:

4 .a. Gaining access to and write cheques from the MQH bank account at

5 WFB when he knew he was not a signor authorized by WFB to sign

6 bank cheques in the MQH account;

7 b. Writing cheques drawn in the MQH bank account to pay his personal

8 expenses;

9 c. Misrepresenting the fact that leases had been signed for a grow

10 warehouse operation;

11 d. Misrepresenting the fact that the grow warehouse operation was growing

12 plants;

13 e. Failing to transfer the LJM and leasehold interest held thereby to MQH;

14 f. Failing to transfer the TWB interest to MQH; and

15 g. Failing to assign his interest in MQH to Quast as security for personal

16 loans and Quast's investment.

17 44.

18 As a direct and proximate result ofT. Maurer's unauthorized use ofMQH


20 leaving MQH unable to cover its operating expenses. In addition, as a direct and

21 proximate result ofT. Maurer's other breaches, including his failure to perform his

22 fiduciary duties and act in the best interests ofMQH, MQH has suffered significant

23 losses in not being able to open to the public resulting in the loss of revenue from

24 · sales.

25 45.


Page 15 -COMPLAINT



[email protected]


2 46.






8 THIRD CLAIM FOR RELIEF

9 For Declaratory Judgment and Injunctive Relief Expelling L. Maurer and T.

10 Maurer from Membership

11 47.


13 above.

14 48.

15 Pursuant to the Oregon Corporations Code, a Member may be expelled from

16 MQH where:

17 a. the member has been guilty ofwrongful conduct that adversely and

18 materially affects the business or affairs of the Company; or

19 b. the Member has willfully or persistently committed a material breach of

20 the Articles of Qrganization or the Agreement or otherwise breached a duty

21 owed to the Company or the other Members.

22 49.

23 Since at least March 2015, L. Maurer has, without the knowledge or consent of

24 Quast, intentionally and maliciously transferred MQH funds from the MQH bank

25 accounts to The Maurers' various personal accounts and/ or paid personally incurred

26 debts with MQH funds.

Page 16- COMPLAINT



[email protected]

1 50.

2 As a member, Maurer maintained complete control over MQH bank accounts

3 and allowed T. Maurer access to the bank account; therefore, L. Maurer's

4 unauthorized use ofMQH funds was not immediately discovered. Upon discovery,

5 Quast demanded L. Maurer and T. Maurer immediately cease from the unauthorized

6 use ofMQH funds and that the Maurers return all such funds to the MQH accounts.

7 Despite demand the Maurers have used MQH funds to pay their personal expenses and

8 transfer funds to the personal accounts, without authorization of Quast or MQH.

9 51.

10 As a member and manager ofMQH, L. Maurer owed fiduciary duties to MQH

11 and its members, which Quast is a member. L. Maurer is married to T. Maurer. As a

12 result of his agent and wife, T. Maurer gained a marital property interest in MQH, and

13 as a result ofL. Maurer providing access to the MQH cheque book, T. Maurer thus

14 had equal fiduciary responsibilities to MQH, such that T. Maurer owes MQH and its

15 members a fiduciary duty of care to not take or use company funds for personal use.

16 52.

17 As a direct and proximate result of the Maurers' unauthorized use ofMQH


19 leaving MQH unable to cover its operating expenses.

20 53.

21 In addition to the Maurers' unauthorized use ofMQH property, the Maurers

22 willfully and persistently continued to breach their agreement as set forth above,

23 supra, which has caused MQH to suffer significant losses resulting lost revenue from

24 sales.

25 54.

26 Based on the foregoing, plaintiff seeks an order and preliminary and permanent

Page 17 - COMPLAINT


Portland, OR 97205 · Telephone: (503) 226-8122 • Fax: (503) 273-8842

[email protected]

1 injunction expelling L. Maurer from membership in MQH, and enjoining the Maurers

2 from preventing or interfering with Quast's access to MQH assets, specifically the

3 lease for the dispensary and operating bank accounts, and enjoining the Maurers from

4 participating in any MQH business otherwise enjoyed by a member or manager as set

5 forth in Oregon law.

6 55.

7 Alternatively, plaintiff seeks an order and preliminary and permanent injunction

8 removing L. Maurer as an officer or manager ofMQH and enjoining the Maurers from

9 preventing or interfering with Quast's access to MQH property and operating bank

10 accoupts, and enjoining the Maurers from participating in any MQH business

11 otherwise enjoyed by a manager or member as set forth in Oregon law.

12 56.

13 Based on the foregoing, plaintiffs have been damaged in an amount which will

14 be determined upon proof but which is no less than $500,000.00.

15 57.



18 provided for recovery of costs and attorneys' fees incurred as a result of L. Maurer's



21 FOURTH CLAIM FOR RELIEF

22 Breach of Fiduciary Duty by L. Maurer and T. Maurer

23 58.


25 above.

26 II

Page 18 -COMPLAINT



·, [email protected]

1 59.

2 Pursuant to Oregon law, L. Maurer owed a fiduciary duty to Quast and MQH

3 including:

4 a. To account to MQH and hold for it any property, profit or benefit

5 derived by the Maurers in the conduct ofMQH's business or derived

6 from a use by the Maurers of Company property; and

7 b. To refrain from dealing with the MQH in a manner adverse to MQH and

8 its members.

9 60.

1 o As a member and manager ofMQH, L. Maurer owed fiduciary duties to MQH

11 and its members, which Quast is a member. L. Maurer is married toT. Maurer. As a

12 result of his agent and wife, T. Maurer gained a marital property interest in MQH, and

13 as a result ofL. Maurer providing access to the MQH cheque book, T. Maurer thus

14 had equal fiduciary responsibilities to MQH, such that T. Maurer owes MQH and its

15 members a fiduciary duty of care to not take or use company funds for personal use.

16 61.

17 As set forth above, The Maurers have failed to account to MQH and hold for it

18 property, profit or benefit derived in the conduct ofMQH's business and has

19 continually dealt with MQH in a way that is adverse to MQH and its members.

20 62.

21 As a direct and proximate result of The Maurers' unauthorized use ofMQH


23 MQH unable to cover its operating expenses. In addition, as a direct and proximate

24 result of the Maurers' other breaches, including her failure to perform her duties as a

25 member and manager, MQH has suffered significant losses resulting in lost revenue

26 from sales.

Page 19 -COMPLAINT



[email protected]

1 63.

2 Based on the foregoing, plaintiffs have been damaged in an amount which will

3 be determined upon proof but which is no less than $500,000.00.

4 64.






10 FIFTH CLAIM FOR RELIEF

11 Unlawful Conversion by T. Maurer and L. Maurer

12 65.


14 above.

15 66.

16 As set forth above, since at least March 2015, The Maurers have intentionally,

17 continually, wrongfully and unlawfully exerted and exercised control over property

18 rightfully owned by MQH.

19 67.

20 As a direct and proximate result of The Maurers' unauthorized use ofMQH


22 leaving MQH unable to cover its operating expenses.

23 68.



26 II

Page 20 - COMPLAINT

Swider Haver LLP 621 S.\V, Morrison, Suite 1420


[email protected]

1 69.






7 70.

8 As set forth above, The Maurers acted with malice or have shown a reckless

9 and outrageous indifference to a highly unreasonable risk of harm and have acted with

10 a conscious indifference to the welfare of plaintiff. Pursuant to ORS 31.730, plaintiff

11 will seek to amend to include a claim for punitive damages at an appropriate time.

12 SIXTH CLAIM FOR RELIEF

13 Declaratory Relief for Constructive Trust

14 71.


16 above.

17 72.

18 Plaintiff justifiably placed trust and confidence in the Maurers to act in his best

19 interest and to account to MQH and hold for it any property, profit or benefit derived

20 in the conduct ofMQH's business and to refrain from dealing with the MQH in a

21 manner adverse to MQH.

22 73.

23 As set forth in paragraphs 1 to 24 above, supra, The Maurers breached their

24 fiduciary duties in that they failed to account to the MQH and hold for it property,

25 profit or benefit in the conduct ofMQH's business and has continually dealt

26 with MQH in a way that is adverse to MQH and its members, specifically Quast.

Page 21 -COMPLAINT



[email protected]

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

74.

By reason of the wrongful manner in which The Maurers personally used MQH

property, the Maurers have no legal or equitable right, claim or interest therein, but,

instead are a voluntary trustee holding said property and any profits derived therefrom,

in construct trust for the benefit of plaintiff, with the duty to convey the same to

plaintiff forthwith.

above.

SEVENTH CLAIM FOR RELIEF Defamation -Libel by Travis Maurer

75.

Plaintiff realleges and incorporates by reference paragraphs 1 through 34

76.

On or about September 22, 2015, T. Maurer published written materials in e-

mail messages making statements to the effect that Quast was a "pedophile" and a

"fucked up drunk who likes little kids."

77.

The publications were made of and concerning Quast and so understood by

those who read the publications.

78.

All of the statements in the written material were and are false as they pertain to

Quast.

79.

These published statements were and are defamatory and libelous on their face

and clearly expose Quast to hatred, contempt, ridicule and obloquy.

80.

These statements in the written material were seen and read by persons in the

Page 22 -COMPLAINT



[email protected]

' i -1

I

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

State of Oregon and elsewhere in the United States.

81.

As a proximate result of the above-described publications, Quast has suffered

loss of his reputation, shame, mortification, hurt feelings and emotional distress all to

his general damage.

82.

As a further proximate result ofthe above-described publications, Quast has

suffered special damages in the form of injury to his business, trade, profession,

occupations and property all to his injury according to proof but which is no less than

$1,000,000.00.

83.

The above-described publications were published by the T. Maurer with

oppression, fraud and malice in an attempt to gain financial advantage in the dispute as

to fraud and mismanagement ofMQH, LLC.

above.

EIGHTH CLAIM FOR RELIEF Defamation- Slander by Travis Maurer

84.

Plaintiffrealleges and incorporates by reference paragraphs 1 through 34

85.

On or about September 22, 2015, T. Maurer made oral statements of and

concerning Quast to the effect that Quast was a "pedophile" and a "fucked up drunk

who like little kids."

86.

These words and statements were heard by several persons whose names are

not presently known by Quast.

Page 23 -COMPLAINT



[email protected]

1 87.

2 These words and statements were slanderous per se because they accused the

3 Quast of having committing various crimes involving sexual misconduct with minors.

4 88.

5 These words and statements were false and defamatory because Quast has

6 never engaged in such immoral or illegal misconduct.

7 89.

8 These words and statements carried a defamatory meaning because Quast was a

9 relative newcomer to the area and not personally known too many people in the State

10 of Oregon.

11 90.

12 These words and statements were understood by those who heard them as

13 defamatory to Quast.

14 91.

15 As a result of the above-described words and statements, Quast has suffered

16 general damages to his reputation.

17 92.

18 As a further proximate result of the above-described words and statements,

19 Quast as suffered special damages in the form of injury to his business, trade,

20 profession, occupation and property, all to his injury according to proof but which is

21 no less than $1,000,000.00.

22 93.

23 The above-described words and statements were made by T. Maurer with

24 oppression, fraud and malice in an attempt to gain financial advantage in the dispute as

25 to fraud and mismanagement ofMQH, LLC.

26 II

Page 24 - COMPLAINT



[email protected]

-1

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

above.

NINTH CLAIM FOR RELIEF Fraud - Intentional Misrepresentation

94.


95.

During February and March 2015, T. Maurer and L. Maurer made numerous

representations of material fact to Quast relating to the formation and business of

MQH as set forth in paragraphs 1 through 32 herein, including but not limited to the

following: that (1) Quast's investment of funds in MQH would only be used to set up

and operate the new legal marijuana dispensary and grow operation businesses, and no

other purpose; (2) they would assign to Quast all of their interests in MQH, until the

Quast's funds invested in the dispensary and grow operations and all loans from Quast

to them were repaid; (3) they would contribute to MQH all of their interests in the

businesses represented by TWB, LJM and the Text Code; (4) they had substantial

experience in operating dispensary and grow operations; and (5) they would operate

the MQH businesses for the benefit of Quast until he was repaid.

96.

The representations made by both Maurers were false. The true facts were that

(1) Quast's funds invested in MQH were converted and misappropriated by The

Maurers for uses other than the dispensary and grow operation businesses; (2) The

Maurers failed to assign to Quast their interests in MQH; (3) The Maurers failed to

contribute to MQH all oftheir interests in TWB, LJM, and the Text Code; (4) The

Maurers had little to no experience in setting up and running a dispensary or grow

operation business; and (5) The Maurers did not operate the business in a way to

secure repayment to Quast.

Page 25 -COMPLAINT



[email protected]

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

97.

When The Maurers made these misrepresentations, they knew them to be false

and had no intentions of performing pursuant to the representations made to Quast, but

did so to induce Quast to act in reliance on the representations and invest funds in the

dispensary and grow operation businesses.

98.

Quast, at the time that the representations were made by The Maurers and the

Quast took the actions herein alleged, was ignorant of the falsity of The Maurers

representations and intentions and believed them to be true. In reliance on the

representations, Quast was induced to and did invest in the dispensary and grow

operation businesses, and make the loans. Quast's reliance on the representations was

justified and, had he known of the actual facts and intentions, he never would have

taken such action.

99.

As the proximate result of the fraudulent misconduct of The Maurers as alleged

herein, Quast has been damaged in the minimum amount of$852,329.55, the exact

amount to be proved at trial.

100.

The fraudulent misconduct of The Maurers as alleged herein was made with

oppression, fraud and malice, depriving Quast of property and legal rights and

otherwise causing injury, and was despicable conduct in conscious disregard of

Quast's rights.

TENTH CLAIM FOR RELIEF Negligent Misrepresentation.

101.


Page 26 -COMPLAINT



[email protected]

1 above, inclusive, and paragraphs 94, 95, 96 and 97, above.

2 102.

3 When The Maurers made the representations as set forth above, they had no

4 reasonable grounds for believing them to be true.

5 103.

6 The Maurers made the representations with the intention of inducing Quast to

7 act in reliance on the representations and invest funds in the dispensary and grow

8 operation businesses in the manner herein alleged, and make the loans, or with the

9 expectation that he would so act.

10 104.

11 As the proximate result of the fraudulent misconduct of The Maurers as alleged

12 herein, Quast has been damaged in the minimum amount of$852,329.55, the exact

13 amount to be proved at trial.

14 ELEVENTH CLAIM FOR RELIEF

15 Negligence

16 105.


18 above.

19 106.

20 At all times alleged herein, The Maurers' acts and omissions breached their

21 duties of due care by their negligently managing, controlling, and maintaining the

22 dispensary and grow operation and the financial affairs ofMQH.

23 107.

24 As the proximate result of the fraudulent misconduct of The Maurers as alleged

25 herein, Quast has been damaged in the minimum amount of$852,329.55, the exact

26 amount to be proved at trial.

Page 27- COMPLAINT



[email protected]

1 Wherefore, Plaintiffs pray for relief as follows:

2 On Plaintiffs' First Claim for Relief for Breach of Contract for a judgment

3 against L. Maurer for a principal amount which will be determined upon proof but

4 which is no less than $512,054.61, and for interest on the principal amount, and for

5 attorney's fees and costs, and for such other and further relief as the Court deems just

6 and equitable;

7 On Plaintiffs' Second Claim for Relief for Breach of Contract for a

8 judgment against T. Maurer for a principal amount which will be determined upon

9 proofbut which is no less than $512,054.61, and for interest on the principal amount,

1 o and for attorney's fees and costs, and for such other and further relief as the Court

11 deems just and equitable;

12 On Plaintiffs' Third Claim for Relief for Declaratory Judgment and

13 Injunctive Relief for:

14 a. A preliminary and permanent injunction expelling L. Maurer from

15 membership in MQH and enjoining the Maurers from preventing or

16 interfering with Quast's access to MQH operating accounts and

17 enjoining the Maurers from participating in any MQH business

18 otherwise enjoyed by a member or manager as set forth in Oregon law.

19 b. Alternatively, a preliminary and permanent injunction removing L.

20 Maurer as a member or manager ofMQH and enjoining the Maurers

21 from preventing or interfering with Quast's access to MQH operating

22 accounts and enjoining the Maurers from participating in any MQH

23 business otherwise enjoyed by member or manager as set forth in

24 Oregon law.

25 c. A preliminary and permanent injunction enjoining the Maurers from

26 engaging in any activity with the intent to cause damage to MQH,

Page 28- COMPLAINT



[email protected]

1 including damage to any MQH Property and/or goodwill.

2 d. A preliminary and permanent injunction or writ of mandamus requiring

3 the Maurers to assign the lease for the Fremont Street property to MQH;

4 e. Ari Order and Judgment that L. Maurer be directed to file with this Court

5 and serve upon plaintiffs counsel within 30 days of entry of judgment a

6 report in writing under oath setting forth in detail the manner and form in

7 which the Maurers have complied with the requirements of the

8 injunction and order; and

9 f. For such other and further relief as the Court deems just and equitable.

10 On Plaintiffs' Fourth Claim for Breach of Fiduciary Duty for a judgment

11 against L. Maurer for a principal amount which will be determined upon proofbut

12 which is no less than $512,054.61, and for interest on the principal amount, and for


14 and equitable;

15 On Plaintiffs' Fifth Claim for Conversion for a judgment against The

16 Maurers for a principal amount which will be determined upon proof but which is no

17 less than $512,054.61, and for interest on the principal amount, and for attorney's fees

18 and costs, and for such other and further relief as the Court deems just and equitable;

19 On Plaintiffs' Sixth Claim for Declaratory Relief for Constructive Trust for

20 a judgment imposing a constructive trust in favor ofMQH against The Maurers and

21 for such other and further relief as the Court deems just and equitable and for


23 and equitable.

24 On Plaintiffs' Seventh Claim for Defamation by Libel for a judgment against

25 T. Maurer for a principal amount which will be determined upon proof but which is no

26 less than $1,000,000.00, and for interest on the principal amount, and for attorney's

Page 29 - COMPLAINT


Portland, OR 97205 . Telephone: (503) 226-8122 • Fax: (503) 273-8842

[email protected]

'-"-I'

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

fees and costs, and for such other and further relief as the Court deems just and

equitable.

On Plaintiffs' Eighth Claim for Defamation by Slander for a judgment

against T. Maurer for a principal amount which will be determined upon proof but

which is no less than $1,000,000.00, and for interest on the principal amount, and for

attorney's fees and costs, and for such other and further relief as the Court deems just

and equitable.

On Plaintiffs' Ninth Claim for Intentional Misrepresentation for a judgment

against The Maurers for a principal amount which will be determined upon proof but

which is no less than $852,329.55, and for interest on the principal amount, and for

attorney's fees and costs, and for such other and further relief as the Court deems just

and equitable;

On Plaintiffs' Tenth Claim for Negligent Misrepresentation for a judgment

against The Maurers for a principal amount which will be determined upon proof but

which is no less than $852,329.55, and for interest on the principal amount, and for

attorney's fe.es and costs, and for such other and further relief as the Court deems just

and equitable;

On Plaintiffs' Eleventh Claim for Negligence for a judgment against The

Maurers for a principal amount which will be determined upon proof but which is no

less than $852,329.55, and for interest on the principal amount, and for attorney's "fees

and costs, and for such other and further relief as the Court deems just and equitable;

Dated: January 15, 2016

Swider Haver LLP by

Andrea A. Selkregg OSB #092595 Attorneys for Plaintiff

Page 30 - COMPLAINT



[email protected]

Documents

v. )media.oregonlive.com/marijuana/other/2016/01/15/randyquastsuit.pdf · 1/15/2016 · 4 Plaintiff, Randall R. Quast ("Quast"), is an individual who is now, and at all 5 relevant