. JFi”O COLT ;Jr
ZO22APR j5 f 1:
1 f CLERK 0F CIURT 2 IN THE SUPERIOR COURT OF GUAM 3
ANGEL MIGUEL DIAZ CRUZ, CIVIL CASE NO. CV1396-19 Plaintiffs, 5 vs. DECISION AND ORDER Defendant’s Motion to Dismiss 6 JOSEPH M. M. CRUZ,
Defendants.
8 INTRODUCTION 9 This matter came before the Honorable Arthur R. Barcinas on February 17, 2022, for a 10 .
motion hearing. Present at the hearing were: Plaintiff Angel Miguel Diaz Cruz ( Plaintiff) . . .. .
11 with Counsel Wayne Francis Gumataotao, and Defendant Joseph M.M. Cruz (“Defendant”)
12 with Counsel Curtis Van De Veld. At the hearing the parties made their arguments on the
instant motion and the Court took the matter under advisement. Having considered the 13 arguments and the applicable law, the Court hereby GRANTS Defendant’s Motion to Dismiss 14 and GRANTS Plaintiff leave to amend its complaint within 30 days. 15
16 BACKGROUND
17 The instant case arises from Plaintiffs Verified Complaint filed on December 6, 2019,
18 purporting to allege that Defendant fraudulently caused two parcels of Plaintiffs property to be
deeded to Defendant as the grantee. V. Compl. pp. 2 -3 (Dec. 6, 2019). 19 A hearing on Defendant’s Motion to Dismiss was held on February 17, 2022, wherein 20 the parties made their arguments and the Court took the matter under advisement.
Page 1 of7 On March 4, 2020, Defendant filed a Motion to Dismiss for F allure to State a Claim
and Plaintiff filed its Opposition on March 20, 2020. 2
3 DISCUSSION
I. STANDARD FOR FAILURE TO STATE A CLAIM UNDER GRCP RULE 12
5 The Guam Rules of Civil Procedure provide that a party may move for dismissal for
6 failure to state a claim for which relief can be granted. Guam R. Civ. P. 12(b) (6). In deciding
such a motion, the court must “construe the pleading in the light most favorable to the non-
moving party, and resolve all doubts in the non-moving party’s favor.” Taitano v. Calvo fin. $ Corp., 200$ Guam 12 ¶ 9. “Conclusory allegations of law and unwarranted inferences are 9 insufficient to defeat a motion to dismiss for failure to state a claim.” Id. “Dismissal for failure 10 to state a claim is appropriate only of it appears beyond doubt that the [non-moving party] can
11 prove no set of facts in support of his claim which would entitle him to relief.” Id.
12 IL STANDARD FOR CLAIMING FRAUD UNDER GRCP RULE 9
The elements of fraud include: (1) a misrepresentation; (2) knowledge of falsity (or 13 scienter); (3) intent to defraud to induce reliance; (4) justifiable reliance; and (5) resulting 14 damages. Taitano, 200$ Guam 12 ¶ 12. 15 Rule 9(b) provides, in relevant part, that “the circumstances constituting fraud or
16 mistake shall be stated with particularity and that malic, intent, knowledge, and other
17 conditions of state of mind of a person may be averred generally.” Ukau v. Wang, 2016 Guam
26 ¶ 35; Guam R. Civ. P. 9(b). The standard is also known as the “who, what, when, where and 1$ how” requirement. Id. ¶ 47. “While statements of time, place, and nature of the alleged 19 fraudulent activities are sufficient, mere conclusory allegations of fraud are insufficient.” 20
Page 2 of 7 Taitano, 200$ Guam 12 ¶ 15. Similarly, allegations based entirely on information and beliefs
do not usually satisfy the particularity requirement of Rule 9 (b). Id. 2 “Rule 9(b) does not require a plaintiff to prove a claim of fraud at the pleading state.” 3 Ukau, 2016 Guam 26 ¶ 47. What is required is that a plaintiff set forth his claim with sufficient
detail to provide notice to defendants of the particular fraudulent action is being alleged. Id.
5 Although plaintiffs may fairly be expected to identify with specificity the defendant’s alleged
6 misrepresentations they are not expected to plead with specificity the defendant’s state of
mind. Taitano, 200$ Guam 12 ¶ 17.
A plaintiff can satisfy the “who” requirement by identifying the role of the defendant in 8 the alleged fraudulent scheme. Id. ¶ 26. In cases where the exact timing of specific events is 9 critical for determining fraud, lack of precision in alleging dates can be fatal to a pleading. Id. ¶ 10 2$.
11 a. Plaintiffsufficienily pleads the elements offraud.
12 In viewing the motion in light most favorable to Plaintiff as the non-moving party the
Court finds that Plaintiff pleads the elements for fraud with sufficient particularity. first, 13 Plaintiff sufficiently pleads misrepresentation in the allegations in paragraphs 7, 8, 9, and 11 of 14 its Verified Complaint. The alleged misrepresentation is reflected in paragraphs 7 and 9: 15 “Defendant caused a deed to be filed... whereby Plaintiff the purported grantor and Defendant
16 is the purported grantee.” V. Compl. P. 2 (Dec. 6, 2019). The alleged misrepresentation is
17 further reflected in paragraph 8 and 11 alleging that Defendant “forg{ed] the signature of
Plaintiff on the deed and/or obtain[ed] the deed by serving in a confidential relationship with 1$ an elderly person... and failing to ensure that Plaintiff had independent counsel. Id. 19 Second, Plaintiff sufficiently pleads intent to defraud, knowledge of falsity, and 20 justifiable reliance in the allegations in paragraphs 8 and 11. Paragraphs $ and 11 allege that
Page 3 of 7 1 Defendant “failed to ensure that Plaintiff had independent counsel regarding the purported
transaction.” Id. The alleged knowledge and intent is also reflected in paragraph 10: “the 2 transfers were accomplished via Quitclaim deed without consideration.” Id. Intent and 3 knowledge of falsity need only be averred generally. See Ukau, 2016 Guam 26 ¶ 35. As such,
the Court finds that the allegations set forth in paragraph 8, 10, and 11, generally allege
5 Defendant’s intent to defraud and knowledge of falsity, which is sufficient.
6 Finally, Plaintiff sufficiently pleads resulting damages in the allegations in paragraph
15 and 16. Paragraph 15 alleged that Defendant encumbered one or both of the subject parcels
with mortgages without Plaintiffs permission. V. Compi. p. 3 (Dec. 6, 2019). Paragraph 16 $ alleges that Defendant leased one or both of the subject parcels without the permission of 9 Plaintiff. Id. The alleged encumbrance and leasing of the parcels sufficiently plead Plaintiffs 10 damages resulting from Defendant’s conduct.
11 b. Plaintiff satisfies the “who, what, where, when, and how” requirement for particularity. 12 Plaintiff identifies “who” made the alleged misrepresentation in the allegation in 13 paragraphs 4, 7, 8, 9, and 11. Plaintiff first introduces Defendant by describing their
14 relationship as father and son in its allegation in paragraph 4. Plaintiff then goes on to
15 expressly identify “Defendant” in its allegations of the alleged misrepresentation in paragraph
7,8,9, and 11. 16 Plaintiff identifies “what, where, when, and how” the alleged misrepresentation was in 17 the allegations in paragraphs 7, 8, 9, 10, and 11. Those paragraphs reflect a sufficient statement 18 of the time, place, and nature of the alleged fraudulent activity. See Taitano, 2008 Guam 12 ¶
15. The time of the alleged misrepresentation is indicated as “On or about March 24, 2017.” V.
20 Compl. p. 2 (Dec. 6, 2019). The place is indicated as “the Department of Land Management.”
Page 4 of 7 . 1 Id. Finally, the nature of the alleged misrepresentation is reflected in the language “Defendant
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. JFi”O COLT ;Jr
ZO22APR j5 f 1:
1 f CLERK 0F CIURT 2 IN THE SUPERIOR COURT OF GUAM 3
ANGEL MIGUEL DIAZ CRUZ, CIVIL CASE NO. CV1396-19 Plaintiffs, 5 vs. DECISION AND ORDER Defendant’s Motion to Dismiss 6 JOSEPH M. M. CRUZ,
Defendants.
8 INTRODUCTION 9 This matter came before the Honorable Arthur R. Barcinas on February 17, 2022, for a 10 .
motion hearing. Present at the hearing were: Plaintiff Angel Miguel Diaz Cruz ( Plaintiff) . . .. .
11 with Counsel Wayne Francis Gumataotao, and Defendant Joseph M.M. Cruz (“Defendant”)
12 with Counsel Curtis Van De Veld. At the hearing the parties made their arguments on the
instant motion and the Court took the matter under advisement. Having considered the 13 arguments and the applicable law, the Court hereby GRANTS Defendant’s Motion to Dismiss 14 and GRANTS Plaintiff leave to amend its complaint within 30 days. 15
16 BACKGROUND
17 The instant case arises from Plaintiffs Verified Complaint filed on December 6, 2019,
18 purporting to allege that Defendant fraudulently caused two parcels of Plaintiffs property to be
deeded to Defendant as the grantee. V. Compl. pp. 2 -3 (Dec. 6, 2019). 19 A hearing on Defendant’s Motion to Dismiss was held on February 17, 2022, wherein 20 the parties made their arguments and the Court took the matter under advisement.
Page 1 of7 On March 4, 2020, Defendant filed a Motion to Dismiss for F allure to State a Claim
and Plaintiff filed its Opposition on March 20, 2020. 2
3 DISCUSSION
I. STANDARD FOR FAILURE TO STATE A CLAIM UNDER GRCP RULE 12
5 The Guam Rules of Civil Procedure provide that a party may move for dismissal for
6 failure to state a claim for which relief can be granted. Guam R. Civ. P. 12(b) (6). In deciding
such a motion, the court must “construe the pleading in the light most favorable to the non-
moving party, and resolve all doubts in the non-moving party’s favor.” Taitano v. Calvo fin. $ Corp., 200$ Guam 12 ¶ 9. “Conclusory allegations of law and unwarranted inferences are 9 insufficient to defeat a motion to dismiss for failure to state a claim.” Id. “Dismissal for failure 10 to state a claim is appropriate only of it appears beyond doubt that the [non-moving party] can
11 prove no set of facts in support of his claim which would entitle him to relief.” Id.
12 IL STANDARD FOR CLAIMING FRAUD UNDER GRCP RULE 9
The elements of fraud include: (1) a misrepresentation; (2) knowledge of falsity (or 13 scienter); (3) intent to defraud to induce reliance; (4) justifiable reliance; and (5) resulting 14 damages. Taitano, 200$ Guam 12 ¶ 12. 15 Rule 9(b) provides, in relevant part, that “the circumstances constituting fraud or
16 mistake shall be stated with particularity and that malic, intent, knowledge, and other
17 conditions of state of mind of a person may be averred generally.” Ukau v. Wang, 2016 Guam
26 ¶ 35; Guam R. Civ. P. 9(b). The standard is also known as the “who, what, when, where and 1$ how” requirement. Id. ¶ 47. “While statements of time, place, and nature of the alleged 19 fraudulent activities are sufficient, mere conclusory allegations of fraud are insufficient.” 20
Page 2 of 7 Taitano, 200$ Guam 12 ¶ 15. Similarly, allegations based entirely on information and beliefs
do not usually satisfy the particularity requirement of Rule 9 (b). Id. 2 “Rule 9(b) does not require a plaintiff to prove a claim of fraud at the pleading state.” 3 Ukau, 2016 Guam 26 ¶ 47. What is required is that a plaintiff set forth his claim with sufficient
detail to provide notice to defendants of the particular fraudulent action is being alleged. Id.
5 Although plaintiffs may fairly be expected to identify with specificity the defendant’s alleged
6 misrepresentations they are not expected to plead with specificity the defendant’s state of
mind. Taitano, 200$ Guam 12 ¶ 17.
A plaintiff can satisfy the “who” requirement by identifying the role of the defendant in 8 the alleged fraudulent scheme. Id. ¶ 26. In cases where the exact timing of specific events is 9 critical for determining fraud, lack of precision in alleging dates can be fatal to a pleading. Id. ¶ 10 2$.
11 a. Plaintiffsufficienily pleads the elements offraud.
12 In viewing the motion in light most favorable to Plaintiff as the non-moving party the
Court finds that Plaintiff pleads the elements for fraud with sufficient particularity. first, 13 Plaintiff sufficiently pleads misrepresentation in the allegations in paragraphs 7, 8, 9, and 11 of 14 its Verified Complaint. The alleged misrepresentation is reflected in paragraphs 7 and 9: 15 “Defendant caused a deed to be filed... whereby Plaintiff the purported grantor and Defendant
16 is the purported grantee.” V. Compl. P. 2 (Dec. 6, 2019). The alleged misrepresentation is
17 further reflected in paragraph 8 and 11 alleging that Defendant “forg{ed] the signature of
Plaintiff on the deed and/or obtain[ed] the deed by serving in a confidential relationship with 1$ an elderly person... and failing to ensure that Plaintiff had independent counsel. Id. 19 Second, Plaintiff sufficiently pleads intent to defraud, knowledge of falsity, and 20 justifiable reliance in the allegations in paragraphs 8 and 11. Paragraphs $ and 11 allege that
Page 3 of 7 1 Defendant “failed to ensure that Plaintiff had independent counsel regarding the purported
transaction.” Id. The alleged knowledge and intent is also reflected in paragraph 10: “the 2 transfers were accomplished via Quitclaim deed without consideration.” Id. Intent and 3 knowledge of falsity need only be averred generally. See Ukau, 2016 Guam 26 ¶ 35. As such,
the Court finds that the allegations set forth in paragraph 8, 10, and 11, generally allege
5 Defendant’s intent to defraud and knowledge of falsity, which is sufficient.
6 Finally, Plaintiff sufficiently pleads resulting damages in the allegations in paragraph
15 and 16. Paragraph 15 alleged that Defendant encumbered one or both of the subject parcels
with mortgages without Plaintiffs permission. V. Compi. p. 3 (Dec. 6, 2019). Paragraph 16 $ alleges that Defendant leased one or both of the subject parcels without the permission of 9 Plaintiff. Id. The alleged encumbrance and leasing of the parcels sufficiently plead Plaintiffs 10 damages resulting from Defendant’s conduct.
11 b. Plaintiff satisfies the “who, what, where, when, and how” requirement for particularity. 12 Plaintiff identifies “who” made the alleged misrepresentation in the allegation in 13 paragraphs 4, 7, 8, 9, and 11. Plaintiff first introduces Defendant by describing their
14 relationship as father and son in its allegation in paragraph 4. Plaintiff then goes on to
15 expressly identify “Defendant” in its allegations of the alleged misrepresentation in paragraph
7,8,9, and 11. 16 Plaintiff identifies “what, where, when, and how” the alleged misrepresentation was in 17 the allegations in paragraphs 7, 8, 9, 10, and 11. Those paragraphs reflect a sufficient statement 18 of the time, place, and nature of the alleged fraudulent activity. See Taitano, 2008 Guam 12 ¶
15. The time of the alleged misrepresentation is indicated as “On or about March 24, 2017.” V.
20 Compl. p. 2 (Dec. 6, 2019). The place is indicated as “the Department of Land Management.”
Page 4 of 7 . 1 Id. Finally, the nature of the alleged misrepresentation is reflected in the language “Defendant
caused a deed to be filed,” and “by forging the signature of the Plaintiff on the deed and/or 2 obtaining the deed by serving in a confidential relationship with an elderly person, taking the 3 property out of the natural course and failing to ensure that Plaintiff had independent counsel
regarding the purported transaction.” Id. Defendant contends that “Plaintiff does not assert that
5 the signature [sic] on the Deeds are not the Plaintiffs and that such were put on those deeds by
6 the Defendant.” Def.’s Mot. to Dismiss p. 6 (Mar. 4, 2020). Defendant also argues that “the
notary is entitled to the presumption of validity.” Id. at p. 8. Whether the signatures were in
fact placed on the deeds by Defendant, and whether such signatures are presumed valid as they 8 are notarized are related to proving the claim for fraud. Proving the claim of fraud is not 9 required at this stage of the proceedings. Instead, the applicable standard here is whether 10 Plaintiff pleads the claim for fraud with sufficient particularity. The Court finds that Plaintiff
11 plead the elements of fraud with sufficient particularity.
12 III. PLAINTIFF FAILS TO SUFFICIENTLY ALLEGE THE COURT’S JURISDICTION AS IT RELATES TO THE STATUTE OF LIMITATIONS.
13 Title 7 GCA § 11305 sets forth the three year applicable statute of limitations for a
14 fraud claim. The statute states in relevant part:
15 The cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud or mistake.
16 GCA § 11305(b). The Supreme Court has held that “the statute of limitations will begin to
17 run when the plaintiff suspects or should suspect that his injury was caused by wrongdoing or
that someone has done something wrong to him.” Burkhart v. Miranda, 2013 Guam 2 ¶ 26. 18 “Discovery” occurs when a plaintiff could have discovered the wrongful acts with reasonable 19 diligence.” Id. 20
Page 5 of 7 1 The Supreme Court has specifically held that “the question of when [the plaintiff]
discovered [an] error in the deed is important in determining the commencement of the statute 2 of limitations period on any claim that the deed constituted an agreement to convey the 3 property.” Id. ¶ 27. While fraud claims must be plead with particularity, there is no such
requirement for a statement of why the statute of limitations should not apply. Taitano v. Calvo
5 finance Corp (“Taitano II”), 2009 Guam 9 ¶ 30.
6 Defendant argues that Plaintiff fails to plead when or how he “recently discovered” the
alleged misrepresentation and that Plaintiff must plead sufficient facts to demonstrate the
tolling as required in Amsden v. Yamon, 1999 Guam 14. Def.’s Mot. to Dismiss pp. 5-6 (Mar. 8 4, 2020). Tn contrast, Plaintiff urges the Court to consider Fonderosa Homes Inc. v. City of 9 Ramon, 23 Cal. App. 4’ 1761, 1768 (1994), which requires that one plead facts which show an 10 excuse, tolling, or some other basis for avoiding the statutory bar.” Pl.’s Opp’n. p. 12 (Mar. 20,
11 2020). The Supreme Court has expressly stated that “neither Amsden nor Ponderosa should be
12 read as establishing a heightened pleading requirement for jurisdictional issues.” Taitano IJ
2009 Guam 9 ¶ 27. Rather, Amsden stands for the proposition that a pleading should 13 affirmatively indicate the source of the court’s jurisdiction to hear the case. Id. 14 Plaintiff must affirmatively state a short and plain statement indicating that the court 15 has jurisdiction to hear the case. The question of when Plaintiff discovered the alleged
16 misrepresentation as it relates to the deeds is important in determining the commencement of
17 the statute of limitations. See Burkhart, ¶ 27. Plaintiffs allegation in paragraph 12: “Plaintiff
only recently discovered sufficient facts to form his good faith belief that Defendant committed 18 fraud as described with particularity herein and above” is not sufficient to satisfy a short and 19 plain statement affirmatively indicating the court’s jurisdiction. V. Compl. p. 3 (Dec. 6, 2019). 20
Page 6 of 7 1 The Court finds that the phrase “recently discovered” is too vague for the court to establish
when the statute of limitations begins. 2
3 CONCLUSION
4 For the reasons set forth above, the Court GRANTS Defendant’s Motion to Dismiss
and GRANTS Plaintiff leave to amend its complaint within 30 days. 5
6 IT IS SO ORDERED 7
$
9 Judge, Superior Court of Guam
SERVICE VIA E-MAIL 14 I acknowledge that an electronic copy of the original was e-mailed to: ‘-o.7 15
Date: 16 Joseph Bamoa, Jr. Deputy Clerk, Superior Court of Guam 17
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