IN THE SUPERIOR COURT OF GUAM
[7{ ) CIVIL CASE NO. CV0401-13 CHAMORRO EQUITIES, INC., ) ) Plaintiff, ) ) 7 ) DECISION AND ORDER ) (Defendant's Motion to Dismiss) 8 vs. ) ) 9 ) ) 10 ANTHONY R. ULLOA, )
11 ________________D_e_fu_n_d_a_n_t.________ ~j 12 INTRODUCTION 13 This matter came before the Honorable Anita A. Sukola on July 7, 2013, on Anthony R. 14
15 Ulloa's ("Defendant") Motion to Dismiss. Defendant was represented by Attorney Gary W.F.
16 Gumataotao. Chamorro Equities, Inc. ("Plaintiff') was represented by Attorney Charles H. 17 McDonald II. Plaintiffs counsel was not present for oral arguments on the motion. 18 Accordingly, Defendant submitted on the briefs. Following the hearing, the Comi took the 19 matter under advisement. Upon review of the written arguments and legal authorities presented 20
21 by both parties, the Court hereby issues this Decision and Order DENYING Defendant's
22 motion. 23 BACKGROUND 24 On March 28, 2013, Plaintiff filed a Complaint to Recover Finder's Fee or Commission 25
26 Paid to Broker. Plaintiff alleges, inter alia, "[ o ]n or about June 1, 2012, a mortgage loan was
27 made by Calvo's Insurance UnderwTiters, Inc., to the Plaintiff in the amount of Two Hundred
28 Ninety Thousand and 00/100 Dollars ($290,000.00). The loan was fully collateralized by both a First Fee Simple Mortgage and an Assignment of Rents for the location of Cost-U-Less in 1
Harmon. The interest rate on the loan was twelve percent (1 per annum, with monthly
payments of interest only, and with a balloon payment due on June 30, 2013." Plaintiff's
Complaint (Mar. 28, 2013). Plaintiff also alleges that Defendant Ulloa "charged to Plaintiff a
Finder's Fee, or a Commission, of Forty Thousand and 001100 Dollars ($40,000.00). This
Finder's Fee or Commission was equal to fourteen percent (14%) of the total loan amount thus 7
8 reducing the loan proceeds from Two Hundred Ninety Thousand and 0011 00 Dollars
9 ($290,000.00) to Two Hundred Fifty Thousand and 001100 Dollars ($250,000.00)." ld. 10 Consequently, Plaintiff requests that the Finder's Fee Agreement or Commission 11 Agreement with Defendant be null and void. Likewise, Plaintiff requests for judgment against 12
13 the Defendant in the amount of the principal sum of $40,000.00. Id. Plaintiff also prays for
14 pre-judgment interest at the rate of 6% from June 1, 2012 to the date of judgment or payment in 15 full, post judgment statutory interest at the rate of 6% per annum, reasonable attorneys' fees, 16 costs of suit, post-judgment attorneys' fees and costs, and for such other and further relief as 17 seems just and equitable in the premises. ld. 18
19 Defendant filed his Answer on April 24, 2013. Defendant admits that he is a resident of
20 Guam. He denies the allegations in paragraphs 1, 5 and 8 of the Complaint. He lacks sufficient 21 information to form a good faith belief and therefore denies allegations contained in paragraphs 22 2, 4, 6, 7, 9 and 10 of the Complaint. Defendant also objects to Exhibit "A" attached to the 23 Complaint. Defendant states his affirmative defenses as follows: (1) Complaint fails to state a 24
25 claim; (2) lacks jurisdiction; (3) no duty owed-no duty breached; (4) good faith of the
26 Defendant; (5) lack of knowledge; (6) Failure to join indispensable parties; (7) statute of 27 limitations; and (8) no demand for repayment." Def's. Answer (Apr. 24, 2013). 28 On May 20, 2013, Defendant filed a Motion to Dismiss. Plaintiffs opposition was filed 1
on June 17,2013. Defendant filed a reply on June 25,2013. The Court set oral arguments for
July 9, 2013. At that hearing, Defendant submitted on the briefs.
DISCUSSION
Guam Rules of Civil Procedure 12(b) provides how defenses and objections are to b
presented by pleading or motion. 7
8 (b) How Presented. Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, 9 shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: 10 (6) failure to state a claim upon which relief can be granted. 11 A motion making any of these defenses shall be made before pleading if a further pleading is permitted. No defense or objection is waived by being joined to one 12 or more other defenses or objections in a responsive pleading or motion. If a 13 pleading sets forth a claim for which relief to which the adverse party is not required to serve a responsive pleading, the adverse party may assert at trial any 14 defense in law or fact to that claim for relief. If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which 15 relief can be granted, matters outside the pleadings are presented to and not 16 excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable 17 opportunity to present all material made pertinent to such motion by Rule 56. 18 Guam R. Civ. P. 12(b)(6). 19 In ruling on a 12(b)(6) motion, a court's consideration is limited to the complaint, writte 20 instruments attached to the complaint as exhibits, statements or documents incorporated in th 21
22 complaint by reference, and documents on which the complaint heavily relies. Core Tech Jnt 'l.
23 Corp. v. Hanil Eng'g & Const. Co., Ltd., 2010 Guam 13 ~ 29 (citing Mercado Arocho v. Unite 24 States, 455 F.Supp.2d 15, 19 (D.P.R.2006) (quotation omitted)). Dismissal under Rule 12(b)(6 25 is not proper unless "it appears beyond doubt that the plaintiff can prove no set of facts i 26 support of his claim which would entitle him to relief." First Hawaiian Bank v. Afanley, 200 27
28 Guam 2,19 (citing Conley v. Gibson, 355 U.S. 4L 45-46, (1957). "[T]he court is not required t accept legal conclusions cast in the fonn of factual allegations if those conclusions canno 1
2 reasonably be dravvn from the facts alleged." !d. Further, the Court is to construe the pleading i
the light most favorable to the non-moving party, and resolve all doubts in the non-movin~ 1 party's favor. See ld. (citing Clegg v. Cult Awareness Network, et al. 18 F.3d 752, 754-55 (9t 5 Cir. 1994). 6
The Supreme Court of Guam has also instructed that in ruling on a Rule 12(b)(6) motio 7
8 to dismiss, the dismissal motion must convert into a summary judgment motion whenever th
9 Court considers extraneous material outside the pleadings. See Core Tech lnt 'l. Corp. v. Hani 10 Eng'g & Canst. Co., Ltd., 2010 Guam 13 ~ 29 (citing Newby v. Gov't oJGuam, 2010 Guam 4 11 18). "[The Guam Supreme Court's] holding in Newby accords with the general rule that a Rul 12
13 12(b)(6) motion to dismiss must be converted into a Rule 56 motion for summary judgmen
14 whenever 'matters outside the pleadings' are presented to and considered by the court:
15 If, on a motion asserting the defense numbered (6) to dismiss for failure of the 16 pleading to state a claim upon which relief can be granted, matters outside the pleadings are presented to and not excluded by the court, the motion shall be 17 treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made 18 pertinent to such motion by Rule 56." 19
20 Id.
21 The instant case arises out of a fraud claim. "In all averments of fraud or mistake, the 22 circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, 23
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IN THE SUPERIOR COURT OF GUAM
[7{ ) CIVIL CASE NO. CV0401-13 CHAMORRO EQUITIES, INC., ) ) Plaintiff, ) ) 7 ) DECISION AND ORDER ) (Defendant's Motion to Dismiss) 8 vs. ) ) 9 ) ) 10 ANTHONY R. ULLOA, )
11 ________________D_e_fu_n_d_a_n_t.________ ~j 12 INTRODUCTION 13 This matter came before the Honorable Anita A. Sukola on July 7, 2013, on Anthony R. 14
15 Ulloa's ("Defendant") Motion to Dismiss. Defendant was represented by Attorney Gary W.F.
16 Gumataotao. Chamorro Equities, Inc. ("Plaintiff') was represented by Attorney Charles H. 17 McDonald II. Plaintiffs counsel was not present for oral arguments on the motion. 18 Accordingly, Defendant submitted on the briefs. Following the hearing, the Comi took the 19 matter under advisement. Upon review of the written arguments and legal authorities presented 20
21 by both parties, the Court hereby issues this Decision and Order DENYING Defendant's
22 motion. 23 BACKGROUND 24 On March 28, 2013, Plaintiff filed a Complaint to Recover Finder's Fee or Commission 25
26 Paid to Broker. Plaintiff alleges, inter alia, "[ o ]n or about June 1, 2012, a mortgage loan was
27 made by Calvo's Insurance UnderwTiters, Inc., to the Plaintiff in the amount of Two Hundred
28 Ninety Thousand and 00/100 Dollars ($290,000.00). The loan was fully collateralized by both a First Fee Simple Mortgage and an Assignment of Rents for the location of Cost-U-Less in 1
Harmon. The interest rate on the loan was twelve percent (1 per annum, with monthly
payments of interest only, and with a balloon payment due on June 30, 2013." Plaintiff's
Complaint (Mar. 28, 2013). Plaintiff also alleges that Defendant Ulloa "charged to Plaintiff a
Finder's Fee, or a Commission, of Forty Thousand and 001100 Dollars ($40,000.00). This
Finder's Fee or Commission was equal to fourteen percent (14%) of the total loan amount thus 7
8 reducing the loan proceeds from Two Hundred Ninety Thousand and 0011 00 Dollars
9 ($290,000.00) to Two Hundred Fifty Thousand and 001100 Dollars ($250,000.00)." ld. 10 Consequently, Plaintiff requests that the Finder's Fee Agreement or Commission 11 Agreement with Defendant be null and void. Likewise, Plaintiff requests for judgment against 12
13 the Defendant in the amount of the principal sum of $40,000.00. Id. Plaintiff also prays for
14 pre-judgment interest at the rate of 6% from June 1, 2012 to the date of judgment or payment in 15 full, post judgment statutory interest at the rate of 6% per annum, reasonable attorneys' fees, 16 costs of suit, post-judgment attorneys' fees and costs, and for such other and further relief as 17 seems just and equitable in the premises. ld. 18
19 Defendant filed his Answer on April 24, 2013. Defendant admits that he is a resident of
20 Guam. He denies the allegations in paragraphs 1, 5 and 8 of the Complaint. He lacks sufficient 21 information to form a good faith belief and therefore denies allegations contained in paragraphs 22 2, 4, 6, 7, 9 and 10 of the Complaint. Defendant also objects to Exhibit "A" attached to the 23 Complaint. Defendant states his affirmative defenses as follows: (1) Complaint fails to state a 24
25 claim; (2) lacks jurisdiction; (3) no duty owed-no duty breached; (4) good faith of the
26 Defendant; (5) lack of knowledge; (6) Failure to join indispensable parties; (7) statute of 27 limitations; and (8) no demand for repayment." Def's. Answer (Apr. 24, 2013). 28 On May 20, 2013, Defendant filed a Motion to Dismiss. Plaintiffs opposition was filed 1
on June 17,2013. Defendant filed a reply on June 25,2013. The Court set oral arguments for
July 9, 2013. At that hearing, Defendant submitted on the briefs.
DISCUSSION
Guam Rules of Civil Procedure 12(b) provides how defenses and objections are to b
presented by pleading or motion. 7
8 (b) How Presented. Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, 9 shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: 10 (6) failure to state a claim upon which relief can be granted. 11 A motion making any of these defenses shall be made before pleading if a further pleading is permitted. No defense or objection is waived by being joined to one 12 or more other defenses or objections in a responsive pleading or motion. If a 13 pleading sets forth a claim for which relief to which the adverse party is not required to serve a responsive pleading, the adverse party may assert at trial any 14 defense in law or fact to that claim for relief. If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which 15 relief can be granted, matters outside the pleadings are presented to and not 16 excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable 17 opportunity to present all material made pertinent to such motion by Rule 56. 18 Guam R. Civ. P. 12(b)(6). 19 In ruling on a 12(b)(6) motion, a court's consideration is limited to the complaint, writte 20 instruments attached to the complaint as exhibits, statements or documents incorporated in th 21
22 complaint by reference, and documents on which the complaint heavily relies. Core Tech Jnt 'l.
23 Corp. v. Hanil Eng'g & Const. Co., Ltd., 2010 Guam 13 ~ 29 (citing Mercado Arocho v. Unite 24 States, 455 F.Supp.2d 15, 19 (D.P.R.2006) (quotation omitted)). Dismissal under Rule 12(b)(6 25 is not proper unless "it appears beyond doubt that the plaintiff can prove no set of facts i 26 support of his claim which would entitle him to relief." First Hawaiian Bank v. Afanley, 200 27
28 Guam 2,19 (citing Conley v. Gibson, 355 U.S. 4L 45-46, (1957). "[T]he court is not required t accept legal conclusions cast in the fonn of factual allegations if those conclusions canno 1
2 reasonably be dravvn from the facts alleged." !d. Further, the Court is to construe the pleading i
the light most favorable to the non-moving party, and resolve all doubts in the non-movin~ 1 party's favor. See ld. (citing Clegg v. Cult Awareness Network, et al. 18 F.3d 752, 754-55 (9t 5 Cir. 1994). 6
The Supreme Court of Guam has also instructed that in ruling on a Rule 12(b)(6) motio 7
8 to dismiss, the dismissal motion must convert into a summary judgment motion whenever th
9 Court considers extraneous material outside the pleadings. See Core Tech lnt 'l. Corp. v. Hani 10 Eng'g & Canst. Co., Ltd., 2010 Guam 13 ~ 29 (citing Newby v. Gov't oJGuam, 2010 Guam 4 11 18). "[The Guam Supreme Court's] holding in Newby accords with the general rule that a Rul 12
13 12(b)(6) motion to dismiss must be converted into a Rule 56 motion for summary judgmen
14 whenever 'matters outside the pleadings' are presented to and considered by the court:
15 If, on a motion asserting the defense numbered (6) to dismiss for failure of the 16 pleading to state a claim upon which relief can be granted, matters outside the pleadings are presented to and not excluded by the court, the motion shall be 17 treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made 18 pertinent to such motion by Rule 56." 19
20 Id.
21 The instant case arises out of a fraud claim. "In all averments of fraud or mistake, the 22 circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, 23
knowledge, and other conditions of mind of a person may be averred generally." GRCP 9(b). 24
25 Accordingly, "[t]he elements of fraud are: '(1) a misrepresentation; (2) knowledge of falsity (or
26 scienter); (3) intent to defraud to induce reliance; (4) justifiable reliance; and (5) resulting 27
28 damages." Hem/ani v. Flaherty, 2003 Guam 17 ~ 9 (citing Transpacific Export Cot. V Oka 1
Towers Corp., 2000 Guam 3 ~ 23).
Defendant argues that Plaintiff fails to plead fraud with particularity; there is no basis for
fraud; plaintiff lacks authority to enforce; and plaintiff demands attorneys' fees without a lawful
basis. See Def 's lvfot. to Dismiss at 5-9 (May 20, 2013). Conversely, Plaintiff argues that the
Complaint states a valid fraud claim. Pl.s Opp 'n Mot. at 1 (Jun 17, 2013). Furthermore,
Plaintiff contends that Defendant's Motion to Dismiss can be decided without considering 9 matters outside of the pleadings. !d. at 4. 10
11 With respect to the first element to bring forth a fraud claim, the Court agrees with
12 Plaintiff that paragraphs 7 and 9 of the Complaint, when read together, clearly allege that 13 Defendant misrepresented to Plaintiffthat he was legally able to collect a finder's fee when in 14 fact he was not able to do so because he was not a licensed real estate broker. As concerns the 15 second element, paragraphs 5 and 9 of the Complaint allege that Defendant claimed he was a 16
17 licensed broker and legally capable of accepting a brokers' commission, when in fact he was
18 aware that he was not a licensed broker capable of accepting a finder's fee. As concerns element 19 3, the Court agrees with Plaintiff that it can be inferred from paragraphs 5, 7, and 9 ofthe 20 Complaint that Defendant intended to defraud Plaintiff by charging a finder's fee when in fact he 21 was unable to legally do so pursuant to 21 GCA §§ 104101 and 104102(12). In relation to the 22
23 fourth element of fraud, paragraphs 6 and 7 of the Complaint sufficiently allege that Plaintiff
24 justifiably relied on Defendant's claim that he was legally able to accept or charge a finder's fee 25 because Calvo's Insurance provided Plaintiff with a loan and in return Plaintiff paid to Defendan 26 a finder's fee. Lastly, paragraphs 7 and 10 ofthe Complaint clearly allege damages. 27
28 In review of the Complaint and written instruments attached therein as exhibits fo 1
purposes of a 12(b)( 6) motion , the Court is satisfied at this time that Plaintiff has pled the instan
matter with particularity required under Guam's Rules of Civil Procedure. Likewise, the Court i
of the opinion that the instant motion to dismiss can be decided without considering matter
outside ofthe pleadings. Therefore, Defendant's Motion to Dismiss is DENIED.
CONCLUSION
8 By preponderance of the evidence and based on the foregoing reasons, the Court
9 DENIES Defendant's Motion to Dismiss. 10 SO ORDERED this--"--'-- day of OCTOBER, 2013. 11
16 Judge, Superior Court of Guam 17