2 Pt1 J: 50 . ~ l. : : .: ' :· t'i1 1'u)T 3 \. j ·-~ \,) 1"' ~"4-: ~i J l\
5 IN THE SUPERIOR COURT 6 OF GUAM
7 CHAMORRO EQUITIES, INC., ) Civil Case no. CV0408-13 8 ) Plaintiff, ) 9 vs. ) 10 ) VIVIAN McCURDY, LISA ULLOA, and DECISION AND ORDER ) II FEDERICK ULLOA, ) 12 Defendants. ) ) 13 ) VIVIAN McCURDY, WALTER D. ULLOA, ) 14 JUDITH E. OLIVER, and LISA ULLOA ) 15 ) Counterclaim Plaintiffs, ) 16 vs. ) ) 17 CHAMORRO EQUITIES, INC., ROBERT V.) 18 ULLOA, GERALD D. HARTWICK, ) KENNETH E. THOMPSON, PRISCILLA U. ) 19 HARTWICK, SHEILA M. MANALOTO, and) DOES 2-10, ) 20 Counterclaim Defendants, ) ) ) 22 MEC,LLC., ) Intervenor. ) 23
25 INTRODUCTION 26 Pursuant to Rule 7.1 of the Local Rules of the Superior Court of Guam, Intervenor's 27 motion to amend pleading was taken under advisement by the Honorable Judge Michael J. 28 Bordallo on August 11, 2014. The Intervenor, MEC LLC., (hereafter MEC), was represented
Page I of5 by attorney Joseph C. Razzano. Plaintiff was represented by attorney Mitchell F. Thompson. 2 Counterclaim Defendants Robert V. Ulloa, Gerald D. Hartwick, Kenneth E. Thompson, 3 Priscilla U. Hartwick, and Sheila M. Manaloto, (hereafter Counterclaim Defendants) were 4 .< represented by attorney Bill R. Mann. After considering the matters presented, the Court now 5
6 issues the following decision and order granting Intervenor's motion.
7 BACKGROUND 8 This case arises out of a March 29, 2013 complaint, for the cancellation and collection 9 of several improper loan agreements, made between Plaintiff and Defendants. Compl. at 2-5. 10 The complaint seeks to void the loans and recover the amounts of the loans. !d. at 5. II On June 20, 2014, MEC filed its motion to file amended pleading. Mot. at 1. In it 12
13 MEC requests leave to file an amended answer and counterclaim. !d. MEC argues that
14 allowing the amendment will not unnecessarily increase costs or cause undue prejudice. !d. at 15 2. In support of its arguments it asserts that discovery is yet ongoing, and their claims and 16 defenses stem from the same set of existing alleged facts currently at issue. !d. Lastly it argues 17 that its request is timely and not made in bad faith. !d. at 3-4. 18
19 Plaintiff filed its opposition to MEC's request on July 18, 2014. Opp. at 1. In it Plaintiff
20 argues that MEC's request is futile. !d. at 1-2. Plaintiff reasons that because MEC is not the 21 legal owner of the Stock, its additional four counts of: accounting, constructive trust, 22 receivership and violation of 13 GCA § 8401(2), lack the necessary facts to support an 23
24 adequate claim. !d.
25 Specifically, citing two California cases, Plaintiff argues that as to the claim for 26 accounting, because a specific sum is ascertainable MEC accounting claim is not proper. !d. at 27 2. Similarly, as to the proposed claim for constructive trust, Plaintiff argues that MEC's claim 28 for damages is disallowed. !d. Citing a 1979 Massachusetts US District Court decision,
Page 2 of5 Plaintiff argues that there are insufficient facts pled to merit the extraordinary relief a claim for 2 receivership allows; there being no allegation Plaintiff is insolvent or unable to pay the 3 requested amounts. !d. at 3. 4 Counterclaim Defendants filed their joiner to Plaintiffs opposition on July 18, 2014. 5
6 Mot. at 2. Their paper asserts their intention to join Plaintiffs opposition. !d. at 2.
7 MEC filed its reply on August 1, 2014. Reply at 1. In it MEC asserts its pledgee status 8 and or ownership interests in the shares of Mrs. Vivian McCurdy; a first generation shareholder 9 in Plaintiff. !d. at 2. Addressing Plaintiffs futility argument, MEC asserts that Plaintiff failed 10
II to meet its burden that MEC's proposed amendment could not be saved under any possible
12 amendment. !d. at 4. It further counters that it has pled sufficient facts to allow for all counts 13 arising out of its assertions of ownership to proceed. !d. at 5. 14 Addressing the Plaintiffs damages and accounting argument, MEC asserts that its 15 status as a counterclaim defendant and shareholder allow it to so recover. !d. at 6. MEC argues 16
17 that while it may not recover damages and restitution, the rules of pleading allow both of these
IS actions to be pled and tried. !d. Finally as to Plaintiffs receivership argument MEC argues it 19 has alleged sufficient facts to support this claim. !d. 20 DISCUSSION 21 Motions to amend a pleading are regulated by Rule 15 of the Guam Rules of Civil 22 Procedure. Guam R. Civ. P. 15. In pertinent part it provides, "a party may amend the party's 23
24 pleading only by leave of court or by written consent of the adverse party; and leave shall be
25 freely given when justice so requires." In 2005 the Guam Supreme Court outlined the factors a 26 court is to consider when reviewing a request to amend a pleading. Arashi & Co., Inc. v. 27 Nakashima Enterprises, Inc., 2005 Guam 2 ~ 16. The Arashi Court held that assertions of, 28 "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure
Page 3 of5 deficiencies by amendments previously allowed, undue prejudice to the opposing party by 2 virtue of allowance of the amendment, [or] futility of amendment," all mitigate against granting 3 a party's motion to amend. Arashi & Co., Inc., 2005 Guam 2 ~ 16. 4 While MEC, in its moving paper, generally argues and asserts that its proposed 5
6 amendments satisfy the above factors, it fails to individually, save one amendment, to analyze
7 any of its proposed amendments. Mot. at 1-4. Plaintiff and Counterclaim Defendants however, 8 rather than arguing insufficiency, rely on the futility factor, identifying and opposing the 9 majority ofMEC's proposed amendments. Opp. at 1-3. 10 The Guam Supreme Court has yet to define or attach a standard to a finding of futility. II
12 However, in 2002 the US 2nd Circuit Court of Appeals held, "[a]n amendment to a pleading is
13 futile if the proposed claim could not withstand a motion to dismiss pursuant to [Rule] 14 12(b)(6)." Lucente v. Int'l Bus. Machines Corp., 310 F.3d 243,258 (2d Cir.2002). Viewing the 15 pleading facts asserted in the light most favorable to MEC, having made sufficient assertions of 16 ownership, the Court is not persuaded that the amendments sought are futile. Further; 17
18 Plaintiff, having not raised an objection to the other Arashi factors, the Court finds them, for
19 purposes ofthis motion, waived. Arashi & Co., Inc., 2005 Guam 2 ~ 16. 20 II 21 II 22 II 23
Page 4 of5 2 CONCLUSION 3 Based upon the foregoing the Court grants MEC's request. Upon timely filing the 4 appropriate pleadings and accounting for the Guam Supreme Court's Administrative Rule 13- 5
6 003, the Parties shall submit a stipulated or individually proposed discovery and scheduling
7 order within 45 days. 8
9 SO ORDERED, this 10
II
Page 5 of5 CIVILLE & TANG, PLLC 330 HERNAN CORTEZ AVENUE, SUITE 200 HAGATNA, GUAM 96910 TELEPHONE: (671) 472-8868 2u,l 1'tl'i JUl"1'1 ?n o.U .,., ~ j-,] 1..;; 07 - FACSIMILE: (671) 477-2511
Attorneys for Petitioner, MEC, LLC.
IN THE SUPERIOR COURT OF GUAM
CHAMORRO EQUITIES, INC., CIVIL CASE NO. CV0408-13
Plaintiff,
vs.
VIVIAN McCURDY, LISA ULLOA, and FREDERICK ULLOA, MOTION AND MEMORANDUM IN Defendants. SUPPORT OF MOTION TO FILE AMENDED PLEADING
VIVIAN McCURDY, WALTER D. ULLOA, JUDITH E. OLIVER, and LISA ULLOA
Counterclaim Plaintiffs,
CHAMORRO EQUITIES, INC., ROBERT V. ULLOA, GERALD . D. HARTWICK, KENNETH E. THOMPSON, PRISCILLA U. HARTWICK, SHEILA M. MANALOTO, and DOES 2-10,
Counterclaim Defendants.
MEC,LLC.,
Intervenor and Counterclaim Plaintiff. ·~
Pursuant to Rule 15(a) of the Guam Rules of Civil Procedure, Intervenor and Counterclaim
Plaintiff MEC, LLC ("MEC") respectfully requests leave of court to file an amended answer and
amended counterclaim in this matter. MEC seeks to amend its answer as well as its counterclaims.
The proposed Amended Answer and Amended Cross-complaint is attached to the Declaration of
Joshua D. Walsh (hereinafter "Walsh Dec.") as Exhibit "A" and is incorporated by reference.
Leave to amend should be freely given when justice so requires. Guam R. Civ. P. 15(a);
see also, Arashi & Co., Inc. v. Nakashima Enterprises, Inc., 2005 Guam 21, ~16; Foman v. Davis,
371 U.S. 178, 182, 83 S. Ct. 227,230 (1962); Walton v. Mental Health Ass'n., 168 F.3d 661, 665
(3d Cir. 1999). Moreover, unless the opposing party can show prejudice, bad faith, or undue
delay, a court should grant leave to file an amended pleading. Foman. 371 U.S. at 182, 83 S. Ct. at
.230. The Proposed Amended Complaint, as explained to all parties, adds statutory claims as well
as seeks equitable relief and protection from this Court.
I. THERE IS NO PREJUDICE TO ANY CURRENT PARTY; THE COURT SHOULD GRANT THE MOTION.
Plaintiff and Counterclaim Defendants will not be prejudiced by MEC's amended pleading
because prejudice results when an amendment would unnecessarily increase costs or would
diminish the opposing party's ability to respond to the amended pleading. Morongo Band of
Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990). For example, if a motion to amend
seeks to change a party's claims in close proximity to trial, then permitting the amendment may
delay the progress of the case and prejudice the opponent's ability to prosecute its case. Hill v.
Opus Corp., 841 F.Supp.2d 1070, 1103-04 (C.D.Cal. 2011); see also Lockheed Martin Corp.v.
Network Solutions, Inc., 194 F.3d 980, 986 (9th Cir. 1999) ("A need to reopen discovery and
thereby delay the proceedings supports a district court's finding of prejudice from a delayed
motion to amend."). 2 In this case, discovery is ongoing and counterclaim Defendants have every opportunity to
investigate the new claims and defenses. Importantly, the claims and defenses stem from the same
set of existing alleged facts that currently shape the litigation in this case. As such, there will be no
substantial increase in time or cost to this litigation and permitting the amendment is proper.
II. THERE IS NO BAD FAITH; THE COURT SHOULD GRANT THE MOTION.
Bad faith exists when the moving party seeks to amend merely to prolong the litigation by
adding "new but baseless legal theories." Griggs v. Pace American Group, Inc., 170 F .3d 877, 881
(9th Cir. 1999). It includes amendments filed frivolously or for an improper purpose. Westlake
North Prop. Owners Ass'n v. CityofThousand Oaks, 915 F.2d 1301, 1305 (9th Cir. 1990).
The claims added by MEC are either statutory or equitable in nature and deal with the theft
and conversion of its property-claims that stem from allegations that have already been alleged. 1
As an example, MEC alleged that the counterclaim Defendants tortuously interfered with its
contract with Vivian McCurdy. See Intervening Defendant MCE, LLC's Answer to Second
Amended Complaint; Counterclaims, filed March 12, 2014. This tortious interference takes the
form, among other things, of Chamorro Equities refusing to register the transfer of Chamorro
Equities shares from Vivian McCurdy to MEC. This behavior, while being a tortious interference
with contract, is also a violation of Guam's Uniform Commercial Code and is subject to damages.
13 G.C.A. §8401(2). As such, MEC added the violation of statue as a claim, as is its right. There
can be no allegation that the proposed amendment is in bad faith.
1 Some facts are new because Chamorro Equities has taken new steps to frustrate MEC as a shareholder. These new facts, however, are reiterations ofChamorro Equities' previous position- it utterly refuses to recognize MEC as a shareholder. As an example of the new facts, Chamorro Equities refused to allow MEC to participate in the most recent Shareholder meetings. See correspondence, June 10, 2014, attached to Walsh Dec., as Exhibit "B." That correspondence and these actions, however, post date MEC's Answer to Second Amended Complaint; Counterclaims and the inclusion of these facts, in no way, demonstrate bad faith. 3 ,,
III. THE MOTION IS TIMELY; THE COURT SHOULD GRANT THE MOTION.
The Court set the deadline to amend the complaint as the 20th of this month. MEC seeks to
amend on or before this date.
CONCLUSION
This Court has a duty to allow the proposed amendment unless the objecting party can
demonstrate prejudice or bad faith. This is an impossible task as there is no prejudice to any party
or bad faith on the part of MEC. As such, MEC respectfully requests that it be allowed to amend
its complaint.
DATED this 1..0 day of June, 2014. CIVILLE & TANG, PLLC
By:_+-+-_::::_.._w_~-- Jos JOS Attorneys for MEC, LLC.
4 -----~----~~~--~---------------- --··
FlLED SUPERIOR COURT THOMPSON GUTIERREZ&: ALCANTARA A Limited Liability Company 7Cit\ ..1\l\. \ '8 PM \: 45 23 8 Archbishop Flores Street Suite 801, DNA Building CLERK OF CO\JRi Hagatfia, Guam 9691 o ~·'!• ·::? Telephone: (671) 472-2089 Facsimile: (671) 477-5206
Attorneys for Plaintiff Chamorro Equities, Inc.
CHAMORRO EQUITIES, INC., ) CIVIL CASE NO. CV0408-13 ) PJruntiff, ) ) vs. ) ) VIVIAN McCURDY, LISA ULLOA, and ) FREDERICK ULLOA, ) ) CEI'S OPPOSITION TO ________________________ Defendanu. )) MEC, LLC'S MOTION TO FILE AMENDED PLEADING ) VIVIAN McCURDY, WALTERD. ULLOA,) JUDITH E. OLIVER, and LISA ULLOA, ) ) Counterclaim-Plaintiffs, ) ) vs. ) ) CHAMORRO EQUITIES, INC., ROBERT V.,) ULLOA, GERALD D. HARTWICK, ) KENNE1H E. THO:MPSON, PRISCILLA U. ) HARTWIC~ SHEILA M. MANALOTO, ) AND DOES 2-10, ) ) Counterclaim-Defendants. )
) MEC, LLC, ) ) Intervenor. )
ORIGINAL ----·· -----
Plaintiff Chamorro Equities, Inc, ("CEI") submits its opposition to the Motion to
File Amended Pleading by Intervenor MEC, LLC ("MEC'') herein. CEI opposes the
motion to amend as the proposed amendments are futile.
I. MEC'S PROPOSED AMENDMENTS A~ FUTILE
A. Futility of Proposed Amendment as Basis to Deny Amendment.
The Supreme Court has recognized that one basis to deny leave to amend is when
the proposed amendment is futile. Arashi & Co .. Inc. v. Nakashima EnteQ?rises. Inc., 2005
Guam 21, at ~16. Federal courts, in interpreting the federal model for Rule 15 of the Guam
Rules of Civil Procedure have also denied leave to amend on the basis of futility. Whitley
v. Hanna, 726 F.3d 631, 648-49 (5th Cir. 2013), cerf. dnd -U.S.- (2014) (motion to amend
properly denied when proposed amendments were futile); Win@:et v. J.P. Morgan Chase
Bank N.A., 537 F.3d 565, 573 (6th Cir.2008) (trial court properly denied leave to amend
when amendment would be futile; plaintiffs' claims were barred by res judicata or were
premature).
See also ~oth v. Marg~z. 942 F.2d 617, 629 (9th Cir. 1991) (trial court properly
denied leave to amend when amended claim would certainly be defeated at summary
judgment).
In this case, it is curious that MEC's motion fails to note, let alone discuss, futility
as grounds for denying a motion to amend. This silence speaks volumes. MEC's proposed amended pleading seeks to add four new" counts." Each of the
four "counts" [accounting; constructive trust; receivership; and violation of 13 GCA
8401(2)] is predicated on MEC's ownership of Vivian McCurdy's shares in CEI. .
However, as set forth in CEI's opposition to MEC's Motjon for Injunctive Relief.
filed July 14, 2014, herein, MEC does not have legal ownership of Mrs. McCurdy's shares
due to MEC's failure to comply with the requirements of 13 GCA 9505(2). As MEC has
not even alleged compliance with 13 GCA 9505(2). Vivian McCurdy remains the owner
of her CEI stock, and MEC's proposed new claims are futile as a matter oflaw.
8. Other Defects in Proposed Amended Claims.
Further, MEC fails to provide any authority to support its proposed new claims
would not be futile even ifMEC owned Mrs. McCurdy's shares. For example, Count [sic]
Nine asserts a claim for accounting. However, if an ascertainable sum is owed, an action
for accounting is not proper. Prakashpalan v. Eng~trom. Lipscomb & Lack, 223
Cai.App.4th 1105, 167 Cal.Rptr.3d 832 (2014); St Jmnes Chut;ch of Christ Holiness v.
SyPerior Court. 135 Cal.App.2d 352,287 P.2 387, 391 (1955) (same).
In its original pleading herein, and even in its proposed amended pleading, MEC
alleges that monthly cash distributions and dividends have been declared, and other
shareholders have been paid. See MD's pleading filed March 12, 2014, at m!I05 to 107.
See also count eight of MEC's proposed amended pleading. Having alleged that the
distribution has been declared and paid, MEC has acknowledged that there any amount due
is not unknown. MEC's claims for an accounting is thus defective.
Further, MEC previously elected to demand damages for its claim as to
distributions. See ~13 at page 23 of the proposed amended pleading. MEC cannot now
elect to also demand a constructive trust as its remedy. See Weightman v. Hadley, 113
Cal. App. 2d 598, 248 P.2d 801, (1952).
2 . ...
As to MEC's claim for receivership [count 11], MEC fails to allege a sufficient
basis for the appointment of a receiver. The appointment of a receiver is an extraordinary
remedy, which should be employed with utmost caution and granted only in cases of clear
necessity to protect the party's interest. See Commodity Futures Trading Commission v.
Comvest TrMting Corp., 481 F.Supp. 438,441 (D.Mass.l979).
pay the distributions to MEC should the court ultimately make a determination that MEC
does indeed lawfully own the shares, and had a right to the distribution. In fact, MEC, in
its own pleading herein, alleged that CEI has a monthly income of $140,000.00. MEC's
Answer to Second Amended Complaint and Counterclaims, fled March 12, 2014, at ,44.
Further, MEC alleged that CEI is financially sound, and has "more than sufficient income,
retained earnings, or surplus profits" to pay monthly cash dividends. Ibid., at ,46. MEC
by its own pleadings has demonstrated the futility of its proposed receivership claim.
II. CONCLUSION
Bac;ed on the forgoing. the Court should deny the motion to amend.
Dated this 18th day of July, 2014.
THOMPSON GUTIERREZ & ALCANTARA, LLC Attorneys for Plaintiff Chamorro Equities, Inc.
Pl41176.MFT
3 Chamarro Eptities, Inc. v. Vivian McCurdy, et al. Civil Case No. CV0408-13 Joinder in Opposition of Chamorro Equities, Inc. to MEC. LLCs Motion to File Amended Pleading
1 2 The Counterclaim Defendants Robert V. Ulloa, Gerald D. Hartwick,
3 Kenneth E. Thompson, Priscilla U. Hartwick, and Sheila M. Manaloto hereby join in 4 the Opposition of Chamorro Equities, Inc. to MEC, LLC's Motion to File Amended 5
6 7 Pleading. . DATED this JK!! of July, '}i)14. BERMAN O'CONNOR & MANN Attorneys for Counterclaim Defendants 8 Robert V. Ulloa, Gerald D. Hartwick, Kenneth E. Thompson, Prisdlla U. Hartwick, and 9 Sheila M. Manaloto . 10 11 ~y::&r·~M~ BILLR.MANN 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- III= ELEMENTS OF OFFENSE
JURY INSTRUCTION NO. 3A
ESSENTIAL ELEMENTS OF FAMILY VIOLENCE
The People must prove beyond a reasonable doubt that the defendant, LESTER
ANASTACIO,
1. On or about February 5, 2011,
2. onGuam
3. recklessly placed a family member or household member,
that is G.J.C. (DOB: 10/11/2000)
4. in fear of bodily injury,
5. and did not act in self-defense. •
FILED 1 CIVILLE & TANG, PLLC SUPERIOR COURT 330 HERNAN CORTEZ AVENUE, SUITE 200 2 HAGATNA, GUAM96910 1f\!{l .1. f II'· - ). '' ·, I • II "''~ t.',. lf~ ., :,11n TELEPHONE: (671) 472-8868 • j ! .: "j·•
3 FACSIMILE: (671} 477-2511 4 Attornryt for Intervenor MEC, lLC 5 IN THE SUPERIOR COURT OF GUAM 6 HAGATNA, GUAM
7 CHAMORRO EQUITIES, INC., Civil Case No. CV0408-13 8 Plaintiff, 9 vs. 10 VJVIAN McCURDY, LISA UlLOA and 11 FREDERICK ULLOA MEC, LLC'S REPLY TO CHAMORRO 12 EQUITIES, INC.'S OPPOSITION TO THE Defendants. MOTION TO FILE AN AMENDED 13 PLEADING 14 VIVIAN MCCURDY, WALTER D. 15 UlLOA, JUDITH E. OLIVER AND LISA ULLOA, 16 Counterclaim PWntiffs, 17 vs. 18 CHAMORRO EQUITIES, INC., R013ERT 19 V. ULLOA, GERALD D. HARTWICK, KENNETH E. THOMPSON, PRISCULA 20 U. HA.R1WICK, SHEILA M. MANALOTO and DOES 2-10 21 Counterclaim Defendants. 22 ~-------~-------·--------------------------------~--
23 MEC,LLC Intervenor. 24 25 26 27 ?R ·- ORIGINAL·; JURY INSTRUCTION NO. 3B
ESSENTIAL ELEMENTS OF ASSAULT
The People must prove beyond a reasonable doubt that the defendant, LESTER
3. recklessly caused
4. bodily injury
5. to another, that is, G.J.C. (DOB: 1011112000)
6. and did not act in self-defense. ARGUMENT IN REPLY 1 I. CHAMORRO EQUITIES' CONDUCT NECESSITATED MEC's INTERVENTION, AND lTS 2 CONTINUING CONDUCT JUSTIFIES THE AMENDMENTS THAT MEC SEEKS. 3 Pla.itltiff Chamorto Equities, Inc. ("Chamorro Equities") brought suit against the original 4 Defendants alleging that its fonner officers and directors breached theit fiduciary duties owed to the 5 company.~ Partial Motion fat Summary Judgment, filed on Apri19, 2014. Vivian McCmdy, Lisa 6 Ulloa, and Frederick Ulloa (collectively the "Counterclaim Defendants'')) for their part, all accuse 7
8 Chamorro Equ.itie!> and the remaining Counterclaim Defendants of conversion and shareholder
9 oppression.~ Amended Answer and Cmmterclaim, filed May 3, 2013.
10 MEC, LLC ("MEC'') became involved with the parties two (2) years ago when it took, as
11 security for a loan, a pledge of Vivian McCurdy's ("Mrs. McCurdy'') shares of stock (the "Shares") in 12 Chamorro Equities. MEC, at the very least, is a pledgee of Vivian McCw:dy's shares. Importantly, it 13 has no interest in the squabble that currendy exists between Chamorro Equities and the 14 Counterclaim Plaintiffs beyond the baseline consideration that its rights must be respected and that 15 its investment must be protected. Despite repeated attempts to preserve its rights without judicial 16
17 action-rights that Chamorro Equities impe:rmissibly ignores 1 -MEC was compelled to intervene
18 in this lawsuit. MEC brought suit against not just Chamotto Equities, but several of its officers and
19 directors as well. Subsequent to its intervention, Chamono Equities, its officer, directors, and
20 ilttorneys continued to trample on MEC's rights by refusing to allow it to vote at the annual 21 shareholders meeting held on June 11, 2014. It took this action despite the fact that MEC had a 22 valid proxy agreement from Mrs. McCurdy. 2 23
24 1 As noted in previous filings with this court, Chamorro Equities, untenably, treats MEC as a 25 holder and as an assignee of some of the rights of the Shares when it wishes to exercise its "right" of first refusal but refuses to recognize MEC's rights to participate in Chamorro Equities 26 either through voting or through profit participation.
27 2 In his deposition, President Ulloa indicated that the reason Chamorro Equities refused to let MEC vote at its shareholder meeting was due to the fact that the Mrs. McCurdy's proxy given to
-2- VII. CLOSING INSTRUCTIONS
JURY fi',JSTRUCTION NO. 4A
RIGHT TO SEE EXHIBITS AND HEAR TESTIMONY;
COMMUNICATIONS WITH THE COURT
You are about to go into the jury room and begin your deliberations. The exhibits will be
sent to you in the jury room. If you want any of the testimony played, that can also be done.
Any communication with the court - should be made to me in writing, signed by your
foreperson, and given to one of the marshals. I win respond to any questions or requests you
have as promptly as possible, either in writing or by having you return to the courtroom so I can
speak with you in person. In any event, do not tell me or anyone else how the jury stands on the
issue of the defendant's guilt or innocence until after a unanimous verdict is reached.
JURY INSTRUCTION NO. 4B
GENERAL VERDICT AS TO THE OFFENSE CHARGED
Verdict forms have been prepared for your convenience concerning the charges
contained in the indictment. Do not disclose to anyone outside the jury, not even to me or any
member of my staff, either orally or in writing, how you are divided numerically in your
balloting as to the guilt or innocence of the defendant or as to the offenses charged, or any
finding required, until I specifically direct otherwise. Because of these actions MEC sought leave of court to amend its counterclaim in 1 ·' intetvention (the "Motion"). The Motion, and its exhibits, detail Chamorro Equities' continuing acts 2
3 of shareholder oppression and adds the following claims: accounting; constructive trust;
4 receivership; and violations of the Guam Uniform Commercial Code.ld:. Put simply, MEC chUms to
5 be a shareholder and Chamorro Equities, and the other Counterclaim Defendants, refuse to 6 recognize its status as a shjll'eholder or even respect its rights as a secured creditor with an interest in 7 shares. Against this backdrop, Chamor.t:o Equities claims, tlult MEC: (1) does not own the Shares; 8 and (2) that the amendments ue futile. None of these jll'guments have any merit. 9 11. CHAMORRO :EQUITIES FAILED TO IDENTIFY THE CORRECT STANDARD FOR THE 10 MO'l'ION AND 1NAPPROPRIA1'ELY SHIFTED THE BURDEN. 11 Chamorro Equities neglects to state the standard and burden for its Opposition. As stated in 12 the Motion, leave to amend should be freely given when justice so requit:es. Guam R. Civ. P. 15(a); 13 ~ee ~SQ.. ,Amshi ~Co .. In~. v. Nakashima Enterprises, Inc., 2005 Guam 21, ,16. A court may only 14 deny leave to amend on the bjl.sis of prejudice, bad faith, undue delay or futility, Foman v. Davis, 15 16 .371 U.S. 178, 182 (1962), and Chamo.rro Equities only argues futility in its Opposition. This is an
17 extremely difficult standard for Chamotto Equities because '"(t]he party opposing amendments
18 bears the burden of showing prejuilice, futility, or one of the other pennissible reasons for denying a 19 motion to amend!' farina v. Compuware Corp., 256 F. Supp. 2d 1033, 1060 (D. Ariz. 2003) 20 (quoting Dc;:D Prggrams. Ltd. v. Leigbto~ 833 F.2d 183, 187 (9th Cir. 1987)). Moteovet, opposing 21 a motion to amend on the grounds of futility is imp:roper unless it is "clear . . . that the complaint 22 could not be saved by any amendment." United States ex rel. Lee y. Corinthian Coli§.. 655 F. 3d 984, 23
25 MEC was contained within "an invalid stock transfer." Deposition ofRobertV. Ulloa, p. 42, lns. 7-21, attached to the Declaration of Joshua D. Walsh (hereinafter Walsh Dec.) as Exhibit "A." 26 As the President of Chamorro Equities believes that the pledge agreement between MEC and Mrs. McCurdy was an ''invalid stock transfer[,]" it is impossible to reconcile Chamorro Equities 27 legal argument that the pledge agreement is not, in fact, a stock transfer. Opposition to Injunction at pp. 7-8. ?R
-3- JURY INSTRUCTION NO. 4C
VERDICT - UNANIMOUS - DUTY TO DELIBERATE
The verdict form must represent the considered judgment of each juror. In order to return
a verdict, it is necessary that each juror agree thereto. Your verdict must be unanimous.
It is your duty, as jurors, to consult with one another, and to deliberate with a view to
reaching an agreement, if you can do so without violence to individual judgment. Each of you
must decide the case for him or herself, but do so only after an impartial consideration of the
evidence in the case with your feilow jurors. In the course of your deliberations, do not hesitate
to reexamine your own views, and change your opinion, if convinced it is erroneous. But do not
surrender your honest conviction as to the weight or effect of evidence, solely because of the
opinion of your fellow jurors, or for the mere purpose of returning a verdict.
JURY INSTRUCTION NO. 4D
ELECTION OF A FOREPERSON
You shall now retire and select one of your number to act as foreperson. He or she will
preside over your deliberations. In order to reach verdicts, all six jurors must agree to the
decision. As soon as all of you have agreed upon a verdict, so that each may state tmthfully that
the verdict expresses his or her vote, have it dated and signed by your foreperson and then return
with them to this courtroom. 995 (9th Cir. 2011) (emphasis added) (internal quotation marks omitted). In other words, it is 1 Chamorro Equities' burden to convince the court that MECs ptoposed amendment cocld not be 2 3 saved by any possible amendment, and it failed that task. Beyond failing to meet its burden in
4 demonstrating futility, Chamorro Equities inappropriately attempted to shift the burden onto MEC
5 to demonstrate a ku'k of futility. Opposition at p. 2 ("MEC fails to provide any authority to support 6 its proposed new claims would not be futile even if MEC owned Mrs. McCurdy's shares."). As such, 7 Chamorro Equities' Opposition must fail. 8 Ill. MEC IS THE OWNER OF THE SHARES AND CHAMORRO EQUITIES, ATTEMPT TO ASSERT 9 OTHERWISE IS IRRELEVANT TO MEC's EFFORT TO AMEND ITS PLEADINGS.
10 Chamorro Equities major argument regarding futility is that MEC does not own the Shares 11 and, as such, the amendments are futile. Opposition at pp. 1-2,3 Chamorro Equities entire argument 12 is nothing more than a referral to its Opposition to MEC's Motion for Injunctive Relief, filed July 13 14, 2014 (hetdnafter "Opposition to Injunction").ls;L In other words, Chamotro Equities asks this 14 Comt to take notice of the previously filed opposition ~nd apply the same reasoning in this Motion. 15
16 This argument, such as it is, is misplaced.
17 The central issue of this case is ownership of the Shares and the rights that flow from
18 ownership. Simply declaring that MEC does not own the Shares does not make it so. Moreover,
19 Chamotro Equities has never act11alfy tnatk the mg11ment that the Sham do not belong to MEC. Rather, 20 Chamorro Equities has argued that: "MEC failed to provide any evidence that it complied with the 21 .requirements of [Article 9 of the Guam Uniform Commercial Code f'GUCC")]." Opposition to 22 Injunction at p. 7. Put simply, Chamorro Equities has only argued that MEC hasn't proven 23 compliance "'-ith the debtor's rights and that the failure to demonstrate compliance with the debtor's 24 25 rights bars MEC's claim to the Shares. Id,. This argument provides no basis for Chamono Equities'
26 3 Again, this isn't even the correct standard. The standard regarding futility isn't whether or not 27 the proposed amendment is futile, but whether or not any amendment is futile. CorinthiibQ, 655 F.3dat 995. ?.~ ***********************************************
JURY INSTRUCTIONS
PEOPLE OF GUAM
Lester Anastacio,
Criminal Case No. CM0177-11
*********************************************** opposition to MEC's amendment effort.
First, Chamorro Equities has no standing to make this argument in the first place. Article 9 2 3 of the GUCC is the law of secured transactions and Chamorto Equities isn't a secured party, isn't a
4 debtor, and isn't involved in the transaction between Mrs. McCurdy and MEC. As such, Chamorro
5 Equities has no standing to raise a debtor's rights defense under i\rticle 9. 6 Second, the issue in this Motion is not whether Chamorro Equities has a defense or not. 7 The only issue is whether the new pleading puts Chamotto Equities on notice of the new claims 8 being brought and whether or not those claims can be pled under an] set of facts. See, generally. 9 GRGP 8. MEC has alleged that it owns the Shares. Chamorro Equities disputes this fact. Chamorro 10 Equities, while able to litigate these facts, is not able to avoid the entire process at the outset by 11 12 declaring itself the winner at this stage of the proceedings. MEC should be allowed to amend its
13 complaint.
14 IV. THE REMAINING ARGUMENTS PROFFERED BY CHAMORRO EQUITIES FAIL AS WELL.
15 The last section of the Opposition complains that: (1) if an ascertainable sum is owed an 16 action for accounting is improper; (2) a party is not entitled to both a constructive trust and 17 damages; and (3) MEC fails to offer sufficient facts to support a receivership. These arguments all 18 fail for the same reason--Chamorro Equities misapprehends the standard that governs the 19 amendment of pleadin~. Again, denying a motion to amend based on futility is only proper if it is 20 21 "clear. , . that the complaint could not be saved by any amendment." Corin~n. 655 F.3d at 995.
22 Given this stitndard, it is unclear why Chamorro Equities argues futility in the first place. Futility is a
23 perfecdy flne argument for a statute of limitations defense, Wilkerson v, World S&L Ass'n.. 404 Fed. 24 Appx. 211 (9th Cir. 2010), but it is inappropriate to use in any case where the complaint could be 25 .repled to state a claim. None of Chamotto Equities' arguments are valid as they all depend on facts 26 that could be pled. 27 Chamotto Equities also argues that since the dividend it owes MEC is ascertainable, there is ?R
-5- JURY INSTRUCTIONS
INDEX
JURY INSTRUCTION NUMBER
I. PRELIMINARY OPENING INSTRUCTIONS
JUROR ATTENTIVENESS AND DUTIES ....................................................................... lA EVIDENCE ................................................................................................................... lB CREDIBILITY............................................................................................................ lC THE PEOPLE AS A PARTY BURDEN OF PROOF ......................................................... lD JUSTIFIED USE OF FORCE ON A MINOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... lE
II. SPECIFIC DEFINITIONS
"FAMILY VIOLENCE" DEFINED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2A "ASSAULT" DEFINED . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2B "RECKLESSLY" DEFINED . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2C "BODILY INJURY" DEFINED ....................................................................................... 2D "FAMILY MEMBER" DEFINED .................................................................................... 2E "SELF DEFENSE" DEFINED.................................................................... 2F
III. ELEMENTS OF OFFENSE
ESSENTIAL ELEMENTS OF FAMILY VIOLENCE ............................. .,........ 3A ESSENTIAL ELEMENTS OF ASSAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3B
VI. CLOSING INSTRUCTIONS
VERDICT -- UNANIMOUS -- DUTY TO DELIBERATE .............................................. 4A GENERAL VERDICTS AS TO EACH OFFENSE CHARGED ..................................... 4B ADMONITION AGAINST DISCLOSURE OF JURY BALLOTfNG ............................ 4C ELECTION OF FOREPERSON ......................................................................................... 4D no basis for an accounting. Opposition, 2. Chamorro Equities fails to grasp MEC's damages claim. 1 Chamotto Equities is not the only Counterclaim Defendru:tt, and it is entided to seek damages and 2
( 3 equitable relief against ~ the tortfeasors involved in this case. Moreover its co-counterclaim
4 defendants are currently accepting payments and authorizing expenditures that are not in Chamorro
5 Equities' best .interests. MEC is thus a shareholder of a corporation shirking its duties to its 6 shareholders- engaging in bad faith litigation, questionable decision making, and outright bad faith 7 conduct facilitated by a rogue group of individuals. Until MEC is able to el'amine the books and 8 depose all witnesses it is impossible to know how much MEC's actual damage:; are. Put another way, 9 the dividend loss alleged in this case is a floor, not a ceiling. 10 Additionally, Chamono Equities cites Wightman v. Hadley, for the proposition that MEC 11
12 cannot bring suit for both damages and constructive trust. Opposition at p. 2, citing, Wighl;man, 248
13 P.2d 801, 807 (Cal. App. 1952). This case is inapposite as the Wightman court clearly stands for the
14 proposition that a plaintiff may not elect to rrcover both damages and restitution, but that is not the 15 same thing as not being able to plead both damages and restitution. Moreover, Chamorro Equities 16 ignores the fact that the ~htman court states that "[t]his [case at bar] was not an action at law for 17 the conversion of stock." Wightman, 248 P.2d at 807. Wightman was a contract case and an 18 aggrieved party to a contract can generally not recover more than the benefit of the bargaiu- fact:~ 19 completely distinguishable ftom Chamotto Equities' conversion of its shareholders' stock 20
21 In the instant matter there are multiple Counterclaim Defendants and MEC is allowed to
22 plead its case and seek differing remedies against all of them; Chamotto Equities ignores this fact.
23 Legal damages compensate a plaintiff for its injuries such as lost profits, expenses incurred as a 24 consequence of the harm, etc. Equitable remedies such as restitution, unjust enrichment, 25 disgorgement:, accounting, constroctive trust, etc., require a defendant to tum over the benefits the 26 defendant gained unjustly. Unlike the case in Wightman. this case is a case for conversion, and a 27 constructive trust is allowed if a legal remedy (i.e. damages) alone cannot compensate MEC. Ss;e, 7~
-6- I. PRELIMINARY OPENING INSTRUCTIONS
JURY li~STRUCTION NO. lA
JUROR ATTENTIVENESS AND DUTIES
Ladies and gentlemen, it is now your job to decide the facts of this case and apply them
to the law. It is not your job to decide whether a law is good or whether it should be followed.
Your only duty is to decide the truth. To do this you must weigh the value of evidence,
determining the credibility of the witness, and resolve any conflicts as there may be in either.
To decide the facts you must rely upon your memory. Anything the lawyers or I have
said is not evidence and you should not consider it.
The question of possible punishment of the defendant is of no concern to the jury and
should not, in any sense, enter into or influence your deliberations. The duty of imposing
sentence rests exclusively upon the court. You must decide all questions of fact in this case from
the evidence received in this trial and not from any other source. You must not make any
independent investigation of the facts or the law or consider or discuss facts as to which there is
no evidence. This means, for example, that you must not on your own visit the scene, conduct
experiments, or consult reference works or persons for additional information. • 1
~McWilliams Ballard> Inc. v. Level2 Dev., 697 F. Supp. 2d 101, 110 (D.D.C. 2010). 1 Chamorro Equities final argument regarding the difficulty in obtaining a .receivership is 2 3 misplaced. Whether or not MEC will succeed on its claim is not the standard fo.r opposing a motion
4 to amend. MEC has alleged that Chamorro Equities and its agents a.re engaging in shareholder
5 oppression and willfully denying MEC's rights. MEC alleges that Chamorro Equities is an out of 6 control company, and the facts as plead indicate this. See, Proposed Amended Counterclaim at mJ 7 17-19 and 86-90. Even if the facts as currently plead are not enough, Chamorro Equities cannot and 8 did not carry its burden and demonstrate that there are no facts that would entitle MEC to a 9 receivership. MEC is entitled to amend its Complaint. 10
11 V. CONCLUSION
12 MEC's Amended Counterclaim sets forth the facts and evidence putting Chamorro Equities
13 on notice of the new claims MEC seeks to advance. Chamorro Equities in response has argued
14 futility but rather than focusing on the true standard, attempts to bring dismissal arguments and 15 defenses to prove futility. These arguments are not appropriately brought at this stage of the 16 litigation. Therefore, the Court should grant MEC's motion and allow it to amend its Counterclaim 17 intervention. 18 Respectfully submitted at Hagatiia, Guam, on August 1, 2014. 19 CIVILLE & TANG, PLLC 20 21 o.weL. 22
23 24
25 26 27 ?.R
-7- JURYINSTRUCTIONNO.lB
EVIDENCE
Evidence consists of the ans\vers given by \Vitnesses and the exhibits that \vere received
in evidence. There are two types of evidence which you may use. One type of evidence is
called direct evidence. An example of this is when a witness testifies to what he said, heard or
observed. What a witness sees, feels, touches or hears -- that is called direct evidence.
Circumstantial evidence is the second type of evidence. It is evidence that tends to prove
a disputed fact by proof of other facts. There is a simple example of circumstantial evidence
which is often used in this courthouse.
Assume that when you came into the courthouse this morning the sun was shining and it
was a nice day. As you were sitting here, someone walked in with an umbrella which was
dripping wet. Somebody else then walked in with a raincoat which also was dripping wet.
Now, you cannot look outside of the courtroom and you cannot see whether or not it is
raining. So you have no direct evidence of that fact. But, on the combination of facts which I
have asked you to assume, it would be reasonable and logical for you to conclude that it had
been raining.
That is all there is to circumstantial evidence. You infer on the basis of reason and
experience and common sense from an established fact that existence or the nonexistence of
some other fact. Circumstantial evidence is of no less value than direct evidence; for, it is a
general rule that the law makes no distinction between direct and circumstantial evidence.