Family Fed'n for World Peace v. Moon, 2011 CA 003721 B

• Decision Date: 28 October 2013
• Docket Number: 2011 CA 003721 B
• Parties: THE FAMILY FEDERATION FOR WORLD PEACE AND UNIFICATION, et al., Plaintiffs v. HYUN JIN MOON, et al., Defendants. UCI, Counterclaim Plaintiff v. THE FAMILY FEDERATION FOR WORLD PEACE AND UNIFICATION, et al., Counterclaim Defendants. HYUN JIN MOON, Counterclaim Plaintiff v. BO HI PAK, et al., Counterclaim Defendants.
• Court: D.C. Superior Court

THE FAMILY FEDERATION FOR WORLD PEACE AND UNIFICATION, et al., Plaintiffs
v.
HYUN JIN MOON, et al., Defendants.

UCI, Counterclaim Plaintiff
v.
THE FAMILY FEDERATION FOR WORLD PEACE AND UNIFICATION, et al., Counterclaim Defendants.

HYUN JIN MOON, Counterclaim Plaintiff
v.
BO HI PAK, et al., Counterclaim Defendants.

2011 CA 003721 B

SUPERIOR COURT OF THE DISTRICT OF COLUMBIA Civil Division

October 28, 2013

Judge Anita Josey-Herring
Calendar 4

OMNIBUS MEMORANDUM OPINION ON MOTIONS TO DISMISS THE COUNTERCLAIMS

On August 24, 2012, UCI and Hyun Jin "Preston" Moon answered the complaint in this matter. In those filings, UCI and Preston Moon filed counterclaims against numerous parties, some of whom were not plaintiffs in the underlying action. Subsequently, all counterclaim defendants filed motions to dismiss the counterclaims. The following motions are now before the Court: (1) "Motion of all Plaintiffs-Counterclaim Defendants and Counterclaim Defendant the Holy Spirit Association

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for the Unification of World Christianity (USA) to Dismiss the Counterclaims of Defendants UCI and Preston Moon," filed on September 28, 2012 by the Family Federation for World Peace and Unification (the "Family Federation"), the Universal Peace Federation, the Holy Spirit Association for the Unification of World Christianity (Japan) (the "Holy Spirit Association (Japan)"), Douglas Joo, Peter Kim, and the Holy Spirit Association for the Unification of World Christianity (USA) (the "Holy Spirit Association (USA)"), which was separately opposed by UCI and Preston Moon on November 20, 2012; (2) "Counterclaim Defendants Hyung Jin Moon's Kook Jin Moon's, and In Jin Moon's Motion to Dismiss Defendant UCI's Counterclaims," filed on October 30, 2012 by Hyung Jin "Sean" Moon, Kook Jin "Justin" Moon, and In Jin "Tatiana" Moon,¹ which was opposed by UCI and Preston Moon on November 20, 2012 and in support of which a reply was filed with subsequent leave of court on November 30, 2012; (3) "Motion of Counterclaim Defendants the Tongil Foundation and The Mission Foundation for the Family Federation for World Peace and Unification to Dismiss Defendant UCI's Counterclaims," filed on December 10, 2012 by the Tongil Foundation and the Mission Foundation for the Family Federation for World Peace and Unification (the "Mission Foundation"), which was opposed by UCI on December 28, 2012; and (4) "Bo Hi Pak's Motion to Dismiss Counterclaims of Hyun Jin Moon and UCI," filed December 26, 2012 by Counterclaim Defendant Bo Hi Pak, which was separately opposed by UCI and Preston Moon on January 22, 2013.²

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I. Background³

1. Plaintiffs' Complaint

In the complaint, the plaintiffs allege that Reverend Sun Myung Moon founded the Holy Spirit Association for the Unification of World Christianity (the "Unification Church") in 1954 in Seoul, Korea. Dr. Bo Hi Pak joined the Unification Church in 1957 and began to work with Reverend Moon to expand the Unification Church's membership in Korea; Reverend Moon sent missionaries to the United States further expand the Church in the late 1950s and early 1960s. In 1961, the Holy Spirit Association (USA) was registered as a California nonprofit corporation to act as the embodiment of the Unification Church in the United States. In 1971, Reverend Moon and Dr. Pak moved from Korea to the United States to expand the Unification Church's worldwide activities.

In 1975, Reverend Moon directed Dr. Pak to open a bank account in the name of the "Unification Church International" at Diplomat National Bank in the District of Columbia.⁴ The first sum deposited in the Unification Church International's bank account came from an account in Reverend Moon's name, and additional funds were contributed by the Holy Spirit Association (Japan) and other Unification Church entities. Reverend Moon instructed Dr. Pak to hold the funds in this account in trust solely for the benefit and support of the Unification Church and its related activities. Plaintiffs contend that the directions given by Reverend Moon and implemented by Dr. Pak demonstrate their intention to create an oral charitable trust in support of the Church.⁵ Plaintiffs assert that Reverend Moon and the Holy Spirit Association (Japan) are co-settlers of the UCI Trust; that Dr. Pak was the first trustee of the UCI Trust; that Plaintiffs Family Federation and the Univer-

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sal Peace Federation are among the beneficiaries or "potential beneficiaries" of the UCI Trust; and that Plaintiffs Joo and Kim are co-trustees.

By 1977, approximately $7 million had been donated and were being held in the Unification Church International bank account. In February of that year, Reverend Moon directed Dr. Pak to establish a District of Columbia nonprofit corporation to implement the purposes of the UCI Trust. Dr. Pak named the DC nonprofit "Unification Church International"⁶ and changed the UCI Trust's bank account to reflect that the funds therein would be held by the Unification Church International, rather than the (unincorporated) UCI Trust. Reverend Moon intended for Unification Church International to implement the purposes of the UCI Trust and for its Directors to serve as trustees to ensure that the corporation and its assets would be administered "for the benefit of the Unification Church." Plaintiffs allege that the Articles of Incorporation of the Unification Church International⁷ reflected that intent, specifically in Article 3, Section 2, which stated that UCI will "serve as an international organization assisting, advising, coordinating, and guiding the activities of Unification Churches organized and operated throughout the world," and Section 3, stating that the Unification Church International will "promote the worship of God, and to study, understand and teach the Divine Principle, the new revelation of God, and, through the practical application of the Divine Principle, . . . achieve the interdenominational, interreligious, and international unification of world Christianity and all other religions." Article 9 also states that the Directors of the Unification Church International "recognize and acknowledge that the Reverend Sun Myung Moon . . . is the spiritual leader of the international Unification Church movement," and assert that the Divine Principle is the theological textbook of the Church and contains the essential religious teachings of Reverend Moon.

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Moreover, the Plaintiffs note that the Bylaws,⁸ Article 2, Section 1.1, specifying that "[t]he Board of Directors shall consist of five (5) members, except that the number of directors may be increased or decreased from time to time by amendment of [the] By-Laws." Article 3, Section 9 of the Bylaws defines the role of the President as "the principal executive officer of the Corporation" who, "subject to the control of the Board of Directors, shall in general supervise and control all of the affairs and property of the Corporation"; Plaintiffs contend this means that the UCI President is the head of Unification Church International, a providential organization within the Unification Church, and is therefore subject to appointment and removal by the International President of the Family Federation.

From 1977 to 2006, the Unification Church International operated in accordance with the Articles of Incorporation and their mission and purposes. Plaintiffs assert that, although the written Bylaws of the Unification Church International do not address the nomination of corporate directors,⁹ Reverend Moon, as the co-settlor of the trust and spiritual leader of the Unification religious movement, had designated all of the individuals to serve on the Board of Directors as directors of the Unification Church International, and that the directors have accepted this "continuous" and "uniform" practice as a "binding convention." During this time, the President of the Unification Church International — Dr. Pak from the founding of the Unification Church International through 1992, when Plaintiff Douglas Joo assumed the position — managed the Corporation's assets, to which the Holy Spirit Association (Japan) donated hundreds of millions of dollars to be "held in trust" and used for the Church's endeavors, and in turn, Unification Church International contributed significant funds to the Universal Peace Federation. Both Dr. Joo and Dr. Pak understood during

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their tenures that Unification Church International held its assets in trust to fund the Church's activities.

Reverend Moon designated Plaintiff Peter Kim as a corporate Director of Unification Church Interational in October 2003 and appointed Reverend Chung Hwan Kwak, who was Defendant Preston Moon's father-in-law, to replace Dr. Joo as President in early 2005, while Dr. Joo stepped down and remained a member of the Board of Directors. Moreover, in early 2006, Reverend Moon designated his son, Defendant Preston Moon as a Director of the Unification Church International. At the same time, Reverend Kwak, in his capacity of the International President of the Family Federation, appointed Preston Moon President and Chairman of the Board of Directors of the Unification Church International.

Plaintiffs allege that, at some point between 2006 and 2009, Preston Moon used his powers as President and Chairman of UCI to engage in self-dealing and diverted UCI assets for his own interests, in violation of his fiduciary duties and of the District of Columbia Nonprofit Corporation Act. Specifically, Preston Moon allegedly caused one of UCI's indirect subsidiaries, True World Group LLC ("TWG"), to purchase property in Rockleigh, New Jersey (the "Rockleigh property") from UV Sales, Inc. ("UV Sales"), a wholly owned entity of United Vision Group, Inc. ("UVG"), which is itself wholly owned and controlled by Preston Moon. Plaintiffs claim that TWG agreed to pay UV Sales $5.9 million for the Rockleigh Building, but that the fair market value of the Rockleigh Building was less than the...