9th Circuit: Donald Flores’ claims for $200K TCD timely filed

The U.S. Court of Appeals for the Ninth Circuit has ruled that the claims of the late former Saipan mayor Donald G. Flores, that a bank breached the contract and violated the Commonwealth Consumer Protection Act in connection with his alleged time certificate of deposit in the amount of $200,000, were timely filed in court and so may proceed.

The Ninth Circuit reversed U.S. District Court for the NMI Chief Judge Ramona V. Manglona’s ruling that the clock on Flores’ claims started to run in 1999 when he visited the bank, so his right to sue had expired by 2011 when he filed the lawsuit.

The federal court held that Flores’ visit to Union Bank in 1999 and his inquiry—“how I get my money”—constituted a demand.

The 9th Circuit judges disagree.

The 9th Circuit judges said it is disputed whether Flores was requesting payment or merely inquiring about the process by which to redeem his time certificate of deposit.

The 9th Circuit judges said even if Flores requested payment, Union Bank did not refuse to pay him at that time.

The judges said instead, the bank simply told him to bring in his time certificate deposit, which was a conditional acceptance.

The judges said the statute of limitations did not begin to run until Flores’ demand was refused.

The 9th Circuit judges said although this is an issue of first impression in the CNMI, every court to consider what constitutes a “demand” in the context of suing on a certificate of deposit requires not only an unequivocal “demand,” but also a refusal.

The 9th Circuit judges concluded that that CNMI Supreme Court would follow the general rule and hold that a refusal is required to begin the statute of limitations after a demand for payment of certificate of deposit has been made.

Accordingly, the judges said, Flores’ claim did not accrue in 1999.

Attorney Juan T. Lizama, counsel for the administrator of Flores’ estate, told Saipan Tribune yesterday that their appeal was filed in late 2013, but it took a long time for the Ninth Circuit to hear the parties argue the merits.

“Sadly, during that wait, both Mr. and Mrs. Flores passed away so they are not able to witness the good news,” Lizama said.

Lizama said he looks forward to moving forward with this case so they can finally realize justice and get the Flores family their money back with appropriate interest as well as penalties for Union Bank’s unreasonable and irrational refusal to honor a clear contractual commitment, and for breaking the law meant to protect people from this sort of power-play against the bank’s small customers.

Flores sued Union Bank and First Hawaiian Bank for allegedly refusing to return the principal and interest earned on a certificate of deposit in the amount of $200,000 that he bought from the then-Union Bank Saipan branch in 1993.

In 2011, Union Bank sold all its assets and liabilities of its Saipan branch to FHB.

Manglona granted summary judgment to Union Bank on the ground that the statute of limitations bars Flores’ claims. The judge awarded attorney’s fees to defendants.

Lizama, counsel for the administrator of Flores’ estate, then appealed, asking the 9th Circuit to reverse the District Court’s ruling that the statute of limitations began to run in 1999.

Lizama argued that it took Mr. and Mrs. Flores nine years to find the certificate of deposit but when they did Union Bank refused to pay.

Lizama said all of the delay in this case since 2008 is the bank’s fault.

In the 9nth Circuit ruling, the judges said that on June 10, 2008, Flores wrote to Union Bank, formally requesting payment.

“This action was unequivocally a demand that was refused on Sept. 22, 2008, when the bank wrote back,” they said.

The judges hold that a cause of action accrued on that date and began the statute of limitations period.

Flores filed his lawsuit on Sept. 22, 2011, claiming breach of contract, unjust enrichment, negligence, fraud, and violation of the CNMI Consumer Protection Act.

In the CNMI, the statute of limitations for contract claims is six years. The period is four years for claims under the Consumer Protection Act. It is two years for tort claims.

The 9th Circuit judges hold that Flores’ contract claims and Consumer Protection Act claim are not barred by the statute of limitations; his tort claims are time-barred.

The judges upheld the District Court’s awarding attorney’s fees to defendants.

Judge Jay Scott Bybee concurred in part and dissented in part.

Bybee said the majority judges has stepped into the role of factfinder and decided that Union Bank did not refuse Flores.

“If the majority is unsure—as I am—that decedent demanded his money, I don’t see how the majority gets to decide that the bank didn’t refuse him,” Bybee said.

Bybee said the issues of demand and refusal should be decided by a jury.