Court Opinion

ID: 3182912
Source: CourtListenerOpinion
Date Created: 2016-03-04 21:07:11.384095+00
Date Added: 2024-06-11T12:20:38.949249
License: Public Domain

NOT FOR PUBLICATION                             FILED
                    UNITED STATES COURT OF APPEALS                         MAR 04 2016

                                                                        MOLLY C. DWYER, CLERK
                           FOR THE NINTH CIRCUIT                         U.S. COURT OF APPEALS

DERRON GERARD FLORES,                            No. 13-17434
administrator of the Estate of Donald G.
Flores,                                          D.C. No. 1:11-cv-00022

              Plaintiff - Appellant,
                                                 MEMORANDUM*
 v.

FIRST HAWAIIAN BANK,

              Defendant,

 and

MUFG UNION BANK, N.A, fka Union
Bank of California, fka Union Bank, N.A.,

              Defendant - Appellee.

                  Appeal from the United States District Court
                       for the Northern Mariana Islands
               Ramona V. Manglona, Chief District Judge, Presiding

                    Argued and Submitted February 11, 2016
                  University of Hawaii Manoa, Honolulu, Hawaii

Before: GRABER, BYBEE, and CHRISTEN, Circuit Judges.

        *
          This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
      Plaintiff Derron Gerard Flores, administrator of the Estate of Donald G.

Flores ("Decedent"), appeals the district court’s grant of summary judgment to

Defendant Union Bank on the ground that the statute of limitations bars Plaintiff’s

claims and appeals the award of attorney fees to Defendant. Reviewing de novo

the grant of summary judgment, Johnson v. Poway Unified Sch. Dist., 658 F.3d
954, 960 (9th Cir. 2011), and for abuse of discretion the award of attorney fees,

Goodman v. Staples Office Superstore, LLC, 644 F.3d 817, 822 (9th Cir. 2011),

we affirm in part, reverse in part, and remand for further proceedings.

      1. We reverse the district court’s holding that the statute of limitations

began to run in 1999. Under relevant law of the Commonwealth of the Northern

Mariana Islands ("CNMI"), a "cause of action against the obligor of a demand or

time certificate of deposit accrues upon demand." 5 CMC § 3122(2). The district

court held that Decedent’s visit to the Bank in 1999 and his inquiry—"how I get

my money"—constituted a demand.

      We disagree. It is disputed whether Decedent was requesting payment or

merely inquiring about the process by which to redeem his time certificate of

deposit ("TCD"). But, even if Decedent requested payment, the Bank did not

refuse to pay him at that time. Instead, it simply told him to bring in his TCD,

which was a conditional acceptance.

                                          2
      The statute of limitations did not begin to run until Decedent’s demand was

refused. Although this is an issue of first impression in the CNMI, every court to

consider what constitutes a "demand" in the context of suing on a certificate of

deposit requires not only an unequivocal "demand," but also a refusal. See, e.g.,

Statute of Limitations as Applied to Certificate of Deposit, 128 A.L.R. 157 (1940);

Allied Fid. Ins. Co. v. Bank of Okla., N.A., 894 P.2d 1101, 1105 (Okla. 1995)

(statute of limitations began to run when unequivocal demand was unsatisfied);

Edelmann v. Chase Manhattan Bank, N.A., 861 F.2d 1291, 1302 n.66 (1st Cir.

1988) ("Demand occurs upon presentment and refusal to pay." (quoting Garcia v.

Chase Manhattan Bank, N.A., 735 F.2d 645, 648 (2d Cir. 1984))); Erwin v. Erwin,

41 N.E.2d 644, 646 (Ind. Ct. App. 1942) ("great weight of authority" holds that

claim does not accrue until there has been a refusal). When we confront an issue

of first impression under state law, we must decide what we think the highest state

court would do. Med. Lab. Mgmt. Consultants v. Am. Broad. Cos., 306 F.3d 806,

812 (9th Cir. 2002). Here, we conclude that the CNMI Supreme Court would

follow the general rule and hold that a refusal is required to begin the statute of

limitations after a demand for payment of a certificate of deposit has been made.

Accordingly, Decedent’s cause of action did not accrue in 1999.

                                           3
      2. On June 10, 2008, Decedent wrote to the Bank, formally requesting

payment. This action was unequivocally a demand that was refused on September

22, 2008, when the Bank wrote back. We therefore hold that a cause of action

accrued on that date and began the statute of limitations period.

      3. Decedent filed this action on September 22, 2011, claiming breach of

contract, unjust enrichment, negligence, fraud, and violation of the CNMI

Consumer Protection Act. In the CNMI, the statute of limitations for contract

claims is six years. Century Ins. Co. v. Guerrero, 2009 MP 16 ¶ 7, 2009 WL
4855961, at *2 (N. Mar. I. 2009). The period is four years for claims under the

Consumer Protection Act. 4 CMC § 5110. It is two years for tort claims. 7 CMC

§ 2503(d). Therefore, we hold that Decedent’s contract claims and Consumer

Protection Act claim are not barred by the statute of limitations; his tort claims are

time-barred.

      4. Decedent argues that fraudulent concealment tolls the statute of

limitations for his tort claims. But Decedent did not raise a material issue of fact

that Defendant fraudulently concealed facts that prevented him from discovering

his claim. Accordingly, the fraudulent concealment claim fails.

      5. Defendant argues that, notwithstanding the statute of limitations, laches

should apply to bar his claims. A party claiming a laches defense bears the burden

                                           4
to show "(1) inexcusable delay in the assertion of a known right; and (2) the party

asserting laches was prejudiced." In re Estate of Rios, 2008 MP 5 ¶ 9, 2008 WL
986043, at *3 (N. Mar. I. 2008). The Bank has shown neither inexcusable delay

nor prejudice. Even assuming that laches could apply in addition to the applicable

statute of limitations, the doctrine would not bar Plaintiff’s claims.

      6. Finally, Decedent argues that the district court erred in awarding attorney

fees despite denying a grant of a motion to compel. Federal Rule of Civil

Procedure Rule 37 provides that the court must award attorney fees for a motion to

compel "[i]f the motion is granted—or if the disclosure or requested discovery is

provided after the motion was filed." Here, Decedent produced all tax documents

in his possession after Defendant had filed a motion to compel. For that reason,

the district court correctly awarded attorney fees to Defendant.

      AFFIRMED in part, REVERSED in part, and REMANDED. The

parties shall bear their own costs on appeal.

                                           5
                                                                        FILED
                                                                        MAR 04 2016

Flores v. MUFG Union Bank, N.A., No. 13-17434                        MOLLY C. DWYER, CLERK
                                                                      U.S. COURT OF APPEALS

BYBEE, Circuit Judge, concurring in part and in the judgment, dissenting in part:

      I agree with the majority’s decision holding that summary judgment in favor

of Union Bank (“the Bank”) was inappropriate at this stage in the litigation, and

concur in the judgment that this case should be remanded to the district court. See

Mem. Dispo. at 2. I also agree that Decedent’s fraudulent concealment claim fails,

see Mem. Dispo. at 4, that the doctrine of laches does not apply to this case, see

Mem. Dispo. at 4–5, and that the district court properly awarded attorney fees to

the Bank, see Mem. Dispo. at 5.

      I part ways with the majority, however, as to what is necessary under the

governing law of the Commonwealth of the Northern Mariana Islands (“CNMI”)

to trigger the two, four, and six-year limitations periods at issue here. See Mem.

Dispo. at 2–4. 5 CMC § 3122(2) explains that a “cause of action against the

obligor of a . . . time certificate of deposit accrues upon demand.” (Emphasis

added.) The majority, however, reads into § 3122(2) a refusal requirement,

holding that “refusal is required to begin the statue of limitations after a demand

for payment of a certificate of deposit has been made.” Mem. Dispo. at 3. This

requirement is absent from the text of the CNMI statute, and, as the majority

rightly points out, such a requirement has never been found by the CNMI Supreme

Court. See Mem. Dispo. at 2 (noting that “what constitutes a ‘demand’” is “an
issue of first impression in the CNMI”). Although the weight of out-of-jurisdiction

authority favors the majority’s reading of the statute, see Mem. Dispo. at 2–3, I see

no need to answer this question on behalf of the CNMI Supreme Court, especially

as the district court did not pass on the issue.

      Instead, I think that summary judgment was improper because there is a

disputed issue of material fact—whether Decedent’s 1999 conversation with a

Bank representative constituted a demand or merely a request for information. If

the finder of fact was to determine that the conversation was a demand, then I think

the statute of limitations on all Decedent’s claims began ticking in 1999, rendering

all his claims time-barred when he brought his suit in 2011. Alternatively, if the

finder of fact was to determine that the conversation was not a demand, then I think

the statute of limitations would not begin running until Decedent’s counsel wrote a

letter to the Bank demanding payment in 2008, rendering only his tort claims time-

barred.

      Even if I were to agree with the majority’s reading of § 3122(2) and hold

that both a demand from the Decedent and a refusal from the Bank are necessary to

start the statute-of-limitations clock, I do not believe the outcome I have outlined

above would change. If, on remand, the finder of fact were to determine that

Decedent’s 1999 conversation with a Bank representative was a demand, then

                                            2
didn’t the Bank refuse that demand? Perhaps the Bank did not say, “Mr. Flores,

we are refusing your demand and you may not have your money,” but Decedent

certainly did not walk out of the Bank with $200,000 in his pocket. If the Bank’s

response was not a refusal, what was it? A “conditional acceptance,” see Mem.

Dispo. at 2, as the majority terms it? A contingent refusal? The practical effects of

the Bank saying “no” and the Bank saying “no, because you don’t have your

certificate of deposit” are the same—both are refusals of Decedent’s immediate

demand of “I’d like my money right now, please.”1 As the Oklahoma Supreme

Court observed when examining a similar statute under Oklahoma law, the statute

of limitations began running only after the holder of the certificate of deposit, “first

made demand for the funds, and that demand was unsatisfied.” Allied Fid. Ins. Co.

v. Bank of Okla., N.A., 894 P.2d 1101, 1105 (Okla. 1995) (emphasis added). That

is precisely what the finder of fact could determine happened here: Decedent made

a demand and it was unsatisfied. The majority has stepped into the role of

factfinder and decided that the Bank did not refuse the Decedent. If the majority is

unsure—as I am—that Decedent demanded his money, I don’t see how the

      1
        The majority resists this conclusion, noting that “even if Decedent
requested payment, the Bank did not refuse to pay him,” and instead “simply told
him to bring in” his certificate of deposit. Mem. Dispo. at 2. When one is in need
of $200,000 and cannot find his certificate of deposit to redeem that $200,000, this
seems to me a distinction without a difference.

                                           3
majority gets to decide that the Bank didn’t refuse him.

      Because I would decline to read a refusal requirement into § 3122(2) where

the CNMI Supreme Court has not, as to that issue, I respectfully dissent. And,

even if I agreed with the majority’s construction of § 3122(2), I think the issues of

demand and refusal should be decided by a jury.

                                          4