U.S. District Court for the NMI designated judge Consuelo B. Marshall has dismissed a lawsuit filed by United Micronesia Development Association Inc. against its former president and chief executive officer, David L. Wickline.<\/p>\n
In an order on Tuesday, Marshall dismissed with prejudice UMDA\u2019s claims for declaratory relief, fraud, and wrongful dilution. Dismissed with prejudice means UMDA cannot re-file the lawsuit.<\/p>\n
In the same order, Marshall dismissed without prejudice UMDA\u2019s claims for breach of fiduciary duty, unjust enrichment, and injunctive relief. The judge gave UMDA no later than Oct. 22, 2014, to submit an amended complaint.<\/p>\n
Dismissed without prejudice allows UMDA to re-file the case on those claims in the future.<\/p>\n
UMDA sued Wickline \u201cto protect its shareholders from dilution of their interests in the company, to recover substantial damages that UMDA discovered during the course of its investigation, and to stop Wickline from working behind the scene to undermine shareholder confidence.\u201d<\/p>\n
Wickline also sued UMDA, seeking monetary damages. The cases are now consolidated.<\/p>\n
Wickline, through counsel Colin Thompson, moved to dismiss UMDA\u2019s complaint.<\/p>\n
UMDA alleged three causes of action against Wickline: no right to any additional compensation, no right to travel pass or employment, and no right to UMDA stock options.<\/p>\n
In dismissing the declaratory relief claims, Marshall said such claims are \u201csuperfluous\u201d and unnecessary to settle aspects of a controversy that\u2019s already before the court.<\/p>\n
Accordingly, Marshall said the court declines to exercise jurisdiction over UMDA\u2019s declaratory action claims, and dismissed them with prejudice.<\/p>\n
With respect to the fraud claim, the judge ruled that a two-year statute of limitations applies to UMDA\u2019s claim.<\/p>\n
Marshall said that UMDA had specific opportunities to discover Wickline\u2019s alleged fraud well before January 2012, the expiration of the statute of limitations.<\/p>\n
Therefore, Marshall said, the court is not persuaded by UMDA\u2019s claim that its first reasonable opportunity to discover the purported fraud was in February 2012, when Wickline sought to exercise the disputed stock options.<\/p>\n
Marshall said UMDA further delayed bringing its fraud claim until the lawsuit was filed on Jan. 13, 2014.<\/p>\n
On breach of fiduciary duty claim, the judge noted that there are no specific factual allegations that Wickline breached his contract of service generally or failed to faithfully fulfill his other required duties.<\/p>\n
\u201cIn fact, plaintiff alleges that UMDA continued to utilize Wickline\u2019s services even after UMDA was allegedly made aware of Wickline\u2019s disloyalty,\u201d she said.<\/p>\n
Marshall said as a result of Wickline\u2019s disloyalty, UMDA pleads only that Wickline demanded 150,000 shares of UMDA stock for $5 per share, demanded an additional $600,000 in compensation, and demanded retention of the United Airlines travel pass until its expiration in 2018.<\/p>\n
Marshall said UMDA alleges that it refused to pay Wickline any of the severance and compensation he is now seeking.<\/p>\n
\u201cAssuming plaintiff\u2019s allegations are true, UMDA was not damaged by Wickline\u2019s alleged breaches of the fiduciary duty of loyalty,\u201d she said.<\/p>\n
On unjust enrichment claim, Marshall said that UMDA failed to allege that any of the compensation it paid Wickline resulted from or was related to Wickline\u2019s allegedly disloyal or fraudulent activities.<\/p>\n
On injunction relief matter, UMDA seeks to stop Wickline\u2019s communications with shareholders where he might challenge the position of current UMDA directors.<\/p>\n
Marshall said there is no allegation that Wickline\u2019s communications threaten UMDA\u2019s constitutional rights, or that a restraint of this speech is compelling.<\/p>\n
Marshall said the complaint fails to provide any facts upon which the court could conclude that UMDA is entitled to prior restraint of their former director\u2019s communications.<\/p>\n
With respect to dilution issue, UMDA alleges that UMDA and its shareholders were damaged by Wickline\u2019s \u201cself-dealing\u201d because his \u201cpurported 150,000 shares\u201d diluted the value of the shares of other UMDA shareholders.<\/p>\n
Marshall said UMDA\u2019s allegations are insufficient to state a claim.<\/p>\n
First, the judge said, the complaint alleges that UMDA did not award, nor honor, Wickline\u2019s alleged self-grant of stock options.<\/p>\n
Marshall said an award of stock options or dilution of shares is necessarily a corporation action, not an action that an individual director can orchestrate without the corporation\u2019s approval.<\/p>\n
Marshall said Wickline could not (and UMDA alleges he could not) award himself stock options.<\/p>\n","protected":false},"excerpt":{"rendered":"
U.S. District Court for the NMI designated judge Consuelo B. Marshall has dismissed a lawsuit…<\/p>\n","protected":false},"author":23,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[402,353,93,259],"class_list":["post-181407","post","type-post","status-publish","format-standard","hentry","category-local-news","tag-ceo","tag-colin-thompson","tag-district-court","tag-lawsuit"],"_links":{"self":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/181407","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/comments?post=181407"}],"version-history":[{"count":0,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/181407\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/media?parent=181407"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/categories?post=181407"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/tags?post=181407"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}