7 2, 2013, and January 30, 2013. Q at qt 17. Wing Chi, Kevin, Larry, and Norman agreed that each
8 would receive Eighty Thousand Dollars ($80,000.00) from the first set.
9 As to the second set, the Shareholders agreed that each was to receive a one-fourth (1/4)
10 share of One Million Dollars ($1,000,000.00). Q at qt 19. To ensure the funds continued to benefit
11 TBC, Wing Chi, Kevin, and Norman allegedly decided to keep their one-fourth (1/4) shares of the
12 One Million Dollars ($1,000,000.00) in First Commercial Bank to secure loans and lines of credit
13 for TBC's operations. Q at 19. They deposited their one-fourth (1/4) portions into the three TCD
14 accounts at issue. Q, supra note 1. Norman alleges he received statements addressed to Man Ling
15 Au, however he wrote a shareholder's name on top of individual statements for each account. Q at
16 'll 20. Norman alleges that his share is the Two Hundred Fifty Thousand Dollars ($250,000.00) in
17 TCD No. 901 1TD300002, Kevin's share is the Two Hundred Fifty-Two Thousand Dollars
18 ($252,000.00) in TCD No. 901 lTD300002, and Wing Chi's share is the Two Hundred Fifty
19 Thousand Dollars ($250,000.00) in TCD No. 9011TD300003. d at 'li 20.
20 Affidavit of Kam Vent Tam (aka "Kevin Tam")
21 TBC also provided an affidavit of Kevin Tarn in Support of their Opposition to the Motion
22 for Summary Judgment or in the Alternative to Dismiss. Kevin has been a Director of TBC for
23 several years. Kam Veng Tam Aft. Supp. Opp'n Defs' Mot. Summ. J. or Dismiss qt 3 (Jan. 17,
24 2018). Kevin makes similar allegations as those raised by Norrnan in his affidavit. Kevin alleges
25 that Larry told him the funds in the Time Certificates of Deposit held in Man Ling Au's name
26 belonged to TBC. Q at 'l['l[ 9-10. Finally, Kevin alleges that while some funds in First Commercial
27 Bank belong to him, the funds are only in the bank because Kevin, Wing Chi, and Norman all kept
CVl2l8-17 Tsang Bros. Corp. v. Man Ling Au et al Page 4 of 10 DECISION AND ORDER (Defendants Ping Chung Tsang's and Man Ling Au's Motion for Summary Judgment or in the Alternative to Dismiss) _HIIH l\lll l
1 the money in First Commercial Bank to secure TBC's loans and lines of credit for TBC. 151 at ']1
2 14. Kevin alleges that Man Ling Au revoked the power of attorney for the three TCDs on October
3 12, 2017. at '][ 8.
4 DISCUSSION
5 In support of the Motion for Summary Judgment, Larry and Man Ling Au argue that "the
6 undisputed facts presented at the time of the motion for restraining order that the plaintiff and its
7 officers alleged that they did not authorize the transfer of assets to Defendant Ling, but have been
8 aware of such transfer since July 2001 and no action to recover the property has since occurred."
9 Defs' Mot. Summ. J. or Dismiss 3 (Dec. 20, 2017). Larry and Man Ling Au further argue that
10 "there is simply, no evidence of a constructive trust arrangement between Plaintiff and Defendant
11 Ling." Larry and Man Ling Au's final argument is that even if the allegations in the Verified
12 Complaint are true, "the action for recovery would have arisen at the time of such knowledge of
13 such theft, that being not later than July 2001 and the time for commencing an action will have
14 lapsed in July 2004."
15 In Opposition, TBC posits that the Motion for Summary Judgment should be denied
16 because "the ownership of the TCD accounts is a material fact that is in dispute." PTs Opp'n Mot.
17 Summ. J. or Dismis 7 (Jan. 17, 2018). TBC argues that the date of the alleged conversion is also a
18 material fact that is in dispute.See QL at 8.
19 The Guam Rules of Civil Procedure (GRCP) provide that summary judgment is appropriate
20 "if the pleadings .. , together with the affidavits, if any, show that there is no genuine issue as to
21 any material fact and that the moving party is entitled to a judgment as a matter of law." Guam R.
22 Civ. P. 56(c). A genuine dispute "occurs where there is 'sufficient evidence' which establishes a
23 factual dispute requiring resolution by a fact finder." Hawaiian Rock Products Corp. v. Ocean
24 Housing, Inc., 2016 Guam 4 '][ 26. The dispute must be to a material fact, that is, a fact "that is
25 relevant to an element of a claim or defense and whose existence might affect the outcome of the
26 suit." Bank of Guam v. Flores, 2004 Guam 25 'II 8.
CVl2l8-17 Tsang Bros. Corp. v. Man Ling Au et al Page 5 of 10 DECISION AND ORDER (Defendants Ping Chung Tsang's and Man Ling Au's Motion for Summary Judgment or in the Alternative to Dismiss) 1 When analyzing a summary judgment motion, the Court "must view the evidence and draw
2 inferences in the light most favorable to the non-movant." Helmani v. Hemlani, 2015 Guam 16 'll
3 13. The movant bears the initial burden of showing that "undisputed facts in the record support a
4 prima facie entitlement to the relief requested." Hawaiian Rocks Products Corp., 2016 Guam 4 at 'll
5 27. If such a showing is made, "the non-movant may not simply deny the allegations to create a
6 factual dispute, but is obligated to set forth specific facts showing there is a genuine issue for
7 trial." Gayle v. Hernlani, 2000 Guam 25 *][21 (citations omitted), see also, Guam R. Civ. P. 56(e).
8 i. Conversion Against Man Ling Au.
9 Conversion is the "wrongful exercise of dominion over the property of another." Welco
10 Electronics. Lnc., v. Mora, 166 Cal.Rptr.3d 877, 881 (Cal. Ct. App. 2014). Conversion of money
11 can occur "if the claim involves a specific, identifiable sum ...." at 882 (citations omitted). In
12 Guam, to sustain the cause of action of conversion, the plaintiff must prove: "(1) facts showing
13 plaintiff's ownership or right to possession of property, (2) defendant's wrongful act toward, or
14 disposition of, the property, interfering with plaintiffs possession, and (3) damage to plaintiff."
15 Marianas Hospitality Corp. v. Premier Business Solutions, Inc., Civil No. 07-00002, 2009 WL
16 750247 at *l0 (D. Guam Jan. 14, 2009). The Court finds that the Ping Chung Tsang and Man Ling
17 Au have failed to meet the burden of showing there is no genuine dispute as to any material fact
18 relative to each element of TBC's claim for conversion.
19 As to the first element, TBC provided affidavits of Norman and Kevin alleging that
20 Christina and Larry both provided documentation, and further that Larry stated that the funds in
21 the subject accounts of this litigation at First Commercial Bank belonged to TBC even though the
22 fund s we re i n M a n L i ng Au's na me . In c ont ra st , t he C ourt fi nd s t he De c e mbe r l l , 2 0 1 7
23 Declaration of Ping Chung Tsang fails to conclusively establish that Man Ling Au is the rightful
24 owner of the funds in the TCDs at issue in this litigation. Because ownership of the funds is an
25 element of conversion, the Court finds ownership of the funds is a material fact. The Court further
26 finds that the ownership of the funds is disputed by the Parties. Therefore, Man Ling Au and Larry
27 are not entitled to summary judgment on the first element of TBC's conversion claim.
CV1-218-17 Tsang Bros. Corp. v. Man Ling Au et al Page 6 of 10 DECISION AND ORDER (Defendants Ping Chung Tsangls and Man Ling Au's Motion for Summary Judgment or in the Alternative to Dismiss) 1 As to the second element, Larry and Man Ling Au have again failed to demonstrate they
2 are entitled to judgment as a matter of law. If TBC succeeds in proving what Larry and Kevin
3 claim by affidavit, that the funds in the TCDs belong to TBC, then Man Ling Au's revocation of
4 the power of attorney on October 12, 2017 would be a wrongful possessory act over property she
5 had no ownership interest in. The Court finds that a determination of facts underlying element one
6 is necessary before this Court can weigh on the second element of conversion. Thus, the Court
7 finds there is a genuine issue of whether Man Ling Au's revocation of the power of attorney was a
8 wrongful possessory act which interfered with TBC's alleged ownership of the funds. The Court
9 further finds that the revocation is a material fact relative to the second element of conversion, the
10 requirement of a wrongful act that interferes with an possessory right. Because the Parties dispute
11 ownership, the fact of whether Man Ling Au's revocation was wrongful is also disputed.
12 Therefore, the Court concludes that Larry and Man Ling Au are not entitled to summary judgment
13 on the second element of TBC's conversion claim.
14 Finally, as to the third element, if TBC can prove that Man Ling Au acted wrongfully and
15 interfered with their alleged ownership of the funds in the accounts, then the issue of damages
16 would necessarily follow from such conclusion. The Court finds that the lack of access to the
17 funds since October 12, 2017 allegedly resulted in a loss of security for potential lines of credit and
18 loans previously extended to TBC. Therefore, the Court again finds Larry and Man Ling Au are
19 not entitled to summary judgment on the third element of TBC's conversion claim. The Court
20 finds the genuine disputes of material fact related to elements one and two will necessarily affect
21 this Coup's finding of whether Man Ling Au's alleged wrongful action(s) caused TBC damages.
22 ft. Aiding and Abetting Tortuous Conduct Against Ping Chung Tsang and Lai Hint Au.
23 The Court again finds that Larry and Man Ling Au have failed to meet their burden of
24 proving there is no genuine dispute of material fact as to TBC's claim that Larry and Christina
25 aided ardor abetted in Man Ling Au's alleged conversion, The December 11, 2017 Ping Chung
26 Tsang declaration, and Larry and Man Ling Au's Motion are devoid of any argument related to
27 issues of material fact underlying the second cause of action in the Complaint. Thus, the Court
CVl2l8-17 Tsang Bros. Corp v. Man Ling Au et al Page 7 of 10 DECISION AND ORDER (Defendants Ping Chung Tsang's and Man Ling AulaMotion for Summary Judgment orin the Alternative to Dismiss) W W
1 finds that Larry and Man Ling Au are not entitled to summary judgment with respect to TBC's
2 aiding and abetting claim. Insofar as Christina joins the Motion, for the reasons set out herein, the
3 Court finds that Christina is not entitled to Summary Judgment on TBC's aiding and abetting
4 claim.
5 iii. Constructive Trust
6 Man Ling Au and Larry also argue that they are entitled to Summary Judgment because
7 TBC has failed to provide evidence of a constructive trust agreement between Plaintiff and
8 Defendant Ling. Defs' Mot, Summ. J. or Dismiss 3 (Dec. 20, 2017). The Court notes that Man
9 Ling Au and Larry misunderstand the equitable remedy of constructive trust. A constructive trust
10 is a "form of restitution." Guam Bar Ethics Committee v. Maquera, 2001 Guam 20 'll 32. The
11 constructive trust is imposed by the Court "when a person holding title to property is subject to an
12 equitable duty to convey it to another on the ground the he would be unjustly enriched if he were
13 permitted to retain it," 111 at qt 30 (citing Restatement (First) of Restitution § 160 (1935)).
14 Guam law provides for the remedy of constructive trust. See 18 G.C.A. § 65110. The
15 Guam statute uses the same language as Section 2224 of the California Civil Code, thus California
16 case law regarding constructive trusts is persuasive to this Court's interpretation and application of
17 Guam law regarding constructive trusts. See In re Moylan, 2011 Guam 16 qt 19. California Courts
18 make clear that "an action to impose a constructive trust is a suit in equity to compel a person
19 holding property wrongfully to transfer the property interest to the person to whom it rightfully
20 belongs." Higgins v. Higgins, 217 Cal.Rptr.3d 691, 699-700 (Cal. Ct. App. 2017). A constructive
21 trust may be "imposed in practically any case where there has been a wrongful acquisition or
22 detention of property to which another is entitled ...." Optional Capital, Inc., v, Das Corp., 166
23 Cal.Rptr.3d 705, 715 (Cal. Ct. App. 2014). The requirements for a constructive trust are: "(1) the
24 existence of a res (property or some interest in the property), the plaintiff's right to that res, and the
25 defendant's acquisition of the res by some wrongful act." Calistoga Civic Club v. City of
26 Calistoga, 191 Cal.Rptr. 571, 575-76 (Cal. Ct. App. 1983) (citations omitted).
CV1218»l7 Tsang Bros. Corp. v. Man Ling Au et al Page 8 of10 DECISION AND ORDER (Defendants Ping Chung Tsang's and Man Ling Aula Motion for Summary Judgment or in the Alternative to Dismiss) 1 Here, the Court finds Man Ling Au and Larry are mistaken in arguing that they are entitled
2 to summary judgment because TBC has not put forward any evidence of a constructive trust
3 arrangement between Man Ling Au and TBC. The constructive trust is a court-imposed remedy on
4 property which only requires distribution of the property the Court finds is wrongfully held by the
5 tortfeasor, or other party with wrongful possession, back to the rightful owner. The Court
6 determines whether imposition of a constructive trust is appropriate as a remedy, the Parties are
7 not required to plead the existence of a constructive trust agreement. Therefore, the Court finds
8 that the constructive trust-related argument advanced by Defendants Man Ling Au and Larry does
9 not entitle them to summary judgment.
10 iv. Statute of Limitations
11 Finally, Man Ling Au and Larry claim that TBC's claim is barred by 7 G.C.A. § 11305,
12 which provides that an action for conversion must be brought within three (3) years. Man Ling Au
13 and Larry argue that the "action for recovery would have arisen at the time of such knowledge of
14 such theft, that being no later than July 2001 and the time for commencing the action will have
15 lapsed in July 2004." Defs' Mot. Summ. J. or Dismiss 3 (Dec. 20, 2017).
16 The Court disagrees with Man Ling Au and Larry's position. Here, TBC pleads a theory of
17 conversion, which requires a wrongful act which interferes with an owners possessory right over
18 property. The Court finds that the facts, as currently plead, demonstrate that TBC had access to the
19 TCDs to secure lines of credit and loans from First Commercial Bank until October 12, 2017.
20 Further, but for Man Ling Au's residence outside of Guam the funds would have been in TCDs
21 under the TBC shareholders' names. Thus, under the Plaintiff's theory, Man Ling Au did not
22 commit an alleged wrongful act which interfered with the TBC's possessory rights over the funds
23 until she revoked the power of attorney on October 12, 2017. Because this action was commenced
24 on December l, 2017, within the three year statute of limitations provided for in 7 G.C.A. § 11305,
25 the Court finds that TBC's conversion claim is not time-barred. The Court further finds that Man
CVl2l8-17 Tsang Bros. Corp. v. Man Ling Au Er al Page 9 of 10 DECISION AND ORDER (Defendants Ping Chung Tsangls and Man Ling Au'sMotion for Summary Judgment or in the Alternative to Dismiss) 1 I Ling Au and Larry are not entitled to summary judgment with regard to the conversion claim
2 I based on the 7 G.C.A. § 11305 statute of limitations argument
3 CONCLUSION
4 By preponderance of the evidence and based on the foregoing reasons, the Court DENIES
5 I the Man Ling Au's and Ping Chung Tsang's Motion for Summary Judgment. The Court also
6 i DENIES the Defendant's Motion insofar as Man Ling Au and Ping Chung Tsang move in the
7 I alternative for the Court to Dismiss the Complaint and its Counts l and 2 pursuant to Rule l2(b)(6)
8 I of the GRCP. Finally, insofar as Lai Hint Au joined in Ping Chung Tsang's and Man Ling Au's
9 I Motion for Summary Judgment or in the Alternative to Dismiss, the Court DENIES the Motion as
10 I it relates to TBC's claim against Lai Hing Au for aiding and abetting.
12 A Status Hearing is set for Mav 24. 2018 at 9:00 a.m.
14 aduvicmh mniwn \W 1A'201% No :swam 15
16 I g; / GVDV -vrv>, /,o *'7"T!*lt~.¢ We Jednpqe-Kc. lldms The Honorable Anita A. Sukola Judge, Superior Court of Guam 18 QdliWumurcuuuumun Man Ling Au and Larry argue that if summary judgment is not warranted, they are alternatively entitled to dismissal 19 under 12(b)(6) of the GRCP. Under Rule l2(b)(6), dismissal is appropriate when it appears "beyond doubt that the plaintiff could prove no set of facts in support of his claim which would entitle him to relief." Lucan v, J.L.H. Trust, 20 2016 Guam 24 <][ 12 (citing Conlev v. Gibson, 355 U.S 42, 45-46 (l957)). In ruling on a motion to dismiss, the court construe the pleading in the light most favorable to the non-moving party and resolve all doubts in the non- 21 moving party's favor." First Hawaiian Bank v. Manley, 2007 Guam 2 'll 9 (internal citations omitted). The Court finds that these authorities make clear that an action that is not brought within an applicable statute of limitations is barred 22 as a matter of law and should be dismissed. The crux of Man Ling Au and Larry's argument for dismissal is that "[i]f Defendant Ling was in exclusive possession of corporate property without legal authority and approval of such action 23 the time to commence recovery for such act would be the date the Defendant first learned of the alleged unapproved transfer, not the Las! date of any action by Ling with such money." Defs' Mot. Summ J. or Dismiss 7 24 (Dec. ll, 2017). Man Ling Au and Larry posit the applicable date was the date of Larry and Christinals termination from TBC in February of 2014. The Court disagrees. As noted above, TBC had access to the funds at issue and used 25 I the funds to secure lines of credit and loans from First Commercial Bank until the power of attorney allowing TBC to so use the funds was revoked on October 12, 2017. Thus, contrary to the position of Man Ling Au and Larry, Man 26 I Ling Au did was not in exclusive possession of the funds. The Court thus finds, that the October 12, 2017 date constitutes the date where Man Ling Au's alleged wrongful action interfered with TBCls possessory rights over the 27 I funds. Thus, the Court finds the action being brought by December 1, 2017 renders the action within the statute of limitations at 7 G.C.A. § 11305. Therefore insofar as Man Ling Au and Christina alternatively ask this Court to 28 I dismiss the Complaint and Counts 1 and 2, the Motion is D E N I E D.
CV1218-17 Tsang Bros. Corp. v. Man Ling Au et al Page 10 of 10 DECISION AND ORDER (Defendants Ping Chung Tsang's and Man Ling Au's Motion for Summary Judgment or in the Alternative to Dismiss)