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?fl22 MAY 17 PM 2: It r ‘r ‘( !fl LL1’ U --‘-‘y 2 BY___ —
3 IN THE SUPERIOR COURT OF GUAM 4
5 888 GUAM LLC dba Civil Case No. CV0680-19 CLEAN SHOT GUAM, 6 Plaintiff,
7 VS• DECISION AND ORDER Plaintiffs Motion for Attorney’s fees and Costs 8 JASON PAUL CASTRO CAMPOS and 9 GINA ANN P. CAMPOS,
10 Defendants.
11 INTRODUCTION 12 This matter came before the Honorable Arthur R. Barcinas on March 1, 2022, for a
13 hearing on 888 Guam LLC dba Clean Shot Guam’s (“Plaintiff’) Motion for Attorney’s Fees
14 and Costs. Plaintiff was represented by Attorney Minakshi V. Hemlani. Defendants Jason Paul
Castro Campos and Gina Ann P. Campos (“Defendants”) were represented by Attorney Mark 15 Williams. Afier considering the pleadings, oral arguments, and applicable law, the Court 16 GRANTS Plaintiffs Motion for Attorney’s fees and Costs.
17
18 1 BACKGROUND
This case arises from Plaintiffs Verified Complaint for Specific Perfonriance and
Alternatively for Breach of Contract filed on May 31, 2019. The Verified Complaint concerns 3 an option to purchase real property described as 3 11 Monessa Lane, Pago Bay, Chalan Pago
(“Property”) executed by the parties on or about July 25 and 26, 2014. See V. Compl. ¶5 (May
5 31,2019).
6 On July 8, 2019, Defendants filed a Notice of Bankruptcy indicating that they filed a
voluntary petition for bankruptcy in the U.S. Bankruptcy Court, District Court of Guam
(“District Court of Guam”). As a result, proceedings in the instant case were stayed pursuant to 8 ii U.S.C. § 362.
9 About a year later, on July 6, 2020, Plaintiff filed a Notice of Bankruptcy Case 10 Dismissal indicating that Defendants’ bankruptcy case was dismissed. Plaintiff served a copy
11 of the Notice via certified mail to Defendants’ last known address on July 7. 2020. A status
12 hearing was held on September 29, 2020, where neither Defendants nor their counsel appeared.
The next day, September 30, 2020, Plaintiff filed a Motion for Entry of Default and Judgment, 13 which was served on Defendants’ counsel via email. Then on October 7, 2020, an Entry of 14 Default was entered by the Clerk of Court.
Defendants filed their Answer and Counterclaim in the instant case on October 22, 16 2020. Then on October 30, 2020, Defendants filed an Opposition to the Motion for Default.
17 Plaintiff filed its Reply on November 11, 2020. A hearing on Plaintiffs Motion for Default
was held on December 3, 2020. After taking the matter under advisement, the Court issued a 18 Decision and Order granting Plaintiffs’ Motion for Entry of Default Judgment on December 19 30, 2020. The decision upheld the Entry of Default entered by the Clerk of Court, and ordered 20 Defendants to perform their obligations under the Lease/Purchase Agreement and convey
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1 marketable title to the Property. The Court also ordered that Defendants’ Answer and
Counterclaim be stricken from the record. See Decision & Order p. 6 (Dec. 30, 2020).
2 On March 11, 2021, Defendants filed a Motion to Set Aside Default Judgment. Plaintiff 3 filed its Opposition on April 5, 2021. Defendants filed their Reply on April 22, 2021, and 4 Plaintiff filed its Surreply on May 24, 2021. A hearing on Defendants’ Motion to Set Aside
5 Default Judgment was held on May 26, 2021. where the Court took the matter under
6 advisement. On August 11, 2021, the Court issued its Decision and Order wherein it denied
Defendants’ Motion to Set Aside Default Judgment, and again ordered Defendant to
specifically perform their obligations due under the Lease/Purchase Agreement and convey $ marketable title to the Property to Plaintiff by General Warranty Deed. Decision & Order p. 9 9 (Aug. 11, 2021).
On September 22, 2021, Plaintiff filed a Request for Hearing to Finalize Purchase Price 10 . . .
11 where it included an accounting for the reimbursement of attorney’s fees and costs. See Pl.’s
12 Req. For Hearing p. 3 (Sept. 22, 2021). On December 2$, 2021, Defendants filed their
Objection to Plaintiffs Attorney Fee Request. On January 3, 2022, Plaintiff filed a Motion for 13 Attorney’s Fees and Costs. Defendants filed their Opposition to Plaintiffs Motion for 14 Attorney’s Fees on January 31, 2022. Plaintiff filed its Reply on February 14, 2022. A hearing 15 on Plaintiffs Motion for Attorney’s Fees was held on March 1, 2022, and the Court took the
16 matter under advisement.
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1$
DISCUSSION 2 I. The Court may award reasonable attorney’s fees and costs to Plaintiff as the 3 prevailing party pursuant to the Lease/Purchase Agreement.
4 Guam follows the American rule for attorney’s fees in civil cases. Fargo Pacific, Inc. v.
Korando Corp., 2006 Guam 22 ¶ 49; citing Fleming v. Quigley, 2003 Guam 4 ¶ 7. Generally,
“the American rule is that each party bears its own expenses of litigation, including attorney’s 6 fees.” Id. Guam also recognizes the exception that attorney’s fees are allowed where they are
provided for in a contract. Id,; citing Mobil Oil Guam (“Mobil ‘), Inc. Tendido, 2004 Guam 8 7 ¶ 43 49. When an exception applies, fee-shifling is allowed. Fleming, 2003 Guam 4 ¶ 7.
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9 a. Contract Exception
Here, Paragraph 21(e) of the Lease/Purchase Agreement provides that “[i]n the event 10 that any legal proceeding is brought to enforce any right or obligation under this Lease/Option 11 the prevailing party shall recover its reasonable court costs and attorney fees from the non-
12 prevailing party.” See V. Compl. Ex. A (May 31, 2019). The Lease/Purchase Agreement is a 13 contract executed by the parties, which includes language allowing the prevailing party to
14 recover reasonable costs and attorney fees. As such, the contract exception to the American
15 rule applies here. The Court now turns to identify the prevailing party.
b. Prevailing Party 16 “Generally, the prevailing party to a suit, for the purpose of determining who is entitled 17 to attorney fees, is the one who successfully prosecutes the action or successfully defends 18 against it, prevailing on the merits of the main issues.” Rahmani v. Park, 2011 Guam 7 ¶ 61;
19 see also Guam Mem ‘1 Hosp. (“GMH’) v. Civil Serv. C’omm ‘n, 2015 Guam 18 ¶ 46
20 (“Generally, the prevailing party to a suit, for purposes of entitlement to recovery of costs in a
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1 contested case, ordinarily means the party achieving a favorable judgment.”) Making the
determination of whether a party prevailed “requires the trial court to look at the lawsuit as a 2 whole.” GMH, 2015 Guam 18 ¶ 46.
3 Here, the record reflects three instances indicating that Plaintiff is the prevailing party.
First, after Plaintiff filed the Notice of Bankruptcy Case Dismissal on July 2, 2020, the Court
held a status hearing on September 29, 2020, where Defendants and defense counsel failed to
6 appear. This led Plaintiff to file its Motion for Entry of Default and Judgment on September
30, 2020. Then, on October 7, 2020, an Entry of Default was entered by the Clerk of Court.
Second, on October 22, 2020, Defendants untimely filed their Answer and $ Counterclaim in the instant case. About 23 days after the Default was already entered, 9 Defendants filed their Opposition to Plaintiffs Motion for Default on October 30, 2020. On 10 December 30, 2020, the Court issued its Decision & Order in favor of P1aintiff wherein it
11 upheld the Entry of Default Judgment entered by the Clerk of Court, and ordered Defendants’
12 Answer and Counterclaim be stricken from the record.
Third, on March 11, 2021, Defendants filed a Motion to Set Aside Default Judgment, 13 and a hearing on the motion was held on May 26, 2021. After taking the matter under 14 advisement, the Court issued its Decision and Order in favor of Plaintiff wherein it denied 15 Defendants’ Motion to Set Aside Default Judgment, and ordered Defendants to specifically
16 perform under the Lease/Purchase Agreement. In light of the circumstances the Court finds that
17 Plaintiff is the prevailing party and is entitled to reasonable attorney’s fees and costs pursuant
to the parties’ Lease/Purchase Agreement.
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II. Plaintiffs attorney’s fees are reasonable and an across-the board fee reduction is not warranted.
2 The American rule has attained “common law” status in the United States, and it has
3 developed as part of the American jurisprudence both at the federal and state levels. Fleming,
2003 Guam 4 ¶ 13. While the Guam Supreme Court has adopted the American rule for
attorney’s fees, it has not yet addressed the method for determining the reasonableness of
attorney’s fees. As such, this Court finds federal case law to be highly persuasive authority in its 6 analysis.
“It is well established that the determination of what constitutes reasonable attorney fees
8 is committed to the discretion of the trial court.” United States for use and benefit of Forges
9 Electrical Group, Inc. (“Froges Electrical ‘) v. Travelers Casualty and Surety, 2022 WL
1125377 *5 (D. Guam 2022); citing FLCM Grp. v. Drexler, 22 Cal. 4th 1084, 1096 (Cal. 2000).
10 Courts used the “lodestar method” to determine the reasonableness of the requested attorneys’
11 fees and costs. Forges Electrical, at *5: citing Hensley v. Eckerhar, 461 U.S. 424, 433 (1983).
12 “The ‘lodestar’ is calculated by multiplying the number of hours the prevailing party reasonably 13 expended on the litigation by a reasonable hourly rate.” Id.; citing Ferland v. Conrad Credit
14 Corp., 244 f.3d 1145, 1149 n.4 (9th Cir. 2001); see also S.i Gargrave Syndicate at Lloyd’s v.
15 Black Const. Coip., 2006 WL 1815325, at * 2 (D. Guam 2006). Once the court has established
the number of hours reasonably expended, the court must determine a reasonable hourly rate by 16 considering the experience, skill, and reputation of the attorney requesting the fees. Froges
Electrical, at *5; citing Chalmers v. City of Los Angeles, 796 F.2d 1205, 121 (9th Cir. 1986).
18 Other factors the court may consider include:
19 (1) the time and labor required, (2) the novelty and difficulty of the questions, (3)...(4),
the preclusion of other employment by the attorney due to acceptance of the case, (5) the 20 customary fee, (6) whether the fee is fixed or contingent, (7) time limitations imposed by the client or the circumstances, (8) the amount involved and the results obtained, (9)
1 (10) the “undesirability” of the case, (11) the nature and length of the professional relationship with the client, and (12) awards in similar cases.
2 Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975).
3 Here, Defendants do not contest that Plaintiff counsel’s rates are unreasonable. Defs’
Opp’n p. 3 (Jan. 31, 2022). Instead, Defendant’s contend that “what makes Plaintiffs requested
attorney fees unreasonable is that the rounding up, block billing, and vague entries show that
counsel’s reported number of hours is likely inflated and leaves the court unable to evaluate the 6 utility of the hours purportedly spent in the case.” Id.
The Court disagrees. After a close review of Plaintiffs invoices it does not appear that
$ Plaintiffs counsel engaged in excessive billing, or a pattern of rounding up, block billing, or
9 vague entries. See Hemlani Second Supp. Decl. Ex. 1 (Mar. 2, 2022). The Court is satisfied that
the invoices provide enough evidence to reflect that (1) an invoice was made at the end of every 10 month since the inception of the case, (2) the monthly invoices identify the case matter in which 11 the attorney’s fees and costs were incurred, and (3) that Plaintiff counsels’ attorney fees and 12 costs rise and fall in accordance with the timeline of the proceedings and motions before this 13 Court and the bankruptcy court. The fact that Plaintiff counsel’s attorney fees rise and fall
14 accordingly defeats Defendants’ contention that Plaintiffs counsel “likely inflated” her hours.
15 See Defs’ Opp’n p. 3 (Jan 31, 2022). Therefore, based on the invoices, which sufficiently reflect
the amount of time Plaintiffs counsel spent on enforcing Plaintiffs rights under the 16 Lease/Purchase Agreement, coupled with Defendants’ non-contention that Plaintiff counsel’s 17 rates are unreasonable, the Court finds that Plaintiffs requested attorney fees are reasonable and 1 a reduction is not warranted.
III. An award of attorney’s fees for the related bankruptcy case is permitted by the Lease/Purchase Agreement.
2 Defendants argue that Plaintiff may not recover attorney fees and costs for the
3 bankruptcy case because an award is not authorized by the Lease/Purchase Agreement. See
Defs’ Opp’np. 8 (Jan. 31, 2022).
In the Mobil case, the Guam Supreme Court addressed the effect of a contractual lease
provision for attorney’s fees and what it means to enforce a right under such lease. The lease in 6 Mobil stated, “in the event of judicial proceedings by either party against the other to enforce
any of its rights hereunder, the party in default will pay the other party’s reasonable attorney’s
8 fees and cost of suit.” Mobil, 2004 Guam 7 ¶ 43. The appelle was seeking declaratory relief Id.
9 ¶ 45. However, the appellant, construing the language of the lease narrowly, argued that actions for declaratory relief are not authorized under the lease provision because such actions 10 are not brought to enforce a party’s rights under a contract. Id. ¶ 47. The Supreme Court 11 declined to adopt such a narrow interpretation of the lease provision and held that attorney’s 12 fees were recoverable pursuant to lease provision because the lease was the source of the 13 underlying action and was central to the controversy. Id. ¶ 48 (emphasis added).
14 The Mobil case suggests that contractual provisions allowing for the recovery of
attorney’s fees in an action to enforce a party’s rights are to to be interpreted broadly.
Therefore, the question of whether Plaintiff may recover attorney’s fees for the bankruptcy 16 case pursuant to the Lease/Purchase Agreement turns on (1) whether the Lease/Purchase 17 Agreement is central to the controversy, and (2) whether Plaintiff was enforcing its right under 18 the Lease/Purchase Agreement in the bankruptcy case. The Court addresses each inquiry in
19 turn.
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1 a. Whether the Lease/Purchase Agreement is central to the controversy in the bankruptcy case 2 Here, the Lease/Purchase Agreement and the Property described therein are central to
3 the dispute in the instant case. See V. Compi. ¶ 5, Ex. A (May 31, 2019). The same are central
to the dispute in the bankruptcy case. Specifically, the dispute in the bankruptcy case involved
a mortgage on the subject Property. See Hemlani Supp. Deci. Ex. 1, 1-A (Jan. 5, 2022).
Therefore, the Court finds that the instant case and the bankruptcy case share a center of 6 controversy that is the Lease/Purchase Agreement and the Property described therein. The
Court now turns to the second inquiry.
8 b. Whether Plaintiff was enforcing its right under the Lease/Purchase Agreement in the bankruptcy case 9 As mentioned above, the bankruptcy case involved a mortgage on the subject Property.
10 This led Plaintiff to file an Official Form 410 Proof of Claim as it relates to the subject
11 Property. See Hemlani Supp. DecI. Ex. 1 (Jan. 5, 2022). In other words, mortgage on the
12 Property which was the subject of the bankruptcy case, created a risk to Plaintiffs right to the
very same Property. This evidence reflects that Plaintiffs participation in the bankruptcy 13 proceedings was necessary to defend and enforce its rights under the Lease/Purchase 14 Agreement and the Property described therein. The Court finds that Plaintiffs involvement in 15 the bankruptcy case reflects its efforts to enforce its right under the Lease/Purchase Agreement.
16 Having satisfied both inquiries, the Court finds that Plaintiff is entitled to attorney’s fees for
17 the related bankruptcy case.
IV. This Court has the authority to award attorney’s fees for the related bankruptcy 18 case.
19 Defendants contend that this Court does not have jurisdiction to award attorney fees for
20 the separate bankruptcy case. Defs’ Opp’n p. 6 (Jan. 31, 2022). The Court is not persuaded by
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1 this argument. This Court is not deciding the substance of the bankruptcy case. Instead, the
Court is to decide whether Plaintiffs involvement in the bankruptcy case is related to
Plaintiffs effort to enforce its rights under the Lease/Purchase Agreement, which the Court has 3 so found above. further, the Court is not persuaded by the authorities cited by Defendant, and 4 distinguishes each authority in turn.
a. Webber v. Miller Distinguished
6 First, Defendants advance their argument by cherry picking convenient language from
the Webber case, specifically that “Bankruptcy courts, through the United States district courts,
have exclusive jurisdiction over the matter of attorney’s fees in a bankruptcy proceeding.”
$ Webber v. Miller, 175 Vt. 592, 593 (Vt. 2003). See Defs’ Opp’n p. 8 (Jan. 31, 2022).
9 The Webber case is neither applicable nor persuasive. The Webber case involved a live 10 and “open” bankruptcy case. See Webber, at 594 (the “[p]laintiffs argument—that the
11 bankruptcy court does not have exclusive jurisdiction because [the] plaintiff is suing the
12 attorneys and not an estate directly—ignores the fact that the bankruptcy case is still open and
that future awards of attorney’s fees could be made, thereby affecting the property or assets of 13 the estate under the core control of the bankruptcy court.”) (emphasis added). That is not the 14 case here as the record reflects that the bankruptcy case was dismissed. See Notice of Dismissal 15 Ex. 1 (July 6, 2020). Furthermore, the Webber court takes the time to explain that “this case
16 does not involve a lawsuit brought after the conclusion or dismissal of the underlying
17 bankruptcy case by the bankruptcy court.” Webber, at 594 (emphasis added). Therefore,
Defendants’ that this Court lacks jurisdiction to award attorney’s fees related to the bankruptcy 18 case, and its reliance on the Webber case fail.
1 b. Rockstad v. Erikson Distinguished
Defendants further advance their argument that this Court lacks jurisdiction by citing to 2 the Rockstad case and quoting: “where the substantive issues raised in a bankruptcy proceeding 3 include issues of state law, federal courts have held that attorney’s fees may be awarded where
penitted or provided under the relevant state law. However, awarding fees is still part of the
bankruptcy procedure, and as such it is a decision for the bankruptcy court to make.” Rockstad
6 v. Erikson, 113 P.3d 1215, 1225 (Ak. 2005). See Defs’ Opp’n p. $ (Jan 31, 2022).
Again, the Court is not persuaded by this authority. The Rockstad case involved a 7 bankruptcy case between a lender and a borrower. See Rockstad, at 121$. That is not the case $ here. The bankruptcy case here involved a creditor/mortgagor (BankPacific), a 9 debtor/mortgagee (Defendant), and Plaintiff as an interested party (buyer of the mortgaged 10 property). See Hemlani Supp. Decl. Ex. 1-A (Jan. 5, 2022). As such, the context of the instant
11 case is distinguished from the Rockstad case. Therefore, Defendants’ argument and its reliance
12 on the Rockstad case also fail.
c. In re 5900 Associates LLC Distinguished 13 finally, Defendants rely on the In re 5900 Associates LLC case for the contention that 14 “1 1 U.S.C. § 33 0(a) establishes the exclusive means by which a claim for professional fees 15 relating to a bankruptcy case is allowed and a debtor is simply not liable for professional fees
[that] have not been allowed by the bankruptcy court.” In re 5900 Associates LLC, 326 B.R.
17 402, 405 (E.D. Mich. 2005); See Defs’ Opp’n p. $ (Jan. 31, 2022).
1$ This authority still does not persuade the Court. The In re 5900 Associates case
involves a debtor who filed a petition for bankruptcy and was authorized by the bankruptcy 19 court to retain a specific attorney as its counsel. In re 5900 Associates LLC, at 404.
20 Compensation for that attorney was to “be paid afier application and Court Order authorizing 1 payment.” Id. None of those circumstances exist here. Instead, the instant case involves a
Lease/Purchase Agreement that allows the prevailing party to recover reasonable attorney fees 2 from the non-prevailing party in any action brought to enforce a right or obligation under its 3 provisions. See V. Compi. Ex. A (May 31, 2019). Therefore, Defendants’ argument and its 4 reliance on the In re 5900 Associates LLC case still fail.
5 In sum, the Court finds the following: (1) the Lease/Purchase Agreement falls within
6 the contract exception of the American rule for attorney’s fees; (2) Plaintiff is the prevailing
party and is entitled to the an award for attorney’s fees; (3) Plaintiff counsel’s attorney fees are
reasonable and no reduction is warranted; (4) the Lease/Purchase Agreement permits Plaintiff 8 to recover attorney’s fees for the related bankruptcy case; and (5) this Court has the authority to 9 award attorney’s fees for both the instant case and the related bankruptcy case.
10
11 CONCLUSION
12 For the reasons set forth above, the Court the Court GRANTS Plaintiffs Motion for
Attorney’s Fees and Costs.
13 kV 4 7 14 IT IS SO ORDERED
HONORABLE ARTHUR R. BARCINAS 17 Judge, Superior Court of Guam ER1 acknoMcdge that an eectrc 18 copy of the ohgina was emaied to:
19 ‘ Date:
20 Joseph Bamba Jr Deputy Oerk, Suphor Court of GJam