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Green Cross Medical, Inc. v. Gally

Court of Appeals of Arizona, First Division, Department C

September 26, 2013

GREEN CROSS MEDICAL, INC., an Arizona non-profit corporation, Plaintiff/Appellee,
v.
JOHN V. GALLY, Trustee of the John V. Gally Family Protective Trust, dated January 11, 1993, Defendant/Appellant

Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure

Appeal from the Superior Court in Navajo County Cause No. S0900CV201200208 The Honorable Ralph E. Hatch, Judge

Cunningham Mott, PC Flagstaff By William Whitney Cunningham Attorneys for Plaintiff/Appellee

KL Ward & Associates, LLC Chandler By Kathryne L. Ward Attorneys for Defendant/Appellant

MEMORANDUM DECISION

PATRICIA A. OROZCO, Judge

¶1 John V. Gally (Gally), as trustee of the John V. Gally Family Protective Trust appeals the trial court's order granting an application for a preliminary injunction filed by Green Cross Medical Center (GCM). For the following reasons, we affirm the trial court's decision.

FACTS AND PROCEDURAL HISTORY

¶2 In April 2012, Gally, in his capacity as Trustee, executed a commercial lease agreement with GCM, in which Gally agreed to rent to GCM a property located in Winslow, Arizona. At the time of the lease's execution, GCM was attempting to obtain a license to grow and dispense medical marijuana and intended to use the property for those purposes. The purpose of GCM's business was clearly set forth in the lease. Approximately two weeks later, Gally purported to revoke the lease.

¶3 GCM filed suit to enforce the lease, arguing that Gally was in breach of contract. Upon filing suit, GCM filed a motion for a temporary restraining order and a motion for a preliminary injunction. The trial court issued the temporary restraining order.

¶4 Gally filed a motion to vacate the temporary restraining order, arguing only that the previous tenant, Winslow Water Conditioning (WWC), had a superior interest in the property in the form of an option to purchase the property with Mantegic Technologies, Inc. (MTI), which manages WWC.

¶5 The trial court granted the preliminary injunction, finding that GCM "has a superior leasehold interest in the property to any interests of [MTI], managing member of [WWC], which purports to have exercised an option to purchase the property." Gally timely appealed. We have jurisdiction pursuant to Arizona Revised Statutes (A.R.S.) sections 12-120.21.A.1 (2003) and -2101.A.5(b) (Supp. 2012).

DISCUSSION

Illegal Purpose

¶6 On appeal, Gally argues that, notwithstanding Arizona law regarding growing and dispensing medical marijuana, federal law prohibits such activities, and thus, the contract is void based on illegality of purpose. GCM argues that this issue was not decided by the ...


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