Bautista v. Torres

Opinion

Fl'r SUFEP OR COURT 1

2 2614 !"I')7 AM9: 111 3 CLERK O , '_r+ 4 FAY: 5 IN THE SUPERIOR COURT OF GUAM 6

ROSARIO S. BAUTISTA and ) Civil Case No. CV0471-07 7 MANUEL C. SHOLING, 8 Plaintiffs. 9 V 9. ) DECISION AND ORDER: Intervention Defendants Rosario Bautista and Manuel 10 FRANCISCO TORRES, Individually and Sholing ' s Motion to Dismiss the Complaint as the Previous Special Administrator and in Intervention 11 Now Executor of the Estate of Jesus U. ) Torr es, Deceased, 12 Defendant. ) 13 ) ) 14 DANIEL U. TORRES and BARBARA M. 15 DeMELLO, TRUSTEE UNDER THE ESTEBAN TORRES FAMILY TRUST ) 16 DATED MAY 12,1995 ) 17 Intervenor Plaintiffs. 18 vs. ROSARIO S. BAUTISTA and 19 MANUEL C. SHOLING, 20 Defendants, 21 And 22 GLORIA C. SHOLING,

23 Third-Party Defendant.

INTRODUCTION 25

26 This matter came before the Court on Intervention Defendants' (Rosario Bautista and

27 Manuel Sholing) Motion to Dismiss the Complaint in Intervention. Attorney Daniel J. Berman 28 represented Plaintiff-Intervenors. Intervention Defendants were represented by Attorney

Bautista and Sholing v. Torres (CV0471-07) Decision and Order

ORIGINAL Wayson W.S. Wong. Upon review of the evidence, written arguments, and legal authorities 1

2 presented, the Court hereby issues this Decision and Order Granting the Intervention

3 Defendants' motion. 4 BACKGROUND 5 On April 23, 2007, Plaintiffs (Intervention Defendants) Rosario Bautista and Manuel 6

7 Sholing filed a complaint against Defendants Francisco Tones and Peter Perez, executors of the

8 Tones estate, for breach of fiduciary duty, recission and restitution, deceptive trade practices, 9 and negligence.' This action arose from a 1987 retainer agreement between Ms. Ana Sholing 10 (deceased) and Attorney Jesus U. Tones (deceased) in which Attorney Tones would provide 11 legal services in exchange for ten percent of the monthly rental earnings from the Pacific Island 12

13 Club Property for a period of twenty five years.2 Plaintiffs allege improprieties in the handling

14 of Plaintiffs' business and financial affairs by Attorney Tones and, following his death, by 15 Defendant Perez. 16 On October 29, 2009, Plaintiff-Intervenors sought to intervene in the litigation to protect 17

their interests as heirs to the Tones estate and to assert claims the representative of the estate was 18

19 allegedly unable or unwilling to make 3 The Court granted the heirs requested intervention. 4

20 Additionally, Plaintiff-Intervenors sought to join Third-Party Defendant Gloria Sholing as a 21 necessary party to the litigation, which the Court allowed.5 In response, Gloria moved to dismiss 22 the Intervenors' claims for lack of standing.6 On May 31, 2013, the Court granted the motion and 23

25 'See Third Amended Complaint, CV0471-07 (Jul. 10, 2009) 26 _ Id. ¶¶ 11-12 at 2-3. Motion to Intervene and Join Third-Party Defendant, CV0471-07 (Oct. 29, 2009) 27 Hearing Minutes. CV0471-07 at 4:55:13 PM (Dec. 16, 2009) 6 Motion to Intervene and Join Third-Party Defendant, at 1; Summons to Gloria Sholing, CV0471-07 (Dec. 28, 28 2009) 6Gloria C. Sholing's Motion to Dismiss. CV0471-07 (May 28, 2010)

2 Bautista and Sholing v. Torres (CV0471-07) Decision and Order dismissed the claims against the Third-Party Defendant.? Intervention Defendants now move to 1

2 dismiss the claims against them, asserting that such litigation is similarly barred by Intervenors'

3 absence of standing. 4 DISCUSSION 5 Intervention Defendants' Motion to dismiss is made pursuant to both Guam Rule of Civi 6

7 Procedure 12 (b) (6) and the Court's Order granting Third-Party Defendant Gloria Sholing'

8 Motion to Dismiss under Rule 12 (c). (See Intervention Defendants Motion to Dismiss the 9 Complaint in Intervention CV0471-07 at 2 (Jul. 1, 2014)). 10 Following service of a summons and complaint, a defendant may move to dismiss a suit 11

against them on the grounds that the complaint fails to "state a claim upon which relief can b 12

13 granted." Guam R. Civ. P. 12 (b) (6). "To survive a [Rule 12 (b) (6)] motion to dismiss,

14 complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that i 15 plausible on its face. A claim has facial plausibility when the plaintiff pleads factual content tha 16 allows the court to draw the reasonable inference that the defendant is liable for the misconduc 17

alleged." Rodriguez v. Gov't of Guam, CIV. 09-00025, 2010 WL 480989 at *5 (D. Guam Feb. 3 18

19 2010) (citing Ashcroft v. Igbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949 (2009). For purposes o

20 evaluating a motion to dismiss, a court "must take all of the factual allegations in the complain 21 as true" though it is "not bound to accept as true a legal conclusion couched as a factual 22 allegation." Id. at *6 (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 195 23

(2007)).Granting a Rule 12 (b) (6) motion is proper when it "appears beyond doubt that th 24

25 plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Cot 26

28 7 Bautista and Sholing v. Torres and Perez, CV0471-07, Decision and Order. Gloria Sholing' s Motion to Dismiss (May 31, 2013).

Bautista and Sholing v. Torres (CV0471-07) Decision and Order Tech Intl Corp. v. Hanil Eng'g & Const. Co., Ltd., CVA09-029, 2010 WL 3610447 (Guam Sept

2 13, 2010) (citing Twombly, 550 U.S. at 561; Taitano v. Calvo Finance Corp., 2009 Guam 9N6.)

3 Alternately "[a]fter the pleadings are closed but within such time as not to delay the trial

any party may move for judgment on the pleadings." Guam R. Civ. P. 12 (c). A Rule 12(c 5 motion provides a means to dispose of cases where no material facts are disputed. See Kruzitis v. 6 Okuma Mach. Tool, Inc., 40 F.3d 52, 54 (3d Cir. 1994) ("Under Rule 12(c), we will not gran 7

a judgment on the pleadings unless the movant clearly establishes that no material issue of fac

9 remains to be resolved and that he is entitled to judgment as a matter of law.") (intema 10 quotations omitted). The legal standard for Rule 12(c) is essentially identical to that of a Rule 1 11 (b) (6) motion. See Dworkin v. Hustler Magazine, Inc., 867 F.2d 1188, 1192 (9th Cir. 1989) 12

The evaluating court should presume the veracity of the Plaintiff Intervenors' allegations an 13

14 must draw all reasonable inferences in their favor. See Usher v. City of Los Angeles, 828 F.2

15 556, 561 (9th Cir. 1987). Granting a Rule 12(c) motion is appropriate "when, taking all the 16 allegations in the pleading as true, the moving party is entitled to judgment as a matter of law." 17 Ada v. Guam Telephone Authority, 1999 Guam 10 19 (internal quotations omitted). 18

19 Standing

20 "Standing is a component of subject matter jurisdiction, and is a threshold jurisdictional 21 matter ...... Guam Election Comm 'ii v. Responsible Choices for All Adults Coal., 2007 Guam 2 22 ¶ 26 (citing Taitano v. Lujan, 2005 Guam 26 ¶ 15). Thus, this Court "has no subject matte 23

jurisdiction to hear a claim when a party lacks standing." Id.; Taitano, 2005 Guam 26 ¶ 15. 24

25 "The question of standing to sue goes to the existence of a cause of action against the defendant."

26 Taitano, 2005 Guam 26 ¶ 15 (citing Parker v. Bowron, 254 P.2d 6, 9 (Cal. 1953); Commo n 27 Cause v. Bd. of Supervisors, 777 P.2d 610, 613-14 (Cal. 1989)). 28

4 Bautista and Sholing v. Torres (CV0471-07) Decision and Order 1. May 31, 2013 Decision and Order 1 2 In this instance, the Court has already ruled on the standing of Plaintiff-Intervenors t c

3 bring claims for breach of the 1987 Amended Agreement in substitution of the Tones estate' 4 representative. Bautista and Sholing v. Torres and Perez, CV0471-07, Decision and Order. 5 Gloria Sholing's Motion to Dismiss (May 31, 2013). Interpreting the relevant statutory guidance 6 and applicable which allegedlycaselaw, belongs this to anCourt estateheld only unlike can that, be litigated real property, by the executor claimsof forthat personal estate.property Id. at 7- 7

9 9. As explained in the previous Order, Section 2205 of the Guam Probate Code states: 10 (a) Except as otherwise provided in Section 2207 of this Title, the 11 personal representative shall take into his possession all the estate of the decedent, real and personal, and collect all debts due to the 12 decedent or to the estate; and the personal representative is entitled 13 to the possession of all the real and personal property of the decedent, and to receive the rents, issues and profits thereof until 14 the estate is settled or until delivered over by order of the Superior Court of Guam to the heirs, devisees or legatees. 15

16 (c) Notwithstanding the provisions of subsection (a) of t hi s Section, after the time to file or present claims has expired the 17 personal representative is not entitled to recover the possession of any property of the estate from any heir who has succeeded to the 18 property in such heir's possession, or from any devisee or legatee 19 to whom the property has been devised or bequeathed, or from the assignee of any such heir, devisee or legatee, unless the personal 20 representative proves that the same is necessary for the payment of debts or legacies, or of the expenses of administration already 21 accrued, or for distribution to some other heir, devisee or legatee 22 entitled thereto. (d) Any of the heirs or devisees may themselves, or jointly with the 23 personal representative, institute and maintain an action for the possession of the real property, or for the purpose of quieting title 24 to the same, against any one [sic] except the personal 25 representative, but they are not required to do so.

26 Id. (citing 15 G.C.A. § 2205) 27 Based upon application of this statute, the Court concluded that "[s]ince Plaintiff Intervenors' 28 action is for the possession of estate personal property (i.e. money owed under the 198 5 Bautista and Sholing v. Torres (CV0471-07) Decision and Order Agreement), Section 2205 of the Guam Probate Code does not confer standing on Plainti

2 Intervenors. Plaintiff Intervenors also have not alleged any exceptional circumstance that woul d

3 allow them to bring forth an action for estate personal property. Therefore, since Section 220 4 does not confer standing on Plaintiff Intervenors." Id. at 9. The Court bolstered this statutory 5 analysis with consistent findings from California courts interpreting an identically-written law. 6

See e.g. Rogers v. Bank of America National Trust and Savings Association, 140 Cal. App. 2 7

8 228, 232, 294 P.2d 959, 961 (1st Dis. 1956) (actions for personal property "must be brought b

9 the executor or administrator of the estate.") (citations omitted); Manti v. Gunari, 5 Cal. App. 3 10 42, 446-47 (1st Dist. 1970) ("Only the duly qualified executor or administrator may being [sic] 11 an action for recovery of personal property"); Hall v. Alexander, 64 P.2d 767, 767-68 (2d Dis. 12

1937) ("A debt due to the intestate is a personalty, and does not descend to the heir like realty 13

14 but vests in the administrator, who has the sole right to maintain actions to collect the same... 15 The heir cannot bring an action to enforce payments or collect debts... This action, therefore 16 could be maintained only by the qualified personal representative of the decedent") (citation 17 omitted). Accordingly, Plaintiff -Intervenors were not permitted to bring a breach of contras 18

19 claim despite their potential interest as heirs of the estate. Id. at 9-10.

20 II. Law of the Case 21 The Law of the Case doctrine states that a court is not to reconsider an issue that has 22 already been decided by the same court or a higher court in the same case. Carlson v. Perez 23 2007 Guam 6 ¶ 19. Given the outcome-determinative nature of May 31, 2013 Order's finding 24

25 and connection between its facts and those now before the Court, that Order's holdings regarding

26 standing of the Plaintiff-Intervenors to bring their claims have become the Law of the Case. 27 Lower Elwha Band of S'Klallams v. Lummi Indian Tribe, 235 F.3d 443, 452 (9th Cir. 2000 28 ("The Law of the Case applies to issues that have been decided explicitly or by necessar) 6 Bautista and Sholing v. Torres (CV0471-07) Decision and Order implication in [the] previous disposition.") (internal quotations omitted); Transamerica Leasing, 1

2 Inc. v. Institute of London Underwriters, 430 F.3d 1326, 1331 (11th Cir. 2005). As such, th e

3 findings and rationale used in granting Defendant Gloria Sholing's Motion control resolution o 4 the present Motion to Dismiss. See Lujan v. Lujan, 2002 Guam 11 ¶ 7 (`[A] court is generall y 5 precluded from reconsidering an issue that has already been decided by the same court, or 6

higher court in the identical case.") (citations omitted); People v. Hualde, 1999 Gua m 3 ¶ 13 7

8 (absent a showing of clear error, manifest injustice, or an intervening change in law, evidence, o

9 circumstances, "failure to apply the doctrine of l a w of the case... constitutes an abuse o 10 discretion"). 11 In their opposition to the Motion to Dismiss, Plaintiff-Intervenors claim that the Court' 12

decision to allow intervention itself constitutes the Law of the Case establishing that then 13

14 standing is proper. However, as explained in the May 31 Order, "[a]lthough Plaintiff Intervenor

15 maintain were allowed theirto breach intervene, of contract they are still required action." Decisiontoand establish Order,that at 10. they (citing have Comrie standingv.toEnerasy file and 16

17 Networks, Inc., No. Civ. A. 19254, 2004 WL 293337, at *2, n. 14 (Del. Ch. Feb. 17, 2004) ("The 18

19 implication of guaranteeing intervention is that the defendants would not waive any potential

20 defenses, including a standing defense."); Hausmann v. Farmers Ins. Exchange, 213 Cal. App. 21 2d 611, 615, 29 Cal. Rptr. 75, 78 (2d Dis. 1963) (citing Moran v. Bonynge, 157 Cal. 295, 107 P 22 312) ("When the intervener is admitted, the pleading which he presents and files must state fact 23 sufficient, if true, to establish the right or interest which he claims, or else he has no standing i 24

25 court as a litigant if proper objection is made.")). Thus, allowing Intervenors to put forth a claim

26 not yet presented by the estate did not preclude the Court from ultimately concluding that the 27 lacked standing under Guam law to litigate the asserted claim. Id. 28

7 Bautista and Sholing v. Torres (CV0471-07) Decision and Order Further, Plaintiff-Intervenors allege that the Law of the Case does not bar their action du

2 to the independent claim that standing was conferred through partial distribution by the Probate

3 Court. In support of this argument, Intervenors cited Brewster v. Gage, 280 U.S. 327, 334, 50 S 4 Ct. 115, 116 (1930) and Baza v. Pacific 98, CV0625, at 6 (Super. Ct. Jan 28, 2008). However, 5 the Court examined both of these cases and found their holdings did not affect the outcome 6

prescribed under general statutory guidelines. As explained in the previous Order, Baza deal 7

8 with an heirs rights regarding real property, not personal property, and is thus inapplicable to the

9 present facts. Decision and Order, at 9. In addition Brewster held specifically that title t 10 personal property passed to the representative of the estate while heirs are vested only with the 11 rights to "his distributive share of so much as shall remain after proper administration and the 12

right to have it delivered upon entry of the decree of distribution." 280 U.S. at 334. Here, while 13

14 partial disbursement of assets has occurred, the disputed personal property at issue in this case 15 has not been settled or administrated through the estate by the Probate Court, Thus, the genera 16 rule applies to the assets at issue in the present litigation and an heir may not "by any act of hi s 17 own, strip the representative of any of his rights, nor relieve him from the performance of any o 18

19 his duties." Decision and Order , at 9 (citing Hall, 18 Cal. App. 2d at 663). Intervenors lac

20 standing to bring suit in their individual capacity. Id. 21 Finally, Intervenors allege that, in finding that they lacked standing, the Court committed 22 clear error by failing to consider Section 2205 in light of the common law exception employed i 23 California and other jurisdictions. However, this argument mischaracterizes the analysis of the 24

25 previous Order. Indeed, the Court specifically stated the importance of considering Californi a

26 holdings in probate mattersZahnen due to thev.similarity Limtiaco, 2008 inGuam of statutes the two5 jurisdictions. ¶ 17 (citing People Decision v. Angoco, anOrder, 200 at 7-8 (citing 27

28 Guam I ¶ 52 n. 4)) ("Because the Guam Legislature enacted a probate code substantially simil 8 Bautista and Sholing v. Torres (CV0471-07) Decision and Order to the California Probate Code in 1953, we look to California case law for interpretation." ); se

2 People v. Hall, 2004 Guam 12 ¶ 18 (finding that California case law interpreting a California

3 statute from which a Guam statute was derived is persuasive authority, and adopting such case 4 law "absent a compelling reason to deviate.")).While determining the standing of the heirs t 5 bring suit against Defendant Gloria Sholing, this Court thoroughly examined the California 6

caselaw interpreting the state's statutory counterpart on which the Guam law is based. Id. (citing 7

8 Cal. Prob. Code §§ 571, 581; Rogers, 294 P.2d at 961; Manti, 5 Cal. App. 3d at 446-47; Hall, 6

9 P.2d at 767-68). This evaluation revealed clearly that "[ijn California, it has long been settle 10 that actions for personal property must be brought by the executor or administrator of the estate." 11

Id. at 8 (internal quotations omitted). 12

13 As noted by Intervention Defendants in their reply brief, the Decision and Orde

14 acknowledged and considered California's exception to the stated rule where the executor i 15 unable or unwilling to bring suit or where the executor obstructs or colludes with obligors to the 16 detriment of the estate. Id. at 8. Despite such consideration, the Court concluded that Plaintiff 17

Intervenors had not satisfactorily demonstrated the existence of exceptional circumstances whit 1s

19 justified departure from the general rule barring suit by heirs for personal of the estate. Id. at 9.

20 Intervenors presented no evidence of bad faith, collusion, or outright obstruction on the part o 21 the estate. On the contrary, representatives of the estate have worked proactively an 22 competently to defend its assets throughout the course of the litigation. Additionally, all parties 23

agree that the representatives have the ability, on behalf of the estate, to bring the claims asserted 24

25 by Intervenors. Finally, in the absence of further evidence to the contrary, the Court is unwillin

26 to infer actual opposition on the part of the representatives to assert any particular cognizable 27 claim merely from the fact that they have not yet done so. Accordingly, the Complaint again 28

9 Bautista and Sholing v. Torres (CV0471-07) Decision and Order Intervention-Defendants Bautista and Sholing is governed by the Law of the Case and must bq' 1

2 dismissed for lack of standing.

3 Dismissal without Prejudice 4 As discussed supra, standing is a threshold issue of jurisdiction which must be addressed 5 prior to reaching the substance of a claim. Taitano, 2005 Guam 26 ¶ 15; Apex Digital, Inc. v. 6

Sears. Roebuck & Co., 572 F.3d 440, 443 (7th Cir.2009). Thus, because adjudication based on 7

8 lack of standing is disposed of without a decision on the merits, it is well settled that dismissal

9 without prejudice is proper. See e.g. Am. Bottom Conservancy v. U.S. Army Corps ofEng'rs, 650 10 F.3d 652, 660 (7th Cir.201 1) (where a district court dismisses a suit for lack of standing, "it [has] 11 no jurisdiction [and] therefore [can] only dismiss without prejudice"); Martinez v. Richardson, 12

13 472 F.2d 1121, 1126 (10th Cir.1973) ("It is fundamental ... that a dismissal for lack of

14 jurisdiction is not an adjudication of the merits and therefore ... must be without prejudice.");

15 Brereton v. Bountiful City Corp., 434 F.3d 1213, 1216-17 (10th Cir. 2006) ("once a court 16 determines it lacks jurisdiction over a claim, it perforce lacks jurisdiction to make any 17

determination of the merits of the underlying claim.") (citations omitted); County of Mille Lacs 18

19 v. Benjamin, 361 F.3d 460, 464-65 (8th Cir.); Harris v. Quinn, 656 F.3d 692, 701 (7th Cir.201 1)

20 Indeed, the Guam Rules of Civil Procedure echo the federal rationale explicitly. Guam. R. Civ. 21 P. 41(b) ("Unless the court in its order for dismissal otherwise specifies, a dismissal under this 22 subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of 23

jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an 24

25 adjudication upon the merits.") (emphasis added). Thus, the Dismissal of the Complaint in

26 intervention is without prejudice. 27

10 Bautista and Sholing v. Torres (CV0471-07) Decision and Order CONCLUSION 1

2 Based on the foregoing reasons, the Court GRANTS Intervention Defendants' (Rosario

3 Bautista and Manuel Sholing) Motion to Dismiss the Complaint in Intervention. 4

5 SO ORDERED this day of August, 2014. 6

9 'e; 10 HONORABLE KATHERINE A. MARAMAN Judge, Superior Court of Guam 11

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11 Bautista and Sholing v. Torres (CV0471-07) Decision and Order