Camacho v. Cunliffe

Opinion

(Ri •1 —‘ fi T

IN THE SUPERIOR COURT OF GUAM 6

7 ) $ ) VIELISSA P. CAMACHO, ) CiVIL CASE NO.: CV0046-20 9 ) 10 Plaintiff, ) 11 vs. ) ) DECISION AND ORDER: 12 RANDALL CUNLWFE, as Trustee of . ) Defendant’s Partial Motion to Dismiss the he Pedro R. Pangelinan Trust, aka the ) Second, Fifth, Sixth, and Seventh Causes 13 )ONGO TRUST, ) of Action in Plaintiff’s Verified 14 ) Complaint Defendant. ) 15

16 [. INTRODUCTION 17 This matter came before the Honorable Judge Maria T. Cenzon on December 1, 2020 for a

earing on Defendant F. Randall Cunliffe’s (“Defendant”) Partial Motion to Dismiss the Second, 19 ifth, Sixth, and Seventh Causes of Action in Plaintiff’s Verified Complaint (“the Motion”).’ 20 )efendant was represented by Attorney Joe Razzano. Attorney Rachel Taimanao Ayuyu 21 epresents Plaintiff Melissa P. Camacho (the “Plaintiff’). All parties were present at the hearing 22

23 via Zoom platform and the Court took the matter under advisement. After reviewing the Parties’

24 Nritten briefs and the record on file with the court, the arguments presented at the Motion

25 Flearing, and the applicable statutes and case law, the court now issues this Decision and Order 26 GRANTING IN PART and DENYING IN PART DEFENDANT’S PARTIAL MOTION TO DISMISS. 27

2$ Defendant is named in his capacity as Trustee of the Pedro R. Pangelinan Trust aka the Dongo Trust.

Decision and Order Re. Defendant’s Partial Motion To Dismiss Second, ftfth, Sixth and Seventh Causes of Action Civil Case No. CV0046-20; Page 1 of 13 . 1 I. BACKGROUND 2 Plaintiff filed a Verified Complaint on January 21, 2020 alleging that, while acting

ursuant to his duties as trustee, the Defendant breached his duty of good faith, engaged in self- 4 ealing, exerted undue influence, failed to provide an accounting and that he acted fraudulently. 5 n particular, Plaintiff alleges that Defendant has attempted to sell trust property for far less than 6 air-market value, that such actions are not in the best interest of the beneficiaries of the trust and

$ hat the Defendant engaged in fraudulent activities. Ver. Compt. at p. 5—9. These averments form

he basis of Plaintiff’s Second cause of action for Self-Dealing and the Fifth, Sixth and Seventh 10 auses of action for Fraud. 11 On March 17, 2020, Defendant brought this Motion pursuant to Guam Rules of Civil 12 13 rocedure (“GRCP”) Rules l2(b)(6) and Rule 9. Defendant argues that the Second, Fifth, Sixth,

14 and Seventh Causes of Action in Plaintiff’s Verified Complaint fail to state a claim for which 15 elief can be granted and fail to plead fraud with particularity and, as such, must be dismissed.

16 ot. at p. 2. Plaintiff filed an Opposition to Plaintiff’s Motion on November 13, 2020, and 17 efendant filed a Reply to the Plaintiff’s Opposition on November 20, 2020. 18 II. LAW AND ANALYSIS 19 Guam law requires only “notice pleading” of a short and plain statement of the claim 20 showing entitlement to relief. Rule 8 of the Guam Rules of Civil Procedure provides: 21

22 (a) Claims for Relief. A pleading which sets forth a claim for relief, whether an original claim, counterclaim, cross-claim, or third-party claim, shall 23 contain (1) a short and plain statement of the grounds upon which the court’s jurisdiction depends, unless the court already has jurisdiction and the claim needs 24 no new grounds of jurisdiction to support it, (2) a short and plain statement of the 25 claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief to which the pleader seeks. Relief in the alternative or of several 26 different types may be demanded.

Decision and Order Re. Defendant’s Partial Motion To Dismiss Second, Fifth, Sixth and Seventh Causes ofAction Civil Case No. CV0046-20; Page 2 of 13 . 1 owever, “a plaintiff’s obligation to provide the grounds of his entitlement to relief ‘requires

2 ore than labels and conclusions, and a formulaic recitation of the elements of a cause of action

ill not do.” Ukau v. Wang, 2016 Guam 26 ¶91 25, 26 (citing Core Tech mt. ‘1 Corp. v. Hanil 4 ngineering & Construction Co., 2010 Guam 15 ¶ 52 (quoting Belt Atlantic Corp. v. Twombty, 5 50 U.S. 544, 555 (2007)). The dismissal of a complaint is appropriate only when the non- 6

7 oving party “can prove no set of facts in support of his claim which would entitle him to

$ elief.” Ulcati, 2016 Guam ¶91 5 1—52 (quoting Taitano v. Calvo fin. Corp., 200$ Guam 12 ¶ 9).

dditionally, in determining whether the 12(b)(6) motion should be granted, the pleadings must 10 e viewed in the light most favorable to the non-moving party and resolve all doubts in the non 11 oving party’s favor. Taitano ‘. &ztvo Fin. Corp. (“Taitano 1”), 2008 Guam 12 ¶ 9. To survive 12

13 efendant’s Motion, the Plaintiff’s Complaint must contain facts establishing the material

14 lements necessary to the claims.

15 A trustee clearly owes a beneficiary the highest duty of good faith. 18 GCA § 65201; 16 ujan v. J.L.H. Tr., 2016 Guam 24, ¶ 16. Under 1$ GCA § 65201, the trustee may not obtain any 17 advantage over beneficiaries by misrepresentation, concealment, threat, or adverse pressure. 18 oreover, 18 GCA § 65202 restricts the trustee from using or dealing with trust property for 19

20 own profit or any purpose unconnected with the trust. Defendant’s Motion is based upon the

21 ontention that the Plaintiff has failed to articulate a sufficient claim against him for self-dealing

22 ecause Plaintiff has not alleged any facts establishing that the trustee has personally benefitted 23 rom any transactions. The Plaintiff replies that the Verified Complaint contains allegations that 24 hat Defendant “has attempted to sell trust property to others for far less than fair-market value,” 25 and this act in and of itself constitutes a purpose which is unconnected to the trust, in violation of 26

27 18 GCA § 65202. Ver. Compi. at ¶ 29.

Decision and Order Re. Defendant’s Partial Motion To Dismiss Second, Ftfth, Sixth and Seventh Causes ofAction Civil Case No. CV0046-20; Page 3 of 13 . 1 a. Second Cause of Action: Self-Dealing 2 Plaintiff’s cause of action for “self-dealing” is grounded in 18 GCA § 65202, which

)rovides that “[a] trustee may not use or deal with the trust property for his own profit, or for any 4 )ther purpose unconnected with the trust, in any manner.” 18 GCA § 65202; Ver. Complaint ¶ 5 28; Opp. to Partial Mot. to Dismiss at p. 2. Plaintiff alleges specifically in her Verified 6

7 Complaint, as follows: 8 28. The Trustee is prohibited from using or dealing with the trust property for his own benefit, profit, or for any other purpose unconnected with the trust, in any manner. 10 29. Upon information and belief, the Trustee has attempted to sell trust 11 property to others for far less than fair-market value. Namely, upon belief, the Trustee has engaged in discussions wit/i others to sell prime beach- 12 front property located in Urunao, Guam, for a negligible amount. 13 Ver. Complaintfl 28, 29 (emphasis added). 14 The Guam Supreme Court has not previously addressed the question of what constitutes a 15 )rima facie case of self-dealing by a trustee under these circumstances, however, several cases 16

17 hay be considered to apply by analogy. See, Estate of Rena vente v. Maqitera, 2000 Guam 9, ¶ 23

18 (failing to disclose an interest in the transaction constitutes a breach of a fiduciary duty; attorney

19 )reached his fiduciary duty to client by placing himself in a position where his self- 20 nterest prevented him from giving disinterested advice to his client); Chung v. Blair Constr. Co., 21 2019 Guam 28, ¶ 21 (discussing self-dealing in reference to the fiduciary duties owed by a real- 22 estate broker to principal). Guam’s trust laws are adopted from California; therefore, the Court 23

24 ooks to “early California approach” on this issue for guidance.2

26 Lujan v. J.LH. Trust, 2016 Guam 24 ¶43 (“As we adopted our trust laws from the jurisdiction, this overview is helpful to our current inquiry, offering a clearer picture of Guam’s trust law as it now stands, and an indication of 27 rnw to venture forward. The procession of California trust law regarding trustee liability can be divided into three ras: common law, the early California approach and the modern view. Guam currently maintains the early 28 Thlifornia approach. Hemlani v. Meiwani, 2020 Guam 31 (“Guam’s statutory scheme regarding trusts derives from a

Decision and Order Re. Defendant’s Partial Motion To Dismiss Second, Ftfth, Sixth and Seventh Causes ofAction Civil Case No. CV0046-20; Page 4 of 13 1 “The duty of loyalty, requiring a trustee to administer the trust solely in the interest of the

2 )eneficianes ... is the most fundamental duty of a trustee.” Uzyel v. Kadisha, 18$ Cal.App.4th

$66, 905, 116 Cal. Rptr. 3d 244, (Cal. Ct. App. 2010); see, CA Probate Code § 16002, subd. 4 (a)(l991)(tmstee has a duty to administer the trust solely in the interest of the beneficiaries). A 5 :rustee violates this duty when, without the authorization of the trust instrument, permission by 6 he court, or the consent of the beneficiaries, the trustee engages in self-dealing or any other

$ ransaction “in which the trustee’s personal interests may conflict with those of the

eneficiaries.” Uzyel, at p. 905; see, CA Probate Code § 16004, subd. (a)(1991)(”[tjhe trustee has 10 ‘i duty not to use or deal with trust property for the trustee’s own profit or for any other purpose 11 rnconnected with the trust, nor to take part in any transaction in which the trustee has an interest 12

13 adverse to the beneficiary”). Compare, 18 G.C.A. § 65202 (“A trustee may not use or deal with

14 :he trust property for his own profit, or for any other purpose unconnected with the trust, in any

15 nanner”).3

16 The nile against self-dealing is stated in § 170 of the Restatement (Third) of Trusts, as 17 ollows: 1) The trustee is under a duty to administer the trust solely in the interest of the 18 )eneficiaries; and (2) The trustee in dealing with a beneficiary on the trustee’s own account is 19

20 mder a duty to deal fairly and to communicate to the beneficiary all material facts the trustee

21 nows or should know in connection with the transaction.4 No averments in Paragraphs 28 and

22 29 of the Verified Complaint establish facts constituting “self-dealing” as it is defined in the 23 estatement. 24

25 former version of California’s trust statutes. Where we have adopted California statutes, California case law interpreting those statutes stands as persuasive authority.”) 26 See, Corman v. Corman, 2016 WL 4501991 *5 (citing to Rest.3d Trusts, § 78 [“[e]xcept in discrete circumstances, he trustee is strictly prohibited from engaging in transactions that involve self-dealing or that otherwise involve or 27 reate a conflict between the trustee’s fiduciary duties and personal interests”l; id., § 78, corn. d [describing self [ealing as “engaging on behalf of the trust in transactions with the trustee personally”J. 2$ California courts have considered the Restatement of Trusts in interpreting California trust law. Id., fn. 5.

Decision and Order Re. Defendant’s Partial Motion To Dismiss Second, ftfth, Sixth and Seventh causes ojAction Civil Case No. CV0046-20; Page 5 of 13 1 On the face of the Verified Complaint and in its Opposition to Defendant’s Motion, the

2 laintiff argues that “[s]elling prime beach-front property for a negligible amount is for any other

urpose unconnected with the trust” and, therefore, constitutes unauthorized self-dealing. 0pp. at 4 3. However, nothing in Plaintiff’s complaint establishes a prima facie case of self-dealing and no 5 ases cited to by Plaintiff in its Opposition are on point. Compare, Churchill v. Peters, 57 Cal. 6

7 pp. 2d 521, 134 P.2d $41 (Cal. Ct. App. 4 1943)(Defendant was using or dealing with trust

$ )roperty for his own profit)); Estate of Pitzer, 155 Cal. App.3d 979, 202 Cal. Rptr. 855 (Cal. Ct.

pp. 5 1984)(finding self-dealing to have occurred, but ruling that “whether an investment or 10 sale is proper depends upon the circumstances existing at the time the trust was made, rather than 11 ipon subsequent events.” Rest.2d Trusts § 227, com. o, p. 535)); Municipal Bond Co. v. City of 12

13 ?iverside, 138 Ca. App. 267, 32 P 2d. 661 (Cal. Ct. App. 4 1934)(trustee was engaged in

14 lealings with the trust estate in a manner inuring to trustee’s benefit and beneficiaries’

15 letriment). Indeed, the allegation is that Defendant “attempted to sell” and “engaged in

16 liscussions” regarding the sale of the property for a “negligible amount.” The Property which is 17 he subject of the Petitioner’s Verified Complaint has not been sold and remains a trust asset.5 18 Even if the trustee actually consummated the sale of trust property at below fair market 19

20 ?alue, which sale has not occurred, this does not necessarily establish self-dealing without

21 anything more establishing a benefit to the trustee from such transaction. See, Neel v. Barnard,

22 24 Cal. 2d 406, 150 P.2d 177 (Cal. 1944)(in action against trustee, court rejected beneficiaries 23 ilaim that refusal to sell trust property for a certain price was breach of duty; trustee is entitled to 24 he benefit of the presumptions of regularity and good faith). Plaintiff contends that the 25 )efendant does not have to engage in activity that is solely for his own benefit to have engaged 26

27 - Mot. at p. 4 (“the Urunao property mentioned in the Declaration of Trust ... was not sold and remains a trust asset. 28 o be clear, no Urunao lots have ever been sold.”

Decision and Order Re. Defendant’s Partial Motion To Dismiss Second, Fifth, SLt1i and Seventh causes ofAction Civil Case No. CV0046-20; Page 6 of 13 1 •n self-dealing, only that the Defendant has dealt with the trust property for any other purpose

2 nconnected with the trust in any manner. Opp ‘n. at p. 2. However, as discussed, the Verified

omplaint fails to allege that Defendant used or dealt with trust property for his own profit or for 4 any other purpose unconnected with the trust, in any manner. Instead, Plaintiff only resorts to 5 onclusions of law which are unsupported by the facts as alleged in the Verified Complaint. As 6 he Guam Supreme Court held in Core Tech, “more than labels and conclusions, and a formulaic

8 ecitation of the elements of a cause of action” is required. Given that the Verified Complaint

ails to allege facts upon which relief may be granted, dismissal is proper. First Hawaiian Bank 10 v. Manley, 2007 Guam 2 ¶ 9. 11 b. Dismissal of the fifth, Sixth, and Seventh Causes of Action: Fraud 12

13 Defendant asks the Court to dismiss the Fifth, Sixth, and Seventh Causes of Action

14 ecause Plaintiff has failed to meet the heightened particularity standard required to plead claims

15 of fraud. The elements of fraud are: “(1) a misrepresentation; (2) knowledge of falsity (or

16 scienter); (3) intent to defraud to induce reliance; (4) justifiable reliance; and (5) resulting 17 amages.” Ukatt v. Wang, 2016 Guam 26, ¶ 36. 18 In order to sufficiently plead a claim for fraud, the Plaintiff must articulate her claims 19

20 ith particularity as required under GRCP Rule 9, which provides, in relevant part, as follows:

21 In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other 22 conditions of mind of a person may be averred generally. 23 ule 9(b) does not require a plaintiff to prove a claim of fraud at the pleading stage. Ukau v. 24 Wang, 2016 Guam 26, ¶ 47 (quoting Taitano I, 2008 Guam 12 ¶ 16). Rather, what is required is 25 hat a plaintiff set forth her claim with sufficient detail to provide notice to defendants as to what 26

Decision and Order Re. Defendant’s Partial Motion To Dismiss Second, Ftfth, Sixth and Seventh Causes ofAction Civil Case No. CV0046-20; Page 7 of 13 . 1 articular fraudulent action is being alleged. This standard has been described as a “who, what,

2 hen, where, and how” requirement. Id.

Under 18 GCA § 65207, any violation of the Trustee’s duties as articulated by these 4 statutes constitute a fraud on behalf of the Trustee. Plaintiff submits that the reason why she

ases her claims “upon information and belief’ is because the Defendant has failed to provide a 6

7 rust accounting to the beneficiaries. This is the very heart and gravamen of her complaint.

8 Generally, claims based on information and belief do not meet the heightened standard of

articularity required under Rule 9(b), but in instances where there are relevant facts which are 10 own only to the defendant, the pleading standard is slightly relaxed. Taitano v. Calvo Fin. 11 Corp., 2008 Guam 12, ¶ 15 (citing Concha v. London, 62 F.3d 1493, 1503 (9th Cir.1995)). “But 12

13 yen where allegations concern facts peculiarly within a defendant’s knowledge, the plaintiffs

14 ust still state a factual basis for their belief.” Id. (citing Neubronner v. Milken, 6 F.3d 666, 672

15 (9th Cir. 1993). Where defects in the pleading can be cured by the allegation of other facts, 16 owever, leave to amend should be freely given. Bly-Magee at p. 1019. 17 We now consider whether the Plaintiff has sufficiently pled fraud with the requisite 18 articularity in the the Fifth, Sixth and Seventh Causes of Action as contained in the Complaint: 19

20 1. Fifth Cause of Action

21 The Fifth Cause of Action alleges Fraud as follows:

22 40. Plaintiff repeats and realleges all above paragraphs. 23 41. Defendant informed Plaintiff and her siblings that the Dongo Trust owes taxes to the government of Guam which required trust corpus to be sold. 24 42. Defendant knew or should have known that the Dongo Trust received monthly payments from Guam Music Inc. sufficient to pay any taxes owed by the Trust. 25 43. Upon information and belief, the outstanding tax liabilities belong to the Dongo Estate, not the Trust. 26 44. Upon information and belief, Defendant knew or should have known as 27 Dongo’s attorney that those liabilities do not belong to the Trust.

Decision and Order Re. Defendant’s Partial Motion To Dismiss Second, Fifth, Sixth and Seventh Gauses ofAction Civil Case No. CV0046-20: Page 8 of 13 1 45. Upon information and belief Defendants acts and statements to Plaintiff and the other beneficiaries were intended to conceal and defraud the beneficiaries 2 from use and distribution of trust assets to them. 46. Upon information and belief, from March through August 2019, Defendant 3 and DOES 1-5 engaged in acts to defraud the beneficiaries and to divest the trust 4 corpus of an Umnao properly by private sale for less than fair-market value. 47. Plaintiff and her sibling beneficiaries have relied on Defendants minimal 5 disclosure of information because they have no other source of information relating to the administration of trust properties and liabilities. 6 4$. Defendants actions have damaged Plaintiff and her sibling beneficiaries in an 7 amount to be determined at trial, but no less than One Million Dollars ($1,000,000.00). $ Ver. Compi. ¶(j[ 40—47.

10 Despite the use of the phrase “upon information and belief’ in Paragraphs 43 to 45, in

11 eviewing these paragraphs, if taken as true, the Court finds that Plaintiff has established that (1)

12 efendant informed Plaintiff and her siblings that trust res had to be sold in order to pay for tax 13 iabilities of the Trust (Paragraph 41); (2) that the outstanding tax liabilities were that of the 14 state, not of the Trust (Paragraph 43); (3) that Defendant knew or should have known that the 15 iabilities do not belong to the Trust (Paragraph 44); (4) that Defendant’s acts and statements 16

17 [regarding the Trust’s tax liabilities] were “intended to conceal and defraud the beneficiaries

18 rom use and distribution of trust assets to them” (Paragraph 45). Where the Verified Complaint 19 s defective, however, is in Paragraph 46, which states that “from March through August 2019, 20 efendant and DOES 1-5 engaged in acts to defraud the beneficiaries and to divest the trust 21 orpus of an Urunao properly by private sale for less than fair-market value.” As the Court has 22

23 led, supra, the private sale of trust property for less than fair-market value does not, in and of

24 tself, establish that Defendant has engaged in self-dealing or that he has acted fraudulently.

25 hese averments are purely conclusory, unlike the complaint at issue in Ukau which the Guam 26 Supreme Court found “[went] far beyond a mere conclusory allegation and satisfies the 27

2$

Decision and Order Re. Defendant’s Partial Motion To Dismiss Second, Fifth, Sixth and Seventh Causes ofAction Civil Case No. CV0046-20; Page 9 of 13 1 eightened “particularity” pleading standard set out in Rule 9(b) for the circumstances

2 surrounding the fraud.” Compare, Ukau at 48. ¶9 45 —

While this Court finds that the that portions of the Verified Complaint in this case (as 4 dentified, above) do give sufficient notice of Defendant’s intent, the acts purportedly taken by 5 efendant fall short of the requirement “to provide notice to defendant[] as to what particular 6 raudutent action is being alleged.” Ukau ¶ 47 (emphasis added). Alleging merely that the

8 efendant did something (without specifying the act) to sell the trust res at less than fair market

alue is insufficient to survive the motion. 10 2. Sixth Cause of Action 11 The Sixth Cause of Action alleges Fraud as follows: 12

13 49. Plaintiff repeats and realleges all above paragraphs. 50. Upon information and belief, Defendant and DOES 1-5 have engaged in acts 14 to divert monthly payments from Guam Music Inc. away from the Dongo Trust since August 2019. 15 51. Upon information and belief, Defendant has informed one or more beneficiaries that the Trust cannot distribute monies to the beneficiaries because 16 the payments from Guam Music Inc. have ceased. 17 52. Plaintiff and her sibling beneficiaries have relied on Defendant’s statements because they have no other source of information relating to the administration of 1$ trust properties and liabilities. 53. Defendant’s actions have damaged Plaintiff and her sibling beneficiaries in an 19 amount to be determined at trial, but no less than One Million Dollars 20 ($1,000,000.00).

21 Ver. Complaint ¶ 49-52 (emphasis added). For the same reasons articulated, above, Paragraph 50 22

23 fails to sufficiently plead facts necessary to provide the Defendant notice as to “what particular

24 raudulent action is being alleged.”

25 /

26 / 27

Decision and Order Re. Defendant’s Partial Motion To Dismiss Second, Ftfth, Sixth and Seventh causes ofAction Civil Case No. CV0046-20; Page 10 of 13 1 3. Seventh Cause of Action 2 The Seventh Cause of Action alleges Fraud as follows:

1. Plaintiff repeats and realleges all above paragraphs. 4 2. Defendant knew or should have known the amounts of monetary distributions made to the beneficiaries in 201$. 5 3. Defendant is responsible for and causes the tax preparation and payment of tax liabilities of the Dongo Trust and monetary distributions to the beneficiaries. 6 4. Upon information and belief, Defendant intentionally reported Plaintiffs 201$ 7 distribution as One Hundred Seventy-four Thousand Nine Hundred Fifty-Three Dollars ($174,953.00). $ 5. Upon information and belief, Defendant paid for Plaintiffs income tax from the Dongo Trust. 6. Plaintiff relied on Defendant’s accounting of her 201$ distribution and tax 10 preparation. 7. Upon information and belief, Defendant only distributed to Plaintiff One 11 Hundred Fifty-Four Thousand Nine Hundred Fifty-Three Dollars ($154,953.00) in 201$. 12 8. Upon information and belief, Defendant has concealed a distribution from the 13 Dongo Trust to DOES 1-5 in the amount of Twenty Thousand Dollars ($20,000.00) which he buried in Plaintiff s tax return. 14 9. Defendant’s actions have damaged Plaintiff and her sibling beneficiaries in an amount to be determined at trial, but no less than One Million Dollars 15 ($1,000,000.00). 16 96 Vet. Compi. ¶J[ 1 —

Applying the factors set forth in Taitano and U/can, the Court finds that 17 1aintiff has failed to sufficiently pled fraud in the Seventh Cause of Action because it does not 1$ ontains factual allegations necessary to identify “what particular fraudulent action is being 19

20 alleged.” Taking as true the averments in Paragraphs 1 to 9 of the Seventh Cause of Action, there

21 s nothing to establish that the actions of Defendant amount to fraud.

22 4. Leave to Amend is Appropriate. 23 As discussed in detail, above, the Plaintiff has failed to articulate sufficient detail in her 24 ‘/erified Complaint that meets the “who, what, when, where, and how” standards established in 25 Taitano and its progeny. However, dismissal is only proper if “it is clear that the complaint 26 .. .

27 ould not be saved by any amendment.” Tctitano ¶ 9. Under Guam law, leave to amend should be

2$ Plaintiffs Verified Complaint continues the numbering of her paragraphs from 1, rather than continuing from 91 53.

Decision and Order Re. Defendant’s Partial Motion To Dismiss Second, Ftfth, Sixth and Seventh causes ofAction Civil Case No. CV0046-20; Page 11 of 13 1 iberally granted. Amshi & Co. v. Nakashima Enterprises, Inc., 2005 Guam 21, ¶ 16 (citing

2 oman v. Davis, 371 U.S. 178, 83 5. Ct. 227 (1962)). While leave to amend pleadings should be 3. iberally granted, however, Foman directs courts to review whether certain factors are present 4 hich may mitigate against leave to amend, including: “undue delay, bad faith or dilatory motive 5 n the part of the movant, repeated failure to cure deficiencies by amendments previously 6 allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or]

8 utility of amendment.” Arashi & Co. v. Nakashima Enterprises, Inc., 2005 Guam 21, ¶ 16.

In this case, the Defendant has not filed an Answer to Plaintiff’s Verified Complaint, 10 here is nothing in the record to establish bad faith or any dilatory motive on the part of the 11 efendant movant, and this would be the Plaintiffs first opportunity to correct any deficiencies 12

13 n the Complaint as identified herein. At this time, the Court does not find amendment to the

14 erified Complaint to be futile. Additionally, the Defendant did not object to the Court’s

15 suggestion regarding allowing the Plaintiff the opportunity to amend the Verified Complaint

16 during the December 1, 2020 hearing on the motion. Hrg. Mm. at 2:49:45 PM (Dec. 1, 2020). 17 / 18 / 19

20 21

22 23

25 [THIS SPACE INTENTIONALLY LEFT BLANK.1 26

Decision and Order Re. Defendant’s Partial Motion To Dismiss Second, Fifth, Sixth and Seventh causes ofAction Civil Case No. CV0046-20; Page 12 of 13 . 1 V. CONCLUSION 2 For the reasons set forth herein, the Court GRANTS Defendant’s Motion to Dismiss the

Second Cause of Action for Self-Dealing. The Court DENIES Defendant’s Motion to Dismiss 4 he Fifth, Sixth and Seventh Causes of Action, finding an appropriate remedy which does not 5 rejudice the Defendant and warranted under the circumstances, to permit the Plaintiff to amend 6 er Verified Complaint in order to cure the deficiencies therein. The Amended Verified

$ Complaint must be filed and served upon the Defendant within twenty (20) days of the entry of

his Decision and Order on the docket. 10

11 SO ORDERED this_____________________

HONORABLE MARIA T. CENZON 14 JUDGE, SUPERIOR COURT OF GUAM 15

19 SERVICE VIA E-MAIL 20 knowledge that an electton’( e-maI to. cOpy 01 me 0ngfla was ‘A P-’ 21 ,

22 1ime:_ila/21 Dat. e.

23 Guam Deputy Cleric Superior Court 01 24

Decision and Order Re. Defendant’s Partial Motion To Dismiss Second, Fifth, Sixth and Seventh causes ofAction Civil Case No. CV0046-20; Page 13 of 13