9th Circuit affirms verdict favoring bank in suit to collect $200K TCD

The U.S. Court of Appeals for the Ninth Circuit has affirmed the federal jurors’ verdict that is favorable to the MUFG Union Bank in Derron Gerard Flores’ lawsuit to collect a $200,000 time certificate of deposit that his late father, former Saipan Mayor Donald Flores, had purchased in 1993.

The Ninth Circuit found that substantial evidence—specifically the testimony of Victoria Concepcion that the MUFG Union Bank repaired the deposit—supports the jury’s verdict.

Concepcion was then an employee of Union Bank on Saipan. Union Bank on the island was closed several years ago and is now known as MUFG Union Bank.

The Ninth Circuit found no plain error in the verdict form and also determined that U.S. District Court for the NMI Chief Judge Ramona V. Manglona properly rejected Derron Flores’ claim for “rollover” interest.

According to the Ninth Circuit ruling issued by Chief Judge Sidney R. Thomas and judges Consuelo M. Callahan and Morgan Christen last Thursday, the jury’s finding of no breach precludes any award of prejudgment interest.

The Ninth Circuit judges ruled that because Donald Flores based both his statutory claim and his breach of contract claim on the same conduct—MUFG Union Bank’s failure to return the deposit—the jury’s finding of no breach by the bank means that any error in the district court’s rejection of the statutory claim was harmless.

According to court documents, in March 2008, Donald’s wife, Cecilia, found the TCD original certificate.

Donald Flores filed the lawsuit in 2011. When he died in June 2014, Cecilia was appointed administratrix of his estate. Cecilia, however, died in September 2015. Their son, Derron Flores, continued the lawsuit as administrator of Donald Flores’ estate.

The lawsuit seeks to collect from MUFG Union Bank the principal and interest on the $200,000 32-day TCD 24 years after Donald Flores took it out at Union Bank on Saipan in 1993.

Donald Flores claimed damages is for the $200,000 TCD principal, plus $438 for the 2.5-percent interest on the principal for the 32-day time period, for a total of $200,438.

Manglona, who presided over the trial, ruled that Derron Flores may seek prejudgment interest on any damages that may be awarded in the trial.

On Nov. 13, 2017, the federal jurors found that Donald Flores and Union Bank did enter into a contract.

The jurors, however, determined that Donald Flores failed to prove by a preponderance of evidence that Union Bank breached the contract by failing to do something that the contract required it to do, without a valid excuse.

Juan T. Lizama is counsel for Derron Flores.

Attorneys Sean Frink and Catherine Cachero are counsels for Union Bank.

Derron Flores then appealed, asking the Ninth Circuit to reverse the jury’s verdict.

In the appeal, Derron Flores argued that the evidence at trial was insufficient to support the jury’s finding that the bank did not breach the parties’ contract.

In affirming the verdict, the Ninth Circuit said Derron Flores forfeited this argument by failing to challenge the sufficiency of the evidence in appropriate pre-verdict and post-verdict motions.

Derron Flores asserted error in the verdict form.

But the Ninth Circuit ruled that because Derron Flores did not raise his challenge to the verdict form in the district court, they review the verdict form for plain error.

Derron Flores argued that the verdict form shifted in him, the burden of proving the bank’s lack of an excuse for failing to perform its duties under the contract.

The Ninth Circuit, however, pointed out that the jury instructions made clear that the bank bore the burden of proving its defense that it had returned the deposit.

Derron Flores also argued that the district court erred in ruling that he is not entitled to “rollover” interest.

But the Ninth Circuit judges disagreed. The judges said the CD unambiguously provided a date detain for “maturity” (Oct. 12, 1993) and stated that it “earns no interest after maturity.”

The Ninth Circuit judges said Manglona correctly interpreted the CD under its plain terms consistent with CNMI law.

Derron Flores also argued that the district court erred in concluding that the issue of prejudgment interest was for the court, not the jury, to decide.

The Ninth Circuit judges, however, said Derron Flores would have been entitled to prejudgment interest only if he prevailed at trial.

Derron Flores finally challenged the district court’s ruling that Donald Flores’ claim under the CNMI Consumer Protection Act abated upon his death.

The Ninth Circuit judges said the CNMI Supreme Court’s decision in a precedent case supports Manglona’s conclusion that the statutory claim abated upon Donald Flores’ death.

According to court papers, Donald Flores purchased from Union Bank’s Oleai Branch a 32-day maturing $200,000 TCD on Sept. 10, 1993. The $200,000 that Donald used to purchase the TCD was originally derived from a check written payable solely to him in the amount of $288,000.

Donald received this $288,000 check as partial payment from a land transaction in which he leased agricultural homestead land in Laulau to some Korean investors.

Lourdes Deleon Guerrero, an employee of Union Bank at that time, assisted Donald Flores in purchasing the TCD on Sept. 10, 1993. Deleon Guerrero signed the TCD on behalf of the bank.

Donald Flores and his wife, Cecilia, left Saipan for Huntington Beach, California within a few days after Sept. 10, 1993, because Donald required medical consultation and treatment due to serious kidney problems.

From September 1993 to mid-1995, Cecilia remained in California for medical consultation and treatment. During this time, Donald Flores spent the majority of his time in California but returned to Saipan occasionally.

In 2001, Union Bank sold its CNMI and Guam assets and liabilities to First Hawaiian Bank and stopped doing business in the CNMI.

On June 10 and Sept. 1, 2008, Donald Flores, through a prior attorney, wrote a letter to Union Bank in California, stating that he had the original TCD in his possession and requesting that the bank redeem it.

On Sept. 22, 2008, Union Bank, through its office in California, responded that it had no record of the TCD and thus could not redeem it.