Kim v. Quichocho, Civil No. 09–0046.

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of the Northern Mariana Islands
Citation763 F.Supp.2d 1214
Docket NumberCivil No. 09–0046.
PartiesJung Ja KIM, Plaintiff,v.RAMON K. QUICHOCHO, Law Offices of Ramon K. Quichocho, L.L.C., a limited liability company, Frances C. Quichocho, and Karissa, L.L.C., a limited liability company, and Does I through V, Defendants.
Decision Date24 January 2011

763 F.Supp.2d 1214

Jung Ja KIM, Plaintiff,
RAMON K. QUICHOCHO, Law Offices of Ramon K. Quichocho, L.L.C., a limited liability company, Frances C. Quichocho, and Karissa, L.L.C., a limited liability company, and Does I through V, Defendants.

Civil No. 09–0046.

District Court for the Northern Mariana Islands.

Jan. 24, 2011.

[763 F.Supp.2d 1216]

Colin M. Thompson, The Law Offices of Colin M. Thompson, Robert T. Torres, Law Office of Robert Tenorio Torres, Saipan, MP, for Plaintiff.

MARK W. BENNETT, District Judge.





Factual Background



Procedural Background






Applicable Pleading Standards



The Pleading Of A Pattern Of Racketeering Activity



Arguments of the parties






Predicate acts of wire fraud



Predicate acts of money laundering



Pattern of racketeering activity



Conduct or acquisition of control






Additional Challenges To The RICO Conspiracy Claim



Pleading of an agreement among proper parties



Pleading of an agreement



The Pleading Of The Fraud Claim





This case involves claims that the defendants, including the plaintiff's attorney, have defrauded the plaintiff of two of her businesses, which own poker machines, under the guise of protecting her from litigation by her former husband and his family and helping her through a period of depression. In an amended complaint, the plaintiff asserts claims pursuant to the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(b), (c), and (d); legal malpractice, in the form of professional negligence and breach of fiduciary duty; breach of lease agreements; conversion; common-law fraud; and constructive trust. This case is before the court on the defendants' second motion to dismiss, after the court granted the defendants' first motion to dismiss the RICO claims, but permitted the plaintiff to amend her complaint to attempt to address deficiencies. See Kim v. Quichocho, 708 F.Supp.2d 1079 (D.N.Mar.I.2010).1 The

[763 F.Supp.2d 1217]

defendants contend that the plaintiff has failed to follow the “road map” laid out by the court to cure deficiencies in the RICO claims and, despite notice of deficiencies in her common-law fraud claim, has failed to plead that claim with the necessary particularity. Therefore, the defendants seek dismissal with prejudice of the plaintiff's RICO and common-law fraud claims. The plaintiff asserts that the challenged claims are adequately pleaded.

A. Factual Background 2

According to the First Amended Complaint (docket no. 21), filed in this action on August 9, 2010, plaintiff Jung Ja Kim is a plaintiff of the Republic of Korea. The defendants are Ramon K. Quichocho, a citizen of the United States and a resident of the Commonwealth of the Northern Mariana Islands (CNMI); the Law Office of Ramon K. Quichocho, L.L.C. (Law Office), a limited liability company organized under the laws of the CNMI, through which Ramon provided legal services as a CNMI Bar licensed attorney; Frances C. Quichocho, a resident of the CNMI, wife of Ramon, and a member of the Law Office; and Karissa, L.L.C., a limited liability company organized under the laws of the CNMI with its principal place of business in the CNMI, through which Mrs. Quichocho rendered document handling, accounting, payroll, business, and legal support services.3

Other entities central to the claims in the First Amended Complaint are Latte Stone, L.L.C., a company allegedly formed in 2008 by the Quichochos for Kim's benefit to hide her true ownership interest from her former husband, and Tan Dingo, L.L.C., which was allegedly formed by the Quichochos and Joaquin Atalig, Ramon's uncle, in 2006, then purportedly transferred to Kim in 2008. Kim alleges, generally, that, after inducing her to purchase Tan Dingo and to transfer title of poker machines to Latte Stone, the Quichochos waited until Kim had transferred some twenty-six gaming machines to the company and paid taxes and license fees before denying her ownership interest. She alleges that this scheme was knowingly implemented by the Quichochos, by their affirmative conduct and material omissions concerning the creation of Tan Dingo and Latte Stone, by inducing her to transfer property to these entities on the pretext that her interests would be safeguarded and that she would possess an ownership interest, and then by deliberately denying

[763 F.Supp.2d 1218]

her any interest in these companies after her property had been transferred. She contends that the scheme was perpetrated through wire fraud and money laundering.

More specifically, Kim alleges that, in the middle of April 2008, she met with the Quichochos at Ramon's office in San Jose, Saipan, seeking assistance in forming a new business or purchasing one for the purpose of holding title to and operating for profit CNMI licensed poker machines. Kim explained that she intended to transfer CNMI licensed poker machines to the new business entity from other business entities that she and her daughter either owned or controlled. At the meeting, the Quichochos offered Kim Tan Dingo for this purpose, and represented that Ramon would “take care of it.” However, Kim alleges that Ramon neither intended to nor did anything to “take care of it,” and the Quichochos and Atalig remained the only members of Tan Dingo. Kim alleges that, as the result of Ramon's failure to disclose material information that he did not intend to resign from Tan Dingo but to remain a member, she lost control over any assets that she transferred to Tan Dingo, which she would not have transferred had she known she was not the owner of Tan Dingo. Kim alleges that, on or about May 15, 2010, in the Second Floor offices of the Law Firm in San Jose, Frances gave Kim all the records and books for Tan Dingo, including the bank book, blank checks, BGRT tax forms, the tax ID number, and the Articles of Organization, and told Kim that Tan Dingo was now Kim's company. Kim paid Frances $650.00 in cash for Tan Dingo. Although minutes of a meeting for Tan Dingo dated April 25, 2008, drafted by Frances in June 2008, stated that Kim was a member of Tan Dingo and that all members accepted Kim as a new member, Kim alleges these statements were false.

Kim also alleges that she became severely depressed in October 2008, apparently because of increasingly bitter litigation by her former husband and his brothers, and that the Quichochos were aware of her emotional condition. She alleges that she increasingly turned to the Quichochos for advice as her emotional condition declined. She alleges that, at the end of October 2008, at his office in San Jose, Ramon counseled Kim that “things are too hard to do alone,” and advised her that, to “protect her and her assets” from her former husband's family's litigation and any other lawsuits, Kim should form another company that did not have her name attached to it. This company, she was told, would hold title to and operate her poker machines for her benefit. Kim alleges that the Quichochos, knowing Kim's emotional condition, advised and convinced her that she was in no condition to take on the pressures of running a business, that hiding her true ownership interest in the company was necessary for her protection, and that her husband's family would continue to cause problems if her name were associated with or appeared on company records and/or its bank account. She alleges that, on or about October 2008, the Quichochos formed Latte Stone, L.L.C., apparently for Kim's benefit. Records filed by the company list Frances as the only member. The Quichochos did not prepare any documentation confirming Kim's ownership of either Tan Dingo or Latte Stone.

On or about May 14, 2008, allegedly in reliance on the Quichochos' material representations and omissions, Kim “caused” eight poker machines to be transferred to Tan Dingo, for the below market price of $7,600, from Pacific Saipan, L.L.C., an entity owned by her daughter, Dan Bi Choi, and on or about May 16, 2008, Kim paid, by debit card, $60,000.00 to renew the license for five machines that she had transferred to Tan Dingo. However, neither Tan Dingo, Atalig, or the Quichochos

[763 F.Supp.2d 1219]

paid for these machines. Kim alleges that, in reliance on the Quichochos' representations and omissions, she transferred more poker machines to Tan Dingo: eight on or about July 10, 2008, and ten on or about October 7, 2008.

Kim alleges that she relied on the Quichochos to act as her trustees and for her benefit to collect revenues from poker machines transferred to Latte Stone, for operation as Latte Poker Room on Rota, relying on their false promises that Latte Stone was their business in name only. She also alleges that, on or about October 26, 2008, in reliance on the Quichochos' representations and omissions, she transferred ten poker machines belonging to Tan Dingo to Latte Stone, along with air conditioners, keys, a generator, a computer system, office supplies, and cash; that she transferred one poker machine from Tan Dingo to Latte Stone on November 10, 2008; and that she then transferred nine additional poker machines to Latte Stone (although it is not clear from what entity) on November 10, 2008. She alleges that Latte Stone did not pay for these machines. She also alleges that, on November 14, 2008, she “caused” ten poker machines to be shipped by air cargo from Saipan to Rota for Latte Stone to commence operations, and that she paid for this shipping by electronic debit card.

Kim also alleges that, in reliance on the Quichochos' representations and omissions, she paid, by means of interstate wire, additional license fees for poker machines transferred to Latte Stone or Tan Dingo, including $80,000 on November 17, 2008. She also...

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