Peter v. Gill, Cyfred

• Court: Superior Court of Guam
• Decided: October 25, 2019
• Docket: CV0444-19
• Status: Unknown

Opinion

.•

IN THE SUPERIOR COURT OF GUAM

JOSHUA F. PETER, ET. AL, Superior Court Case No. CV0444-19

Plaintiffs, DECISION AND ORDER VS. RE VD AKTrIc t”TT T IVDL’Th TPTh. MOTION TO DISMISS THE FIRST I ‘““‘“ ‘“‘ AMENDED COMPLAINT OR STEPHANIE MENDIOLA; CURTIS VAN ALTERNATWELY, SUMMARY DE VELD; and DOE DEFENDANTS 1-100,

Defendants.

The Court here considers Defendants’ Motion to Dismiss, which raises issues of

vexatious litigation, failure to state a claim, untimeliness, and lack of standing. Having

considered the parties’ arguments and applicable law, the Court GRANTS IN PART and

DENIES iN PART Defendants’ Motion.

I. PROCEDURAL AND FACTUAL BACKGROUND

CV0444-19 is the latest in a string of cases involving the Gill-Baza Subdivision. In 2013,

several but not all parties here entered into a settlement agreement to resolve extensive litigation

concerning the titles of several lots in the Gill-Baza Subdivision. Plaintiffs now allege

Defendants breached that settlement agreement, and have filed numerous cases including active

cases before this Court (CV0425-18, CV0426-18, CV0736-1$) as well as two prior cases already

dismissed without prejudice (CV0073-16 and CV0934-15).

In this case, Plaintiffs allege fraud, Deceptive Trade Practice Act (DTPA) violations,

breach of contract, and various tort claims against Francis Gill, Cyfred, Ltd., Stephanie

ORIGINAL CV0444-19 DECISION AND ORDER RE MOTION TO DISMISS Page 2

Mendiola, Curtis Van de veld, and several Does. First Am. Compi. (Apr. 29, 2019).1 Defendants

move to dismiss based on the Court’s lack of subject mailer jurisdiction, Plaintiffs’ failure to

state a claim, and Wayson Wong’s lack of standing. Plaintiffs respond that although this case

shares a similar fact pattern to the other cases, they filed this action afterwards because some

claims arose mid-litigation, and some claims were dismissed by this Court in CV0426- 1$ as

facially time-barred.

II. DISCUSSION

A. Lack of Subject Matter Jurisdiction / Duplicative Litigation

Defendants seek to dismiss Plaintiffs’ suit on lack of subject mailer jurisdiction grounds

due to its alleged duplicative nature. However, a court does not dismiss a case as duplicative

based on its lack of subject mailer jurisdiction but as part of its general power to administer its

docket. Curtis v. Citibank, N.Am., 226 F.3d 133, 138 (2d Cir. 2000) (“As part of its general

power to administer its docket, a district court may stay or dismiss a suit that is duplicative of

another federal court suit.”). The exercise of this general power is discretionary. Id.

In exercising its discretionary supervisory powers, the Court finds Plaintiffs’ fraud and

DTPA claims duplicative of CV0426-18’s fraud and DTPA claims and dismisses them on that

basis. Plaintiffs admit that “CV0444- 19 involves many of the same facts, law and claims set

forth in the pleadings for CV0426-l8.” Ex Parte App. Consol. at 3 (Apr. 22, 2019). Specifically,

Plaintiffs admit that CV0444- 19’s fraud and DTPA claims are the same claims they asserted in

CV0426-18, which the Court dismissed without prejudice in its February 15, 2019 Decision and

Order re Motion to Dismiss.2

Plaintiffs are not pursuing their fifth count. Opp’n at 15 (June 25, 2019). 2 The Court affirmed its decision in its June 4, 2019 Decision and Order Re Ex Parte Motion to Reconsider Dismissal of Fraud and DTPA Claims

ORIGINAL CV0444-19 DECISION AND ORDER RE MOTION TO DISMISS Page 3

By filing a separate action after the Court’s dismissal, Plaintiffs engaged in

claim-splitting and sought to circumvent the rules on amending complaints, leading to concurrent

litigation over the same subject matter that could be more efficiently disposed of in a single suit.

Claim splitting occurs when a party asserts claims from the same nucleus of facts across multiple

lawsuits, wasting scarce judicial resources and undermining the effective disposition of cases.

Katz v. Gerardi, 655 F.3d 1212, 1217 (10th Cir. 2011). As Plaintiffs admit, CV0444-19 and

CV0426- 18 generally share the same parties, law, and facts. Plaintiffs abused the judicial process

when, instead of attempting to revive their fraud and DTPA claims in CV0426-1 8 by pleading

specific facts, they filed a new suit. This engendered a waste of judicial resources. It forced the

Court to review and compare the Complaint and First Amended Complaint in this case with the

allegations filed, amended, and dismissed in CV0426-18. Second, the Court had to address

Plaintiffs’ attempt to consolidate CV0444-19 with the other cases, a step that appeared

unnecessary for the fraud and DTPA claims had they attempted to correct their pleading defects

in CV0426-18.

Beyond the fraud and DTPA claims, Plaintiffs alleged in Count Three that Defendants

committed a “breach of assistance contract.” The underlying allegations concern the same

nucleus of facts and law as in CV0426- 18, meaning that Plaintiffs could have raised this claim in

CV0426- 18. Given the history of numerous cases, continuous litigation, and intensive work by

the Court in examining the expansive scope of legal, factual and discovery issues before it in

each active related case, the Court will not allow causes of action pertaining to the same course

of conduct to extend across multiple lawsuits.

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The Court’s recent grant of summary judgment over the breach of contract and related

claims in CV0426- 18--which eliminated claims against Cyfred3 and leaves alive one of two

claims against Mendiola--still does not permit Plaintiffs to claim split and utilize this action to

pursue the fraud, DTPA, and breach of contract claims. See CV0426- 18 (Dec. and Order re

Defs.’ Mot. Summ. 1., Oct. 3, 2019). Prior to granting summary judgment in CV0426-18, the

parties had the opportunity to conduct discovery related to the same factual nucleus involved in

the fraud and DTPA, and breach of contract claims. The Court is again concerned with the

conservation of resources. Even if related claims have been disposed in CV0426- 18, the Court

still finds it inappropriate for Plaintiffs to avail of a new lawsuit when extensive discovery and

motion work has been expended in an existing case.

The Court is therefore compelled to minimize the endless duplicative lawsuit tactics that

have plagued these parties and their various dealings over the years. For this reason, the Court

determines that Plaintiffs may not utilize CV0444- 19 to raise issues that were already raised or

should have been raised in CV0426-18. The Court therefore dismisses Plaintiffs’ First, Second,

and Third Counts without prejudice. If Plaintiffs wish to raise those claims, they must seek leave

in CV0426-18. On the other hand, Plaintiffs’ conspiracy claim arose mid-litigation in

CV0426- 18 and involves different facts and claims Plaintiffs could not have initially asserted in

any of the other related cases. The Court therefore does not dismiss Plaintiffs’ conspiracy claim

on duplicative litigation grounds.

The parties disagree on whether the Court’s grant of summary judgment also applies to Gill.

ORIGINAL CV0444-19 DECISION AND ORDER RE MOTION TO DISMISS Page 5

B. Failure to State a Claim

Defendants contend that Plaintiffs’ remaining claim of conspiracy to commit wrongful

acts should be dismissed under Guam Rule of Civil Procedure 12(b)(6) because it is facially

time-barred and improperly pled. Mot. Dismiss at 9-13 (May 21, 2019).

On a motion for dismissal for failure to state a claim, the Court must “construe the

pleadings in the light most favorable to the non-moving party, and resolve all doubts in the

non-moving party’s favor.” Taitano v. Calvo Finance Corp., 2008 Guam 12 ¶ 9 (quoting First

Hawaiian Bank v. Manley, 2007 Guam 2 ¶ 9). “Dismissal for failure to state a claim is

appropriate only if it appears beyond doubt that the non-moving party can prove no set of facts in

support of his claim which would entitle him to relief.” Id. (internal quotation and citations

omitted). A claim may also be dismissed because it either asserts a non-cognizable legal theory

or because it fails to allege sufficient facts to support a cognizable legal claim. SmiteCare Dental

Group v. Delta Dental Plan of Cal., Inc., 8$ F.3d 780, 783 (9th Cir. 1996).

For Plaintiffs to make a prima facie case of civil conspiracy, they must allege (1) the

formation and operation of the conspiracy, (2) the wrongful act or acts done pursuant thereto, and

(3) the damage resulting from such act or acts. Moylan v. Citizens Sec. Bank, 2015 Guam 36 ¶

72. The alleged wrongful act must then be further analyzed because “[s]tanding alone, [civil]

conspiracy does no harm and engenders no tort liability... [it] does not give rise to a cause of

action unless a civil wrong has been committed resulting in damage.” Applied Equip. Corp. v.

Litton Saudi Arabia Ltd., 869 P.2d 454, 457 (Cal. 1994) (quoting Doctors’ Co. v. Superior Court,

775 P.2d 508 (Cal. 1989)). “Therefore, it is the acts done and not the conspiracy to do them

which should be regarded as the essence of the civil action.” Id. (citations and internal quotations

omitted).

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Under the umbrella claim of “wrongful conduct,” Plaintiffs allege Defendants conspired

to commit the following: (1) tortious interference with the parties’ Settlement Agreement and

promised assistance contract; (2) misrepresentation of Cyfred’s ability to clear Mendiola’s title to

the 14 lots; and (3) fraud on the court by filing in CV0426-l$ that Mendiola has interests in the

14 lots when they knew or should have known that she did not have such an interest4 First Am.

Compi. ¶J 104, 105.

Though Plaintiffs plead all the elements of tortious interference, jurisdictions disagree on

whether a party to a contract can be sued for conspiracy to interfere with the contract. California

law, which Plaintiffs cite in their opposition, decidedly has held that parties to a contract cannot

be sued for conspiracy to interfere with their own contract because their appropriate recourse is a

breach of contract claim. Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 869 P.2d 454, 457

(Cal. 1994). New York case law also overwhelmingly holds that a party to a contract cannot be

sued in tort for conspiracy to interfere with the contract. See, e.g., Sharma v. Skaarup Ship Mgmt.

Corp., 916 F.2d $20 (2d Cir. 1990), cert. denied, 499 U.S. 907 (1991). Other jurisdictions have

permitted actions in tort against a contracting party for conspiracy to interfere with the contract,

but a third party must also be involved. See e.g., Fox v. Deese, 362 S.E.2d 699, 708 (Va. 1987);

Boyles v. Thompson, 585 $.W.2d 821 (Tex. Civ. App. 1979); Nat’l Linen Serv. Corp. v. Clower,

175 $.E. 460, 465 (Ga. 1934); Sorenson v. Chevrolet Motor Co., 214 N.W. 754, 754 (Minn.

1927). As there is no relevant Guam case law, the Court finds Plaintiffs have sufficiently pleaded

conspiracy to commit tortious interference based on Van de veld’s alleged interference.

Plaintiffs also allege that Defendants conspired to misrepresent to Plaintiffs that Cyfred

has no further obligation to assist Plaintiffs with clearing Mendiola’s title to the 14 lots when it

Plaintiffs have represented that they decline to pursue theft criminal thefi of property claims. Opp’n at 13.

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had the ability to do so simply by recording the deed she had signed, notarized, and given to

Cyfted, thus forcing Plaintiffs to pursue various lawsuits to clear the title to the 14 lots. First Am.

Compl. ¶ 106. Under Guam law, the tort of intentional misrepresentation has the following

elements: “(1) a misrepresentation; (2) knowledge of falsity (or scienter); (3) intent to defraud to

induce reliance; (4) justifiable reliance; and (5) resulting damages.” Hemlani v. Flaherty, 2003

Guam 17 ¶ 9 (quoting Transpac(flc Export Co. V. 0/ca Towers Corp., 2000 Guam 3 ¶ 23). The

elements for negligent misrepresentation are: “(1) a misrepresentation of a past or existing

material fact; (2) without reasonable grounds for believing it to be true; (3) with intent to induce

another’s reliance on the fact misrepresented; (4) ignorance of the truth and justifiable reliance

thereon by the party to whom the misrepresentation was directed, and (5) damages.” Id.5

The alleged misrepresentation--i.e., that Cyfred and Gill had no further obligation to

assist Plaintiffs--does not appear to concern a past or existing material fact. It resembles more of

an opinion, or at least a legal position that Cyfted no longer had an obligation to assist Plaintiffs.

However, such a statement is buttressed against an allegation that Cyfred had a notarized deed in

hand from Mendiola. So while an opinion cannot usually qualify as a misrepresentation of fact,

an opinion that lacks a basis in fact may. See Watts v. Jackson Hewitt Tax Serv. Inc., 579 F. Supp.

2d 334 (E.D.N.Y. 200$); McKinney/Pearl Rest. Partners, L.P v. Metro. Lfe Ins. Co., 241 F.

Supp. 3d 737 (N.D. Tex. 2017) (opinion may form basis of fraud if parties do not have same

access to information). Having reviewed the Complaint in a light most favorable to Plaintiffs, the

Court finds Plaintiffs adequately pled misrepresentation because Gill’s statement that Cyfred no

longer had an obligation to assist Plaintiffs could be construed as a misrepresentation of fact.

Plaintiffs also assert reckless misrepresentation as a claim but cite to little case law in support. The Court therefore analyzes Plaintiffs’ claim under intentional and negligent misrepresentations, keeping in mind that Plaintiffs also asserted reckless misrepresentation.

ORIGINAL CV0444-19 DECISION AND ORDER RE MOTION TO DISMISS Page $

Finally, Plaintiffs allege Defendants conspired to commit fraud on the court in

CV0426-18 by representing to the Court that Mendiola has interests in the 14 lots when they

knew or should have known that she did not have such interests. First Am. Compi. ¶ 105. On

Guam, “the circumstances constituting fraud or mistake shall be stated with

particularity... [mlalice, intent, knowledge, and other conditions of mind of a person may be

averred generally.” GRCP 9(b). A plaintiff “must set forth his claim with sufficient detail to

provide notice to defendants as to what particular fraudulent action is being alleged.” Taitano,

2008 Guam 12 ¶ 16. The elements of fraud are as follows: (1) a misrepresentation; (2)

knowledge of falsity; (3) intent to defraud to induce reliance; (4) justifiable reliance; and (5)

resulting damages. Id., 2008 Guam 12 ¶ 12. Furthermore, in determining whether fraud

“constitutes fraud on the court, the relevant inquiry is not whether fraudulent conduct ‘prejudiced

the opposing party,’ but whether it ‘harmed’ the integrity of the judicial process.” United States

v. Estate of Stonehill, 660 F.3d 415, 444 (9th Cir. 2011) (quoting Alexander v. Robertson, $82

F.2d 421, 424 (9th Cir. 1989)). Fraud on the court involves “far more than an injury to a single

litigant.” Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 246 (1944) abrogated on

other grounds by Standard Oil Co. of Calfornia v. United States, 429 U.S. 17 (1976). In

reviewing Plaintiffs’ Complaint, the Court finds that Plaintiffs have failed to plead justifiable

reliance, damages, or how the Defendants’ filing “harmed the integrity of the judicial process.”

Plaintiffs have therefore only sufficiently pled tortious interference and misrepresentation

as a wrongful act under the umbrella of their conspiracy claim. California law and Guam’s

criminal statute for conspiracy follow the “last overt act” rule for determining the accrual of a

conspiracy. Though civil conspiracy actions’ applicable statute of limitations depends on the

nature of the underlying act, Maheu v. CBS, 247 Cal. Rptr. 304 (Ct. App. 1988), “when a civil

ORIGINAL CV0444-19 DECISION AND ORDER RE MOTION TO DISMISS Page 9

conspiracy is properly alleged and proved, the statute of limitations does not begin to run on any

part of a plaintiffs claims until the ‘last overt act’ pursuant to the conspiracy has been

completed.” 115’att v. Union Mortg. Co., 598 P.2d 45, 53 (Cal. 1979).

The alleged “last overt act” for both the tortious interference and misrepresentation

claims was Defendants’ failure to disclose a copy of Mendiola’s deed to the Court in March or

April of 2019. Opp’n at 14; First Am. Compl. ¶ ill. It was only then that Defendants’

conspiracy to keep the 14 lots’ titles from Plaintiffs through tortious interference and

misrepresentation came to light. Therefore, viewed in the light most favorable to Plaintiffs, the

statute of limitations has not yet expired for either claim, and Plaintiffs have stated a claim for

which relief can be granted.

C. Wong’s Lack of Standing

A litigant may claim standing if he or she possesses “the irreducible constitutional

minimum of standing” under Article III of the US Constitution. Benavente v. Taitano, 2006

Guam 15 ¶ 15. In other words, “[a] party acquires standing...by suffering an injury in fact.” Id. ¶

1$. Absent a statute conveying standing, a plaintiff must satisfy the following elements for each

and every claim pursued: (1) suffer a concrete, particularized, and actual or imminent

injury-in-fact, (2) demonstrate a causal connection between the injury and the complained-of

conduct, and (3) show that a favorable decision by the court will likely redress the injury. Id.

Wong claims standing for Plaintiffs’ conspiracy claim based on “the expenditure of

attorney’s fees and costs resulting from the breach of the assistance contract, the fraud as to it

(including promissory estoppel), the tortious interference with that contract and/or the fraud on

the Court. Additionally, the latter two[/three] tort claims.. .include the injuries in fact of his

emotional distress and anxiety and his entitlement to punitive or exemplary damages, all

ORIGINAL CV0444-19 DECISION AND ORDER RE MOTION TO DISMISS Page 10

traceable to such torts.” Opp’n at 16. None of these claims confer Wong with standing because

they are based on actions concerning his role as Plaintiffs’ attorney. Those are not interests he

has as an individual, and it is not proper for him to argue Defendants injured his interests as

Plaintiffs’ attorney. However, he does have standing for count four’s conspiracy claim based on

his mortgage interests on five of the 14 lots. First. Am. Compi. ¶ 103. The lack of clear title

threatens those interests, and a favorable decision by this Court could redress his imminent

injury.

III. CONCLUSION

Based on concerns of duplicative litigation, the Court dismisses without prejudice

Plaintiffs’ first, Second, and Third Counts. The remaining claim to be litigated is conspiracy to

commit wrongful conduct. The Court therefore DENIES TN PART and GRANTS N PART

Defendants’ Motion.

The Court ORDERS the parties to meet and confer per CVR 16.1 and provide the Court

with a Scheduling Order and Discovery Plan prior to the Scheduling Conference, which will be

held on November 7,2019, at 9:30 a.m.

SO ORDERED this 25th of October 2019.

court box ‘ HO ELYZE M IRIARTE Judge, Superior Court of Guam

dTV

Appearing Attorneys: Wayson W. S. Wong for Plaintiffs Curtis C. Van de veld for Cyfred, Ltd., Leonard Francis Gill, Stephanie Mendiola, and Curtis Van de veld

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