CASE UPDATE - MEC V KENNETH MACIORA ET AL
Signature Stock Transfer filed a Demurrer to Maciora's Cross Complaint on December 12. A hearing has been scheduled for February 4.
The Demurrer challenges the Sixth through Twelfth Causes of Action for being insufficient to establish a Cause of Action. They are premised on two contradictory statements in Maciora's Cross Complaint.
Below is the content of the Intro and Conclusion.
INTRODUCTION
This case was initiated on October 31, 2016 when MyECheck (MEC) sued Kenneth Maciora (Maciora) and his co-conspirators seeking to invalidate the 66,666,666 shares of MEC stock that Signature Stock Transfer (SST) had issued to Maciora on August 24, 2016 in settlement of a Texas lawsuit that Maciora had filed against SST and to prevent SST from transferring the stock from Maciora to any third party. MEC alleged that the stock was fraudulently issued and that Maciora had purchased it for a nominal sum ($2,000) because he and his co-defendants knew the issuance was not and never would be ratified by MEC'.
In response, Maciora cross-complained against MEC, its transfer agent SST and others. It appears that the essence of Kenneth Maciora's (Maciora) rather lengthy cross-complaint is articulated in paragraph 190: "MyECheck, GreenPay Starrs and Signature Stock Transfer agreed in July of 2016 never to recognize Maciora as a shareholder and to never recognize his stock certificate as genuine even though they were agreeing and representing to Maciora that he would receive a stock certificate and be a registered shareholder."
However, at paragraph 79 of the cross-complaint Maciora states just the opposite: "(Starrs, MyECheck and Greenpay) knew Maciora was going to rely on the fact that Starrs told Signature Stock Transfer and Signature's attorney that Starrs would forever agree that Maciora is a registered shareholder and that he should be issued the stock."(Emphasis added)
Since the allegation in paragraph 79 is a judicial admission and thus "a conclusive concession of the truth of the matter" Addy v. Bliss & Glennon (1996) 44 Cal.App.4* 205, 218, either the cross-complaint cannot state facts sufficient to state a cause of action because there was no agreement to defraud Maciora or the cross-complaint is hopelessly uncertain. Maciora cannot truthfully plead on the one hand that the cross-defendants agreed to never recognize his stock certificate as genuine and, on the other hand, that the cross-defendants always agreed to recognize his stock certificate as genuine.
In addition to certain procedural deficiencies discussed infra, the cross-complaint is also fundamentally flawed as it pertains to SST, MEC's transfer agent. As the transfer agent, under
California law, SST has no liability to Maciora for any delay or refusal to issue stock, to transfer stock or to remove a restrictive legend on stock. "There is no direct liability of a transfer agent or transfer officer to the holder for delay in transferring or refusal to transfer stock even if such delay or refusal is wrongful, and might subject the corporation itself to liability in damages or in conversion." Mears v. Crocker First Nat 7 Bank of San Fi-ancisco (1950) 97 Cal.App.2d 482-485-86.
Therefore, even if Maciora did not admit in paragraph 79 that the cross-defendants did not engage in a conspiracy to defraud him and, thus, did not commit any wrongful acts, SST could not be held liable for any of its co-defendants allegedly wrongful conduct because, as a matter of law, it owed no duty to Maciora to timely transfer his stock, or to transfer it all, or to remove the restrictive legend that Maciora agreed upon as part of the Texas settlement.
CONCLUSION
The judicial admission in paragraph 79 that "(Starrs, MyECheck and Greenpay) knew Maciora was going to rely on the fact that Starrs told Signature Stock Transfer and Signature's attorney that Starrs would forever agree that Maciora is a registered shareholder and that he should be issued the stock" (emphasis added) is irreconcilable with the overarching premise of the cross-complaint that Starrs and MEC would never recognize the legitimacy of Maciora's MEC stock. Consequently, the cross-complaint is fatally uncertain.
Additionally, as enumerated above, each of the causes of action alleged against SST fails to state facts sufficient to state a cause of action because: i) Maciora admits in paragraph 79 that the cross-defendants did not agree to never issue him stock nor to never recognize him as a registered shareholder; ii) as the transfer agent SST is not liable to Maciora as a matter of law for the refusal to issue or delay in issuing him stock, even if he was rightfully entitled to it; and iii) for the litany of technical defects cited above. Accordingly, this demurrer should be sustained to the sixth through twelfth causes of action.
