Kim v. Quichocho, C 09-0046.

• Citation: 708 F.Supp.2d 1079
• Decision Date: 20 April 2010
• Docket Number: No. C 09-0046.,C 09-0046.
• Parties: Jung 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., limited liability company, and Does I through V, Defendants.
• Court: U.S. District Court — Northern Mariana Islands

708 F.Supp.2d 1079

Jung 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., limited liability company, and Does I through V, Defendants.

No. C 09-0046.

District Court for the Northern Mariana Islands.

April 20, 2010.

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COPYRIGHT MATERIAL OMITTED

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

Michael W. Dotts, O'Connor Berman Dotts & Banes, Saipan, MP, for Defendants.MEMORANDUM OPINION AND ORDER REGARDING DEFENDANTS' MOTION TO DISMISS COUNTS 1 THROUGH 3MARK W. BENNETT, District Judge.

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I. INTRODUCTION AND BACKGROUND A. Procedural Background

On December 18, 2009, Plaintiff Jung Ja Kim filed her complaint (docket no. 1) in this case, which contains nine claims for relief. Kim's first claim alleges that Defendants Ramon Quichocho (“Mr. Quichocho”) and Francis Quichocho (“Mrs. Quichocho”) violated the Racketeer Influenced and Corrupt Organizations Act ¹ (“RICO”), specifically 18 U.S.C. § 1962(b), which makes it “unlawful for any person through a pattern of racketeering activity or through collection of an unlawful debt to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.” 18 U.S.C. § 1962(b). Kim's second claim alleges that Mr. and Mrs. Quichocho violated RICO, § 1962(c), which makes it “unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.” 18 U.S.C. § 1962(c). In Kim's third, and last claim under RICO, she alleges that all of the defendants violated § 1962(d), which makes it “unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section.” 18 U.S.C. § 1962(d). These three counts are at issue in the motion to dismiss currently before the court, but the court notes that Kim also alleges the following claims: Claim 4 is against Mr. Quichocho and Defendant Law Offices of Ramon K. Quichocho, L.L.C. (“Quichocho Law Offices”), for legal malpractice resulting from professional negligence; Claim 5 is also a claim for legal malpractice against the same defendants, for their alleged breach of fiduciary duty; Claim 6 is for breach of lease agreements against Mr. and Mrs. Quichocho and Quichocho Law Offices; Claim 7 is against Mr. and Mrs. Quichocho for conversion; Claim 8 is against Mr. and Mrs. Quichocho for fraud; and Claim 9 is against Mr. and Mrs. Quichocho for constructive trust.

On January 28, 2010, the defendants filed their Memorandum in Support of Motion to Dismiss the First, Second, and Third Claims for Relief (docket no. 5), which is what brings this case before the court. The defendants seek to dismiss the RICO claims, with prejudice, for “fail[ing] to state a claim upon which relief can be granted,” pursuant to Federal Rule of Civil Procedure 12(b)(6) and, where fraud has been alleged, Federal Rule of Civil Procedure 9(b) ². According to the defendants, these claims should be dismissed for numerous reasons, which will be discussed in detail below. The defendants concede that there are arguable causes of action for malpractice, breach of lease, and conversion, assuming arguendo that what Kim has alleged is true. However, the defendants allege the same is not true for the RICO claims.

On March 22, 2010, Kim filed her Opposition to Defendants' Motion to Dismiss Racketeer Influenced Corrupt Organizations Act Claims (docket no. 10). In her opposition brief, Kim resists dismissal of the claims. However, if the court determines

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that there are deficiencies in her complaint, she asks that she be allowed to amend her complaint and proceed with the case on the merits.

The defendants filed their Reply to Plaintiff's Opposition to Defendant's Motion to Dismiss Racketeering Influenced Corrupt Organizations Act Claims (docket no. 11) on April 12, 2010.

On April 15, 2010, this court held a hearing on the defendants' motion to dismiss. Robert Torres of the Law Office of Robert Tenorio Torres in Saipan, and Colin Thompson of the Law Offices of Colin M. Thompson in Saipan, appeared on Kim's behalf-Mr. Thompson argued on Kim's behalf. Michael Dotts of O'Connor Berman Dotts & Banes, in Saipan, appeared-and argued-on behalf of the defendants. The motion was well briefed, and the briefs were of great assistance to the court. The arguments were spirited, yet concise, and both counsel were exceptionally well prepared.

B. Factual Background

“[W]hen ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint.” Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), in turn citing Swierkiewicz v. Sorema N. A., 534 U.S. 506, 508, n. 1, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002); Neitzke v. Williams, 490 U.S. 319, 327, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989); Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974)); see Williston Basin Interstate Pipeline Co. v. An Exclusive Gas Storage Leasehold and Easement in the Cloverly Subterranean, Geological Formation, 524 F.3d 1090, 1096 (9th Cir.2008) (“To survive a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) ... [w]e accept all factual allegations in the complaint as true ....”) (citing Outdoor Media Group, Inc. v. City of Beaumont, 506 F.3d 895, 899-900 (9th Cir.2007) (internal quotation marks and citation omitted)). Based on the above standards, the court accepts the following factual background, as drawn from Kim's complaint, only for the propose of considering the defendants motion to dismiss.

1. The parties' business arrangements that Kim alleges in her complaint

Kim's complaint alleges that she is a citizen of the Republic of Korea. Kim also alleges that she retained Mr. Quichocho to form limited liability companies, to be operated in the Commonwealth of the Northern Mariana Islands (“CNMI”), in or around the year 2007-Mr. Quichocho is allegedly a resident of CNMI and an attorney with Defendant Quichocho Law Offices. Mr. Quichocho allegedly charged Kim a flat rate of $650 to form each company, in addition to any costs Mr. Quichocho incurred. Mr. Quichocho and Kim also entered into an alleged agreement where Quichocho Law Offices leased spaces 203 and 204, in the Cabrera Building in San Jose Village, Saipan, from Kim, according to Kim. Quichocho Law Offices paid what Kim alleges is the below market rental rate of $400.00 per month. In exchange for the discounted rent, Mr. Quichocho and Quichocho Law Offices were to allegedly provide Kim legal assistance for labor disputes and mediations. Kim further alleges Mrs. Quichocho, through Quichocho Law Offices, and through a company known as Karissa, L.L.C., a defendant in this case, provided other services to Kim as part of the agreement, including the preparation, handling, and filing of all documents required for Kim's businesses, many of

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which appear to own poker machines. The documents allegedly included employee renewals and transfer applications, business licenses and corporate reports, tobacco licenses, tax filings and payments, and all other filings necessary to operate Kim's business in CNMI.

Kim alleges that she utilized Mr. Quichocho's services pursuant to the agreement. On or around May of 2008, Kim also alleges that Mr. Quichocho agreed to represent Kim in resolving claims made by her employees. In June of the same year, Kim further alleges she retained Mr. Quichocho to provide legal advice and representation to several companies named in a lawsuit brought by Kim's former spouse. While Kim alleges Mr. Quichocho did not provide a fee agreement for his services, Mr. Quichocho did draw up a lease agreement for spaces 203 and 204. The agreement was said to be between Mr. Quichocho and B.K. Choi, Kim's brother-in-law, who was acting on behalf of Soi-In Corporation ³. The lease allegedly required Mr. Quichocho to pay Kim $400.00 per month rent, on the fifteenth of each month, starting on November 15, 2007. The lease was set to expire on January 31, 2010, according to Kim's complaint. Mr. and Mrs. Quichocho also arranged for the renovation of spaces 201 and 202 at the top of the same building for their residence, according to Kim. Kim alleges that neither Quichocho Law Offices nor Mr. and Mrs. Quichocho paid rent as required by the leases.

Kim was involved in litigation with her former husband, B.S. Choi, and his brothers B.J. Choi and B.K. Choi. At some point, Kim had terminated and evicted the brothers from her business for failure to pay rent. Kim alleges that the scope of Mr. Quichocho's representation of Kim continued to expand as Kim became depressed in or around October of 2008.

Kim alleges that while the scope of Mr. Quichocho's representation of her expanded, the quality of work Mr. and Mrs. Quichocho performed on Kim's behalf declined. Kim's complaint alleges that Mrs. Quichocho delayed and failed to make timely corporate filings for the businesses entrusted to her by Kim. Kim further alleges that Mrs. Quichocho also became routinely late with employee social security filings and failed to submit other data to government agencies. Kim alleges that Karissa, L.L.C., also failed to submit employee data for Kosta, L.L.C.⁴, to the CNMI Department of Labor, causing an employee to file and prevail in a...