Maria Verna Liza Sablan v. Sablan Corporation, Sablan Enterprises, Inc., Sablan Construction Co., Ltd., and Conrad Muna Sablan; Conrad Muna Sablan v. Maria Verna Liza SablanMaria Verna Liza Sablan v. Sablan Corporation, Sablan Enterprises, Inc., Sablan Construction Co., Ltd., and Conrad Muna Sablan; Conrad Muna Sablan v. Maria Verna Liza Sablan
On October 31, 2024, Plaintiff Maria Verna Liza Sablan (“Maria“) filed her First Amended Complaint in this action against her ex-husband—Conrad Muña Sablan (“Conrad“)—and three Defendant Corporations alleging violations of her rights based upon the Commonwealth of the Northern Mariana Islands (“CNMI“) Superior Court‘s division of Maria and Conrad‘s marital property in their divorce action. (FAC, ECF No. 33.) Now before the Court is Maria‘s Motion for Summary Judgment against Defendants Conrad, Sablan Corporation (“SC“), Sablan Enterprises, Inc. and Sablan Construction Co., Ltd. (“SCCL“), and Maria‘s Motion for Judgment on the Pleadings as to Conrad‘s
Maria and Sablan Enterprises, Inc. reached a settlement agreement and withdrew their Cross-Motions for Summary Judgment against one another the day before the motions hearing. (Not. of Settlement, ECF No. 82.) At the hearing, Maria and Sablan Enterprises read the terms of their settlement agreement into the record, and the Court heard counsel‘s arguments as to the remaining causes of action for which Maria seeks summary judgment: 1) declaratory judgment and injunctive relief against Defendant Corporations Sablan Corporation and Sablan Construction Co., Ltd. for recognition as a shareholder (see FAC 5); 2) conversion against Conrad (see id.); and 3) unjust enrichment against Conrad (see id. at 7). (Mins., ECF No. 83.) The Court also heard arguments regarding Maria‘s Motion for Judgment on the Pleadings as to Conrad‘s counterclaim for unjust enrichment based upon Maria‘s failure to pay her share of marital debts. (Id.) Having considered the briefs, the applicable law, and counsel‘s arguments, the Court now GRANTS IN PART Maria‘s Motion for Summary Judgment on her claims, and DENIES Maria‘s Motion for Judgment on the Pleadings on Conrad‘s counterclaim for the reasons detailed herein.
In the divorce action Sablan v. Sablan, FCD-DI Civil Action No. 03-0378 (“Divorce Action“), the Commonwealth Superior Court entered a decree of absolute divorce in November 2004, granting Conrad‘s petition for divorce from Maria. (Divorce Decree 1, ECF No. 75-1; D&O 2, ECF No. 24.) In June 2008, the Superior Court entered its Findings of Fact and Conclusions of Law (“FFCL“), which purportedly resolved issues related to “custody, property distribution and division of marital debts” in Maria and Conrad‘s divorce. (FFCL 1, ECF No. 33-1.) In relevant part, the FFCL found that all the stocks owned by Conrad in the three Defendant Corporations were marital property and divided them equally between Conrad and Maria. (Id. at 3–4.) Further, the Superior Court‘s FFCL identified $428,010.90 worth of marital debt, splitting the debts equally between Conrad and Maria. (Id. at 5.)
Fourteen years after the Superior Court decided the distribution of marital assets, Maria initiated this civil action. (See Compl., ECF No. 1.) Defendants moved to dismiss the Complaint, arguing that the FFCL does not constitute a final judgment in the Divorce Action, abstention is appropriate, and the Defendant Corporations did not receive due process because Maria brought this instant action before providing any notice of the FFCL to them. (See D&O 6–15.) The Court denied the Motion as to the causes of action against Conrad for conversion and unjust enrichment, finding that the FFCL constitutes a final order and that abstention was inappropriate.2 (Id. at 5.) However, the Court granted the Motion to Dismiss all claims against the Defendant Corporations, finding there were
After the issuance of the Decision and Order, the Court denied Maria‘s Motion for Reconsideration of its dismissal of her claims against the Defendant Corporations. (Mins., ECF No. 32.) Maria subsequently filed her First Amended Complaint, and Conrad filed a counterclaim against Maria (Conrad‘s Answer 6, ECF No. 38). Defendants then moved for
II. LEGAL STANDARDS
A. Summary Judgment
The court shall grant summary judgment when the movant “shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
The moving party bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “If a moving party fails to carry its initial burden of production, the nonmoving party has no obligation to produce anything, even if the nonmoving party would have the ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc., 210 F.3d 1099, 1102–03 (9th Cir. 2000) (internal citations omitted). When the moving party has met its burden, the non-moving party must present “specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting
B. Judgment on the Pleadings
“After the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings.”
“Judgment on the pleadings is properly granted when there is no issue of material fact in dispute, and the moving party is entitled to judgment as a matter of law.” Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009) (citing Heliotrope Gen., Inc. v. Ford Motor Co., 189 F.3d 971, 979 (9th Cir. 1999)). The court “must accept all factual allegations in the complaint as true and construe them in the light most favorable to the non-moving party.” Id. (citing Turner v. Cook, 362 F.3d 1219, 1225 (9th Cir. 2004)). To survive a motion for judgment on the pleadings, a complaint must contain sufficient factual matter so as to “state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is plausible on its face when the factual allegations allow the court to infer the defendant‘s liability based on the alleged misconduct. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The factual allegations must present “more than a sheer possibility of misconduct.” Id.
III. DISCUSSION
With Maria and Sablan Enterprises having settled their claims, the Court now addresses the remaining causes of action against Conrad, Sablan Corporation, and Sablan Construction Co., Ltd. for which Maria seeks summary judgment. For the following reasons, the Court 1) grants Maria‘s Motion as to the first cause of action for declaratory and injunctive relief against Defendants Sablan
A. Maria Is Entitled to Recognition as a Shareholder of Sablan Corporation and Sablan Construction Co., Ltd Based on the Initiation of this Action, Not the Issuance of the FFCL.
In the FAC‘s first cause of action, Maria alleges that she “is entitled to a declaratory judgment, declaring that she is a shareholder of the Defendant Corporations ... and that she holds shares in at least the amounts provided by the Superior Court in its Order3 . . . .” (FAC 5.) Further, the FAC alleges that Maria “is entitled to a mandatory injunction, commanding Defendant Corporations . . . to recognize Plaintiff as a shareholder . . . and to provide her henceforward with all the rights, notices and funds to which such a shareholder is entitled.” (Id.)
Maria moves for summary judgment on this cause of action, arguing that she “became a shareholder of the three corporate Defendants upon the property division in her divorce from Defendant Conrad[,]” and as this Court already recognized in its prior Decision and Order on
1. The Bylaws’ Registration Requirement Protects the Corporations from Recognizing Maria as a Shareholder Until She Presents Herself for Registration or Secures a Court Order Requiring the Corporations to Register Her.
Article IX, § 5 of the corporations’ bylaws outline each corporation‘s right to rely on “its books” in recognizing shareholders:
The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as owner. Registered shareholders only shall be entitled to be treated by the corporation as the holders in fact of the stock standing in their respective names. The corporation shall
not be bound4 to recognize any equitable or other claim to5 or interest in6 any share on the part of any other person, whether or not it shall have express or other notice therefore7, except as expressly provided by the laws of the state8 of incorporation.
(SC Bylaws 3, ECF No. 70-3; SCCL Bylaws 2–3, ECF No. 70-4.)
Maria recognizes that the registration requirement in the bylaws protects, “at most,” only SC and SCCL, not Conrad himself. (Maria‘s Reply 4.) However, she argues that not even SC and SCCL are protected in this case because the registration requirement in the bylaws applies only “except as expressly provided by the laws of the state of incorporation,” and the FFCL constitutes such a law. (Id. at 5.)
a. Legal Standard
Requiring registration of transfers of shares on the books of a corporation protects the corporation, “so that it may have the means of knowing at any time who . . . its shareholders are, and as such entitled to receive dividends, vote at corporate meetings, and otherwise participate in the management of the corporation . . . .” See 12 Fletcher Cyclopedia of the Law of Corporations § 5489 (updated 2025) (collecting cases). “Although a transfer of stock between individuals must be registered on the corporation‘s books to receive recognition by the corporation, an unregistered
a. Analysis
Assuming that the FFCL constitutes a law of the Commonwealth so as to fall within the Defendant Corporations’ bylaws’ exception to the registration requirement, the FFCL merely recognized the distribution of marital property—the corporate shares—between Conrad and Maria. (FFCL 3–4.) The FFCL did not order Conrad or the Defendant Corporations to register Maria on the corporations’ books, nor did it even formally declare Maria to be a shareholder of the corporations. The FFCL only decided the “property distribution” between Conrad and Maria, ultimately dividing the corporate stocks owned by Conrad equally between the two as marital property (Id. at 1, 3). “The [Superior] Court retain[ed] jurisdiction of th[e] matter for the entry of such further orders as it may deem fair and necessary.” (Id. at 6.)
Based on the FFCL‘s judicial partition, Maria could have at any time after the FFCL‘s issuance sought recognition as a shareholder by presenting herself for registration on the books. See e.g., Earthman‘s, Inc. v. Earthman, 526 S.W.2d 192, 196 (Tex. Civ. App. 1975) (“Subsequent to the entry of the divorce decree, Mrs. Earthman and her attorneys sought to have the stock which had been awarded to her transferred into her name on the corporate records of the three corporations.“). In the alternative, Maria also could have sought a court order—from the family court judge who distributed
2. The Bylaws’ Procedural Requirements for Effectuating Valid Transfers Recognized by the Corporations Apply to Transfers by Operation of Law and Are Not “Transfer Restrictions.”
Article IX, § 4 of SC and SCCL‘s bylaws discuss the transfer of stock in the corporations:
Shares of the corporation may be transferred by endorsement by the signature of the owner, his agent or attorney or legal representatives, and the delivery of the certificate; but such transfer is not valid except as to the parties thereto, until the same is so entered upon the books of the corporation as to show the names of the parties by whom and to whom transferred, the number of certificates, and the number or10 designation of shares and the date11 of transfer, and until the old certificates are surrendered and cancelled.
Maria characterizes Article IX, § 4 of the corporations’ bylaws—which provide that transfers are invalid “except as to the parties thereto” until the transfer is entered upon the books of the corporations—as a “transfer restriction” which does not apply to “transfers by operation of law.” (Maria‘s Reply 2–3.) Maria argues that “the transfer restriction at Section 4 of both corporations’ bylaws applies on its face only to transfers ‘by endorsement by the signature of the owner, his agent or attorney or legal representatives, and the delivery of the certificate.‘” (Id. at 2 (quoting the bylaws).)
a. Legal Standard
“Corporate stock is generally subject to division in an action for divorce or dissolution of marriage.” 11 Fletcher Cyclopedia of the Law of Corporations § 5102 (collecting cases). Under Commonwealth law, corporate bylaws “may impose restrictions on the transfer or registration of transfer of shares of the corporation.”
a. Analysis
Maria‘s cited authorities are inapposite because the corporate bylaws here do not limit the alienability of shares—they merely outline the procedural requirements for the corporations to recognize a valid transfer.12 Indeed, the bylaws expressly provide that transfers which do not follow
B. Summary Judgment on Maria‘s Conversion Claim Against Conrad Is Inappropriate.
In the FAC‘s second cause of action, Maria alleges that “[b]y retaining record ownership of the stock in the Defendant Corporations that was distributed to Plaintiff by the . . . [FFCL], and obtaining the profits and other benefits deriving from ownership of that stock, Defendant Conrad Sablan has taken Plaintiff‘s property, and wrongfully converted it to his own use.” (FAC 5.) The FAC also alleges punitive damages based on Conrad‘s conduct. (Id. at 6.)
Maria moves for summary judgment on this cause of action, but does not make any arguments specific to Conrad‘s liability for conversion. Instead, Maria combines her arguments against Conrad and Sablan Enterprises for the second through sixth causes to actions,14 ultimately arguing that as a holder of 750 shares of Sablan Enterprises, she is entitled to “damages and/or restitution” of $63,300.00 “on her claims against Sablan Enterprises and Conrad.” (Maria‘s MSJ and MJP 3–4.) Further, Maria argues that she is entitled to punitive damages from Sablan Enterprises and Conrad based on their conduct in the amount of $513,375.00. (Id. at 4–8.) In opposition, Conrad argues that Maria has not established that Sablan Enterprises recognizes her as a shareholder, challenges Maria‘s damages/restitution calculation because Conrad never received the cash alleged, and argues that punitive damages are inappropriate because he has not acted with “evil motive” or “reckless
1. Legal Standard
The Restatement defines conversion as “an intentional exercise of dominion or control over a chattel which so seriously interferes with the right of another to control it that the actor may justly be required to pay the other the full value of the chattel.” Restatement (Second) of Torts § 222A (1965).15 “Although a share of stock is intangible property, the Restatement provides that a share certificate, and the intangible rights it represents, can be the subject of a conversion.” 11 Fletcher Cyclopedia of the Law of Corporations § 5114 (updated 2025) (citing id. § 242).
Courts consider the following factors in determining whether a conversion as taken place: the duration or extent of the defendant‘s dominion or control over the shares; whether the owner demanded that the shares be turned over; the actor‘s intent to assert a right in fact inconsistent with the other‘s right of control; the actor‘s good faith; the extent and duration of the resulting interference with the other‘s right of control; whether the shares were sold; and the inconvenience and expense caused to the owner.
Id. (collecting cases). “In general, the conversion dates from the time when the shareholder, being entitled to the immediate possession of the shares or of the certificate, makes a demand for it that is refused.” Id. (collecting cases). However, “no demand is necessary where the taking of possession and
2. Analysis
The Court denies Maria‘s Motion for Summary Judgment on this cause of action for conversion against Conrad. Maria‘s sole argument is that Conrad‘s retention of record ownership over the corporate shares that the FFCL declared as her interest amounted to conversion. Although the FFCL established Maria‘s equitable ownership interest in the corporate shares, see 12 Fletcher Cyclopedia of the Law of Corporations § 5497 (updated 2025) (“unregistered transfer passes equitable title as between the transferor and transferee“); Milstead v. Bradshaw, 43 Va. Cir. 428, 1997 WL 33616661, at * 3 (Va. Cir. Ct. 1997) (final divorce decree transferred “an equitable ownership interest“), Conrad‘s continued retention of record ownership did not deprive Maria of her “dominion” over the shares absent evidence that she made a demand to Conrad for the share certificates which he refused. See Eureka Cnty. Bank v. Clarke, 130 F. 325, 326–28 (9th Cir. 1904) (affirming that defendant‘s actions amounted to conversion, depriving her of dominion over shares, after plaintiff demanded delivery of stock and payment of dividends and defendant refused). Maria has not presented any evidence of a demand and subsequent refusal, nor any evidence at all as to the possession of the share certificates at issue. Accordingly, the Court denies Maria‘s Motion for Summary Judgment, and this cause of action for conversion may proceed to trial.
In the FAC‘s sixth cause of action, Maria alleges that “[b]y retaining record ownership of the stock and obtaining the profits and other benefits deriving from ownership of the stock in Defendant Corporations, Defendant Conrad Sablan has unjustly enriched himself at Plaintiff‘s expense, entitling Plaintiff to restitution.” (FAC 8.) Maria does not allege punitive damages in relation to this unjust enrichment cause of action. (See id. at 7–9.) Similarly to Maria‘s summary judgment arguments with respect to the conversion cause of action, Maria moves for summary judgment on this unjust enrichment cause of action but does not make any arguments specific to Conrad‘s liability for unjust enrichment. (See Maria‘s MSJ and MJP 2.) The parties’ briefing on this issue is identical to that for the conversion cause of action, outlined supra § III.B.
1. Legal Standard
To state a claim for unjust enrichment under Commonwealth law, the claimant must show:
(1) the defendant was enriched; (2) the enrichment came at the plaintiff‘s expense; and (3) equity and good conscience militate against permitting the defendant to retain what the plaintiff seeks to recover.
Syed v. Mobil Oil Mariana Islands, Inc., 2012 MP 20 ¶ 41 (citing Restatement (Third) of Restitution and Unjust Enrichment § 1 (2011)).
“While the paradigm case of unjust enrichment is one in which the benefit on one side of the transaction corresponds to an observable loss on the other, the consecrated formula ‘at the expense of another’ can also mean ‘in violation of the other‘s legally protected rights,’ without the need to show that the claimant has suffered a loss.” Restatement (Third) of Restitution and Unjust Enrichment § 1
2. Analysis
The Court grants Maria summary judgment on her unjust enrichment claim against Conrad as to liability. As stated above, the FFCL established Maria‘s equitable ownership interest in the corporate shares. Supra § III.B.2. Despite Maria‘s equitable title to shares, Maria never received any dividend payments from Sablan Enterprises; Conrad did, as the registered owner of the shares that Maria held an equitable interest in. (Maria‘s MSJ and MJP 2–3; Gregory Ledger 2, ECF No. 64-1; Conrad Dep. 4, ECF No. 64-3; Corp. Reso. 2, ECF No. 64-4.)
However, genuine issues of material facts exist as to how much Conrad was unjustly enriched. Maria calculates restitution to be $63,300.00—the total value of dividends she was entitled to as a shareholder of 750 shares in Sablan Enterprises. (Maria‘s MSJ and MJP 3–4.) Her calculation is based on the $844,000 in value paid to all shareholders of record—$211,000 to the four individuals—in 2018 and 2019. (Id. at 3.) Aside from an initial $25,000 cash payment to Conrad on June 15, 2018 (Gregory Ledger 2), Conrad received subsequent dividends in the form of property transferred by Sablan Enterprises—the As Lito site—rather than as cash. (Conrad Dep. 4.) Maria‘s ultimate restitution calculation is premised upon the fact that on top of $25,000 in cash, Conrad received $186,000 value in the form of property from SE‘s dividends. However, the record shows that Conrad was only credited $135,500 towards his $200,000 purchase of the As Lito property as a dividend payment, not $186,000. (Corp. Reso. 2.) Thus, Maria‘s calculated total value of dividends is not sufficiently supported by
D. The Court Denies Maria‘s Motion for Judgment on the Pleadings as to Conrad‘s Unjust Enrichment Counterclaim.
Conrad‘s counterclaim alleges that Maria, by failing to pay . . . her just share of the marital debt in the amount of $214,005.45 as found by AJ Govendo, has unjustly enriched herself at [his] expense,” warranting an award of restitution to Conrad by Maria. (Conrad‘s Answer 6.) Maria moves for judgment on the pleadings on Conrad‘s counterclaim because he has failed to plead any facts demonstrating that Maria‘s enrichment came at his expense—one of the elements of an unjust enrichment claim under CNMI law. (Maria‘s MSJ and MJP 8–9.) Maria argues that “[e]ven if Maria has paid none of her share of the debts,” Conrad fails to state a claim for unjust enrichment because he “makes no allegation that he was forced to pay any more than his own share . . . .” (Id. at 9.) In opposition, Conrad asserts that he has “more than alleged a claim for unjust enrichment against the Plaintiff in this case” because he has stated the amount of his claim. (Conrad et al. Opp‘n 9–10.) In reply, Maria maintains that Conrad has failed to state a claim because there is no allegation that Conrad incurred damages. (Maria‘s Reply 8.)
1. Legal Standard
The legal standard for an unjust enrichment claim under Commonwealth law is articulated supra § III.C.1.
2. Analysis
IV. CONCLUSION
For the foregoing reasons, the Court GRANTS Maria‘s Motion for Summary Judgment on her first cause of action for recognition as a shareholder against the remaining Defendant Corporations and her sixth cause of action for unjust enrichment against Conrad as to liability only. The calculation
IT IS SO ORDERED this 27th day of October, 2025.
RAMONA V. MANGLONA
Chief Judge