Hisamatsu v. Niroula et al

Memorandum in Opposition to Dft BOH's Motion to Dismiss The SAC

N.D. Cal.August 8, 2008

______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 1 STEPHEN M. SHAW, SB 1076251 P.O. Box 23532 Honolulu, Hawaii 968043 Telephone: (808) 521-08004 Facsimile: (808) 531-21295 Email: shawy001@gmail.com6 7 Attorney for Plaintiff8 MEGUMI HISAMATSU9 10 UNITED STATES DISTRICT COURT11 NORTHERN DISTRICT OF CALIFORNIA12 -SAN FRANCISCO DIVISION13 14 MEGUMI HISAMATSU, ) CASE NO: 3:07-cv-04371-JSW15 )16 Plaintiff, )17 vs. ) PLAINTIFF MEGUMI HISAMATSU’S18 ) MEMORANDUM OF POINTS AND19 ) AUTHORITIES IN OPPOSITION TO20 KAUSHAL NIROULA; ) DEFENDANT BANK OF HAWAII’S21 BANK OF HAWAII, ) MOTION TO DISMISS THE SECOND22 A Corporation; DOES 1-60; ) AMENDED COMPLAINT23 )24 ) (FRCP 12(b)(6)25 Defendants. )26 ) Hearing: 9-19-0827 ) Time: 9:00 a.m.28 ) Judge: Honorable Jeffrey S. White29 ) Courtroom: 2, 17th floor30 31 32 33 34 PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS35 AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S36 MOTION TO DISMISS THE SECOND AMENDED COMPLAINT37 38 39 40 41 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 1 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW i TABLE OF CONTENTS1 2 Page3 4 I. INTRODUCTION …………………………………………………………… 15 6 II. NEWLY PLEADED FACTS ARE SUFFICIENT …………………………. 17 8 A. BOH Misconstrues Its Indemnity Form …………………………… 19 10 B. BOH’s Investigation Was Complete On October 4, 2006 ………. 411 12 III. ISSUES ADDRESSED …………………………………………………….. 513 14 IV. DISCUSSION …………………………………………………………………515 16 A. Choice Of Law Issue Waived By Failure To Comply17 With Civil Rule 7 - 9 …………………………………………………………518 19 B. If Rehearing Were Allowed, BOH’s Arguments Fail ……………............ 720 21 C. No UCC §4-406(f) Preclusion ……………………………………............ 1022 23 1. Second Report To BOH Was Timely ……………………………..1024 25 2. Objection To Second Attempt At Rehearing ……………………. 1126 27 28 D. Claims Attacking The Indemnification Agreement29 (Count 9-20 and 24) ………………………………………………. 1330 31 1. All Claims Are Sufficient ……………………………………………1332 33 34 2. All Of The Claims Attacking The IOL Are Legally Sufficient ……1335 36 a. Count 9 Is Sufficient (Rescission/Undue Influence) …….1337 38 b. Count 10 (Improper Third-Party Conduct) ………………. 1739 40 c. Rescission-Mutual Mistake OF Fact (Count 11)41 Is Sufficient …………………………………………………. 1942 43 d. Rescission-Material Failure Of Consideration44 (Count 12) Is Sufficient …………………………………… 2045 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 2 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW ii TABLE OF CONTENTS1 2 Page3 4 e. Rescission-Failure Of Consideration-Fault of BOH5 (Count 13) Is Sufficient ……………………………………. 226 7 f. Rescission-Unlawful Agreement (Count 14)8 Is Sufficient …………………………………………………… 229 10 g. Rescission (Void Consideration-Count 15) Is Sufficient … 2311 12 h. Rescission (Undue Influence/Known Vulnerability)13 Is Sufficient (Count 16) ………………………………………. 2314 15 i. Unilateral Mistake Of Fact Fall Of BOH (Count 17)16 Is Sufficient ……………………………………………………..2317 18 j. Rescission-Unilateral Mistake (Count 18) Is Sufficient …….2519 20 k. Rescission-Fraud In The Inducement (Count 19)21 Is Sufficient ……………………………………………………. 2822 23 l. Tort In Essence Claim (Count 20) Is Sufficient …………… 2924 25 m. Declaratory Relief (Count 24) Is Sufficient …………………. 3126 27 28 E. Cal. Bus & Prof Code §17200 (Count 8) And Hawaii Unfair29 Competition (Count 26) Claims Are Sufficient……………………………….3130 31 1. §17200 Count …………………………………………………………. 3132 33 2. Hawaii UCL Claim Is Sufficient (Count 26) …………………………..3334 35 36 F. The Conspiracy (Count 21) Is Sufficient ……………………………………..3337 38 39 G. Fraud (Counts 20 and 27) Are Sufficient ……………………………………..3440 41 1. Fraud In The Inducement Count ………………………………………3442 43 2. Promissory Fraud ………………………………………………………3444 45 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 3 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW iii TABLE OF CONTENTS1 2 Page3 4 5 H. Negligence Claims (Counts 25, 28, 32, 33, 34 and 35)6 Are Sufficient …………………………………………………………………..357 8 1. Wrongful Withholding Of Funds (Count 25) Is Sufficient ………….359 10 2. Negligent Misrepresentation (Count 28) Is Sufficient………………3611 12 3. Gross Negligence (Count 32) Is Sufficient ………………………….3613 14 4. Negligence (Count 32) Is Sufficient ………………………………….3615 16 5. Negligent Infliction Of Emotional Distress (Count 34) Is Sufficient…3617 18 6. Negligence Per Se (Count 35) Is Sufficient………………………….3619 20 21 I. Conversion (Count 29) Is Sufficient ………………………………………….3722 23 24 J. Equitable Lien (Count 30) IS Sufficient ………………………………………3825 26 27 K. Constructive Trust (Count 31) Is Sufficient ………………………………….3828 29 30 L. Intentional Infliction Of Emotional Distress (Count 23) Is Sufficient ……….3931 32 33 34 V. CONCLUSION ………………………………………………………………….4035 36 37 38 39 40 41 42 43 44 45 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 4 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW iv TABLE OF AUTHORITIES1 2 Page3 CASES4 5 AMFAC Inc. v. Waikiki Beachcomber etc,6 74 Haw 85, 110, 839 P.2d 10, 17 (1992)…………………………………. 47 8 Basin Oil Co. v. Baash Ross etc9 (1954) 125 Cal.App.2d 578, 594-597 271 P.2d 122, 131-133 …………….310 11 Ben Haw Inc. v. Kida,12 96 Haw 289, 314, 30 P.3d 895, 920 (2001)……………………………….3913 14 Brooks v. Nance etc,15 113 Haw 406, 415, 153 P.3d 1091 (2007)………………………………….3816 17 Butler v. Adoption Media LLC,18 486 F.Supp.2d 1022, 1049 (N.D. Cal.2007)…………………………………919 20 Chainey v. Jensen,21 1 Haw.App.94, 96, 614 P.2d 402 404 (App. 1980)……………………….3622 23 Campbell v. Birch24 (1942) 19 Cal.2d 778, 791, 122 P.2d 902…………………………………1425 26 Campbell v. Superior Court27 (2005) 132 Cal.App.4th 904, 921, 34 Cal.Rptr.3d 68, 80…………………3828 29 Civic Center Drive etc v. South Western Bell Video Serv.,30 295 F.Supp.2d 1091, 1106 (N.D.Cal.2003) ………………………………….431 32 Defazio v. Hollister etc,33 406 F.Supp.2d 1085, 1090 (E.D.Cal.2005)…………………………………834 35 Commander Door Inc. v. Dunsmuin Lumber Co.,36 197 F.2d 513, 518 n.3 (9th Cir. 1952)…………………………………………937 38 County of Los Angeles v. Construction Laborers etc39 (2006) 137 Cal.App.4th 410, 416, 39 Cal.Rptr.3d 917………………………3840 41 Diamond Multimedia etc v. Superior Court,42 19 (1999) Cal.4th 1036-1063-64, 80 Cal.Rptr.2d 828, 968 P.2d 539 …………3143 44 45 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 5 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW v TABLE OF AUTHORITIES1 2 Page3 CASES4 5 Donovan v. RRL Corp.6 (2001) 26 Cal.4th 261, 282, 109 Cal.Rptr.2d 807,7 824, 27 P.3d 702, 716……………………………………………………24, 25, 26, 278 9 Eberle v. City of Abaheim,10 901 F.2d 814, 818 (9th Cir. 1990)…………………………………………………..811 12 Enslow v. Von Guenther13 (1961) 193 Cal.App.2d 318, 321, 14 Cal.Rptr.231, 233………………………….2114 15 Est. of Stephens v. Williams16 (2002) 28 Cal.4th 665, 673, 122 Cal.Rptr.2d 358, 363………………………….25, 2617 18 Ericson v. Pardus,19 __ U.S. __ 127 S.Ct. 2197, 2200 (2007) (minute detail not required)…………..1320 21 Demateis v. Vezu22 (1920) 49 Cal.App.453, 458, 193 P.793, 795………………………………………1423 24 Faulkner v. First Ntl Bank25 (1900) 130 Cal.258 62 P.463………………………………………………………...3726 27 Fletcher v. Western Life Ins. Co.28 (1970) 10 Cal.App.3d 376, 404, 89 Cal.Rptr.78……………………………………4029 30 Francois v. Goel31 (2005) 35 Cal.4th 1094, 1096-7, 29 Cal.Rptr.3d 249, 112 P.3d 636. …………….532 33 French v. Construction Laborers Pension Trust34 (1975) 44 Cal.App.3d 479, 487, 118 Cal.Rptr.731………………………………...2835 36 Frontier Oil Corp v. RLI Ins. Co.37 (2007) 153 Cal.App.4th 1436, 1443, 63 Cal.Rptr.3d 816…………………………..638 39 Gluckstein v. Rappaport40 (1928) 92 Cal.App.236, 239, 267 P.939 941……………………………………….1441 42 Gruen Watch Co. v. Artists Alliance Inc.,43 191 F.2d 700, 703 (9th Cir. 1951)……………………………………………………..944 45 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 6 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW vi TABLE OF AUTHORITIES1 2 Page3 CASES4 5 6 Hac v. University of Hawaii,7 102 Haw 92, 106, 73 P.3d 46, 60 (2003)…………………………………………408 9 Hardy v. Musicraft Records Inc10 (1949) 93 Cal.App.2d 698, 701, 209 P.2d 839……………………………………911 12 Harris v. Rudin etc13 (2002) 95 Cal.App.4th 1332, 1342, 116 Cal.Rptr.2d 552, 559 …………………2014 15 Haigler v. Donnelly16 (1941) 18 Cal.2d 674, 681, 117 P.2d 331, 335…………………………………..3717 18 Haw Community Fed. Credit Union v. Keka,19 94 Haw 213, 227 11 P.3d 1, 15 (2000)……………………………………………3320 21 Hawley v. Orange Cty Flood Control Dist.22 (1963) 211 Cal.App.2d 708, 713, 27 Cal.Rptr.478, 481…………………………3, 423 24 Honda v. Bd Trustees ERS etc,25 108 Haw 212, 219, 118 P.3d 1155, 1162 (2005)…………………………………2826 27 Hil-Mac Corp v. Mendo Wood Prod. Inc28 (1965) 235 Cal.App.2d 526, 529, 45 Cal.Rptr.396, 398………………………….2029 30 Kearney v. Saloman Barney Inc.31 (2006) 39 Cal.4th 95, 107, 137 P.3d 914…………………………………7, 9, 24, 3232 33 Keithley v. Civil Service Bd34 (1970) 11 Cal.App.3d 443, 89 Cal.Rptr.809………………………………………1535 36 Kaho’ohanohano v. DHS,37 117 Haw 262, 306, 178 P.3d 538, 582…………………………………………….3638 39 Kaichen’s Metal Mart Inc. v. Fezzo Cast Co. etc40 (1995) 33 Ca,.App.4th 8, 11, 39 Cal.Rptr.233, 234……………………………….3841 42 Kussman v. Cross country Ban43 (2005) 134 Cal.App.4th 1283, 1299, 36 Cal.Rptr.3d 728, 740…………………..944 45 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 7 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW vii TABLE OF AUTHORITIES1 2 Page3 CASES4 5 6 LSO Ltd v. Stroh etc7 205 F.3d 1146, 1156 (9th Cir. 2000)……………………………………………… 308 9 Matleson v. Wagoner10 (1905) 147 Cal.739, 744, 82 P.436………………………………………………..1411 12 McKell v. Washington Mutual13 (2006) 142 Cal.App.4th 1457, 1491 49 Cal.Rptr.3d 227, 255……………………3714 15 M.F. Kemper Const. Co. v. City of L.A.16 (1951) 37 Cal.2d 696, 702, 235 P.2d 7……………………………………………2817 18 Moon v. Guardian Prot Serv,19 (2002) 95 Cal.App.4th 1005, 1009, 116 Cal.Rptr.2d 218, 220…………………..3620 21 Muraoka v. Budget Rent-A-Car-Inc22 (1984) 160 Cal.App.3d 107, 117, 206 Cal.Rptr.476………………………………3523 24 Nereau v. City of Fresno etc,25 392 F.Supp.2d 1159, 1183 (E.D.Cal. 2005)………………………………………..526 27 Nichols v. Leach28 (1931 Dist 2) 114 Cal.App.545, 300 P.103, 105…………………………………..2929 30 NL Industries v. Kaplan,31 792 F.2d 896, 897 (9th Cir. 1986)……………………………………………………1132 33 Northwest Mortgage Inc. v. Superior Court (San Diego)34 (1999) 72 Cal.App.4th 214, 222, 85 Cal.Rptr.2d 18………………………………..3235 36 Odom v. Microsoft etc,37 486 F.3d 541, 545 (9th Cir. 2007)…………………………………………………….238 39 O’Meara v. Haiden40 (1928) 204 Cal.354, 358 268 P.334, 335…………………………………………...1941 42 Perdue v. Crocker Bank43 (1985) 38 Cal.3d 913, 928, 702 P.2d 503, 513……………………………………..3344 45 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 8 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW viii TABLE OF AUTHORITIES1 2 Page3 CASES4 5 6 People v. Martinez7 (1999) 20 Cal.4th 225, 236-237, 83 Cal.Rptr.2d 533,8 973 P.2d 512 (kidnapping)…………………………………………………………379 10 Quaker Alloy etc v. Gulfco Indus.11 123 F.R.D.282, 288 (N.D.Ill 1988)…………………………………………………3012 13 Rakestraw v. Rodriguez14 (1972) 8 Cal.3d 67, 73, 104 Cal.Rptr.57, 61, 500 P.2d 1401,15 1405……………………………………………………………………………… 22, 2316 17 Riopta v. Aresco etc,18 101 Fed.Supp.2d 1326, 1332 (D.Haw. 1999)……………………………………..3319 20 Rusheen v. Cohen21 (2006) 37 Cal.4th 1048, 1062, 128 P.3d 713, 722………………………………..3422 23 Sandi v. Muroc etc24 (1997) 14 Ca, 4th 1066, 1086, 60 Cal.Rptr.2d 263, 276…………………………3625 26 Seeger v. Odell27 (1941) 18 Cal.2d 409, 417, 115 P.2d 977 982. …………………………………..1428 29 Shaw v. North American Title Co.,30 76 Haw. 323, 332 876 P.2d 1291 (1994)…………………………………..831 32 Skaff v. Meridien etc,33 506 F.3d 832 841 (9th Cir. 2007)……………………………………………………1334 35 Smith etc v. Pacific Properties etc,36 358 F.3d 1097, 1105 (9th Cir. 2007)…………………………………………………137 38 Smith v. Wells Fargo Bank39 (2005) 135 Cal.App.4th 1463, 38 Cal.Rptr.3d 653…………………………………3340 41 Smith v. Williams42 (1961) 55 Cal.2d 617, 12 Cal.Rptr.665, 667 361 P.2d 241………………………2943 44 45 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 9 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW ix TABLE OF AUTHORITIES1 2 Page3 CASES4 5 South Bay Bldg Emt. Inc. v. Rirliera etc6 (1999) 72 Cal.App.4th 1111, 1123 85 Cal.Rptr.2d 647, 654……………307 8 Stewart v. Marvin9 (1956) 139 Cal.App.2d 769, 775, 294 P.2d 114, 118…………………14, 1610 11 Sterling v. Taylor12 (2007) 40 Cal.4th 757, 772, 55 Cal.Rptr.3d 116, 128,13 152 P.3d 420, 429…………………………………………………………….314 15 Story Road Flea Market Inc. v. Wells Fargo Bank16 (1995) 42 Cal.App.4th 1733, 1739, 50 Cal.Rptr.2d 524………………… 1217 18 S. Utsunomiya Enters v. Moomuko etc,19 75 Haw 480, 501, 866 P.2d 951, 963 (1994)………………………………3820 21 Swartz v. KPMG etc,22 476 F.3d 756, 763 (9th Cir. 2007)………………………………………….1, 1323 24 Sweet v. Pfizer,25 232 F.R.D. 360, 364 (C.D.Cal 2005) ………………………………………..826 27 Seeger v. Odell28 (1941) 18 Cal.2d 409, 414-415, 115 P.2d 977……………………………..2829 30 Tahoe Ntl. Bank v. Philllips31 (1971) 4 Cal.3d 11, 20 n.12, 480 P.2d 320, 327……………………………432 33 Thomas v. Hunt Mfg. Corp34 (1954) 42 Cal.2d 734, 739, 269 P.2d 12, 15………………………………...435 36 United States v. Alexander37 106 F.3d 874, 876 (9th Cir. 1997)…………………………………………….3038 39 Van Meter v. Best Construction Co.40 (1956) 46 Cal.2d 588, 594, 297 P.2d 644………………………………… 2841 42 Van’t Rood v. County of Santa Clara43 (2003) 113 Cal.App.4th 549, 571, 6 Cal.Rptr.746, 764…………………….2244 45 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 10 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW x TABLE OF AUTHORITIES1 2 Page3 CASES4 5 6 Virgin Atl Airways Ltd v. Nt’l Mediation Bd,7 956 F.2d 1245, 1249 (2d Cir. 1992)………………………………………348 9 Walker v. Carnival Cruise Lines etc,10 107 F.Supp.2d 1135, 1137 (N.D. Cal 2007)……………………………...1211 12 Weger v. Rocha13 (1934) 138 Cal.App.109, 32 P.2d 417…………………………………….1514 15 Williams v. Puccinelli16 (1965) 236 Cal.App.2d 512, 518, 46 Cal.Rptr.285………………………2817 18 Wood v. Kalhaugh19 (1974) 39 Ka.App.3d 926, 930, 114 Cal.Rptr.673……………………….2820 21 World Svngs & Loan Assn V. Kurtz Co22 (1960) 183 Cal.App.2d 319, 327, 6 Cal.Rptr.665, 670………………….2123 24 25 STATUTES and RULES26 27 28 Business & Professions Code §17200…………………………………………31, 3229 30 Cal.Civ.Code §1668)…………………………………………………………………431 32 Cal.Civ.Code §1575 …………………………………………………………………1433 34 Civil L.R. 7-9…………………………………………………………………………...1135 36 Civil L.R 7-9(a) ………………………………………………………………...6, 12, 2937 38 Civil LR 7-9(b) (1)-(3) ……………………………………………………………...6, 1239 40 L.R. 7-9(c)……………………………………………………………………………. 641 42 Cal.Civ.Code §1572………………………………………………………………… 2943 44 Cal.Civ.Code §1575………………………………………………………………….2345 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 11 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW xi STATUTES and RULES1 2 Page3 4 Cal.Civ.Code §1668………………………………………………………………….225 6 Cal.Civ.Code §1689(b)(1)……………………………………………………………197 8 Cal.Civ.Code §2310…………………………………………………………………..229 10 Cal.Civ.Code §2310. Comment 3 …………………………………………………..2511 12 Cal.U.Com Code §3403 ……………………………………………………………..2513 14 Cal.U.Com Code §3403, Official Comment 2 …………………………….21, 23, 2515 16 Cal.Civ.Code §3403 comment 3…………………………………………………….2217 18 Cal.Civ.Code §3412…………………………………………………………………..2919 20 Cal.U. Com Code §4102………………………………………………………………621 22 Cal.U.Com Code §4406(f)…………………………………………………..10, 32, 3523 24 Federal Practice & Procedure §1357 (3d ed 2004)……………………………….3525 26 FRCP 12(b)(6)………………………………………………………………………….127 28 FRCP 54………………………………………………………………………………...129 30 FRCP 54(b)…………………………………………………………………………6, 1231 32 FRCP 56…………………………………………………………………………………133 34 Hawaii Revised Statutes (HRS) §480-1…………………………………………….3335 36 HRS §480-2……………………………………………………………………………3337 38 OTHER AUTHORITIES39 40 41 Restatement 2nd Contracts 153(c) ………………………………………………..2542 43 Restatement 2nd Contracts of §153………………………………………………2844 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 12 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 1 I. INTRODUCTION1 Plaintiff will attempt to track Bank of Hawaii’s (BOH’s) arguments by section.2 To avoid repetition, some arguments from Plaintiff’s pending FRCP 56 motion will be3 incorporated by reference.4 Sufficient new facts to support the causes of action in Plaintiff’s Second5 Amended Complaint (SAC) have been sufficiently stated. Defendant BOH’s motion6 is based on FRCP 12(b)(6); and, in some very improper respects, FRCP 54. At this7 stage, the “issue is not whether a Plaintiff will ultimately prevail but whether the8 claimant is entitled to offer evidence to support of the claims.” Swartz v. KPMG etc,9 476 F.3d 756, 763 (9th Cir. 2007).10 In the event greater specificity is anywhere required, Plaintiff requests further11 leave to amend. “A district court should grant leave to amend even if no request to12 amend the pleading was made, unless the court determines that the pleading could13 not be cured by the allegation of other facts.” Emphasis added. Smith etc v. Pacific14 Properties etc, 358 F.3d 1097, 1105 (9th Cir. 2007).15 16 II. NEWLY PLEADED FACTS ARE SUFFICIENT17 A. BOH Misconstrues Its Indemnity Form18 19 The SAC alleges that before BOH sent the Indemnification Of Liability form20 (“IOL”) to Plaintiff’s friend for routing to Plaintiff in San Francisco, Plaintiff Megumi21 Hisamatsu called BOH to have $41,000.00 wired from her account, to San22 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 13 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 2 Francisco. SAC ¶43, ¶44. Ms. Hisamatsu received the form in San Francisco and1 thought it would not affect her claims against the bank. SAC ¶45, 46.2 The following is taken as true, from the SAC ¶46: “BOH knew that Ms.3 Hisamatsu had difficulty with English… At all times, BOH knew that Plaintiff, a4 Japanese national in San Francisco, could not adequately understand the level of5 English in the bank’s form. The parties at all times had unequal bargaining power,6 and BOH was misrepresenting to Plaintiff that the money it would release to Mr.7 Niroula belonged to him” SAC ¶46; also, SAC page 35 (¶95.D).8 These allegations are to be read, at this stage, in the light most favorable to9 the nonmoving party, and assumed to be true. Odom v. Microsoft etc, 486 F.3d 541,10 545 (9th Cir. 2007). The SAC attaches the IOL at ex B. The last paragraph was for11 indemnification/hold harmless from Plaintiff, in favor of BOH, for “having paid the12 funds to Kaushal Niroula.” Emphasis added. There is no mention of indemnity/hold13 harmless for the bank’s doing anything with Mr. Niroula’s bank account #0002-14 933063.15 Above this paragraph, another clause begins: “I Megumi Hisamatsu, also16 agree that funds ($257,546.25) held in suspense…” Emphasis added. It is clear from17 the sentence and its context that the idea, or object, being described is the funds;18 and therefore, the subject. The predicate of the sentence is the explanation of the19 action, condition, or effect of the subject.20 The phrase “belonging to Kaushal Niroula” is properly construed as an21 adjective phrase describing the subject of the entire sentence; i.e. the funds. BOH22 obviously agrees, (at page 19 ¶last and page 20¶1 of its motion).23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 14 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 3 The bank’s varying constructions are an admission that the above sentence in1 the Indemnity agreement (IOL) may be interpreted more than two ways. However,2 the resulting uncertainty must be interpreted most strongly against the drafter, BOH.3 Cal.Civ.Code 1654. Since BOH’s interpretation of the IOL in this context is4 exculpatory, the language is again construed most strongly against the drafter. Basin5 Oil Co. v. Baash Ross etc (1954) 125 Cal.App.2d 578, 594-597 271 P.2d 122, 131-6 133 (“hold harmless” language in catalogs and invoices not clear).7 As in Basin Oil 125 Cal.App.2d at 595, BOH wrote the IOL for its own benefit.8 Since there is uncertainty in meaning, all doubt must be resolved in favor of9 Plaintiff’s construction of the phrase, “belonging to Kaushal Niroula.” It properly10 modifies the subject of the sentence, i.e., “funds”. Id.11 The practical construction is that Ms. Hisamatsu, alone in San Francisco and12 under the influence of a criminal, reasonably believed the bank was releasing Mr.13 Niroula’s money to him, in exchange for his cooperation. The bank was in the best14 position to clarify any uncertainty at that time, but elected not to. This is the most15 reliable determination of the party’s intent. Sterling v. Taylor (2007) 40 Cal.4th 757,16 772, 55 Cal.Rptr.3d 116, 128, 152 P.3d 420, 429.17 BOH’s interpretation of this provision in the IOL “in ultimate result has the18 effect of imposing a forfeiture will be strictly construed, especially where the contract19 as here, was prepared by one seeking to impose the forfeiture”. Hawley v. Orange20 Cty Flood Control Dist. (1963) 211 Cal.App.2d 708, 713, 27 Cal.Rptr.478, 481 (“if an21 agreement can be reasonably interpreted so as to avoid a forfeiture, it is the duty of22 the court to avoid it… ‘A contract is not to be construed to provide a forfeiture unless23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 15 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 4 no other interpretation is reasonably possible’” Emphasis added. While Hawley1 involved a “no damages for delay” clause in a construction contract, the ultimate2 result of the challenged provision in BOH”s IOL is, like Hawley, a forfeiture.3 Next, since the construction urged by BOH ultimately supports its use of the4 IOL to limit liability, it is void as against public policy. Civic Center Drive etc v. South5 Western Bell Video Serv., 295 F.Supp.2d 1091, 1106 (N.D.Cal.2003) (fraudulent6 concealment. Cal.Civ.Code §1668).7 Finally, the IOL clause challenged here fails due to ambiguity. The standard8 to determine ambiguity requires that any interpretation must not “do violence to the9 principles of construing documents against the party who drafts and selects them”.10 Tahoe Ntl. Bank v. Philllips (1971) 4 Cal.3d 11, 20 n.12, 480 P.2d 320, 327 (whether11 interpretation is suggested by extrinsic evidence). Here, as in Tahoe Ntl Bank, an12 ambiguous form was selected, and its proponent/drafter is attempting to give it13 unambiguous effect. This form creates an extreme danger of overreaching by banks14 with superior bargaining power. Id. 4 Cal.3d at 20. No amount of extrinsic evidence15 can overcome the force of the doctrine that BOH’s IOL must be construed against it.16 Even outside the insurance context, ambiguity is construed against the17 drafter. Thomas v. Hunt Mfg. Corp (1954) 42 Cal.2d 734, 739, 269 P.2d 12, 15. This18 is the law of Hawaii, as well. AMFAC Inc. v. Waikiki Beachcomber etc, 74 Haw 85,19 110, 839 P.2d 10, 17 (1992).20 B. BOH’s Investigation Was Complete On October 4, 200621 BOH’s arguments here are unclear. There are many newly pleaded facts in22 the SAC, which speak for themselves. Taken as true, and given the correct23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 16 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 5 inferences, if BOH investigated on the first day (after the forgery complaints were1 made), and it did not investigate afterward, it had a duty to promptly transfer the2 funds. This means on October 5, 2006. SAC ex A.3, A.6 and A.9.3 4 III. ISSUES ADDRESSED5 A. Whether Plaintiff is entitled to offer evidence to support her claims?6 B. Whether many of BOH’s arguments violate the doctrine of law of the7 case and the Court’s rules regarding leave of court for reconsideration motions?8 9 IV. DISCUSSION10 11 A. Choice Of Law Issue Waived By Failure To Comply With Civil12 Rule 7 - 913 14 At page 7¶1 of its 1-10-08 Order Granting In Part And Denying In Part Motion15 To Dismiss Or For A More Definite Statement (Order), it states: “The Court,16 therefore, will apply California law to interpret and determine the validity of the17 Indemnification Agreement signed by Ms. Hisamatsu.”18 Defendant is attempting to relitigate this decision which would be wholly19 improper under California law. Francois v. Goel (2005) 35 Cal.4th 1094, 1096-7, 2920 Cal.Rptr.3d 249, 112 P.3d 636. Even if this and other thinly-veiled reconsideration21 attempts were properly brought by BOH, Federal rules apply. “Federal Courts sitting22 in diversity apply substantive law of the forum state, but apply the procedural rules23 as stated in the Federal Rules of Civil Procedure.” Nereau v. City of Fresno etc, 39224 F.Supp.2d 1159, 1183 (E.D.Cal. 2005).25 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 17 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 6 While Defendant could have requested reconsideration pursuant to FRCP1 54(b), BOH was required by Civil L.R 7-9(a) to first seek leave of this Court. “No2 party may notice a motion for reconsideration without first obtaining leave of court to3 file the motion.” Id.4 Had leave been obtained, BOH was absolutely precluded from repeating “any5 oral or written argument.” L.R. 7-9(c). At page 41¶2 of its motion, BOH repeats the6 same argument. In Defendant BOH’s first motion to dismiss the complaint at pages 57 and 6, the “choice of law” argument proffered two grounds to show that the place of8 performance of the IOL should be in California: (1) the initial deposit agreement, and9 (2) Cal.U. Com Code §4102. Now, in a much more lengthy section (pages 3-5) of its10 second motion, other reasons which could have been raised initially have been11 added.12 None of these reasons justify circumventing Civil L.R. 7-9(a). Nor do the13 cases BOH cites support relitigating this issue. Frontier Oil Corp v. RLI Ins. Co.14 (2007) 153 Cal.App.4th 1436, 1443, 63 Cal.Rptr.3d 816 (cited at page 5 of BOH’s15 motion) stands for their proposition that if, as here, the contract does not expressly16 specify a place of performance, “the place of performance sometimes can be17 gleaned from the nature of the contract and the surrounding circumstances.” Id.18 Had BOH timely filed for leave of Court to make these arguments under Civil19 L.R. 7-9(a), it would have had to make the strong showing it fails to make here.20 While Civil LR 7-9(b) (1)-(3) would preclude BOH’s “governmental interest” test21 arguments, they fail for other reasons.22 23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 18 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 7 B. If Rehearing Were Allowed, BOH’s Arguments Fail1 2 BOH maintains, according to the SAC ¶4, a substantial presence in California3 and should be held accountable under California law for injuries caused by persons4 in California and protected by California law. BOH’s own identity theft policy is not5 suspended when victims are outside of Hawaii’s borders. SAC ¶13. Indeed, on6 August 29, 2006 BOH received instructions to mail and e-mail communications to7 Ms. Hisamatsu in Japan. SAC ¶25.8 Before BOH’s IOL form (SAC ex B) was faxed to San Francisco, Plaintiff9 telephoned BOH (from San Francisco) and asked a manager to wire funds to her10 account in San Francisco. SAC ¶s39, 43 and 46. By its terms, the IOL form was to11 be signed by Plaintiff and any funds belonging to Kaushal Niroula were to be wired12 to him, in California.13 Under the case cited at Defendant’s motion at 4¶2, BOH has completely14 failed to show “whether the relevant law of the potentially affected jurisdictions with15 regard to the particular issue in question is the same or different.” Emphasis added.16 Kearney v. Saloman Barney Inc. (2006) 39 Cal.4th 95, 107, 137 P.3d 914. Not one17 citation or statement of relevant law is identified in BOH’s motion (pages 3-4). BOH18 should not be permitted to cure this failed attempt at reconsideration by a reply,19 because Plaintiff would be unable to adequately respond, to her extreme prejudice.20 The same defect exists regarding the second (missing) prong of BOH’s21 unsupported governmental interest approach. Nowhere did BOH identify differences22 in the relevant law of Hawaii or California to allow this Court to examine “each23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 19 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 8 jurisdiction’s interest in the application of its own law and the circumstances of the1 particular case to determine whether a true conflict exists.” Id. Since there is2 absolutely nothing to support this step of the analysis, it would be highly prejudicial3 to Plaintiff if these failings were addressed in BOH’s reply.4 The third prong of the governmental interest approach, like a second,5 depends upon identification by the movant of the law allegedly in conflict. This Court6 and Plaintiff Megumi Hisamatsu are left to guess about what law is in conflict.7 Plaintiff cannot oppose the governmental interest argument because the law in8 alleged conflict is not identified. The third prong requires much more. “Third, if the9 court finds that there is a true conflict, it carefully evaluates and compares the nature10 and strength of the interest of each jurisdiction in the application of its own law ‘to11 determine which state’s interest would be more impaired if its policy were12 subordinated to the policy of the other state’” Id. Emphasis added.13 Curing these defects in BOH’s reply memorandum would raise new matter14 and is disallowed. “It is well established in this circuit at the general rule is that15 appellants cannot raise a new issue in their reply briefs.” Eberle v. City of Abaheim,16 901 F.2d 814, 818 (9th Cir. 1990). The same rule is reflected at the trial level in this17 Circuit. “(T)he Court… will consider the entire Reply to the extent that it replies to18 arguments raised in the opposition and does not raise new issues or introduce new19 information.” Sweet v. Pfizer, 232 F.R.D. 360, 364 (C.D.Cal 2005); Defazio v.20 Hollister etc, 406 F.Supp.2d 1085, 1090 (E.D.Cal.2005).21 Hawaii courts can handily reach out to California tortfeasors targeting an22 activity, as here, at the forum state. Shaw v. North American Title Co., 76 Haw. 323,23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 20 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 9 332 876 P.2d 1291 (1994). Releases, particularly those involving exculpation or1 forfeiture are a “traditional setting in which a State may act to protect the interests of2 its own residents while in their home state”. Kearney at 104 (citing Watson v.3 Employers Liability Corp, 348 U.S. 66, 72 75 S.Ct 166 (1954) (“The Court has in a4 series of cases held that more states than one may seize hold of local activities5 which are part of multistate transactions and may regulate to protect interests of its6 own people, even though other phases of the same transactions might justify7 regulatory legislation in other states”).8 Acceptance of the IOL was in California, so California law controls the9 determination of the IOL. Commander Door Inc. v. Dunsmuin Lumber Co., 197 F.2d10 513, 518 n.3 (9th Cir. 1952). The last act necessary to give the IOL binding effect11 took place in California, California law controls. Kussman v. Cross country Ban12 (2005) 134 Cal.App.4th 1283, 1299, 36 Cal.Rptr.3d 728, 740. As early as 1949, it13 was held that a contract sent from New York and accepted in California was, in all14 respects, completed in California. Hardy v. Musicraft Records Inc (1949) 9315 Cal.App.2d 698, 701, 209 P.2d 839. California law also governs contracts made in16 California and executed there in large part. Gruen Watch Co. v. Artists Alliance Inc.,17 191 F.2d 700, 703 (9th Cir. 1951).18 The modern approach of protecting California residents while they are in19 California does not differ for purposes here from protecting foreign nationals from20 violators of California law, while the nationals are in California. Butler v. Adoption21 Media LLC, 486 F.Supp.2d 1022, 1049 (N.D. Cal.2007).22 23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 21 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 10 C. No UCC §4-406(f) Preclusion1 1. Second Report To BOH Was Timely2 BOH argues that its non-negotiated, adhesive Deposit Agreement modified3 the one-year provision in the Uniform Commercial Code (UCC). If so, Plaintiff still4 complied with the shorter deadline.5 6 Cal.U.Com Code §4406(f) provides:7 “(f) Without regard to care or lack of care of either the customer or the8 bank, a customer who does not within one year after the statement or items9 are made available to the customer (subdivision(a)) discover and report the10 customer’s unauthorized signature on any alteration on the item is precluded11 from asserting against the bank the unauthorized signature or alteration. If12 there is a preclusion under this subdivision, the payer bank may not recover13 for breach of warranty under section 4208 with respect to the unauthorized14 signature or alteration to which the preclusion applies.”15 16 In this Court’s 1-10-08 Order at 8, the Court stated: “Ms. Hisamatsu does not17 allege that when she learned, on October 31, 2006, that Mr. Niroula had not honored18 his promise to repay her, she alerted BOH that she wanted to reassert her claim that19 the checks were unauthorized.” Based upon the missing allegation, the Court20 determined that “Ms. Hisamatsu did not notify BOH of the forgeries within the 6021 days required by the Deposit Agreement and any claims premised upon asserting22 those forgeries against the bank are precluded under Section 4406(f).” Id.23 In her Second Amended Complaint (SAC) filed 4-9-08, Ms. Hisamatsu24 supplied the allegation inadvertently omitted in the First Amended Complaint (FAC).25 She indeed alerted BOH promptly that Mr. Niroula had not honored his promise to26 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 22 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 11 repay her and that she wanted to reassert her claim that the checks were1 unauthorized. Specifically, at page 19 ¶47, 48 and 100, the SAC provides the2 material allegations, omitted earlier, which must be accepted as true with any doubt3 resolved in favor of the Plaintiff. NL Industries v. Kaplan, 792 F.2d 896, 897 (9th Cir.4 1986). The SAC is sufficient to defeat the UCC ¶4-406(f) preclusion where it states:5 6 “47. … Nonetheless Plaintiff reasonably believed that BOH would7 still keep its promise of 10-3-06 to pay the claims since the investigation, by8 now, was complete.9 48. Plaintiff called the bank during the November 2006, to10 specifically alert it that she wanted BOH to pay her claims for the unauthorized11 transactions. Ex “A”. The bank employee, Chester Dods, refused and told12 Plaintiff to go see a lawyer… Plaintiff explained to both BOH and the police that13 she participated in this transaction because BOH employees vouched for Mr.14 Niroula who had promised, in the final transaction (Ex B), to replace Plaintiff’s15 funds taken earlier…”16 17 Any doubt that the SAC’s allegations are not clear enough is dispelled by the18 SAC at ¶100:19 “At all times BOH had superior knowledge of the transactions in20 comparison to Plaintiff. Nonetheless, she gave sufficient telephone notice of21 rescission of Ex “B” to BOH within 14 days from her signature; and again, in22 writing on August 6, 2007.”23 24 2. Objection To Second Attempt At Rehearing25 26 At page 9, from ¶3 of BOH’s Mtn, it again attempts to re-litigate issues found27 against it in violation of the Court’s rules requiring prior leave of court. Civil L.R. 7-9.28 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 23 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 12 Repeating previous arguments disposed of by binding interlocutory orders burdens1 the Court, and is prejudicial to Plaintiff. Civil L.R. 7-9(a) fills the procedural gap left2 by FRCP 54(b) “but requires that a party first obtain leave of the district court before3 filing a motion to reconsider.” Walker v. Carnival Cruise Lines etc, 107 F.Supp.2d4 1135, 1137 (N.D. Cal 2007). Emphasis added. The precise reason that BOH is5 attempting repeatedly to “back door” reconsideration is because it cannot meet the6 test required to prevail. Id; also Civil L.R. 7-9 (b)(1)-(3).7 BOH is trying to force this Court to reconsider its arguments made at pages 88 and 9 of its first motion to dismiss which; like the present motion at 9, cites Story9 Road Flea Market Inc. v. Wells Fargo Bank (1995) 42 Cal.App.4th 1733, 1739, 5010 Cal.Rptr.2d 524.11 This Court specifically rejected the argument BOH attempts at page 9 ¶ (last)12 of its motion; that is “an untimely forgery claim does not merely preclude the section13 4-406 cause of action, but any and all claims, founded upon a forged drawer14 signature.” Emphasis, BOH’s.15 This argument unfairly attempts to have this Court reconsider pages 8¶1 of16 1/10/08 Order, which stated “On the other hand any claim that is not dependent17 upon proof of the forgery will not be precluded… although the customer will still be18 precluded from asserting the forgery in that claim.” (Citing Roy Supplies v. Wells19 Fargo (1995) 39 Cal.App.4th 1051, 1066, 46 Cal.Rptr.2d 309. Emphasis added.20 While the SAC has satisfied the notice requirements of both §4406 and the21 Deposit Agreement (as required by this Court’s Order at 8¶ 2), BOH’s attempt to re-22 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 24 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 13 litigate §4406 preclusion is an obvious effort to shift the focus from SAC ¶s47, 481 and 100, which are dispositive.2 D. Claims Attacking The Indemnification Agreement (Count 9-20 and 24)3 4 1. All Claims Are Sufficient5 6 Plaintiff incorporates, for this opposition argument the following portions of her7 motion for summary judgment filed 6/10/08: Page 1 ¶ III, pages 4-6 (without header).8 Plaintiff objects to BOH’s miscasting of the allegations in the SAC, which speak for9 themselves. Also objectionable at page 10 of the motion is BOH’s attempt to inject10 evidentiary matters i.e., “unknown to BOH…”11 BOH simply has the wrong standard for its motion. “The issue is not whether12 a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence13 to support the claims.” Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007).14 Emphasis added. This is not an onerous burden. “Specific facts are not necessary;15 the statement need only give the defendants fair notice of what the claim is and the16 grounds upon which it rests.” Ericson v. Pardus, __ U.S. __ 127 S.Ct. 2197, 220017 (2007) (minute detail not required); Skaff v. Meridien etc, 506 F.3d 832 841 (9th Cir.18 2007). “Concerns about specificity in a complaint are normally handled by the array19 of discovery devices available to the defendant. “ Id.20 21 2. All Of The Claims Attacking The IOL Are Legally Sufficient22 a. Count 9 Is Sufficient (Rescission/Undue Influence)23 Plaintiff realleges the foregoing arguments.24 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 25 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 14 At ¶97 and the SAC, Plaintiff fully complied with Cal.Civ.Code §1691(b),1 requiring her to restore everything of value she received from BOH; or an offer to2 restore. This paragraph is incorporated into each rescission count. Cases3 interpreting the section limit the restoration obligation. A Plaintiff, as here, is not4 required to restore property which is rightfully hers. Seeger v. Odell (1941) 18 Cal.2d5 409, 417, 115 P.2d 977 982. No property of BOH’s ever came into Plaintiff’s6 possession; nor in fact, into anyone else’s possession. There is no need to restore7 anything of value to BOH in this situation. Gluckstein v. Rappaport (1928) 928 Cal.App.236, 239, 267 P.939 941.9 Undue influence is a species of constructive fraud. Stewart v. Marvin (1956)10 139 Cal.App.2d 769, 775, 294 P.2d 114, 118. In the context of rescission based on11 fraud, one “is not required to restore that which, in any event, he would be entitled to12 retain.” Matleson v. Wagoner (1905) 147 Cal.739, 744, 82 P.436. This is a well-13 recognized rule. Where, as here, the thing received by Plaintiff is of no value; or14 where the contract is void, there is no requirement to restore anything to rescind.15 Demateis v. Vezu (1920) 49 Cal.App.453, 458, 193 P.793, 795.16 The statement of the claim at Count 9 provided fair notice to BOH that this17 claim for rescission is allowed in California ”where a contract is secured by undue18 influence”. Campbell v. Birch (1942) 19 Cal.2d 778, 791, 122 P.2d 902. “Undue19 influence consists… (2) In taking an unfair advantage of another’s weakness of20 mind; or (3) In taking a grossly oppressive and unfair advantage of another’s21 necessities or distress.” Cal.Civ.Code §1575.22 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 26 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 15 Since the first element of undue influence (confidence is reposed) was not1 alleged in the SAC, this Count was properly captioned “absent confidential2 relationship.” ¶96 Incorporated the prior ¶95 allegations into the SAC. See also SAC3 ¶97 and 102.4 Consistent with the pattern of requiring evidence, or of misreading allegations5 of the SAC, BOH states at 15 ¶(last) of its motion, “This claim fails because there is6 no evidence that BOH was aware of Niroula’s actions …” In stark contrast to this7 contention, the SAC (page 36 ¶99 clearly alleges “BOH knew Plaintiff would be8 ‘assisted’ by a party interested in, and conniving in the execution of the agreement;9 that is, a criminal in San Francisco, far away from BOH’s office.” At this stage of the10 pleadings BOH has sufficient notice of this claim.11 Discussions were taking place at unusual times and at an unusual place.12 BOH well knew that there were extreme pressures on Plaintiff to sign the IOL at13 once so that the rest of the transaction (wiring Niroula’s funds to Niroula) could be14 concluded. There was no time to consult an attorney and there was no one in San15 Francisco for Plaintiff to turn to under these pressured circumstances. This is more16 than sufficient to withstand BOH’s motion. Keithley v. Civil Service Bd (1970) 1117 Cal.App.3d 443, 89 Cal.Rptr.809. Indeed, BOH’s conduct is akin to obtaining a18 release by an insurance company from an accident victim in a hospital who was19 suffering from pain, worried by bills, and in a body cast. Weger v. Rocha (1934) 13820 Cal.App.109, 32 P.2d 417. There, as here, the consideration was lacking, or21 insufficient. This “consideration” from BOH was to release Mr. Niroula’s funds to Mr.22 Niroula.23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 27 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 16 The definition of undue influence “depends upon the facts and circumstances1 of each particular case.” Stewart v. Marvin, supra, 139 Cal.App.2d at 775, 294 P.2d2 at 118. BOH concedes it did nothing between the date it received notice of the3 forged checks (10/3/06) and the date Ms. Hisamatsu went to San Francisco to try to4 reclaim her money from the forger himself. BOH admits to the following grotesque5 lack of investigation during this crucial period. SAC ¶32. At page 9¶2 of BOH’s6 motion it states:7 “BOH’s investigation began by BOH accepting Plaintiff’s sworn8 forgery affidavits and suspending funds in Niroula’s account. Before it could9 proceed further, Plaintiff conducted her own ‘investigation’ …” Emphasis10 added.11 12 BOH at no time intended to either investigate the claims in the forgery13 affidavits (dated 10-3-06), or to pay the claims. Undue influence “is a species of14 constructive fraud which the courts will not undertake to define by any fixed15 principles, lest the very definition itself furnish a fingerboard pointing the path by16 which it may be evaded.” Id. The SAC ¶s incorporated into the rescission counts,17 taken as true, portray a devious, scheming bank, pressuring Plaintiff by doing18 nothing.19 ¶13 of the SAC quotes BOH’s Identity Theft Guide as providing “identity theft20 victims with responsive caring service from beginning to end… staff members will21 follow up with customers… so their concerns and issues are handled in a timely and22 caring manner.” Emphasis added.23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 28 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 17 When notified by Plaintiff that BOH had debited $508,000.00 in forged checks1 on an account barely 8 days old (when the first debit occurred), BOH refused to do2 anything unless Plaintiff flew from Japan to Hawaii. SAC ¶30. When Ms. Hisamatsu3 complied, BOH’s hidebound determination to do nothing became more apparent4 after Ms. Hisamatsu repeatedly requested (on 10-3-06) that BOH call the police.5 BOH refused. SAC ¶32. This request was repeated for over two weeks. SAC ¶35.6 At ¶83, incorporated into the rescission counts, the SAC states “BOH, its7 agents and employees, expressly aimed their efforts to coerce Plaintiff into signing8 the ‘Indemnification Of Liability’ at the State of California, its laws and processes.”9 10 b. Count 10 (Improper Third-Party Conduct)11 12 Plaintiff incorporates the foregoing arguments.13 Cal.Civ.Code §1689(b)(1) permits rescission if Plaintiff’s consent was given14 by “mistake or obtained through duress, menace, fraud or undue influence,15 exercised by… the party as to whom he rescinds, or of any other party… jointly16 interested with such party.” Emphasis added.17 Incorporated allegations of the SAC, taken as true, show that BOH18 employees working with a criminal (Niroula) helped Plaintiff open a personal19 checking account with BOH. SAC ¶19. Confidential information was passed easily20 from BOH to the criminal. SAC ¶19.21 When Plaintiff’s account was only eight days old, BOH began debiting Mr.22 Niroula’s forged checks freely against Plaintiff’s account. SAC ¶s 22-25, 28, and 29.23 Plaintiff was later informed that Mr. Niroula told BOH he would return Plaintiff’s24 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 29 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 18 money. SAC ¶34. A BOH employee handling her case told Plaintiff that Mr. Niroula1 was not a bad person and that he would return her money. SAC ¶35.2 Plaintiff was forced to go to San Francisco to try to recover the money Mr.3 Niroula stole from her “as a direct result of BOH’s statements in its claim forms and4 its indulgent conciliatory attitude toward defendant Kaushal Niroula…” SAC ¶42.5 Once there, BOH would not release Mr. Niroula’s funds to him unless Plaintiff signed6 the Indemnity Of Liability (IOL) form. SAC ¶45, 46. BOH’s employee handling the7 forgery case spoke frequently on the telephone with Mr. Niroula. SAC ¶48. They got8 along very well. Id.9 When BOH’s agents or employees prepared the IOL, they knew that Plaintiff10 was in San Francisco and ”with the assistance, encouragement and delay by BOH,11 Plaintiff was under the control of a criminal, who had just forged her name on12 $508,000.00 in BOH checks.” SAC ¶82. “BOH knew that Co-defendant Kaushal13 Niroula was present in San Francisco and was, at the same time, coercing Plaintiff14 to sign, and even notarize BOH’s IOL form (ex B)”. SAC ¶ 85. BOH knew Plaintiff15 would be “assisted” by a party interested in, and conniving in the execution of the16 agreement…” SAC ¶99.17 BOH refused to pay a valid claim and “instead maneuvered Plaintiff into a18 sham investigation which included direct contact with a known forger and thief.” SAC19 ¶89. Emphasis added. “After the agreement was signed by Plaintiff in San20 Francisco, BOH released the funds to co-defendant Niroula (SIC). “The Bank21 misrepresented Plaintiff’s money as ‘belonging to Kaushal Niroula’.” SAC page 3322 ¶95.D.23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 30 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 19 “(T)here is strong evidence that BOH and Mr. Niroula acted together toward1 the common goal of putting Plaintiff’s money into the check forger’s hands…” SAC2 page 35 ¶95.D. “(T)he release of funds and the participation by BOH in transferring3 those funds to Mr. Niroula at his request, in San Francisco amounted to money4 laundering…” Id.5 The foregoing facts, taken as true, were incorporated into Count 10 by SAC6 ¶103, page 37. That count provides “But for this material harm and prejudice caused7 by the misconduct of BOH, with the connivance of the third party, Plaintiff would not8 have given her consent, or signed the agreement.” SAC ¶108. “Plaintiff’s consent…9 was induced or caused by… Mr. Niroula as well as by BOH.” SAC ¶105. “At all10 times, BOH was aware of Mr. Nrioula’s connivance.” SAC ¶109.11 Undue influence involves multiple persuaders. Odorizzi v. Bloofield Sch. Dist12 (1966) 246 Cal.App.2d 123, 132, 54 Cal.Rptr.533.13 14 c. Rescission-Mutual Mistake OF Fact (Count 11) Is Sufficient15 16 The California Supreme Court has “held that a mutual mistake of fact17 concurred in by the parties invalidates a release.” O’Meara v. Haiden (1928) 20418 Cal.354, 358 268 P.334, 335 (action to recover for later discovered injuries in the19 face of a release). Here, BOH and Plaintiff discovered that Mr. Niroula deposited an20 NSF check to uphold his promise to repay Plaintiff if BOH released the funds21 belonging to Mr. Niroula.22 Cal.Civ.Code §1689(b)(1) includes mistake of fact as a ground for rescission.23 It is well settled that even if BOH or Plaintiff were negligent in failing “to know or24 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 31 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 20 discover facts as to which both parties are under a mistake does not preclude1 rescission or reformation because of the mistake.” Harris v. Rudin etc (2002) 952 Cal.App.4th 1332, 1342, 116 Cal.Rptr.2d 552, 559; Hil-Mac Corp v. Mendo Wood3 Prod. Inc (1965) 235 Cal.App.2d 526, 529, 45 Cal.Rptr.396, 398.4 Again, BOH’s MTN at 19 demonstrates a misreading of the SAC. The5 showing required for mutual mistake is the central fact that Mr. Niroula would not6 uphold his promise to pay Plaintiff. BOH’s attempt, at its MTN 19 ¶2, to disclaim7 knowledge that Niroula was supposed to repay Plaintiff as part of the deal is not8 supported by the SAC or by its own Indemnification form (ex B) to the SAC.9 Detailed SAC allegations supporting Count 10 are incorporated here by10 reference. The BOH employee “investigating” Ms. Hisamatsu’s claims told Plaintiff11 that Mr. Niroula was not a bad person and that he would return her money. SAC12 ¶34, ¶35. Afterward, Plaintiff was then forced to go to San Francisco to try to recover13 her money due to BOH’s indulgent and conciliatory attitude toward Mr. Niroula. SAC14 ¶39. BOH vouched for Niroula. SAC ¶42. BOH knew Plaintiff was in San Francisco15 under the control of a criminal, with BOH’s encouragement and delay. SAC ¶82,16 ¶89. Mr. Niroula and the bank employee investigating Plaintiff’s claims “spoke on the17 phone frequently about the matter and got along very well.” SAC ¶48. BOH had18 superior knowledge of the transactions in comparison to Plaintiff. SAC ¶100.19 Unquestionably, BOH was mistaken over the fact of Mr. Niroula’s promised20 performance in exchange for the release of his funds to him.21 22 d. Rescission-Material Failure Of Consideration (Count 12) Is Sufficient23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 32 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 21 Plaintiff realleges the foregoing arguments1 Blowing hot and cold, BOH now contends that it was the funds (not the BOH2 account) which were to be released to Mr. Niroula by BOH. Compare to BOH’s3 argument at page 1 of its MTN. Plaintiff agreed to release Niroula’s funds back to4 Niroula but did not ratify anything. SAC ¶45, ¶46. BOH’s secret intention was that it5 would assert that this agreement in the IOL form meant that Plaintiff ratified the6 forgeries. This would, the bank planned, forfeit Plaintiff’s claims against BOH. SAC7 ¶s 48. 82-84. 90, 91, 95.B, 95.D.8 “The foregoing of a legal right constitutes a consideration for a contract if the9 minds of the parties meet on the relinquishment of the right as a consideration.”10 World Svngs & Loan Assn V. Kurtz Co (1960) 183 Cal.App.2d 319, 327, 611 Cal.Rptr.665, 670. Emphasis added. Also, Enslow v. Von Guenther (1961) 19312 Cal.App.2d 318, 321, 14 Cal.Rptr.231, 233 (agreement does not use words13 indicating a compromise and from the evidence there was no mutuality).14 In addition to the paragraphs from the SAC, incorporated by SAC ¶113 into15 this count, there is the IOL form attached as Exhibit B to the SAC, which is16 dispositive. There was never a meeting of the minds because BOH’s undisclosed17 intention was that by withdrawing a forgery dispute with Mr. Niroula in exchange18 release of Niroula’s money to him, Plaintiff ratified the forgeries. Exhibit B of the19 SAC.20 Cal.U.Com Code §3403, Official Comment 2, however, required that21 ratification be shown by “express statements.” If, as BOH urges, the IOL results in a22 forfeiture of Ms. Hisamatsu’s claims for $508,000.00, the IOL does not support a23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 33 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 22 forfeiture. Rakestraw v. Rodriguez (1972) 8 Cal.3d 67, 73, 104 Cal.Rptr.57, 61, 5001 P.2d 1401, 1405.2 Mutuality is further lacking since ratification cannot be implied into the3 language of the IOL. This is because ratification is governed by agency principles.4 Cal.Civ.Code §3403 comment 3. As such, Cal.Civ.Code §2310 required that the5 ratification be formal and written. Van’t Rood v. County of Santa Clara (2003) 1136 Cal.App.4th 549, 571, 6 Cal.Rptr.746, 764.7 Further argument on the lack of a meeting of the minds for the IOL is8 incorporated herein by reference from Plaintiff’s companion summary judgment9 motion and pages viii, 1, 8-14, 16-19.10 11 e. Rescission-Failure Of Consideration-Fault of BOH (Count 13) Is Sufficient12 13 Plaintiff realleges the foregoing arguments.14 Taken as true, the SAC and ex B thereto sufficiently allege BOH drafted the15 IOL to represent to Plaintiff that Mr. Niroula’s money was being returned to him.16 17 f. Rescission-Unlawful Agreement (Count 14) Is Sufficient18 Plaintiff realleges the foregoing arguments.19 BOH concedes, by its failure to argue, that it asserts no indemnity claim from20 the IOL. BOH MTN 20 ¶5. BOH ignores its misleading caption and express language21 of indemnity in the IOL (SAC ex “B”). BOH next contends, without authority, that as22 long as the IOL can by implication be recast as a ratification, that Cal.Civ.Code23 §1668 somehow does not apply.24 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 34 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 23 As argued in ¶d, above (and incorporated here), there was no ratification1 agreed to, or offered, in the IOL. Cal.U.Com Code §3403 Official Comment 2;2 Rakestraw 8 Cal.3d at 73; Van’t Rood, 113 Cal.App.4th at 571. In further support of3 the foregoing the following pages from Plaintiff’s companion MSJ are incorporated4 herein by reference: viii, 10-21.5 6 g. Rescission (Void Consideration-Count 15) Is Sufficient7 Plaintiff incorporates the arguments in ¶f, above. Plaintiff incorporates the8 same pages in the MSJ.9 10 h. Rescission (Undue Influence/Known Vulnerability) Is Sufficient11 (Count 16)12 13 Plaintiff incorporates herein the foregoing arguments in ¶2.a (page 13),14 above. BOH took a grossly oppressive and unfair advantage of another’s necessities15 or distress. Cal.Civ.Code §1575. BOH knew Plaintiff was alone in San Francisco,16 being pressured by a thief and check forger (SAC ¶99) to sign an IOL drafted by17 BOH. At every turn, BOH took advantage of Plaintiff’s unfamiliarity with banking18 practices in the United States. SAC ¶30 (refusing to help her until she left Japan).19 BOH refused to call the police at Plaintiff’s request. SAC ¶32. By doing nothing,20 BOH forced Plaintiff to deal directly with the criminal to try to recover her money.21 SAC ¶s39, 85, 89. BOH’s goal of putting Ms. Hisamatsu in harm’s way was to avoid22 paying her valid claims. SAC exhibits A.1-A.9.23 24 i. Unilateral Mistake Of Fact Fall Of BOH (Count 17) Is Sufficient25 Plaintiff realleges the foregoing paragraphs and arguments26 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 35 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 24 Where, as here, BOH had reason to know of, and cause, Plaintiff’s unilateral1 mistake, the IOL must be rescinded. Donovan v. RRL Corp. (2001) 26 Cal.4th 261,2 282, 109 Cal.Rptr.2d 807, 824, 27 P.3d 702, 716.3 Before signing the IOL, Plaintiff was convinced Mr. Niroula was very wealthy.4 SAC ¶s15, 40.A. The BOH employee investigating her claims told Plaintiff that Mr.5 Niroula was not a bad person and he would return her money. SAC ¶35, ¶42.6 Indeed, prior to proposing that Plaintiff sign the IOL, BOH did not investigate the7 claims. SAC ¶s 32, 35 and 39. The BOH investigator and Mr. Niroula spoke with one8 another on the telephone frequently and got along well. SAC ¶48.9 BOH knew it should have retransferred Plaintiff’s stolen money back to her as10 early as 8-24-06, when BOH debited the first forged check to Plaintiff’s account.11 SAC ¶45. At that time, the consumer account had been open about eight (8) days.12 SAC ¶s18, 23.13 As a general matter, a company like BOH that conducts business in14 numerous states ordinarily is required to make itself aware of and comply with the15 laws of the state in which it chooses to do business. Kearney, supra, 39 Cal.4th at16 104. The indemnity form BOH provided to be signed by Plaintiff in San Francisco17 was, according to BOH’s motion at ¶f (pages 20 and 21), to secure ratification of Mr.18 Niroula’s forgery, and not to obtain indemnity. Typographically, by scrivener’s error,19 or oversight, BOH left out the required express terms which BOH had every reason20 to know were required. Donovan, 26 Cal.4th at 280. This omission is dispositive21 Any national bank, including BOH, is so well-versed in the UCC that BOH’s22 omission of express terms relating to ratification falls squarely into the standard of23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 36 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 25 “knew or had reason to suspect that a mistake had been made.” (Id) … or that BOH1 “caused the mistake.” Id. Clearly, Official Comment 2 to Cal.U.Com Code §34032 required that terms of ratification in the IOL be “express statements”. These3 statements were required to be in writing. Cal.Civ.Code §2310. Comment 3 to4 Cal.U.Com Code §3403 adds “ratification is governed by rules and principles5 applicable to ratification of authorized acts of an agent”. Since the checks were in6 writing, ratification terms had to be in writing. Est. of Stephens v. Williams (2002) 287 Cal.4th 665, 673, 122 Cal.Rptr.2d 358, 363.8 9 j. Rescission-Unilateral Mistake (Count 18) Is Sufficient10 The foregoing arguments are incorporated by reference.11 In the event this Court decides that BOH did not cause Plaintiff’s unilateral12 mistake, or that it did not know, or have reason to suspect a mistake had been13 made, Donovan 26 Cal.4th at 280 makes clear that California authorizes rescission14 for unilateral mistake on other grounds. Defendant’s analysis, including its footnote15 12 page 22 misreads Donovan. Count 17, supra, is not based on those other16 grounds due to BOH’s knowledge that there was a mistake and its efforts to benefit17 from it.18 This count, however, is based on the Supreme Court of California’s adoption,19 as law, the rule in Restatement 2nd Contracts 153(c) authorizing rescission for20 unilateral mistake of fact where enforcement would be unconscionable. Donovan 2621 Cal.4th at 28.22 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 37 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 26 Defendant’s unsupported argument prejudicially places the burden on the1 mistaken party to unearth unknowable information. BOH MTN at 23. Nowhere, did2 the California Supreme Court in Donovan require the car dealer to uncover3 inaccuracies in its own advertisements. Id 26 Cal.4th at 290, 292. As in Donovan,4 Plaintiff Hisamatsu’s “good faith, isolated mistake does not constitute the type of5 extreme case in which its fault constitutes the neglect of a legal duty that bars6 equitable relief.” Id. The fallacy of Defendant’s argument is best explained in7 Donovan at 281 where the need by the non-mistaken party to be aware of the8 rescinding party’s unilateral mistake was rejected by the Supreme Court.9 Defendant concedes that ratification is the central, if not the only issue in its10 IOL form. BOH MTN 20 ¶f. Ms. Hisamatsu sufficiently alleges, by incorporation at11 SAC ¶131, that the IOL left out any reference to ratification. See ex B (IOL) to the12 SAC; SAC ¶s 44 - 48, 81-84, 87, 90, 95.C page 33 (ratification).13 Plaintiff sufficiently alleges facts supporting the second element for this type14 of relief in Donovan 26 Cal.4th at 281. See SAC ¶133. The materiality of the effect on15 the agreed exchange meant that, by signing the IOL, BOH would refuse to pay16 $508,000.00 in claims to Plaintiff, based on information not typed into its IOL form.17 The third factor is sufficiently alleged at SAC ¶134 - ¶138 (Plaintiff did not bear the18 risks of this mistake). In Donovan the car dealership did not bear the risk of its19 mistake in advertising an automobile at a price it had not authorized. Likewise, Ms.20 Hisamatsu did not bear the risk of mistakenly signing an agreement bearing no21 express terms of ratification, required by law. Est of Stephens, supra, 28 Cal.4th at22 673.23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 38 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 27 BOH describes the benefit of its bargain as Ms. Hisamatsu “recanting and1 withdrawing her forgery claims.” BOH MTN 23. Likewise, the benefit of the2 customer’s bargain in Donovan was the acceptance of a Jaguar XJ6 at a price $8-3 $10,000 lower than market, even though the auto dealer had not intended the price4 listed in the ad. The salesperson stated “That’s a mistake.” Donovan 26 Cal.4th at5 267.6 BOH is not expected to admit that leaving out the required express terms of7 ratification was intentional. BOH will probably claim that the omission was8 inadvertant and it was unaware of it until Plaintiff brought it to BOH’s attention. This9 is squarely within the facts in Donovan 26 Cal.4th at 268, and it comports with10 Cal.Civ.Code §2314 (ratification may be rescinded when made with imperfect11 knowledge of material facts).12 Allocating the risk of the mistake to Ms. Hisamatsu is not allowed by Donovan13 because of her inability to second-guess BOH’s omitted express terms. Rescission,14 after Donovan, is not barred by any negligence on Ms. Hisamatsu’s part. 26 Cal.4th15 at 283. It is only “in extreme cases the mistaken party’s fault is proper grounds for16 denying… relief for a mistake that [she] otherwise could have avoided.” Id.17 This case is comparable to Donovan and other cases “authorizing rescission18 on the ground that enforcing a contract with a mistaken price term would be19 unconscionable.” Id 26 Cal.4th at 292. Likewise, it would be unconscionable to bar20 rescission of an indemnity or ratification agreement where a bank took advantage of21 a customer’s mistake, and the bank set the stage for the error in the first place.22 Donovan at 293.23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 39 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 28 Like Donovan, the Hawaii Supreme Court adheres to Restatement 2nd1 Contracts of §153. In Honda v. Bd Trustees ERS etc, 108 Haw 212, 219, 118 P.3d2 1155, 1162 (2005), the Court relieved a deceased retiree’s wife from the mistaken3 selection of the type of retirement on an application form.4 5 k. Rescission-Fraud In The Inducement (Count 19) Is Sufficient6 7 The foregoing arguments are incorporated herein by reference.8 Defendant BOH insufficiently briefs its objection to the SAC ¶s incorporated9 into this count by ¶141. BOH does not object to the ¶s, taken as true. It should not10 be allowed to add missing arguments and facts by reply.11 Ms. Hisamatus’s alleged neglect of any legal duty are fact questions for the12 jury. Williams v. Puccinelli (1965) 236 Cal.App.2d 512, 518, 46 Cal.Rptr.285. Gross13 negligence is required. M.F. Kemper Const. Co. v. City of L.A. (1951) 37 Cal.2d 696,14 702, 235 P.2d 7; French v. Construction Laborers Pension Trust (1975) 4415 Cal.App.3d 479, 487, 118 Cal.Rptr.731. Gross negligence means the want of even16 scant care or an extreme departure from the ordinary standards of conduct. Van17 Meter v. Best Construction Co. (1956) 46 Cal.2d 588, 594, 297 P.2d 644.18 But when fraud is intentional, a rescinding party’s negligence is no defense to19 the claim for rescission. Seeger v. Odell (1941) 18 Cal.2d 409, 414-415, 115 P.2d20 977. A misrepresentation justifies rescission if the misrepresentation is material.21 Wood v. Kalhaugh (1974) 39 Ka.App.3d 926, 930, 114 Cal.Rptr.673. Here, Ms.22 Hisamatsu would not have signed the agreement had BOH truthfully stated it was23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 40 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 29 her money (not a third party’s) which was being released in exchange for her1 promise, or that she was ratifying a forger’s signatures on her checks.2 Inducing Ms. Hisamatsu to sign the agreement (ex B to the SAC) by the3 intentional misrepresentation that something is true by BOH, which it did not believe4 to be true, is fraud. Cal.Civ.Code §1572. Fraud also includes the unwarranted5 assertion as true (that the funds belonged to Mr. Niroula) of something that is not6 true even if BOH believed it to be true. Cal.Cov.Code §1572.7 Since BOH was hiding the fact that it was releasing Plaintiff’s own money to8 Mr. Niroula to secure Plaintiff’s release of BOH, the consideration failed and this9 Court should properly cancel the agreement. Cal.Civ.Code §3412; Nichols v. Leach10 (1931 Dist 2) 114 Cal.App.545, 300 P.103, 105. The complaint is more than11 sufficient. Smith v. Williams (1961) 55 Cal.2d 617, 12 Cal.Rptr.665, 667 361 P.2d12 241.13 14 l. Tort In Essence Claim (Count 20) Is Sufficient15 Plaintiff realleges the foregoing arguments.16 Again, BOH misreads the SAC and attempts reconsideration of this Court’s17 choice-of-law decision without leave of Court. See BOH MTN at 24 ¶3 (“if the court18 determines that Hawaii law applies to the Indemnification agreement.” This Court19 has already made that determination. 1-10-08 Order at page 7 ¶1. See SAC ¶83.20 Civil L.R. 7-9(a) provides in part: “No party may notice a motion for reconsideration21 without first obtaining the court to file the motion.”22 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 41 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 30 This Court’s decision nearly 8 months ago was that “The Court therefore, will1 apply California law to interpret and determine the validity of the Indemnification2 Agreement signed by Ms. Hisamatsu.” 1-10-08 Order 7¶1. This is the law of the3 case. “A court is generally precluded” under this doctrine “from reconsidering an4 issue that has already been decided by the same court…“ United States v.5 Alexander 106 F.3d 874, 876 (9th Cir. 1997).6 Interlocutory decisions “are not intended as mere first drafts, subject to7 revision and reconsideration at a litigant’s pleasure.” Quaker Alloy etc v. Gulfco8 Indus. 123 F.R.D.282, 288 (N.D.Ill 1988).9 The standards for motions to dismiss preclude BOH’s remaining arguments.10 Courts presume that the general allegations embrace those specific facts that are11 necessary to support the claim. LSO Ltd v. Stroh etc 205 F.3d 1146, 1156 (9th Cir.12 2000). Plaintiff has sufficiently alleged tort in essence. South Bay Bldg Emt. Inc. v.13 Rirliera etc (1999) 72 Cal.App.4th 1111, 1123 85 Cal.Rptr.2d 647, 654 describes the14 tort:15 “A tort in essence is the breach of a nonconsensual duty owed another.16 Violation of a statutory duty to another may therefore be a tort and violation of17 a statute embodying a public policy is generally actionable even though no18 specific civil remedy is provided in the statute itself. Any injured member of19 the public for whose benefit the statute was enacted may bring the action”20 21 BOH’s tactic is to disregard the allegation in each claim which incorporates22 the prior paragraphs; particularly those in the section captioned “Factual Allegation’s23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 42 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 31 Incorporated Into Each Count” at page 3 of the SAC. Those and other paragraphs1 were all incorporated into the counts against BOH.2 The SAC alleges that BOH and Mr. Niroula spoke frequently on the phone3 together. SAC ¶48. Indeed, they seem to get along “very well”. Id. BOH’s sole4 purpose in preparing the IOL form was to forfeit Plaintiff’s claims against the bank.5 SAC ¶81. “Agents or employees of BOH knew the Plaintiff was in San Francisco,6 California; and, with the assistance, encouragement, and delay by BOH, Plaintiff7 was under the control of a criminal who had just forged her name on $508,000.00 in8 BOH checks.” SAC ¶82. Further, the deposit of the check for $890,000.00 by Mr.9 Niroula in San Francisco was material to BOH’s offering, in the IOL, to release Mr.10 Niroula’s funds to him. SAC ¶137.11 All the allegations are sufficient for this Count; if not, leave to add more facts12 by amendment should be granted.13 14 m. Declaratory Relief (Count 24) Is Sufficient15 Plaintiff realleges and incorporates the following pages from her companion16 motion for summary judgment: viii, 1, 4-21.17 18 E. Cal. Bus & Prof Code §17200 (Count 8) And Hawaii Unfair19 Competition (Count 26) Claims Are Sufficient20 21 1. §17200 Count22 Plaintiff incorporates the foregoing arguments.23 BOH’s extraterritorial issue is resolved partially by Diamond Multimedia etc v.24 Superior Court, 19 (1999) Cal.4th 1036-1063-64, 80 Cal.Rptr.2d 828, 968 P.2d 53925 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 43 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 32 (finding no constitutional impediment in permitting non-Californians a right of action1 under a domestic statute because California had a clear and substantial interest in2 preventing fraudulent practices in the state, or in extending state-created remedies3 to out-of-state parties harmed by wrongful conduct occurring in California.)4 Count 8, ¶83 clearly informs defendant “BOH’s out-of-state conduct caused5 injury to Plaintiff within the State of California“. The cases do not preclude §172006 claims when non-California residents are injured in California. Nor do the cases7 preclude §17200 claims when this type of injury is caused by an out-of-state8 resident. Northwest Mortgage Inc. v. Superior Court (San Diego) (1999) 729 Cal.App.4th 214, 222, 85 Cal.Rptr.2d 18 (“UCL… contains no express declaration10 that it was intended to regulate claims of nonresidents arising from conduct11 occurring entirely outside of California”). Emphasis added. More in point is Kearney12 v. Salomon Smith etc, supra, 39 Cal.4th at 120, which distinguished Norwest since13 conduct occurred in California, even though it was directed from another state. In14 Kearney, California residents’ telephone conversations were being recorded from15 outside the state. Those recordings, like the faxed IOL at Bar, were “effectively acts16 within California in the same way a person effectively acts within the state by, for17 example, shooting a person in California from across the California- Nevada border.“18 Id at 119.19 Defendant BOH did not show how Cal.U.Com Code §4406(f) provides a safe20 harbor for any of the numerous prohibited practices discussed above and alleged in21 the SAC. The deceptive IOL as applied, and on its face, has nothing to do with22 reporting forgeries to the bank by a deadline.23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 44 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 33 The statutes involved are at SAC ¶95. The activities involved were1 incorporated into this Count from the SAC, by ¶80.2 3 2. Hawaii UCL Claim Is Sufficient (Count 26)4 5 A personal checking account is an activity involving the conduct of any trade6 or commerce; and a personal checking customer is a consumer within the meaning7 of Hawaii Revised Statutes (HRS) §480-1. This is no different than a loan extended8 by financial institutions described in Haw Community Fed. Credit Union v. Keka, 949 Haw 213, 227 11 P.3d 1, 15 (2000). Any transactions by a financial institution are10 business transactions within the purview of Chapter 480. Id. Plainly, Ms. Hisamatsu11 was solicited to purchase services (checking account) by BOH. Community Fed,12 supra at n.13.13 Banking practices regarding interest calculations without disclosures violated14 HRS §480-2. Riopta v. Aresco etc, 101 Fed.Supp.2d 1326, 1332 (D.Haw. 1999)15 (citing Burrett v. Ala Moana Pawn (unpublished)).16 California permits UCL actions against banks as well. Perdue v. Crocker Bank17 (1985) 38 Cal.3d 913, 928, 702 P.2d 503, 513 (challenge to method of processing18 nsf charges and signature cards). See also Smith v. Wells Fargo Bank (2005) 13519 Cal.App.4th 1463, 38 Cal.Rptr.3d 653.20 21 F. The Conspiracy (Count 21) Is Sufficient22 Plaintiff realleges the foregoing arguments.23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 45 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 34 The elements of civil conspiracy are supported by the SAC. The respective1 SAC allegations are:2 1. Formation and operation of the conspiracy (SAC ¶s 158, 159, 163-3 166) and4 2. Damage resulting to Plaintiff (SAC ¶s 56- 58; 158, 165, 166),5 3. From a wrongful act done in furtherance of the common design (SAC6 ¶158-161, 163-165).7 Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1062, 128 P.3d 713, 722.8 9 G. Fraud (Counts 20 and 27) Are Sufficient10 1. Fraud In The Inducement Count11 Plaintiff realleges the foregoing arguments12 The SAC, taken as true, is sufficient as to count 19 (argument incorporated)13 as it is here.14 2. Promissory Fraud15 BOH's motion to dismiss the promissory fraud claim in the FAC was denied at16 page 14 of this Court's 1-10-08 Order. This resubmission, like all the other attempts17 at reconsideration, must be denied and stricken. Virgin Atl Airways Ltd v. Nt’l18 Mediation Bd, 956 F.2d 1245, 1249 (2d Cir. 1992).19 The salient allegations of Count 21 (page 45) in the FAC are substantially the20 same as Count 27 in the SAC (page 59). This Court's ruling on FAC Count 21 is the21 law of the case and binding on Count 27 of the SAC. As in the FAC, sufficient22 allegations are pled here. The elements are:23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 46 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 35 “The Regus court explained that ‘facts essential to the statement of a1 cause of action in fraud or deceit based on a promise made without any2 intention of performing it are: (1) a promise made regarding a material fact3 without any intention of performing it; (2) the existence of the intent at the time4 of making the promise; (3) the promises was made with intent to deceive or5 with intent to induce the party to whom it was made to enter into the6 transaction; (4) the promise was relied on by the party to whom I was made;7 (5) the party making the promise did not perform; (6) the party to whom the8 promises was made and was injured.”9 10 Muraoka v. Budget Rent-A-Car-Inc (1984) 160 Cal.App.3d 107, 117, 20611 Cal.Rptr.476 (cited by the Court at 14 fn10 of its 1-10-08 Order).12 13 H. Negligence Claims (Counts 25, 28, 32, 33, 34 and 35)14 Are Sufficient15 16 Plaintiff realleges the foregoing arguments. BOH forces Plaintiff to shadow-17 box. “(F)ederal courts are in agreement that the burden is on the moving party to18 prove that no legally cognizable claim for relief exists." 5 B Charles Wright et al.,19 Federal Practice & Procedure §1357 (3d ed 2004).20 As stated above, Cal.U.Com Code §4406(f) does not apply because Ms.21 Hisamatsu timely contacted BOH after Mr. Niroula’s check bounced, to reassert her22 claims. SAC ¶48. Even if, §4406(f) applied, any claim that is not dependent upon23 proof of forgery will not be precluded. Order at 8¶2.24 25 1. Wrongful Withholding Of Funds (Count 25) Is Sufficient26 Facts could be proved consistent with the allegations of the SAC that would27 entitle Plaintiffs to some relief.28 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 47 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 36 2. Negligent Misrepresentation (Count 28) Is Sufficient1 Arguments re Counts 19 and 22 are incorporated herein by reference.2 3. Gross Negligence (Count 32) Is Sufficient3 Facts could be proved consistent with the allegations of the SAC that would4 entitle Plaintiffs to some relief.5 4. Negligence (Count 32) Is Sufficient6 Neither the IOL or §4406(f) apply to this Count.7 5. Negligent Infliction Of Emotional Distress (Count 34) Is Sufficient8 Again, BOH misreads the allegations incorporated into each count, here, SAC9 ¶235. “An NIED claim is nothing more than a negligence claim in which the alleged10 actual injury is wholly psychic and is analyzed using ordinary negligence principles.”11 Kaho’ohanohano v. DHS, 117 Haw 262, 306, 178 P.3d 538, 582. This is similar to12 the California rule. Moon v. Guardian Prot Serv, (2002) 95 Cal.App.4th 1005, 1009,13 116 Cal.Rptr.2d 218, 220.14 15 6. Negligence Per Se (Count 35) Is Sufficient16 17 Plaintiff realleges the foregoing allegations of the complaint at SAC ¶239,18 including SAC ¶s 95.A-95.D. Ms. Hisamatsu provides sufficient detail to put BOH on19 notice of the statutory duties violated and the related factual bases. The violations of20 Hawaii statutes or statutory duties is evidence of negligence. Chainey v. Jensen, 121 Haw.App.94, 96, 614 P.2d 402 404 (App. 1980).22 The California violations in this Count have a much different standard. Sandi23 v. Muroc etc (1997) 14 Ca, 4th 1066, 1086, 60 Cal.Rptr.2d 263, 276 (“Evidence code24 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 48 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 37 section 669 creates a presumption of negligence arising from violation of a statute,1 but only if the person suffering the... injury... was one of the class of persons for2 whom the protection of the statute was adopted."3 The SAC at ¶s 95.A-95.D, 239 to 240 sufficiently alleges that Plaintiff is one4 of a class for whom the protection of the statutes was adopted.5 The purpose of the criminal statutes in SAC ¶240 is obviously to protect6 citizens from becoming victims of forgery, conspiracy, wire fraud, bank fraud, and7 money laundering. Indeed, the purpose of a bank is to prevent criminals from taking8 their money and property. Generally, criminal statutes protect society; specifically,9 they protect individuals from criminal acts. People v. Martinez (1999) 20 Cal.4th 225,10 236-237, 83 Cal.Rptr.2d 533, 973 P.2d 512 (kidnapping). The civil statutes in SAC11 ¶240 likewise protect individuals from being victimized by criminally indifferent or12 tortious banking practices.13 14 I. Conversion (Count 29) Is Sufficient15 16 Plaintiff realleges the foregoing arguments.17 Again, BOH misreads the SAC, particularly the incorporated paragraphs.18 Conversion is the act of exercising dominion over property inconsistent with the19 ownership of Plaintiff. Haigler v. Donnelly (1941) 18 Cal.2d 674, 681, 117 P.2d 331,20 335; Faulkner v. First Ntl Bank (1900) 130 Cal.258 62 P.463. Since there was a21 specific identifiable sum involved, money is properly the subject of a conversion22 claim. McKell v. Washington Mutual (2006) 142 Cal.App.4th 1457, 1491 4923 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 49 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 38 Cal.Rptr.3d 227, 255. Bank accounts are personal property. Kaichen’s Metal Mart1 Inc. v. Fezzo Cast Co. etc (1995) 33 Ca,.App.4th 8, 11, 39 Cal.Rptr.233, 234.2 Hawaii law follows California law, as to the elements of this tort. Brooks v.3 Nance etc, 113 Haw 406, 415, 153 P.3d 1091 (2007).4 5 J. Equitable Lien (Count 30) IS Sufficient6 Plaintiff realleges the foregoing arguments.7 “An equitable lien is a right to subject property not in possession of the lienor8 to the payment of a debt as a charge against that property.” County of Los Angeles9 v. Construction Laborers etc (2006) 137 Cal.App.4th 410, 416, 39 Cal.Rptr.3d 917.10 An equitable lien is imposed by a court as an equitable remedy. Id. The SAC11 sufficiently pleads this remedy.12 Equitable liens are recognized in Hawaii as well. S. Utsunomiya Enters v.13 Moomuko etc, 75 Haw 480, 501, 866 P.2d 951, 963 (1994).14 15 K. Constructive Trust (Count 31) Is Sufficient16 Plaintiff realleges the foregoing arguments.17 “A constructive trust is a remedy used by a court of equity to compel a person18 who has property to which he is not justly entitled to transfer it to the person entitled19 thereto.” Campbell v. Superior Court (2005) 132 Cal.App.4th 904, 921, 3420 Cal.Rptr.3d 68, 80.21 “A constructive trust is one way through which the conscience of equity finds22 expression when property has been acquired in such circumstances that the holder23 of the legal title may not be in good conscience retain the beneficial interest, equity24 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 50 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 39 may convert him into a trustee.” Ben Haw Inc. v. Kida, 96 Haw 289, 314, 30 P.3d1 895, 920 (2001).2 L. Intentional Infliction Of Emotional Distress (Count 23) Is Sufficient3 Plaintiff realleges the foregoing paragraphs.4 Banks and crime are two sides of a coin. The main purpose of a bank is to5 protect citizen’s property from thieves. BOH’s judicial admission is stunning:6 “BOH investigation began by BOH accepting Plaintiff’s sworn forgery7 affidavit and suspending funds in Niroula’s account. Before it could proceed8 further, Plaintiff conducted her own investigation …" page 9¶2 of BOH’s MTN.9 Emphasis added.10 BOH’s concern with this Count is that its conduct is not “beyond all bounds of11 decency in a civilized society." But see SAC ¶174 and ¶175, incorporating previous12 paragraphs for this count.13 During a crucial period from October 2, 2006 (SAC ¶29) to October 25, 200614 (SAC ¶4), BOH admittedly did not proceed further except to freeze Mr. Niroula’s15 BOH account. This torpor was calculated to both obstruct Ms. Hisamatsu’s claims16 against BOH and to force her to try to recover Plaintiff’s savings directly from the17 forger. SAC ¶s39, 42 - 46, 48.18 Incorporated facts supporting this Count are at arguments D.2.a and D.2.b19 (undue influence). BOH was obviously more concerned about not paying Plaintiff’s20 claim than aggressively getting law-enforcement involved and pursuing Mr. Niroula21 as a suspect. Ms. Hisamatsu was clearly not being treated as a victim under BOH’s22 own policies. SAC ¶13 and ¶89.23 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 51 of 52 ______________________________________________________________________ PLAINTIFF MEGUMI HISAMATSU’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT BANK OF HAWAII’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT - CASE NO. 3:07-cv-04371-JSW 40 Foisting a release on someone in Ms. Hisamatsu’s dire situation, largely1 caused by BOH (SAC ¶99) is sufficiently outrageous. So too, is opening the account2 with a third-party present and thereafter accepting large deposits and withdrawals3 within days, without the slightest intervention.4 In the related context of insurance, there is strong opposition to the use of5 delaying tactics to coerce vulnerable claimants. Fletcher v. Western Life Ins. Co.6 (1970) 10 Cal.App.3d 376, 404, 89 Cal.Rptr.78. Here, as in Fletcher, BOH used its7 vastly superior position to thwart Ms. Hisamatsu’s claims for her savings.8 BOH knew at the time Plaintiff was “particularly vulnerable to oppressive9 tactics on the part of an economically powerful entity." Id.10 Hawaii recognizes the following IIED elements (1) the act allegedly causing11 IIED was intentional or reckless (2) the act was outrageous, and (3) the act caused12 extreme emotional distress to another. Hac v. University of Hawaii, 102 Haw 92,13 106, 73 P.3d 46, 60 (2003).14 15 V. CONCLUSION16 Based upon the foregoing, the BOH’s motion must be stricken and/or denied.17 DATED: Honolulu, Hawaii, August 8, 2008.18 /s/ Stephen M. Shaw19 Stephen M. Shaw, Esq.20 Attorney For Plaintiff21 MEGUMI HISAMATSU22 23 P.O. Box 235324 Honolulu, Hawaii 9680425 Telephone: (808) 521-080026 Facsimile: (808) 531-212927 Email: shawy001@gmail.com28 Case 3:07-cv-04371-JSW Document 96 Filed 08/08/2008 Page 52 of 52