Medbox Incorporated v. Kaplan et al

Filing 101

ORDER Granting in Part and Denying in Part Defendants' 89 Motion for Summary Judgment. Signed by District Judge Matthew F. Leitman. (HMon)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
NOTIS GLOBAL, INC., f/k/a
MEDBOX INCORPORATED,
Plaintiff,

Case No. 13-cv-14775
Hon. Matthew F. Leitman

v.
DARRYL B. KAPLAN et al.,
Defendants.
_________________________________/
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT (ECF #89)

In this action, Plaintiff Notis Global, Inc., formerly known as Medbox
Incorporated, brings claims against Darryl B. Kaplan, Claudio Tartaglia, Eric
Kovan, and Medvend Holdings, LLC (collectively, “Defendants”) arising out of a
Membership Interest Purchase Agreement (the “Agreement”) entered into by the
parties on March 12, 2013.
Plaintiff filed its Third Amended Complaint (the “TAC”) on February 19,
2016. (See ECF #81.) Defendants thereafter filed a motion for summary judgment
(the “Motion”). (See ECF #89.) Plaintiff responded to the Motion on October 3,
2016. (See ECF #92.) Defendants replied to Plaintiff’s response on October 20,
2016. (See ECF # 100.)

1

The claims in the TAC are as follows: Count One alleges breach of contract;
Count Two alleges conversion; Count Three alleges violation of the Michigan
Uniform Securities Act (MUSA); Count Four alleges fraudulent concealment
and/or silent fraud; Count Five alleges negligent misrepresentation; Count Six
alleges violation of the Arizona Consumer Fraud Statute, ARS §44-1522; Count
Seven seeks rescission of the contract between the parties; Count Eight seeks a
declaratory judgment that “Medvend [Holdings, LLC] must return $300,000 lent to
[Plaintiff] under the Agreement.”
The Court held a hearing on the Motion on November 16, 2016. For the
reasons explained on the record at the hearing, the Motion is GRANTED IN
PART and DENIED IN PART. Specifically, the Motion is GRANTED as to
Counts Two, Six, Seven, and Eight and the claims in those Counts are
DISMISSED. In addition, the Motion is GRANTED as to any claims in Count
Four and Count Five that relate to the March 8, 2013, inspection report issued by
the State of Michigan Department of Licensing and Regulatory Affairs and/or any
representations by Defendants that they were in compliance with the law.1 Such
claims are hereby DISMISSED. The Motion is DENIED as to Count One and
Count Three. The Motion is also DENIED as to any claims in Count Four and

1

In other words, the Court dismisses all misrepresentation or fraud tort claims that
involve what the Court referred to at the hearing as the “Pharmacy Issue.”

2

Count Five that relate to Defendants’ alleged misrepresentations regarding whether
they had the authority to consummate the transaction memorialized in the
Agreement.2
Accordingly, the following claims remain for trial:
1. Plaintiff’s breach of contract claim in its entirety (Count I);
2. Plaintiff’s fraud and misrepresentation claims related to what the Court
referred to at the hearing as the “Envy-Tech” issue (Counts IV and V);
and
3. Plaintiff’s claim under the MUSA.
IT IS SO ORDERED.
s/Matthew F. Leitman
MATTHEW F. LEITMAN
UNITED STATES DISTRICT JUDGE
Dated: November 17, 2016

I hereby certify that a copy of the foregoing document was served upon the
parties and/or counsel of record on November 17, 2016, by electronic means
and/or ordinary mail.
s/Holly A. Monda
Case Manager
[phone]

2

In other words, the Court denies summary judgment for Plaintiffs’
misrepresentation and fraud claims that relate to what the Court referred to at the
hearing as the “Envy Tech” issue.

3