The Words of the Spitz Family

Ruling on the UCI motion to dismiss the FFWP US case

Bob Spitz
July 8, 2012

The following is my analysis of the Court's ruling on the Motion to Dismiss that was filed by Preston [Hyun Jin Moon] in the US case.

This not a final ruling on the case, but it does reflect the decision of the Trial Judge on the law that is applicable to this case. This decision is extremely important to establish the legal framework for the case.

Preston has been banking on the Court dismissing most of these causes of action early. However, the Court has left all causes of action available to Unification Church. The Court has sustained all of the legal theories of the Church.

Bob Spitz

Ruling On the Motion to Dismiss

Judge Natalia M. Combs Greene has issued her ruling and Order with regard to the Motion to Dismiss the case filed by Family Federation for World Peace and Unification International (FFWP) and others against Preston Moon, UCI and its current Board of Directors. For all practical purposes, FFWP and Unification Church are the same entity with two different names.

FFWP filed this lawsuit in Superior Court of the District of Columbia with six different causes of action, generally seeking to gain back control of UCI and its assets and place it under the control of Directors who are loyal to FFWP. This case presents claims of Breach of Trust, Breach of Fiduciary Duty as Agent, and Breach of Contract among others. It is seeking to remove Preston Moon, Michael Sommer, Rick Perea, Jinman Kwak and Youngin Kim as members of the Board of Directors of UCI. It is also seeking reimbursement for any assets that were used for a purpose that was not approved by FFWP, such as the non-profit organizations under the control of Preston. The lawsuit seeks to hold each of the current members of the Board of Directors personally liable for any misconduct or misuse of these Trust assets plus attorney's fees and punitive damages.

Preston [Hyun Jin Moon] filed a motion to dismiss this case on the grounds that none of the causes of action are viable legal theories on which FFWP can prevail under any circumstances, including the facts alleged in the lawsuit. The essence of his motion was that UCI is a corporation, like any other profit corporation, there was a vote of the Board of Directors to remove two other Directors and he is now free to do whatever he likes with the assets of UCI and he has no obligation to comply with directions from FFWP, Reverend Moon or anyone else.

The Motion to Dismiss also claimed that there is no Jurisdiction over any of the individual defendants, such as Preston, Sommer, Perea, Kim and Kwak in the District of Columbia since none of them live or do business in DC. In deciding a Motion to Dismiss, all of the facts and information presented by Plaintiff, FFWP are assumed to be true. At trial, the Plaintiff must prove those facts, but many of the underlying facts of this case are not reasonably in dispute. The main purpose of a Motion to Dismiss is to have the Judge decide the legal framework that will be applied to the facts of the case.

The Unification Church and FFWP have prevailed against Preston's Motion to Dismiss. The legal framework set forth in all of the causes of action filed by Unification Church and Family Federation have all been upheld as valid causes of action and if the facts, as alleged, are proven to be true at trial, then Unification Church and FFWP are entitled to all of the relief that they are seeking, including the return of assets and the control of the Board of Directors of UCI.

It is fair to say that the Order of the Court on the Motion to Dismiss is 100% in favor of the legal arguments and the legal framework for the case established by Unification Church and FFWP and it is 100% against all of the arguments and legal issues that have been claimed by Preston Moon. Although Preston Moon has requested an Appeal of this decision, under DC law the Judge needs to approve that Appeal in order to go forward at this time. If that Appeal does go forward, it could lock in the Judge's ruling on these legal issues permanently and it would be very difficult for Preston Moon to successfully appeal these legal issues after Trial.

While this ruling on the Motion to Dismiss is not a final Judgment on the entire case, it means that if FFWP can prove the facts alleged in its Complaint, then it is entitled to prevail on each and every one of these causes of action and it is entitled to all of the relief that is being sought. The following is a description of some of the key points in Court's ruling. Keep in mind that this ruling is based on the assumption that FFWP will be able to establish all of the facts as alleged in the Complaint. However, the underlying facts of this case are not that much in dispute. It has been the position of Preston all along that he is legally entitled to take control of UCI and do whatever he wants, despite the fact that the leadership of FFWP and Reverend Moon object to his use of the assets.

This ruling is a total rejection of the entire legal framework that has been used to support all of Preston's actions as the Chairman of UCI and his claim that he does not need any approval from FFWP. This ruling states that if FFWP can establish the facts set forth in the Complaint, then the following conclusions can be reached at Trial:

* Preston is a co-trustee of a charitable trust that was formed for the exclusive purpose of supporting activities and programs approved by the Unification Church/FFWP.

* Preston improperly removed from the Articles of Incorporation of UCI, a statement that its specific purpose is to support the activities of the Unification Church, and he improperly replaced it with a provision that he can use these assets for any charitable purpose, including his own programs.

* It was wrong for Preston to delete this statement regarding the purpose of UCI and it is right for the Unification Church to insist that UCI funds be used only for the support of FFWP and other purposes that have been approved by FFWP.

* Preston cannot use any of the UCI assets to pay for the activities of his own organizations, as he has been doing.

* Preston does have a Fiduciary Duty to FFWP and that organization is the authoritative religious entity to which Preston can be held accountable.

* Preston's actions that are in contravention of the directions of the FFWP are wrongful and they are a breach of his duties and obligations to conduct himself as a Trustee for FFWP.

* The Court specifically acknowledged that Unification Church is believed to be a "Providential Organization" that has special significance for its members and the people who have donated this money. As a result, using the money for similar organizations, having similar goals and purposes is not the same thing as using the money for this Providential Organization.

* Preston has a fiduciary duty to act according to the relationship that has been historically established between FFWP and UCI and he is in the position of a Trustee over these assets that must be used exclusively for purposes that have been approved by FFWP.

* Preston is in breach of his fiduciary duties, if he spends any of the funds of UCI on charitable organizations that have not been approved by FFWP. He does not have the right or authority to separate UCI from FFWP and go his own way, without any obligation or responsibility to FFWP.

* Preston, as the Chairman of UCI and all of the members of its Board of Directors, are subject to the control of FFWP over the use of these assets and they do not have the freedom to choose to do whatever they want with those assets. They are obligated to use these funds to support the charitable programs approved by FFWP.

* UCI was originally established as a Trust fund to implement the goals and objectives of the founder of Unification Church, Reverend Sun Myung Moon. UCI has consistently followed the directions of Rev. Moon for the past three decades and the assets of UCI have been dutifully administered by its Board of Directors in accordance with his original intent. Preston knew this when he accepted his position on the Board of Directors and thereby accepted his responsibility and obligation to continue to follow the directions of his father in the use of these funds.

* There is an agency relationship between UCI and the Unification Church. Preston is the agent of Unification Church and must conform his actions to that servient role. He is in breach of his fiduciary duties to the Unification Church, if he attempts to make his own decisions without first consulting and obtaining approval from the Unification Church leadership and Rev Moon.

In addition, the court held that the other members of the Board of Directors of UCI -- Sommer, Perea, Kim and Kwak, can also be held personally liable if they have acted in contravention of their position as trustees. The Court has ruled that it does have jurisdiction over them as individuals and it can render a monetary Judgment against them, if they have approved the misuse of UCI funds.

The essence of the Court's ruling is that charitable organizations will be treated differently than ordinary profit corporations. The Board of Directors of UCI are trustees who are in a fiduciary relationship to FFWP and they must follow and obey and act in accordance with the purpose for which that Trust relationship was created. If these Trustees violate those fiduciary duties, they can be held personally liable. The Board of Directors of UCI must serve the purpose and objectives of FFWP and its founder, Reverend Moon. If not, they can be removed. 

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