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IN THE SUPERIOR COURT Of GUA
ANGEL MIGUEL DIAZ CRUZ, CIVIL CASE NO. CV1396-19
Plaintiff,
5 DECISION AND ORDER vs. Re: Defendant Motion to Dismiss for failure 6 to State a Claim
JOSEPH M. M. CRUZ,
Defendant.
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9 INTRODUCTION
This matter came before the Honorable Arthur R. Barcinas on August 2, 2022, for a 10 hearing on Defendant’s Motion to Dismiss for Failure to State a Claim. Present at the hearing 11 were Plaintiffs Counsel Wayne Francis Gumataotao, and Defense Counsel Curtis Van De Veld.
12 Having considered the arguments, briefs, and applicable law, the Court hereby GRANTS 13 Defendant’s Motion to Dismiss for Failure to State a Claim.
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18 1 BACKGROUND
The instant case arises from Plaintiffs Verified Complaint filed on December 6, 2019, 2 alleging that Defendant fraudulently caused two parcels of Plaintiffs property to be deeded to 3 Defendant as the grantee. V. Cornpl. pp. 2 - 3 (Dec. 6, 2019). About three months later,
Defendant filed his first Motion to Dismiss for Failure to State a Claim. Plaintiff filed his
5 Opposition on March 20, 2020, and a hearing on the motion was held on February 17, 2022. The
6 Court later issued its Decision and Order on April 15, 2022, wherein it granted Defendant’s
Motion to Dismiss for Failure to State a Claim and granted Plaintiff leave to amend his
Complaint within 30 days. The Court specifically found that while Plaintiff plead the elements 8 of fraud with sufficient particularity, Plaintiff failed to sufficiently allege the Court’s jurisdiction 9 as it relates to the statute of limitations for fraud claims. See Decision & Order p. 6 — 7 (April
10 15,2022).
11 On April 20, 2022, Plaintiff filed his first Amended Verified Complaint, which is
12 virtually identical to the original Verified Complain filed on December 6, 2019. The only
difference between the amended complaint and the original complaint is the allegation in 13 paragraph 12.’
14 Then on April 29, 2022, Defendant filed the instant Motion to Dismiss for Failure to State 15 a Claim. Defendant argues that the amended allegation in paragraph 12 fails to show jurisdiction
with an adequate description of fact that the statute of limitations has not run and jurisdiction
17 ‘Paragraph 12 of the Verified Complaint:
Plaintiff only recently discovered sufficient facts to form his good faith belief that Defendant committed 18 fraud as described with particularity herein and above. V. Compi. p. 3 (Dec. 6, 2019) (emphasis added).
19 Paragraph 12 First Amended Verified Complaint:
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Plaintiff discovered upon oresentation fsicj of the herein described documents with advice on or about 20 November 29, 2019, sufficient facts to form his good faith belief that Defendant committed each fraud as described with particularity herein and above.
First Amend. V. Compl. p. 3 (April 20, 2022) (emphasis added).
i exists. Plaintiff filed his Opposition on May 23, 2022, and Defendant filed his Reply on June 16,
2022. A hearing on the instant motion was held on August 2, 2022, wherein the parties made 2 their arguments and the Court took the matter under advisement.
3 DISCUSSION
Defendant argues that to avoid dismissal, Plaintiff must plead fraud and any tolling with
5 particularity sufficient to show that the statute of limitations has not lapsed. Defs Mot. p. 3
6 (April 29, 2022). Therefore, the issues before the Court are threefold: (1) determine whether
Plaintiff sufficiently pleads fraud with sufficient particularity; (2) identify when the statute of
limitations begins; and (3) determine whether Plaintiff sufficiently pleads the Court’s jurisdiction 8 as it relates to the statuteof limitations. The Court addresses each in turn.
9 I. PLAINTIFF PLEADS THE ELEMENTS OF FRAUD WITH SUFFICIENT PARTICULARITY.
Generally, Rule 8 of the Guam Rules of Civil Procedure (“GRCP”) provides, in relevant 11 part that “[a] pleading which sets forth a claim for relief ... shall contain ... a short and plain 12 statement of the claim showing that the pleader is entitled to relief.” Ukau v. Wang, 2016 Guam 13 26 ¶ 21; see Guam R. Civ. P. 8(a). When interpreting the plain language of Rule 8(a), [the
14 Supreme Court] has historically held that “Guam law requires only notice pleading, not fact
15 pleading.” Id. (emphasis added); citing Joseph v. Guam Bd. ofAtlied Health Exam ‘rs, 2015 Guam
4 ¶ 9; see also Taitano v. Calvo finance Corp. (“Taitano I’), 2008 Guam 12 ¶ 13 (“Rule 8 16 requires only a short and plain statement of the claim.”). Specific facts are not necessary; the 17 statement need only “give the defendant fair notice of what the ... claim is and the grounds upon 18 which it rests.” Erickson v. Fardus, 551 U.S. 89, 93 (2007). Further, the Guam Supreme Court
19 has declined to adopt the “plausibility standard” that is that “a complaint should not be dismissed
20 for failure to state a claim unless it ‘appears beyond reasonable doubt that the plaintiff can prove i no set of facts in support of his claim which would entitle him to relief” See Ukau, ¶J 26 27; -
citing Core Tech International Coip. v. Hanil Engineering & Construction Co., 2010 Guam 13 ¶ 2 52.
3 further, GRCP Rule 1 2(b)(6) allows a court to dismiss a complaint for failure to state a
claim upon which relief can be granted. See Guam R. Civ. P. 12(b)(6). While a complaint attacked
5 by a Rule 12(b)(6) motion to dismiss need not contain detailed factual allegations, a plaintiffs
6 obligation to provide the grounds of his entitlement to relief “requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Ukau, 7 2016 Guam 26 ¶ 26; quoting Core Tech., 2010 Guam 13 ¶ 52. Beyond this, the Supreme Court $ has declined the invitation to apply a heightened plausibility standard to local civil proceedings, 9 and it imposes only a liberal notice pleading requirement. See Id. at ¶ 33 (emphasis added). When 10 reviewing a Rule 1 2(b)(6) motion, the trial court must “construe the pleading in the light most
11 favorable to the non-moving party, and resolve all doubts in the non-moving party’s favor.” Id.
12 atJ51.
fraud claims are an exception to the general standard. fraud claims are special matters 13 that are subject to a heightened pleading standard. Ukau, 2016 Guam 26 ¶ 35. GRCP Rule 9(b)
14 provides, in relevant part, that “the circumstances constituting fraud or mistake shall be stated 15 with particulari” and that “[m]alice, intent, knowledge, and other conditions of mind of a person
16 may be averred generally.” Id.; citing Guam R. Civ. P. 9(b)(emphasis added). Rule 9(b) does not
17 require a plaintiff to prove a claim of fraud at the pleading state. Id. at ¶ 47; citing Taitano I., 2008
Guam 12 ¶ 16. “Rather, what is required is that a plaintiff set forth his claim with sufficient detail
to provide notice to defendants as to what particular fraudulent action is being alleged.” Id.; citing 19 Taitano L 200$ Guam 12 ¶ 16. The standard is also known as the “who, what, when, where, and 20 how” requirement. Id. ¶ 47.
1 The elements of fraud include: (1) a misrepresentation; (2) knowledge of falsity (or
scienter); (3) intent to defraud to induce reliance; (4) justifiable reliance; and (5) resulting
damages. Taitano L 2008 Guam 12 ¶ 12. “While statements of time, place, and nature of the 3 alleged fraudulent activities are sufficient, mere conclusory allegations of fraud are insufficient.”
Id. ¶ 15. Similarly, allegations based entirely on information and beliefs do not usually satisfy the
5 particularity requirement of Rule 9 (b). Id.
6 In its April 15, 2022, Decision and Order, this Court did a thorough analysis of Plaintiffs
Verified Complaint and found that Plaintiff plead the elements of fraud with sufficient
particularity. Given the substantial and virtually identical allegations in Plaintiffs First Amended 8 Verified Complaint, the Court adopts and incorporates its analysis as it relates to sufficiently 9 pleading the elements of fraud in its April 15, 2022, Decision and Order here. See Decision & 10 Order pp. 2 — 5 (April 15, 2022). As such, the Court finds that Plaintiff pleads the elements of
11 fraud with sufficient particularity in his First Amended Verified Complaint. The Court turns to
12 identify when the statute of limitations for Plaintiffs fraud claim begins.
II. THE APPLICABLE STATUTE OF LIMITATIONS FOR PLAINTIFF’S FRAUD 13 CLAIM BEGAN ON MARCH 24, 2014.
14 The three-year statute of limitations for fraud claims is set forth in Title 7 GCA section
15 11305, which states in relevant part:
(d) An action for relief on the ground of fraud or mistake. The cause of action in such case 16 not to be deemed to have accrued until the discovery by the aggrieved parry of the facts constituting the fraud or mistake.
17 7 GCA § 1 1305(d)(emphasis added). The Supreme Court has held that the question of “when 18 [Plaintiffi ‘discovered’ the [alleged wrongdoing] is important in determining the commencement
19 of the statute of limitations period on any claim that the deed constituted an agreement to convey
20 the property.” See Burkhart v. Miranda, 2013 Guam 2 ¶ 27 (emphasis added); see also Taitano J
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1 2008 Guam 12 ¶ 2$ (“In cases where the exact timing of specific events is critical for determining
fraud, lack of precision in alleging dates can be fatal to a pleading.”). Therefore, the question 2 becomes when did Plaintiff allegedly discover the wrongdoing. In interpreting the term 3 “discovery” in this context, the Supreme Court has noted that:
Discovery does not mean actual knowledge. Discovery occurs when a plaintiff could have discovered the wrong/id acts with reasonable diligence. Reasonable diligence is 5 tested by an objective standard, and when the uncontroverted evidence irrefutably demonstrates that the plaintiff discovered or should have discovered fraudulent conduct, 6 the issue may be resolved by summary judgment.
Taitano I, 2008 Guam 12 ¶ 45 (emphasis added); citing Gayle v. Hemlani, 2000 Guam 25 ¶ 24;
see also Burkheart, 2013 Guam 2 ¶ 26. Further, the Supreme Court has held that “the statute of $ limitations will begin to run when the plaintiff suspects or should sttspect that his injluy was 9 caused by wrongdoing or that someone has done something wrong to him.” Burkhart, 2013 10 Guam 2 ¶26 (emphasis added); citing Taitano I, 200$ Guam 12 ¶ 45; citing Gayle, 2000 Guam
11 25 ¶ 24. “Once the plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, he
12 must decide whether to file suit or to sit on his rights.” Taitano I, 2008 Guam 12 ¶ 45.; citing
Citstodio v. Boonprakong, 1999 Guam 5 ¶ 24; see also Burkhart, 2013 Guam 2 ¶ 26.
13 Here, Defendant directs the Court’s attention to Taitano v. Calvo financial Corp 14 (“Taitano II’)., 2009 Guam 9, for two contentions: (1) the validity of the duty imposed by 15 constructive notice as to matters of recorded title; and (2) the requirement for sufficient facts
16 showing that the statute of limitations has not run. See DePs Mot. pp. 7, 5 (April 29, 2022). The
17 Court addresses each in turn as they relate to identifying and pleading jurisdiction in terms of the
statute of limitations.
18 1 a. Plaintiff was on constructive notice, such that he should have suspected that his injury was caused by wrongdoing.
2 First, in identifying when the relevant statute of limitations is alleged to have
3 commenced—that is when the plaintiffsuspects or should suspect that his injtin was caused by
4 wrongdoing—Defendant calls attention to the validity of constructive notice. See Def s Mot. p 7
(April 29, 2022).
5 Constructive notice means “notice arising by presumption of law from the existence of 6 facts and circumstances that a party had a duty to take notice of.” Taitano II, 2009 Guam 9 J 29;
citing Black’s Law Dictionary 1089 (7th Ed. 1999). In Taitano ll the Supreme Court recognized
8 that “a recorded deed that appears in the chain of title would almost certainly be discoverable
through diligent inquiry.” Id. at ¶ 22.
Here, Plaintiff alleges the following in paragraphs 7 and 9:
10 On or about March 24, 2014, Defendant caused a Deed to be filed at the Department of 11 Land Management for Parcel I as Instrument Number 863075 whereby Plaintiff is the purported grantor and Defendant is the purported grantee.
12 On or about March 24, 2014, Defendant cause a Deed to be filed at the Department of Land Management under Instrument Number $63020 for Parcel II whereby Plaintiff is the 13 purported grantor and Defendant is the purported grantee.
14 First Amend. V. Compl. p. 2 (April 20, 2022). Then in paragraph 12, Plaintiff alleges that:
15 Plaintiff discovered upon oresentation [sic] of the herein described documents with advice on or about November 29, 2019, sufticient facts to form his good faith belief that Defendant committed each fraud as described with particularity herein and above.
16 Id. at p. 3. It appears that the first incident in which Plaintiff could have discovered the wrongful 17 acts with reasonable diligence such that he suspected or should have suspected that his injury was 1$ caused by wrongdoing, was on March 24, 2014, when Defendant is alleged to have recorded the
19 deeds. See Taitano I, 2008 Guam 12 ¶ 45 (emphasis added). This would have put Plaintiff on
20 constructive notice of the purported deeds. It was at that moment, on March 24, 2014, when the
Page 7 of;;
1 statute of limitations is said to begin, and Plaintiff was to decide whether to file suit or to sit on
his rights. See Id. Now, that the beginning of the statute of limitations has been identified, the
next inquiry is whether Plaintiff properly alleged this Court’s jurisdiction as it relates to the statute 3 of limitations.
III. PLAINTIFF FAILS TO PROVIDE A SHORT AND PLAIN STATEMENT OF THE COURT’S JURISDICTION AS IT RELATES TO THE STATUTE OF 5 LIMITATIONS.
6 Defendant next argues that Taitano II supports the requirement that Plaintiff must plead
sufficient facts to show that the statute of limitations has not run. See DePs Mot. p 5 (April 29,
2022).
$ The defendant in Taitano II relied on Amsden v. Yamon, 1999 Guam 14. See Taitano II, 9 2009 Guam 9 ¶ 26. Therefore, before discussing Taitano II this Court briefly turns its attention to 10 Amsden. lnArnsden, the plaintiff appealed the lower court’s decision granting summary judgment
11 due to the claim being time-barred by the relevant statute of limitations. Amsden, 1999 Guam 14
12 ¶ 1. The lower court reasoned that summary judgment was appropriate because the plaintiff “failed to plead specific acts to justify her failure to file the initial Complaint within two years.”
13 Id. at ¶ 11. The Supreme Court then applied the standard in Fonderosa v. Ramon, as reflected 14 below:
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When a complaint shows on its face or on the basis of judicially noticeable facts that the cause of action is barred by the appliable statute of limitations, the plaintiff must plead 16 facts which show an excuse, tolling, or for some other basis for avoiding the statutory bar.
17 Id. at ¶ 12; citing Fonderosa v. Ramon, 23 Cal. App. 4th 1761, 1768 (Cal. App. 1994). The
Supreme Court further noted that the plaintiff omitted any reference to the date of the accident 18 giving rise to the cause of action. Id. at ¶ 13. As such, the Supreme Court held that the standard 19 in Ponderosa applied in light of the fact that ‘judicially noticeable facts,” namely the date of the 20 accident was relayed orally in court, alerted the trial court to the action’s untimeliness. Id.
1 Turning back to Taitano ll, the Supreme Court interestingly states that “neither Amsden
nor Fonderosa should be read as establishing a heightened pleading requirement for jurisdictional 2 issues.” Taitano II, 2009 Guam 9 ¶ 27. Instead, the Supreme Court held that “Amsden stands for 3 the proposition that a pleading should affirmatively indicate the source of the court’s jurisdiction
to hear the case.” Id. The Supreme Court ftirther held that the plaintiff satisfied that standard of
5 affirmatively indicating the source of the court’s jurisdiction. The Supreme Court noted that the
6 plaintiffs complaint specifically indicated the reason that the one-year statute of limitations
should not apply, as reflected below:
19. The Land Registration Decree purportedly granted to [the defendants] was void and 8 hence not subject to 21 GCA § 29146 one[-]year statute of/imitations as [the plaintiffs]
were without notice and lacked any due process with respect to any prior Land 9 Registration process.
Id. (emphasis added). The Supreme Court noted that Taitano II is a “stark contrast to Amsden in 10 that the plaintiff [in Amsden] made no attempt to indicate in the complaint why the statute of 11 limitations should not apply.” Id. Finally, the Supreme Court held that a “short plain statement”
12 is required for a jurisdictional statement as for the claim itself. See Id. at ¶ 30; citing Guam R.
13 Civ. P. 8(a). “While fraud claims must be plead with particularity, there is no such requirement
14 for ... that statement of why the statute of limitations should not apply.” Id.; citing Guam R. Civ.
15 P. 8(a) and 9(b). In other words, the standard to pleading the Court’s jurisdiction as it relates to
the statute of limitations is to provide a short and plain statement that the court has jurisdiction.
16 The Court now analogizes the instant matter to Taitano II and Amsden. Put simply, the 17 instant matter is less like Taitano I1, and more like Amsden, in terms of how Plaintiff pleads this 1$ Court’s jurisdiction. The plaintiff in Taitano II provided a short and plain statement as to why the
19 statute of limitations, in that case, did not apply at the forefront of that complaint. In contrast, the plaintiff in Amsden failed to plead specific acts to justify her failure to file the initial complaint
within the statute of limitations.
2 Here, it has been established that the relevant statute of limitations commenced on March 3 24, 2014, as discussed above. Therefore, the statute of limitations is said to expire three years
from that March 24, 2014, day. See 7 GCA § 11305(d). Here, Plaintiff alleges that:
On or about March 24, 2014, Defendant caused a Deed to be filed at the Department of Land Management for Parcel 1 as Instaiment Number 863075 whereby Plaintiff is the 6 purported grantor and Defendant is the purported grantee[;]
On or about March 24, 2014, Defendant caused a Deed to be filed at the Department of Land Management under Instrument Number 863080 for Parcel II whereby Plaintiff is the purported grantor and Defendant is the purported grantee[;]
8 without providing any short and plain statement justifying his failure to file his complaint within 9 the three-year statute of limitations. See 7 GCA § 11305(d). Hence, Plaintiff in the instant matter 10 is more reflective of the plaintiff in Amsden. Therefore, even with the general notice pleading
11 standard of providing a “short plain statement for a jurisdictional statement,” Plaintiff still fails
12 to allege this Court’s jurisdiction as it relates to the statute of limitations for a claim of fraud. See
Taitano II, 2009 Guam 9 ¶ 30; citing Guam R. Civ. P. 8(a). The face of the First Amended 13 Complaint reflects that this Court lacks jurisdiction because the statute of limitations expired on 14 or about March 14, 2017—three years from the date Plaintiff was on constructive notice of the
purported deeds and should have suspected wrongdoing. Even in viewing the First Amended
16 Complaint in a light most favorable to Plaintiff as the non-moving party, this Court lack
17 jurisdiction as the statute of limitations has expired.
As such, the Court finds that while Plaintiff pleads the elements of fraud with sufficient 18 particularity, Plaintiff failed to provide a short and plain statement of the Court’s jurisdiction as 19 it relates to the statute of limitations for fraud.
i CONCLUSION
For the reasons set forth above, the Court GRANTS Defendant’s Motion to Dismiss for 7
failure to State a Claim.
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IT IS SO ORDERED
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6 HO 0 LE ARTHUR R. BARCINAS Judge, Superior Court of Guam 7
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