The federal court dismissed Wednesday a company’s claims against a man who maintains he is still president of the firm and is in a legal battle over their disputed $224,585 in a company’s savings account.
U.S. District Court for the NMI Chief Judge Ramona V. Manglona granted Wanzhong Yu’s motion to dismiss without prejudice Universal Group Development Inc.’s (Saipan) claims against him.
Manglona, however, allowed Universal Group to amend its complaint by May 21, 2015.
Universal Group, which used to operate the Hailan Market and Oriental Dumpling Restaurant on Saipan, is suing its former president and shareholder, Yu, for conversion and First Hawaiian Bank for breach of contract. Universal alleged that Yu and the bank blocked the company from gaining access to its $225,000 of its own funds from a business savings account.
Yu maintains he is still president of Universal and that he was detained in China for 22 months due to the political influence exerted by his former business partners, Mingnam Jin and Jinwei Guo, who are claiming they are the officers and directors of the company and that Guo is now the sole shareholder.
Yu asked the court to dismiss the claims against him.
In granting Yu’s motion to dismiss, Manglona said the first allegation—that Yu unlawfully removed funds from Universal Group’s account at FHB—lacks sufficient specificity to plausibly state a claim.
The judge said the pleadings do not specify any instance of Yu withdrawing funds from Universal’s FHB account, nor a reasonable time for such withdrawals.
Manglona said the pleadings do not even provide a ballpark figure for the amount of funds allegedly converted.
Manglona said Universal’s second theory of liability—that Yu kept corporate profits to himself at the expense of the other shareholders—must also fail.
“As Yu points out, the pleadings do not allege any harm to Universal,” said the judge, noting that Universal failed to respond to this argument.
Manglona said because the complaint does not allege that Yu misappropriated Universal’s resources, the court finds that Universal lacks standing to assert a conversion claim.
Universal’s third theory of liability—that Yu converted Universal’s bank account by asking FHB to freeze it—also fails to state a claim of conversion, she said.