Kim v. Kim

Opinion

1 ~. IN THE SUPERIOR COURT OF GUAM

2 3 CHUNG SOOK KIM, ) Civil Case no. dv~~~e-ll AM 10: 4 )

4 Plaintiff, )

)

5 v. )

)

6 ) DECISION AND ORDER ) re: Motion to Dismiss First Amended 7 MI HYE KIM, KI YOUNG KIM, MIN ) Complaint for Cancellation of Instrument KYONG KIM, HEE SOON JEONG, )

8 BYUNG GON KIM, AND DOES I )

THROUGH IV, )

9 )

)

10 Defendants. )

11

12 INTRODUCTION

13 This matter came before the Honorable Judge Michael J. Bordallo on November 8, 2011.

14 The Plaintiffwas represented by Attorney Carlos L. Taitano. Defendants Mi Hye, Ki Young, and 15 Min Kyong Kim were represented by Attorney Phillip Torres. After considering the matters 16 presented, the court now issues the following decision and order granting in part and denying in 17 part Defendant's motion. The court grants the motion with leave to amend as to count two against 18 Defendants Hee Soon Jeong and Byung Gon Kim. The court denies the motion to dismiss as to 19 the remaining counts against the rest of the Defendants.

20 BACKGROUND

21 The instant matter arises out of a civil complaint filed by the Plaintiff on April 22, 2011.

22 Plaintiff filed a first amended complaint for cancellation of instrument on May 6, 2011. The first 23 amended complaint states that on August 24, 2009, Defendants deceived Plaintiff into signing a 24 Deed of Gift conveying real estate to the Plaintiff's daughter, Defendant Mi Hye Kim. As a result 25 the first amended complaint alleges four counts: (l) breach of fiduciary duty, (2) fraud, (3) aiding 26 or abetting breach of fiduciary duty, and (4) constructive trust.

DECISION AND ORDER Civil Case no. CV 0710-11 1 On May 26, 2011, Defendants filed a motion to dismiss. Defendants argue that dismissal 2 is appropriate because the Plaintiff has failed to state a claim for which relief can be granted 3 4 pursuant to Rule 12(b)(6) of the Guam Rules of Civil Procedure. More specifically, Defendants

5 argue that (1) Plaintiff fails to sufficiently allege a fiduciary relationship in counts one and three;

6 (2) Plaintiff fails to sufficiently plead fraud with particularity; and (3) constructive trust is not a

7 claim.

DISCUSSION

8 Rule 12(b)(6) provides that "every defense, in law or fact, to a claim for relief in any 9 10 pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in the

responsive pleading thereto if one is required, except that the following defenses may at the option 11 12 of the pleader be made by motion: ... (6) failure to state a claim upon which relief can be granted."

Guam R.Civ. P. 12(b)(6).

13 14 Under Rule 12(b)(6), the facts in the complaint are presumed to be true, and the complaint

15 is liberally construed in favor of the Plaintiff. First Hawaiian Bank v. Manley, 2007 Guam 2, ~9.

16 Generally, a motion to dismiss under Rule 12(b)(6) should be disfavored and doubts should be

17 resolved in favor of the pleader, unless no set of facts could support the claims as plead. Id. A

18 Rule 12 (b)( 6) motion tests only whether the claim has been adequately stated in the complaint,

19 and the purpose of a 12(b)(6) motion is to assess the legal feasibility of the complaint, not to

20 weigh the evidence which the plaintiff offers or intends to offer. Ryder Energy Distribution Corp.

21 v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779 (2d Cir.1984). Thus, on a motion under

22 Rule 12(b)(6), the court's inquiry is limited to the content ofthe complaint and the court should

23 not dismiss the complaint merely because the court doubts the Plaintiff will prevail in the action,

24 or that the possibility of ultimate recovery is remote. Neitzke v. Williams, 490 U.S. 319, 327, 109

25 S.Ct. 1827 (1989). Should the complaint fail to state a claim under Rule 12(b)(6), as with a Rule

26 I2(b)( 1) motion, dismissal without leave to amend is improper unless it is clear that the complaint

26

...

, DECISION AND ORDER Civil Case no. CV 0710-11

1

2 could not be saved by any amendment. Ostrzenski v. Seigel, 177 F.3d 245, 252-53 (4th Cir.1999). 3 However, conclusory allegations of law and unwarranted inferences are insufficient to

4 defeat a motion to dismiss for failure to state a claim. Taitano v. Calvo Finance Corp., 2009 5 Guam 9 ~6. Furthermore, a plaintiff s obligation to provide the grounds of his entitlement to relief 6 requires more than labels and conclusions, and a formulaic recitation of the elements of the cause 7 of action will not do. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). The factual 8 allegations must be enough to raise a right to relief above the speculative level. Id. 9 COUNT I & III - Breach of Fiduciary Duty & Aiding or Abetting Breach of Fiduciary Duty

10

In order to plead a cause of action for breach of fiduciary duty, there must be shown the

11

existence of (1) a fiduciary relationship, (2) its breach, and (3) damage proximately caused by that

12

breach. Pierce v. Lyman, 1 Cal.App.4th 1093, 1101 (1991). Defendants argue that Plaintiff has

13

failed to adequately plead a fiduciary relationship. More specifically, they argue that more than

14

just a familial relationship is required to establish a fiduciary relationship.

15

"The essence of a fiduciary or confidential relationship is that the parties do not deal on

16

equal terms, because the person in whom trust and confidence is reposed and who accepts that

17

trust and confidence is in a superior position to exert unique influence over the dependant party."

18

Gayle v. Hemlani, 2000 Guam 25, ~ 30 (citing BarbaraA.v. John G., 145 Cal. App. 3d. 369,383

19

(Cal. Ct. App. 1983)). Fiduciary obligations "generally come into play when one party's

20

vulnerability is so substantial as to give rise to equitable concerns underlying the protection

21

afforded by the law governing fiduciaries." City ofHope National Medical Center v. Genentech,

22

Inc., 43 Cal. 4th 375,389 (2008). Some reasons generally used to demonstrate that a party to such

23

a relationship is vulnerable include: advanced age, youth, lack of education, ill health, and mental

24

weakness. Richelle L. v. Roman Catholic Archbishop, 106 Cal.App.4th 257,280 (2003).

25

In the instant case, the court agrees with the Plaintiff that count one and count three have

DECISION AND ORDER Civil Case no. CV 0710-11 1 both been adequately stated in the complaint. In her first amended complaint, Plaintiff claims a 2 fiduciary relationship existed between herself and Defendants Mi Hye Kim, Ki Young Kim and 3 Min Kyong Kim, all of whom are family members, because she does not know the English 4 language, her age, the recent death of her husband, and her reliance on the above named 5 Defendants as translators. Thus, the court finds there is evidence that the parties may not have 6 dealt on equal terms, because the Plaintiff had trust and confidence in her relatives who were in 7 a position (as translators and family members) to exert unique influence over her due to the above 8 mentioned factors. Therefore, the court finds that count one and count three have been adequately 9 10 plead in the complaint. I

11 COUNT II - Fraud

12 Guam law defines fraud as follows: 1) a misrepresentation; 2) knowledge of falsity (or 13 scienter); 3) intent to defraud to induce reliance; 4) justifiable reliance; 5) resulting damages. 14 Trans Pacific Export Co. vs. Oka Towers Corporation, 2000 Guam 3 ~ 23 (citing Milne 15 Employees Ass'n. v. Sun Carriers, 960 F.2d 1402 (9 th Cir. 1991)). To successfully plead fraud a 16 Plaintiff must plead facts with sufficient particularity to demonstrate the elements of fraud. Guam 17 R. Civ. P. 9(b)(2007). Under the right conditions, a short plain statement can satisfy the 18 requirement that fraud be plead with particularity. Taitano v. Calvo Finance Corp., 2008 Guam

19 ~ 14. The short, plain pleading of Form 21 in the Appendix to the Federal Rules of Civil 20 Procedure satisfies the requirement of particularity because it details the "who, what, when, 21 where, and how" of the fraud being alleged. Id. (citing Vess v. Ciba-Geigy Corp. USA, 317 F. 3d 22 1097 (9 th Cir. 2003)). The allegations of fraud must be specific enough to give [D]efendants 23 notice of the particular [fraudulent] misconduct ... so that they can defend against the charge and 24

25 IDefendants do not dispute that count three is sufficiently plead, if count one is sufficiently plead. Thus, the court need not address the merits of count three because 26 count one is sufficiently plead.

DECISION AND ORDER Civil Case no. CV 0710-11 1

2 not just deny that they have done nothing wrong. Taitano v. Calvo Finance Corp., 2008 Guam ~ 14.

3 4 Defendants argue that Plaintiff has failed to sufficiently plead fraud with particularity.

5 They assert that Plaintiff has failed to detail the "who, what, when, where, and how" of the fraud

6 being alleged. There is nothing in the pleadings supporting the theory that Defendants Hee Soon

7 Jeong or Byung Gon Kim committed fraudulent acts. Thus, the court fmds that count two against

8 Defendants Hee Soon Jeong and Byung Gon Kim has not been adequately stated in the

9 complaint. However, the court will grant the Plaintiff leave to amend the complaint if she so

10 chooses.

11 The court, however, agrees with Plaintiff s argument that count two against the remaining 12 named Defendants should not be dismissed because the claims against them are legally feasible. 13 The first amended complaint alleges that Defendants Mi Hye Kim, Ki Young Kim and Min 14 Kyong Kim procured the signature of Plaintiff on the Deed of Gift by falsely representing to the 15 Plaintiff that the Deed of Gift was a document pertaining to the funeral arrangements of the

16 Plaintiff s spouse. The evidence suggests that Defendants Mi Hye Kim, Ki Young Kim and Min 17 Kyong Kim, may have committed fraud. Thus, the court denies Defendants' motion to dismiss 18 count two against those Defendants. 19 COUNT IV - Constructive Trust 20 A constructive trust is a form of restitution. Ethics Committee v. Maquera, 2001 Guam 21 20~ 33 (citing Pottinger v. Pottinger, 605 N.E.2d 1130, 1136-37 (Ill. App. Ct. 1992)(recognizing 22 that a constructive trust is a restitutionary remedy)). For example, "where a person holding title 23 to property is subject to an equitable duty to convey it to another on the ground that he would be 24 unjustly enriched ifhe were permitted to retain it, a constructive trust arises." Id. at ~ 30 (citing 25 Restatement (First) of Restitution § 160 (1936)). A constructive trust is often imposed, for

DECISION AND ORDER Civil Case no. CV 0710-11 1 example, in cases of fraud, duress, undue influence or mistake, the wrongful disposition of 2 another's property, or where there is a breach of a fiduciary duty. Id. at, 31.

3 4 Defendants argue that Plaintiff may not assert "constructive trust" as a cause of action

5 because it is an equitable remedy not a claim. The court, however, has the discretion to grant such

6 a remedy through equity. Thus, the court will not dismiss the constructive trust claim because 7 Defendants are holding title to property where if fraud or a breach of a fiduciary duty is found on

8 behalf of Defendants then they would be unjustly enriched if they were permitted to retain title. 9 CONCLUSION 10 For the reasons stated herein, the court GRANTS in part the Defendants' motion to 11 dismiss with leave to amend as to counts two against Defendants Hee Soon Jeong and Byung 12 Gon Kim. The court grants Plaintiff21 days from the date of this decision and order to amend her 13 complaint in order to comply with the requirements expressed herein. The court DENIES in part 14 the motion as to the remaining counts against the rest of the Defendants.

15 16 SO ORDERED, this 1~ day of February 2012.

17 18 19 .--

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20 21 22 Judge, Superior Court of Guam

23 24 I 00 t,e<OOy e<>rtlfy that 1M foreg<>lng 25 It; a fuUlroI! .,no com.c! copy of lh.a origin'" onlll<lln the ~ of the cl<>rI< of the 5upi!<iOf court of Guam.

26 DaUod llt Hagtlfia, Guam

FEB 1 7 ZOlZ