Naputi In re Asuncion v. Asuncion

Opinion

c:1 i I:,_ E"", l./ SUP[RIOR couin OF GUf.~iVl

202q SEP -6 PM 3: 52 CLERl·\ Of COURT

IN THE SUPERIOR COURT OF GUAM

DIANN A. NAPUTI, Personally and as Guardian for HILDEGARD ASUNCION, Case No. CV0652-2 l Plaintiff,

vs. DECISION AND ORDER (Motion to Amend) VERN STANLY ASUNCION, JR.,

Defendant,

INTRODUCTION

This matter came before the Honorable John C. Terlaje on June 18, 2024, for a Motion

Hearing between Diann A. Naputi ("Plaintiff') and Vern Stanly Asuncion, Jr. ("Defendant"), who

filed a Motion to Amend Pleadings. Present were Attorney Daniel J. Berman on behalf of Plaintiff

and Attorney Mark Williams on behalf of Defendant. After reviewing the pleadings, relevant law,

and arguments from the parties, the Court finds that the Motion to Amend is not futile. The Motion

to Amend is therefore GRANTED.

Ill

Ill DECISION AND ORDER (Plaintiff's Motion to Amend) CV0652-21; Diann A. Naputi, et. al. v. Vern Stanly Asuncion, Jr.

BACKGROUND This matter stems from a Verified Complaint filed on August 27, 2021, for civil wrongs

involving Hildegard Asuncion's estate, realized during a time-period between 2017 and 2020.

Verified Comp!. (Aug. 25, 2021). On November 18, 2021, Defendant filed a Motion to Dismiss

pursuant to Rules 12(b)(l) and 12(b)(6). Mot. to Dismiss Pursuant to Rules 12(b)(l) & 12(b)(6)

(Nov. 18, 2021). On December 2, 2021, Plaintiff filed their Opposition. Pl. 's Opp'n to Def. 's

Mot. to Dismiss (Dec. 2, 2021). On February 21, 2022, Plaintiff filed their First Amended

Verified Complaint. pt Am. Verified Compl. (Feb. 21, 2022). Then, on August 19, 2022, the

Honorable Arthur R. Barcinas issued a Decision and Order dismissing the original pleading and

the First Amended Verified Complaint. Diana A. Naputi, et. al. v. Vern Stanly Asuncion, Jr.,

CV0652-21 (Super. Ct. Guam. Aug. 19, 2022). The dismissal was not with prejudice. Id

On October 5, 2022, Plaintiff engaged substitute legal counsel to transfer her

representation to the Berman Law Firm. Notice of Entry of Appearance & Request for Service;

Cert. of Service (Oct. 5, 2022). On October 7, 2022, now with new counsel, Plaintiff filed a

Motion for an order granting leave to file another, Second Amended Complaint. Pl.'s Mot. &

Mem. of Points & Auths. in Supp. of Order Granting Leave to File 2d Am. Compl. (Oct. 7,

2022). On the same day, Plaintiff filed the proposed, Second Amended Complaint. Deel. of Pl.'s

Counsel re: Amendment of Compl. (Oct. 7, 2022). On November 7, 2022, Defendant filed their

Opposition. Opp'n to Pls.' Mot. for Leave to File 2d Am. Compl. (Nov. 7, 2022). On November

18, 2022, Plaintiff filed their Reply. Pl.'s Reply to Opp'n to Pls.' Mot. for Leave to File 2d Am.

2 DECISION AND ORDER (Plaintiff's Motion to Amend) CV0652-21; Diann A. Naputi, et. al. v. Vern Stanly Asuncion, Jr.

Compl. (Nov. 18, 2022). This matter was assigned to this Court on June 7, 2023. Notice of J.

Assignment (June 7, 2023). On June 18, 2024, this Court took the matter under advisement.

DISCUSSION

Defendant maintains that Guam Rule of Civil Procedure 15 is the incorrect legal standard

governing this case, because the Plaintiff is requesting an amendment after the dismissal of an

action, and, therefore, the more stringent requirements of Rules 59(e) or 60(b) should apply. Pl. 's

Opp'n to Def. 's Mot. to Dismiss at 5, (Dec. 2, 2021). Plaintiff replies that, under precedent

established by the Ninth Circuit, an order dismissing a complaint (like the order in this case) is

generally not considered a final order, unless the court expressly dismissed the action, or the court

made clear that the action could not be saved by amending the complaint. Pl.'s Reply to Opp'n to

Pis.' Mot. for Leave to File 2d Am. Compl. at 3, (Nov. 18, 2022) (citing Firchau v. Diamond Nat.

Corp., 345 F.2d 269, 270-271 (9th Cir. 1965)). The Court agrees that a dismissal of a complaint,

rather than an express dismissal of an action does not qualify as a final order, and therefore Guam

Rules of Civil Procedure 15 should apply rather than Rules 59 and 60.

Guam Rules of Civil Procedure 15 "allows for amendment to pleadings 'by leave of court

or by written consent of the adverse party' and states that 'leave shall be freely given when justice

so requires." M Elec. Corp., 2016 Guam 35 1 40. "Guam Rule of Civil Procedure 5 1 5(a)-

conceming amended and supplemental pleadings-was derived from its federal 6 counterpart."

Bautista v. Torres, 2017 Guam 17128 (quoting M Elec. Corp., 2016 Guam 35, 40). "Therefore,

federal interpretation of FRCP 15 is persuasive when interpreting our own GRCP 15." M Elec.

Corp., 2016 Guam 35 ,r 40.

3 DECISION AND ORDER (Plaintifr s Motion to Amend) CV0652-21; Diann A. Naputi, et. al. v. Vern Stanly Asuncion, Jr.

Under Rule 15(b) of the Guam Rules of Civil Procedure ("GRCP"),

When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made by motion of any party at any time, even after judgment; but failure so to amend does not affect the result of the trial of these issues. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the admission of such evidence would prejudice the party in maintaining the party's action or defense upon the merits. The court may grant a continuance to enable the objecting party to meet such evidence.

The Supreme Court of Guam has held that a motion to amend should be denied

when the movant acts in bad faith, when there would be undue prejudice to the

opposing party should the amendment be granted, or the proposed amendment is futile.

See Arashi & Co. v. Nakashima Ents., Inc., 2005 Guam 21, ~ 16.

A. Is the Motion to Amend Disfavored Because It Comes Post-Dismissal?

The Court answers this question in the negative. Defendant asserts that post-dismissal

motions for leave to amend are disfavored, because they are not "liberally granted" and that courts

have "considerable discretion to grant or deny such favored motions." Pl. 's Opp'n to Def. 's Mot.

to Dismiss at 5, (Dec. 2, 2021) (citing Doe v. N. Homes, Inc., No. 18-CV-3419 (WMW/LIB), 2020

WL 2316812, at *2 (D. Minn. May 11, 2020)). Plaintiff points out,h~wever, that the more stringent

requirements of Rules 59(e) and 60(b) do not apply in this case, and under the more liberal standard

of Rule 15(a), a Motion to Amend is not disfavored because it comes post-dismissal. Pl. 1s Reply

to Opp'n to Pls.' Mot. for Leave to File 2d Am. Compl. at 2-4, (Nov. 18, 2022). As mentioned 4 DECISION AND ORDER (Plaintifrs Motion to Amend) CV0652-21; Diann A. Naputi, et. al. v. Vern Stanly Asuncion, Jr.

above, this Court agrees that Rule 15(a), not Rules 59(e) and 60(b), applies, and therefore the

Motion to Amend is not disfavored because it comes post-dismissal.

B. Is the Motion to Amend Justified by Discovery?

The Court answers this q~estion in the negative. Plaintiff claims that discovery "often

justifies a subsequent amendment to the complaint." Pl.'s Mot. & Mem. of Points & Auths. in

Supp. of Order Granting Leave to File 2d Am. Compl. at 5, (Oct. 7, 2022) (citing Matarazzo v.

Friendly Ice Cream Corp., 70 F.R.D. 556, 559 (1976)). Plaintiff also cites Sweetheart Plastics,

Inc. v. Detroit Forming, Inc., where the court "abused its discretion by denying amendment when

evidence for amendment was discovered shortly before trial." Id. citing Sweetheart Plastics, Inc.

v. Detroit Forming, Inc., 743 F.2d 1039, 1044-45 (4th Cir. 1984). However, Defendant points out

that this argument "fails" because "a review of Plaintiffs prior pleadings and new exhibits makes

clear that the proposed amendments [are] not based on newly discovered evidence. Pl. 's Opp'n to

Def. 's Mot. to Dismiss at 8 and 3-4, (Nov. 7, 2022). Defendant further illustrates this by pointing

out that all of the exhibits were previous filed or cited in this and they are not, therefore, "newly

discovered": Exhibits A and B were identified in Plaintiffs First Amended Complaint; Exhibit C

is a document that Plaintiff herself filed in this Court; Exhibit D was replied upon to initiate the

lawsuit; and Exhibit Eis referenced in Plaintiffs First Amended Verified Complaint. Pl.'s Opp'n

to Def. 's Mot. to Dismiss at 4-5, (Nov. 7, 2022). This Court agrees with Defendant and Plaintiff

does not contest any of this in their Reply. Therefore, the Motion Amend is not justified by new

discovery.

5 DECISION AND ORDER (Plaintiff's Motion to Amend) CV0652-21; Diann A. Naputi, et. al. v. Vern Stanly Asuncion, Jr.

C. Is the Motion to Amend Disfavored Because of Repeated Failures to Cure Deficiencies?

The Court answers this question in the negative. Defendant asserts that Plaintiff has

repeatedly failed to cure the deficiencies of their complaint and that "repeated failures to cure

deficiencies by amendments previously allowed" is a factor that may mitigate against leave to

amend. Pl.'s Opp'n to Def.'s Mot. to Dismiss at 9, (Nov. 7, 2022) (citing Arashi & Co. v.

Nakashima Enterprises, Inc., 2005 Guam 21 ,r 16). Plaintiff replies, however, thatArashi and other

cases cited by Defendant are distinguishable, because they "denied leave to amend the complaint

for a third time and Plaintiff Naputi here has cured formed faults." Pl.'s Reply to Opp'n to Pis.'

Mot. for Leave to File 2d Am. Compl. at 5, (Nov. 18, 2022). Further, Plaintiff"engaged substitute

legal counsel for preparation of the Proposed Second Amended Complaint." Id. The Court agrees

that these facts distinguish the present matter from Arashi, and that new counsel has addressed the

deficiencies found by the Honorable Arthur B. Barcinas in his previous Decision and Order.

Therefore, the Motion to Amend is not disfavored because of repeated failures to cure deficiencies.

D. Is the Motion to Amend Futile Because the Plaintiff's Claims Are Time Barred?

The Court answers this question in the negative. Defendant asserts that Plaintiffs claims

are time barred, and therefore amendment is futile. Pl.'s Reply to Opp'n to Pis.' Mot. for Leave to

File 2d Am. Compl. at 9, (Nov. 18, 2022) (citing Holmes v. Flower Food, Inc., 542 F. App'x 556,

557 *9 th Cir. 20139 and McGhee v. Guam Cmty. Coll., No. CIV. 07 - 00012, 2008 WL 914996,

at *3 (D. Guam Mar. 31, 2008). Defendant's argument is derived from the fact that Plaintiff's

claims, "are based on the Grant Deed (July 6, 2017) and Durable Power of Attorney (July 27,

6 DECISION AND ORDER (Plaintiff's Motion to Amend) CV0652-21; Diann A. Naputi, et. al. v. Vern Stanly Asuncion, Jr.

2017)" and the applicable limitation periods for the claims "are one year from the date of the

registration of the lal)d for a quiet title action." Id. at 10 (citing 21 GCA § 29146 (one year for

Conversion) and 7 GCA § l 1305(d) (three years for Breach of Fiduciary Duty and three years for

Fraud). Therefore, according to Defendant, the statute of limitations ran out on these claims in

July 2018 and July 2020, before Plaintiff filed their original Verified Complaint on August 27,

2021. Id at 10.

Plaintiff replies that, generally, "plaintiffs may overcome the statute oflimitations if they

properly plead the circumstances surrounding the discovery of the cause of action and why it

could not have been discovered sooner." Pl.'s Reply to Opp'n to Pis.' Mot. for Leave to File 2d

Am. Compl. at 6, (Nov. 18, 2022) (citing Bourland v. Salas, DCA CIV. 82-0224A, 1986 WL

68918, at *3 (D. Guam App. Div. Oct 24, 1986). Plaintiff concedes that "[d]discovery occurs

when a plaintiff could have discovered the wrongful acts with reasonable diligence," however, "a

fiduciary relationship does relax the requirement for diligent inquiry." Id. (citing Salas, DCA

CIV. 82-0224A, 1986 EL 68919, at *4 and Knapp v. Knapp, 15 Cal.2d 237, 100 P.2d 759, 761

(1940)). As such, Plaintiff argues that Defendant stood in a "confidential and fiduciary

relationship with Hildegard Asuncion" and therefore the requirement of diligent inquiry should

be relaxed. Id. Finally, and critically, Plaintiff argues that "the underlying facts were not or should

not have been discovered until on or about August 20, 2021, when Plaintiffs Ex Parte Petition

for Appointment of Guardian (showing that Hildegard Asuncion suffers from mental and physical

dependency) was granted." Id

Defendant argues, in contrast, that "Plaintiff Hildegard Asuncion-who signed her estate

planning documents in the presence of a notary - was aware of the transactions and must be

7 DECISION AND ORDER (Plaintiff's Motion to Amend) CV0652-21; Diann A. Naputi, et. al. v. Vern Stanly Asuncion, Jr.

presumed to have had knowledge of them at the time." Pl.'s Opp'n to Def.'s Mot. to Dismiss at

12, (Nov. 7, 2022). These documents were signed in 2017, so Defendant seems to think that 2017

is when "Plaintiff Hildegard Asuncion" should have discovered the facts circumstances

surrounding the causes of action. However, so-called "Plaintiff Hildegard Asuncion" is not

actually the Plaintiff in this case. Diann A. Naputi is the Plaintiff, personally and as Guardian for

Hildegard Asuncion. Therefore, the underlying facts were not or should not have been discovered

by Plaintiff Diann A. Naputi until on or about August 20, 2021, when Plaintiff's Ex Parte Petition

for Appointment of Guardian (showing that Hildegard Asuncion suffers from mental and physical

dependency) was granted." As such, the Motion to Amend is not futile because the claims are

time barred.

CONCLUSION

For the foregoing reasons, the Court hereby GRANTS Plaintiff's Motion to Amend. Any

and all amendments must be filed within twenty days of this Order.

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