In a nation where filing lawsuits is as much a part of our social DNA as baseball, tort claims are a sure sign that an emerging business has become lucrative enough to run up legal bills.
By that measure, Oregon’s marijuana market has arrived in the mainstream. In a move marijuana activists and legal experts are calling highly unusual, one man is suing another man for $127,000 in Multnomah County Circuit Court for his stake in a pot-growing operation.
“It certainly is not the typical breach-of-contract case,” says Keith Ketterling, a business lawyer with Stoll Berne in Portland. “The contract performance was possibly illegal to begin with.”
In the lawsuit filed Dec. 17, Kevin Williams claims he was approached in March 2009 by Scott Harman about building a grow operation for medical-marijuana patients.
The two men are unlikely partners. Williams was busted in 2006 for an illegal pot grow in Eastern Oregon and sentenced to six months in jail. Harman lives in Lake Oswego and worked for seven years as a Portland mortgage broker, state records show.
“[Harman] talked to his psychic about it, and she seemed to think it was a good idea,” Williams, 48, tells WW about the pot business. Harman declined to comment.
Williams’ suit says Harman offered him $5,000 a month plus 35 percent of the profit on a “legally licensed medical-marijuana grow.”
But Oregon law expressly forbids medical-marijuana growers from turning a profit.
“That’s not legal,” says Paul Stanford, a longtime Portland pot activist who helped pass the medical-marijuana law in 1998. “[Growers] can only be recompensed for their expenses, not their time.”
Jason Brauser, a business lawyer for Stoel Rives in Portland, suggests whether the grow was legal could be key to the case.
“You won’t be able to legally enforce the contract if the contract was to perform illegal activities,” Brauser says.
Williams’ attorney, Lake Perriguey, insists the grow was legal under Oregon’s medical-marijuana law, which is riddled with loopholes (see “Weed, the People,” WW, Jan. 12, 2011).
But the business never took off. Williams says they abandoned the operation after 6½ pounds of weed were stolen.
Williams’ lawsuit says he never received his pay for that grow in a Beaverton rental home, and that Harman approached Williams again in April 2010 about building another grow—this time in a Clackamas commercial office park.
The suit says Williams and Harman agreed to be equal partners in the new venture under the name “H&W Windsails.” Williams says he built the grow with $100,000 in equipment Harman bought as payback to Williams for the Beaverton grow.
Williams says he spent more than a year living in the office space while he built and tended the grow.
But in early September, the suit says Harman changed the locks and refused to let Williams back inside to collect his things. The lawsuit seeks $106,000 for Williams’ share of the partnership plus $21,000 for his belongings.
A sign for H&W Windsails was still attached to the office in Clackamas when WW visited Jan. 13, but a notice to vacate was taped to the door. Neighbors said the smell of marijuana used to be strong, but they believe the space has now been abandoned.
While Harman lives in a Lake Oswego home assessed at $508,000, Williams says he’s broke and couch-surfing.
“I feel really hoodwinked,” he says. “I’m fairly gullible and naive.”
FACT: Oregon State Police found 76 pot plants when they raided an elaborate underground grow operation in 2006 on a rural Wasco County property Williams shared with his father and stepmother, according to police reports. Williams pleaded guilty to felony drug manufacturing and was sentenced to six months in jail.