E-Land says Torres lack standing to bring claims – Saipan Tribune

E-Land World Co. Ltd., the majority shareholder of a corporation that owns the Coral Ocean Point Golf Resort, has asked the Superior Court to dismiss the lawsuit filed against it by attorney Vincent DLG. Torres, saying that Torres lacks standing to bring the claims.

In his opposition, Torres, through counsel William M. Fitzgerald, asserted that E-Land and its co-defendants, while arguing general principles of law, have not provided authority sufficient to show that the complaint should be dismissed for failure to state a claim.

E-Land is a majority shareholder of Suwaso Corp., while Torres is a minority shareholder. Suwaso owns COP.

E-Lands’ co-defendants in the case are Suwaso Corp., Micronesia Resort Inc., and Kwang Won Seo. Micronesia Resort Inc. is a subsidiary of E-Land World Co. Ltd., a company based in South Korea.

Torres sued the defendants for allegedly failing to provide a proper accounting, embarking upon a scheme to misappropriate business opportunities and funds, and negotiating loans of over $5 million without proper authorization. The case was originally filed in the Superior Court. The defendants then transferred the lawsuit to the district court.

Last April, the district court granted Torres’ motion to remand to the Superior Court his four remaining claims in the lawsuit—for accounting, fraudulent concealment and usurpation of corporate opportunity, breach of fiduciary duty, and assisting a breach of fiduciary duty.

At the hearing in federal court, Torres agreed to arbitrate his first cause of action—fraudulent misrepresentation. The federal court granted defendants’ motion to compel arbitration as to Torres’ first cause of action.

In E-Land’s and co-defendants’ motion to dismiss filed recently before the Superior Court, their counsel, Richard W. Pierce, asserted that Torres’ claims for fraudulent concealment and usurpation of corporate opportunity, breach of fiduciary duty, and assisting a breach of fiduciary duty, should be dismissed because he lacks standing to bring them.

Pierce said these claims allege harm to Suwaso, not to Torres personally, and as a consequence he cannot pursue these corporate claims.

Pierce said plaintiff’s allegations can only be understood as a request for inspection of Suwaso’s books and records under a statute that can only be directed to Suwaso.

Pierce said Torres’ claims for fraudulent concealment and usurpation of corporate opportunity fail to state a claim upon which relief can be granted because Torres does not and cannot allege the required elements of usurpation of corporate opportunity, including that the business opportunities in Korea that defendants allegedly “siphoned off,” were of a kind that Suwaso could have taken advantage of.

Pierce said Torres’ claims for breach of fiduciary duty and assisting breach of fiduciary duty likewise fail to state a claim because Torres does not allege the fraud-based breach of fiduciary duty with particularity, as required by the Commonwealth Rules of Civil Procedure.

Pierce said not only does Torres fail to specify “by whom” and “how” the duties were breached in both causes of action, but also wholly fails to provide factual allegations bearing upon how the defendants carried out the acts of assisting the breach of fiduciary duties.

According to Pierce, the complaint is procedurally defective because it is vague and fails to provide defendants the required notice of the claims he is asserting.

In Torres’ opposition to the motion to dismiss, Fitzgerald said that Torres as shareholder of Suwaso is entitled to an accounting.

“Under principles of fiduciary law, the bylaws of Suwaso, and the law of the CNMI, plaintiff is entitled to receive from the defendants fair and complete information regarding the financial condition of the corporation,” Fitzgerald said.

Fitzgerald said the defendants have presented no authority to support their position that Torres has failed to plead usurpation of corporate opportunity.

Fitzgerald added that defendants have not explained how Torres failed to state a claim for breach of fiduciary duty.

Source: Google News :

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