r
cuRr
1 2i9JN22 3:39 2 CLEJ cURT
3
4 IN THE SUPERIOR COURT OF GUAM 5 MARIANA STONES CORP., ) CIVIL CASE NO. CV0883-17 6 )
7 PLAINTIFf, )
)
$ v. ) DECISION AND ORDER RE:
DEFENDANT MYUNG MOK BAE’S MYUNG MOK BAE, FADIAN ) MOTION TO DISMISS 10 DEVELOPMENT, INC., AND B&K )
DEVELOPMENT, LLC. )
11 )
DEFENDANTS. )
12
13 INTRODUCTION 14 This matter came before the Honorable Maria T. Cenzon on October 22, 2018 for a 15 hearing on Defendant Myung Mok Bae’s (“Defendant Bae”) Motion to Dismiss. Present were 16 Plaintiff Mariana Stones Corp. (“Plaintiff’) and Defendants Myung Mok Bae, Fadian 17 Development, Inc. (“Defendant Fadian”), and B&K Development, LLC (“Defendant B&K”) 1$ through their counsels Attorney Leevin Camacho,’ Attorney Delia Lujan Wolff, Attorney 19 Anthony C. Perez, and Attorney Georgette Concepcion, respectively. At the motion hearing and 20 without further oral arguments, the Court took the matter under advisement pursuant to CVR 7.1 21 of the Local Rules of the Superior Court. Having reviewed the record and the law, the Court now 22 issues this decision and order GRANTING Defendant Bae’s Motion to Dismiss. 23 BACKGROUND 24 This Decision and Order incorporates the background information previously set forth in 25 the Court’s earlier decision addressing Defendant Fadian’s Motion for Summary Judgment (Anti- 26
27 ‘As of January 11, 2019, Plaintiff is no longer represented by Attorney Leevin Camacho and will continue to appear pro se. See Substitution of Counsel (Jan. 11,2019).
28 Mariana Stone Coip. v. Mvung Mok Bae, et at.: CV0883- 17 D&O Re: Defendant Bae’s Motion to Dismiss
.
1 SLAPP) (Jul. 2, 2018). The complaint alleges that on July 31, 2015 Plaintiff and Defendant
2 Fadian entered a five-year contract for the “clearing, leveling, and grading of Tract 157” (the 3 “Fadian Contract”). The Complaint further suggests that sometime around March 2016, through 4 Defendant Bae, Defendant Fadian assigned its rights under the Fadian Contract to Defendant 5 B&K (the “Fadian Assignment”). 6 On May 26, 2016, Delle Swegler Nadler, Moana Swegler Luka, and Mark Swegler (the 7 “Swegler” heirs) sued Defendants Bae, Fadian and B&K in CV0452-16. That suit sought the 8 return of thirty-three (33) parcels to Defendant Fadian, including Tract 157. The parties in 9 CV0452-16 entered a Stipulated Preliminary Injunction (the “SPI”). The SPI prohibited B&K 10 and its agents, servants, employees, assigns and attorneys from selling, removing, assigning, 11 concealing, transferring, encumbering or otherwise disposing of or alienating all or any part of 12 the thirty-three (33) parcels. The court in CV0452-16 ruled that the SPI also binds Plaintiff and 13 therefore ordered Plaintiff to stop all leveling, grading, and clearing activities on Tract 157. 14 In CV0452-16, Plaintiff filed a First Amended Complaint in Intervention asserting a 15 fraud claim against Defendant Bae. See Rep. to Mariana Stones Corp.’s Opposition to Defendant 16 Bae’s Motion to Dismiss, Ex. A (Dec. 6, 2017). In that case, Defendant Bae also moved to 17 dismiss the fraud claim for failure to state a claim and failure to plead with particularity. The 18 court in CV0452-16 granted Defendant Bae’s Motion to Dismiss the initial fraud claim with 19 leave to amend. Plaintiff did not amend its complaint in CV0452-16, but upon the expiration of 20 that leave to amend, Plaintiff initiated the instant action. The instant action also asserts a fraud 21 claim against Defendant Bae. 22 The fraud allegation against Defendant Bae in this case alleges Defendant Bae represented 23 he had authority to enter the Fadian Contract and Fadian Assignment. See Complaint (Sep. 5, 24 2017). Because of Defendant Bae’s alleged misrepresentation, Plaintiff claims it suffered 25 damages in the amount of Twenty-Eight Million Dollars ($28,000,000). 26 Defendant Bae now moves to dismiss the Plaintiff’s fraud claim against him in the 27 Memorandum of Points and Authorities in Support of Defendant Myung Mok Bae’s Motion to
28 Mariana Stone Corp. v. Myung Mok Bae, et cii.; CV0883-17 D&O Re: Defendant Bae’s Motion to Dismiss 1 Dismiss (Oct. 25, 2017). Plaintiff opposes the Motion as set forth in its Opposition to Defendant 2 Bae’s Motion to Dismiss (Nov. 22, 2017). In response, Defendant Bae filed the Reply to 3 [Plaintiff’s] Opposition to Defendant Bae’s Motion to Dismiss on Dec. 6, 2017. However, 4 pursuant to 7 GCA § 17106, the Court stayed all pending motions and instead first addressed 5 Defendant Fadian’s Motion for Summary Judgment (Anti-SLAPP). Having decided the Motion 6 for Summary Judgment (Anti-SLAPP) on July 2, 2018 denying summary judgment, the Court 7 now addresses the instant Motion to Dismiss.
8 DISCUSSION 9 Defendant Bae moves this Court to dismiss Plaintiff’s single claim of fraud for failure to
10 state a claim and failure to plead fraud with sufficient particularity pursuant to GRCP Rule 9(b). 11 See Def.’s Mot. to Dismiss, p. 1 (Oct. 25, 2017). Defendant Bae further argues that Plaintiff has 12 failed to plead all the elements of fraud. Id. p. 2. The Court addresses each of the arguments 13 below. 14 I. Standard under GRCP Rule 12 15 Guam law provides that a party may move for dismissal for failure to state a claim for 16 which relief can be granted. Guam R. Civ. P. 12(b) (6). In deciding such a motion, the court 17 must “construe the pleading in the light most favorable to the non-moving party, and resolve all 18 doubts in the non-moving party’s favor.” Taitano v. Calvo Fin. Corp. (“Taitano I”), 2008 Guam 19 12 ¶ 9 (quoting first Haw Bank v. Manley, 2007 Guam 2 ¶ 6). The Taitano court cautioned, 20 however, that “conclusory allegations of law and unwarranted inferences are insufficient to 21 defeat a motion to dismiss for failure to state a claim.” Id. (quoting Epstein v. Washington Energy 22 Co., 83 F.3d 1136, 1140 (9th Cir. 1996). “Dismissal for failure to state a claim is appropriate only 23 ‘if it appears beyond doubt that the [non-moving party] can prove no set of facts in support of his 24 claim which would entitle him to relief.’ “Id. (citing Vasques v. Los Angeles County 487 F.3d 25 1246, 1249 (9th Cir. 2007); Zimmerman i City of Oakland, 255 F.3d 734, 737 (9th Cir. 2001)). 26 / 27 /
28 Mariana Stone Corp. t’. Mvtmg Mok Bae, et at.; CVO$83- 17 D&O Re: Defendant Bae’s Motion to Dismiss Page3of8 1 IL Standard under GRCP Rule 9 2 The claim at issue is Count I of the Complaint or Plaintiff’s claim of fraud against 3 Defendant Bae. The elements of fraud include: (1) a misrepresentation; (2) knowledge of falsity 4 (or scienter); (3) intent to defraud to induce reliance; (4) justifiable reliance; and (5) resulting 5 damages. Taitano 1, 2008 Guam 12 ¶ 12. To successfully plead this claim, Plaintiff must plead 6 facts with sufficient particularity to demonstrate the elements of fraud. Id. (citing Guam R. Civ. 7 P. 9(b) (2007)). $ Rule 9(b) of the GRCP provides dismissal for failure to plead fraud with particularity. The 9 Supreme Court of Guam recognized situations that assist in determining whether a pleading is 10 sufficient.2 “While statements of the time, place and nature of the alleged fraudulent activities 11 are sufficient, mere conclusory allegations of fraud are insufficient.” Taitano 1, 2008 Guam 12 ¶ 12 15 (quoting Moore v. Kayport Package Exp., Inc., 885 F.2d 531, 540 (9th Cir. 1989) (emphasis 13 added). Guam courts, however, consistently hold that “Rule 9(b) does not reqttire a plainttff to 14 prove a claim of fraud at the pleading stage.” Ukau v. Wang, 2016 Guam 26, ¶ 47 (citing 15 Taitano 1, 2008 Guam 12 ¶ 16). (emphasis added). “[W]hat is required is that a plaintiff set forth 16 his claim with sufficient detail to provide notice to defendants of the particular fraudulent action 17 is being alleged.” Id. (citations omitted). Taitano described this standard as the “who, what, 18 when, where, and how” requirement. Id. (citations omitted). 19 The purpose of this requirement is to “give defendants notice of the particular [fraudulent] 20 misconduct ... so ... they can defend against the charge and not just deny that they have done 21 anything wrong.” Id. ¶ 25. The pleading must be specific enough to give defendants notice of 22
23 2 Taitano I recognized the following:
24 Accusing a defendant of running a “sophisticated pyramid scheme” without explaining what makes it a pyramid scheme or why it is fraudulent is a conclusory allegation and therefore 25 insufficient. (internal citation omitted). Similarly, allegations based entirely on information and beliefs do not usually satisfy the particularity requirement of Rule 9(b). (internal citation omitted).
26 Where “relevant facts are known only to the defendant,” however, the pleading requirement is relaxed somewhat. (citation omitted). But even where allegations concern facts peculiarly within 27 defendants knowledge, the plaintiffs must still state a factual basis for their belief. (citation omitted).
28 Mariana Stone Corp. v. Myang Mok Bae, et al.; CV0883-17 D&O Re: Defendant Bae’s Motion to Dismiss
.
1 the “who, what, when, where, and how of the misconduct charged.” A plaintiff can satisfy the
2 “who” requirement by identifying the role of a defendant in the alleged fraudulent 3 scheme. Pleading specific dates and the manner in which the Defendant made the representation 4 may satisfy the “when and how” requirement. Even when the lack of precision in specifying 5 dates are not fatal, the lack of specificity may weigh against a finding that the pleadings are 6 sufficient under Rule 9(b).3 7 A. Adequate Notice to Defendant 8 Defendant posits that Plaintiff has failed to provide notice to Defendant Bae of the 9 specific fraudulent misconduct so that Defendant Bae can defend against the charge and not just 10 deny that he has done anything wrong. See Def.’s Mot. to Dismiss at pp. 4-5. Defendant argues 11 the complaint does not state with particularity to whom the statements were made, what 12 Defendant Bae exactly represented, where the alleged misrepresentations were made, and how 13 Defendant Bae made the alleged misrepresentations — whether by body language, in writing, 14 verbal or other means. Id. 15 The Court finds problematic Plaintiff’s allegations in Paragraph 44. Plaintiff described 16 “what” Defendant Bae represented: that he had authority to enter the Fadian Contract on July 31, 17 2015. However, Plaintiff omitted “who, where, and how” the representation occurred. Without 18 these details, the Court agrees that Defendant cannot defend his actions or inactions surrounding 19 that alleged representation. 20 Similarly, the Court finds Plaintiff has not sufficiently pleaded the contention that 21 Defendant Bae represented he had authority to enter the fadian Assignment or that transferring 22 the Fadian Assets to B&K was proper in March 2016. In Paragraph 40 of the Complaint, Plaintiff 23 alleged that Defendant Bae “personally” represented to Plaintiff the transfer of Fadians assets to 24 B&K was proper. This claim, however, does not provide supporting allegations. Plaintiff does 25 not provide Defendant Bae notice of the “who, when, and where” the purported 26
27 Taitano I described precision would be fatal in cases involving statements expressing optimistic corporate performance in securities fraud cases. ¶ 28.
28 Mariana Stone Corp. v. Myung MokBae, et al.; CV0883-17 D&O Re: Defendant Bae’s Motion to Dismiss
.
1 representation. Absent these details, the Court agrees that Defendant cannot adequately prepare a
2 defense to Plaintiffs allegations. The Court finds that these details would be helpful to 3 Defendant Bae in preparing for his defense rather Defendant than merely denying a 4 misrepresentation occurred. 5 Ultimately, the Court finds the Complaint does not provide Defendant Bae adequate 6 notice of the circumstances of Defendant Bae’s alleged representation he was authorized to enter 7 the Fadian Contract and Fadian Assignment. 8 B. Pleading Elements of Fraud 9 Defendant Bae also argues that Plaintiff has failed to plead the elements of fraud; 10 specifically that Plaintiff’s Complaint does not sufficiently plead (1) Defendant Bae’s intent to i defraud, (2) Plaintiff’s justifiable reliance, and (3) the resulting damages. However, because 12 Defendant’s final argument is dispositive, the Court need not determine whether the pleading 13 satisfy the other two elements. The Court agrees that the Complaint does not provide how 14 Defendant Bae’s alleged misrepresentations injured the Plaintiff. 15 A party must plead with particularity “what the opponent retained or the claimant lost as a 16 consequence of the alleged fraud.” McQtteen v. Woodstream Corp., 244 F.R.D. 26, 33—34 17 (D.D.C. 2007) (citing United States ex ret. Totten v. Bombardier Corp., 286 f.3d 542, 55 1—52 18 (D.C.Cir. 2002); United States ex ret. Joseph v. Cannon, 642 F.2d 1373, 1385 (D.C.Cir. 1981)). 19 Upon the court’s review of the complaint, the Court found conclusory statements as to 20 Plaintiff’s alleged resulting damages. Although the Complaint claims Plaintiff lost Twenty-Eight 21 Million Dollars ($28,000,000), Plaintiff does not provide how this amount was calculated. For 22 example, what percentage resulted from the funds kept/used by the Defendant for his and his 23 family’s personal gain and what percentage resulted from the lost Plaintiff incurred. Even if the 24 court takes the allegations in Paragraphs 31, 32, and 42 as true, these amounts only total to 25
26 GRCP Rule 9(b) is virtually identical to Rule 9 (b) of the Federal Rules of Civil Procedure therefore, we look to 27 cases which interpret and apply the principles of the federal rule for guidance. Benai’ente u. Taitano, 2006 Guam 15, ¶ 48.
28 Mariana Stone Corp. v. Myung Mok Bae, et at.; CVO8$3-17 D&O Re: Defendant Bae’s Motion to Dismiss
.
1 approximately Seven Hundred Forty Thousand Dollars ($740,000). Therefore, leaving the Court
2 and Defendant Bae to speculate how the Plaintiff suffered the other Twenty-Seven Million 3 Dollars ($27,000,000). The Court finds that without properly pleading how the calculation of 4 the resulting damages, Defendant Bae cannot properly prepare its defense. The Court finds 5 Plaintiff has not properly pleaded the resulting damages. 6 III. Amending the Complaint 7 Having found the Complaint was not properly pleaded, the Court must now determine 8 whether dismissal is appropriate. In the opposition to the instant Motion, plaintiff alternatively 9 requested for leave to amend its claim. Defendant Bae argues the request is improperly before 10 the Court since opposing counsel’s failed to comply with CVR Rule 15.1. Defendant further 11 argues that the allowing such amendment would be futile, and that Plaintiff failed to cure 12 deficiencies previously allowed in CV0452-16. 13 The Supreme Court of Guam opined dismissal is proper only if “it is clear that the 14 complaint could not be saved by any amendment.” Taitano L 2008 Guam 12, ¶ 9 (quoting 15 Simpson v. AOL Time Warnet; Inc., 452 F.3d 1040, 1046 (9th Cir. 2006). “In deciding whether 16 justice requires granting leave to amend, factors to be considered include ‘the presence or 17 absence of undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies by i$ previous amendments, undue prejudice to the opposing party, and futility of the proposed 19 amendment.’ “Hardman v. Gov’t of Guam, No. CW 10-00010, 2011 WL 4901162, at *3 (D. 20 Guam Oct. 14, 2011). Although leave to amend should be granted liberally, there are 21 some limitations. Id. for example, such requests need not be granted if it doing so would be 22 futile. Id. Courts have broad discretion to deny leave to amend if a plaintiff has previously 23 amended the complaint. Id. 24 / 25
26 That Plaintiff incurred Two Hundred Fifty Thousand Dollars ($250,000) in costs in order to obtain [a Mass Grading Plan with Department of Public Works] permit; That Plaintiff spent approximately Four Hundred Thousand 27 Dollars ($400,000) to move its heavy equipment from Dededo to Tract 157; That Plaintiff paid Fadian and its representatives approximately Ninety-One Thousand Dollars ($91,000) prior to the fadian Assignment.
28 Mariana Stone Corp. v. Myung Mok Bae, et al.: CV0883-17 D&O Re: Defendant Bae’s Motion to Dismiss
.
1 The Court agrees that the request for leave to amend is not properly before this Court.
2 The Court will only consider motions and requests which comply with the applicable procedural 3 rules. 4 CONCLUSION 5 For the reasons provided above, the Court hereby GRANTS Defendant Bae’s Motion to 6 Dismiss Count I of the Complaint. A judgment dismissing Count I of the Complaint without 7 prejudice will be issued accordingly.
8 SO ORDERED this JAN 2 2 20T9
11 IONO!LE MARIA T. CENZON
12 }UfX SUPERIOR COURT OF GUAM
13 14 15 16 17 18 19 20 21
22 SERVIcE VIA COURT BOX
ackn wlcdethatacopyofthe
1cpnai mieto was placed in tIm
24
25 Date%j
26 Soror Court of Guam 27
28 Mariana Stone Corp. v. Myung Mok Bae, et al.; CV0883-17 D&O Re: Defendant Bae’s Motion to Dismiss