Court Opinion

ID: 9297000
Source: CourtListenerOpinion
Date Created: 2022-11-29 17:28:26.083431+00
Date Added: 2024-06-11T17:13:21.738702
License: Public Domain

BORJA, J.,
dissenting in part:
I join with my brethren in the decision regarding appellant's second and third causes of action. I respectfully dissent from the majority decision as to the first cause of action.
The first cause of action alleges a breach by the Marianas Public Land Corporation (hereafter MPLC) of its constitutionally required strict standards of fiduciary care when it executed the lease agreement with appellee, AIBIC International Corporation. Appellant listed five factors as the reasons for=the breach.
It is my opinion that the first cause of action is sufficient to withstand a Rule 12(b)(6), Com.R.Civ.P., motion. While it may not be the best artfully drafted pleading, it suffices for purposes of Rule 12(b)(6).
MPLC was constitutionally established to "direct the affairs of the corporation for the benefit of the people of the Commonwealth who are of Northern Marianas descent." Constitution of the Northern Mariana Islands, reprinted in CMC at B-301, B-330.
Article XI, section 4(c) of the Constitution, states, in pertinent part, that, "The directors' shall be held to strict standards of fiduciary care." Id. at B-331.
Section 5, of Article XI lists certain fundamental policies in the performance of its responsibilities. Other than those fundamental policies specifically stated, the Article is silent as to what the strict standards of fiduciary care are.
In addition to the general definition of "fiduciary duty" stated by the majority (see page 7> supra), the case cited by the *505majority of Romisher v. Marianas Public Land Corporation, supra., states the following:
The entire theory of a fiduciary relationship ... is to accord the beneficiary the undivided loyalty of the trustee or public official. As such, the members of the board of directors of MPLC must perform their duties honestly, faithfully. . .
Id. at 851. I am aware of only five other court cases that have dealt with Article XI. In Romisher v. Marianas Public Land Corporation, 1 CR 873 (C.T.C. 1983), the court dealt with the authority of MPLC to acquire private lands. In Marianas Public Land Trust v. Marianas Public Land Corporation, 1 CR 968 (C.T.C. 1984), and in Marianas Public Land Trust v. Marianas Public Land Corporation, 1 CR 976 (C.T.C. 1984) the court addressed the issue of what were reasonable expenses of administration. In Lizama, v. Rios, 2 CR 568 (D.N.M.I. 1986), the court dealt with the standing of a beneficiary. And in Apatang v. Marianas, Public Land Corporation, 3 CR 935 (N.M.I. Super. Ct. 1989), the issue Was land exchanges.
I am not aware of any Commonwealth court case further developing or defining the constitutional words "strict standards of fiduciary care" with regard to MPLC. As such, this is an atea of the law that I would classify as being' novel. Courts should be reluctant to dismiss a case under Rule 12(b)(6) when the issue is new and developing. As stated in 5A C. Wright & A. Miller Federal Practice and Procedure: Civil 2d § 1357 (1990) :
The court should be especially reluctant to dismiss on the basis of the pleadings when the *506asserted theory of liability is novel or extreme, since it is important that new legal theories be explored and assayed in the light of actual facts rather than a pleader's suppositions.
Rule 12(b) (6) must be read together with Rule 8(a) (2) . Before a Rule 12(b)(6) motion is granted, a court must first look to Rule 8 to see if it has been complied with. If there is compliance, then the Rule 12(b)(6) motion should not be granted.
Rule 8(a)(2) states that:
A pleading which sets forth a claim for relief . . . shall contain
a short and plain statement of the claim showing that the pleader is entitled to relief
In In re Adoption of Magofna, No. 90-012, 1 N.Mar.I. 172 (Dec. 5, 1990), we cited with approval 5 C. Wright & A; Miller, Federal Practice and Procedure: Civil 2d § 1216 (1990) for the proposition that:
[T]he complaint . . . need not state with precision all elements that give rise to a legal basis for recovery as long as fair notice of the nature of the action is provided.
The Magofna case established the test- to be used in determining whether a pleading withstands a Rule 12(b)(6) motion. Thé test is whether a pleading contains "direct allegations on every material point necessary to sustain a recovery on any legal theory," or "allegations from which an inference fairly may be drawn that evidence on these material points will be introduced at trial." In re Adoption of Magofna, supra at 4.
It is my opinion that the appellant's first cause of action *507meets either test, especially in view of the novelty of this theory of liability.
The Constitution requires MPLC to direct the affairs of the corporation for the benefit of the people of Northern Marianas descent. It further states that the directors are to be held to strict standards of fiduciary care. The Romisher case cited by the majority states that the beneficiaries of a fiduciary relationship require the "undivided loyalty" of a trustee, and, as such, the trustee must act "honestly [and] faithfully."
Other than what the Constitution expressly states, and what the Romishér case declares, there is no other guidance as to what is a "cause of action" for a breach of the strict fiduciary duty mandated by Article XI of our Constitution. A beneficiary who wishes to challenge an action of MPLC on the basis of a breach of the strict fiduciary duty should be given every opportunity to prove the allegations of his or her complaint. The courts should not dismiss the complaint pursuant to Rule 12(b)(6), until and unless the complaint fails both alternative tests, as stated in In re the Adoption of Magofna, supra, after a full and careful scrutiny. To do so would leave beneficiaries without an effective and needed tool to challenge actions of trustees.
In Paragraph 8 of the complaint, the appellant alleges that there has been a breach of the required fiduciary care and listed six specific allegations as to the reasons that there is a breach. The first alleged that MPLC "failed to act as a reasonably prudent trustee." The second alleges that MPLC leased a large piece of *508property "knowing that there was little public land left on the lagoon." The third stated that MPLC "ignored the fact that there are no outdoor recreational facilities . . . and the leased property was the most logical piece." The fourth expressly alleged that MPLC "did not consider or wrongfully considered the best interests of the public in preserving public land for public uses." The fifth alleged a conflict of interest of MPLC. And the sixth alleged that, "The entire decision making process for the lease of this land was done quickly and purposefully to prevent any public hearings or public debate about the lease." All of these allegations directly or implicitly say that MPLC acted dishonestly, unfaithfully, and not for the best interest of the beneficiary.
It is my opinion that the allegations satisfy the requirement that the complaint contain "direct allegations on every material point necessary to sustain a recovery" for a breach of the fiduciary duty already developed by the Romisher case. Even if, as the majority conclude, that there are no direct allegations to sustain a recovery, the complaint contains "allegations from which an inference fairly may be drawn that evidence on these material points will be introduced at trial."
[[Image here]]