3 I~ BY=----·-·-··----
4 IN THE SUPERIOR COURT OF GUAM 5
6 THE A.B. WON PAT INTERNATIONAL CIVIL CASE NO. CV0371-16 AIRPORT AUTHORITY, GUAM. (Consolidated with CV0595-16 and SP0128-16)
7 Plaintiff,
8 DECISION AND ORDER vs.
Re: GIAA 's Motion to Stay Judgment Pending 9 Resolution ofRemaining Claims Pursuant to DFS GUAM L.P.,. · GR[:P Rule 62(h) , 10 '
Defendants.
11
12 This matter came before the Honorable Arthur R. Barcinas on April 26, 2024, for a 13 motion hearing on Plaintiff A.B. Won Pat International Airport Authority, Guam's ("GIAA'')
14 Motion to Stay Judgment Pending Resolution of Remaining Claims Pursuant to GRCP Rule 15 62(h) ("Motion"). Present at the hearing were Attorneys Christian Calvo and Genevieve 16 Rapadas on behalf of GIAA, and Attorneys Zathrina Perez and Dean Manglona on behalf of 17 Defendant DFS Guam L.P. ("DFS").
18 Having considered the arguments, pleadings, and applicable law, the Court hereby 19 DENIES the motion to stay.
20 BACKGROUND
21 On November 6, 2002, the parties signed a leasing agreement for commercial space at 22 the airport called the Main Concession Agreement, and this agreement covered the "main retail 23 concession area" within the airport. One of the terms of the Main Concession Agreement was
CV0371-16 The A.B. Won Pat International Airport Authority, Guam v. DFS Guam L.P.
1 that DPS would post a $3,375,000 faithful performance bond. DPS originally satisfied the bond 2 through two instruments: first, DPS obtained a standby letter of credit from HSBC Bank worth 3 $2 million; then DPS received a surety bond issued by Travelers for $1,375,000. On September 4 12, 2005, DPS replaced the letter of credit from HSB with one from Citibank in the same 5 amount of $2 million ("LOC"). 6 Shortly after replacing the LOC, DPS entered into another agreement with GIAA, called 7 the Mama Bear Agreement. The Mama Bear Agreement constituted a separate leasing 8 agreement, covered a different space at the airport, and resulted from a separate request for 9 proposal from GIAA and separate negotiations from the Main Concession Agreement. Most 10 notabiy, t:li.e Mama Bear Agreelnent's terms stipulat~d only a $250,0.00 faithful performa~ce ' 11 bond. 12 DPS proposed releasing its surety bond with Travelers and satisfying both faithful 13 perfonnance requirements through the LOC with Citibank, increasing the LOC by $1,625,000 14 for a total of$3,625,000, which would cover the $1,375,000 covered by the original Travelers 15 surety bond as well as the additional $250,000 requirement under the Mama Bear agreement. 16 GIAA agreed, and the LOC was amended to included $3,625,000 and refer to both agreements. 17 Both contracts contained "evergreen" provisions, requiring that, in the event of a 18 drawdown of the faithful performance bond by GIAA, DPS would be responsible for 19 replenishing the original amount of the bond. Under these provisions, DPS was afforded ten 20 ( 10) days to secure the necessary funding to replenish the bond. 21 The agreements also differed significantly in how they addressed dispute resolution, in 22 that the Main Concession Agreement required the parties to go through arbitration in the event 23
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1 of a dispute, and the Mama Bear Agreement provided that any dispute would be handled by the 2 courts of Guam. 3 In 2013, GIAA alleged DFS had violated the Mama Bear Agreement, demanding that 4 Citibank pay out $2,104,582.99 for the damages it had suffered. Citibank eventually did so by 5 drawing on the letter of credit. GIAA did not ever allege that DFS had violated the Main 6 Concession Agreement, only the Mama Bear Agreement. 7 DFS disputed that it had violated the Mama Bear Agreement, and argued that GIAA had 8 violated the Main Concession Agreement by drawing down on funds reserved for the Main 9 Concession Agreement when there was no alleged violation of that contract.
On De~emb'er 4, _2014, DFS filed'an administrativ~ claim against GIAA ·pursuant to the 11 Government Claims Act, arguing that DFS had not violated the Mama Bear Agreement. On the 12 same date, it filed to begin arbitration proceedings against GIAA, arguing that the drawdown on 13 the LOC violated the Main Concession Agreement. 14 On May 6, 2016, arbitrators awarded DFS $1,854,582.88, plus interest, attorney's fees 15 and costs ("Arbitration Award"). 16 On May 9, 2016, GIAA filed a Complaint to Vacate Arbitration Award and for 17 Declaration that Plaintiff is Entitled to Offset, beginning the instant case; GIAA sought 18 declaratory relief ordering that any amount DFS was entitled to recover under the Arbitration 19 Award would be offset by the $2,104,582.88 that DFS allegedly owed to GIAA for its holdover 20 in the Mama Bear space. 21 On July 25, 2016, DFS filed an application seeking to confirm the Arbitration Award, 22 and requesting either $250,000 or $2,104,582.88 in total damages, depending on whether the 23 Arbitration Award was confirmed. DFS argued that, in either case, it sought the $250,000 drawn
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1 down by GIAA, but that if the Arbitration Award was vacated, then it would also seek the 2 $1,854,582.88 as damages, for a total of$2,104,582.88. 3 On September 23, 2016, GIAA filed an answer and counterclaim for declaratory relief, 4 seeking a declaration that under the parties' prior contract, the Mama Bear Agreement 5 ("MBA"), GIAA was entitled to double rent as a result of DFS's holdover on the Mama Bear 6 premises. 7 On September 27, 2018, the Court heard DFS's application to confirm and GIAA's 8 motion to vacate. On December 26, 2018, the Court issued an order granting DFS's application 9 to confirm, denying GIAA's motion to vacate, and confirming the Arbitration Award. 1O .l On April 3, 2019, th~ Court issued a J~dgrflent; on Septemb~r 9,' 2021, the Court issue'd 11 an Amended Judgment to correct a clerical error, and on September 15, 2021, the Court entered 12 the Judgment. 13 On August 7, 2023, the Guam Supreme Court affinned the Amended Judgment after an 14 appeal by GIAA. 15 On September 22, 2023, GIAA filed a Motion for Summary Judgment in conjunction 16 with the instant Motion. In the instant Motion, GIAA moved for an order staying enforcement 17 of the Amended Judgment pending resolution of the claims for breach of contract set forth in 18 DFS's complaint filed on July 25, 2016 in CV0595-16, GIAA's counterclaim for declaratory 19 relief filed September 23, 2016 in the same action, and GIAA's claim for declaratory relief 20 regarding offset in CV0371-16. In seeking the order, GIAA argued that: 21 • The Court has the discretion to stay execution of the Amended Judgment pending 22 resolution of the remaining claims in this matter; 23 • This lawsuit involves the same sum of money at issue in the Amended Judgment; and
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I • The remaining claims should be resolved on summary judgment without further delay. 2 On October 20, 2023, DFS filed an opposition, in which it argued that: 3 • a stay of enforcement of the judgment is not allowed or warranted because GIAA is not 4 entitled to offset, which is the only asserted reason for the stay; Rule 62(h) does not 5 apply because a Rule 54(b) judgment was not issued; and there are no grounds 6 warranting a stay of enforcement of the judgement and DFS will be prejudiced if it is 7 denied the right to enforce the judgment immediately; 8 • the Main Agreement and Mama Bear disputes are entirely separate; and 9 • GIAA is not entitled to summary judgment on its claims under the Mama Bear
. '
Agreement.
11 On November 3, 2023, GIAA filed a Reply, arguing that: 12 • GIAA has committed to pay the Arbitration Judgment and offered to resolve the 13 remaining issues in this matter; 14 • as a practical matter, a judgement in GIAA's favor will necessarily offset the Arbitration 15 Judgment; 16 • as the Supreme Court recognized, the Main Agreement and Mama Bear disputes involve 17 the same funds; and 18 • the Arbitration Judgment does not fully resolve this action. 19 On April 26, 2024, the Court took the matter under advisement. 20 DISCUSSION 21 Pursuant to GRCP 62(h), GIAA moves for an order staying enforcement of the Amende 22 Judgment entered by the Court on September 15, 2023, "pending resolution of the claims fo 23 breach of contract set forth in DFS's complaint filed on July 25, 2016 in CV0595-16, arisin
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1 from DFS's Government Claim, and GIAA's counterclaims for declaratory relief file 2 September 23, 2016 in the same action, as well as GIAA's claim for declaratory reliefregardin 3 offset in CV0371-16." Mot., at 2. 4 GRCP Rule 62(h), which governs a stay of judgment as to multiple claims or multiple 5 parties, states that:
6 When a court has ordered a final judgment under the conditions stated in Rule 54(b ), the court may stay enforcement of that 7 judgment until the entering of a subsequent judgment or judgments, and may prescribe such conditions as are necessary to 8 secure the benefit thereof to the party in whose favor the judgment is entered.
9 . Guam R. Civ. P. 62(h). Additionally, GRCP 54(b), which govem_sjudgment upon multiple IO :- .> ' ,1 ,)
clainis or involving mtiltiple parties, states "that:
11 When more than one claim for relief is presented in an action, 12 whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct the 13 entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is 14 no just reason for delay and upon an express direction for the entry of judgment. In the absence of such detennination and direction, 15 any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of 16 fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is 17 subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the 18 parties.
19 Guam R. Civ. P. 54(b). 20 I. The Court finds no basis for offset, and thus no reason to stay enforcement. 21 GIAA argues that, if the Court's judgment resolves fewer than all claims presented, the 22 GRCP 62(h) allows the Court to stay execution of a 54(b) final judgment in this matter, pendin 23 resolution of any remaining claims that may offset the judgment. Mot., at 5. GIAA further state
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1 that "in a case involving multiple claims or parties, it is appropriate under Rule 62(h) to sta 2 execution of a 'final judgment' that resolves fewer than all of the claims presented pendin 3 resolution of any remaining claims that may potentially offset the judgment." Id. (citing, inte 4 alia, Vehicle Serv. Grp., LLC v. Auto Equip Co. Inc., 838 F.Supp.2d 842, 948-49 (S.D. Ind.
5 2011)). DFS argues that no stay is allowed or warranted in this case, presenting three argument 6 that the Court will address in tum.
7 a. GIAA is not entitled to offset because the pending claims remain in dispute.
8 First, DFS argues that GIAA is not entitled to offset because the offset is the on!
9 asserted reason for the stay, and the Guam Supreme Court has held that "contingent claims ,l IO claims that Ji.ave not yet acc~ed >and depend on some' future event that may never happen 11 cannot be the subject of [offsets]." Mot., at 6 (quoting Waathdad v. Cyfred, Ltd, 2021 Guam 24 12 21. DFS argues that offset is an equitable doctrine based on liquidated claims that have mature 13 and are "presently enforceable". Id. DFS asserts that Waathdad is dispositive because that cas 14 involved plaintiffs who sought to offset monies owed to the defendant with attorney's fees tha 15 they claimed the defendant owed them in a separate litigation, and in that case, the Suprem 16 Court refused to allow the offset on the grounds that the validity of the alleged setoff wa 17 contingent on the outcome of the pending separate litigation. Id. (citing Waathdad, 2021 Gua 18 24 '1] 24). DFS argues that GIAA's claim for offset in the instant case is "concededly contingen 19 on the outcome ofGIAA's pending breach of contract claim asserted in the Government Claim 20 Act action (CV0595-16), which GIAA concedes remains unresolved." Id.
21 Per Waathdad, "[s]etoff or offset is a doctrine grounded in equity requiring that th 22 demands of mutually indebted parties be set off against each other and that only the balance b 23
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1 recovered in a judicial proceeding by one party against the other." 2021 Guam 24 '1l 18. 1 "[A] 2 claim for setoff must be liquidated, meaning it can be precisely determined by operation of la 3 or by the terms of the parties' agreement or has been determined in a judicial proceeding." Id." 4 contingent or unmatured obligation which is not presently enforceable cannot be the subject o 5 set-off." Id. '1!21. 6 Further, contingency aside, Waathdad also states that, "[b ]y the weight of mode 7 authority, ... a disputed counterclaim or setoff is sufficient to render an entire transaction 8 'unliquidated'." Id. '1! 20 (emphasis added); see also Teledyne Mid-America Corp. v. HOH Corp., 9 486 F.2d 987, 992 (9th Cir. 1973) (holding that where a dispute exists between the parties as t IO the validity of a ~lainl., that dispute is sufficient to render the entlre transaction "u~jjquidated"). 11 GIAA has expressly stated in its motion that part of its claim is predicated on the unresolve 12 counterclaim seeking double rent for DFS's holdover, and that said counterclaim remains i 13 dispute. Mot., at 4. Under Waathdad, this disputed counterclaim renders "unliquidated" an 14 transaction involving it, which would include the entire Government Claims Action. 2021 Guai 15 24 ,r 20. GIAA states that "the pending claims involve the same transaction or series o 16 transactions as the claim for which the [Amended Judgment] was issued." Mot., at 5. "Becaus 17 only DFS's Government Claim can resolve who is entitled to the disputed holdover rent, th 18 rightful holder of the principal amount remains unresolved." Id., at 4. Because the disput 19 remains unresolved, Waathdad dictates that the entire transaction be considered unliquidated, 20 and thus invalid. "A possible but unestablished liability, unliquidated in amount, may not b 21 pleaded as an offset to a liquidated claim that is due and payable." Waathdad, 2021 Guam 24 22 21.
23 1 The Supreme Court in Waathdad uses "offset" and "setoff' as identical, interchangeable terms, and the Court
24 conducts its analysis under that same reasoning. 2021 Guam 24 'IJ 18.
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I Upon consideration of the motions, arguments, and relevant law, the Court conclude 2 that, under GIAA's theory that all claims in the consolidated actions arise from the sam 3 transaction, no funds from pending claims in this matter may serve as the basis of an offse 4 because the dispute of any part of the consolidated claims would render the entire matte 5 unliquidated. "Without a recognized exception or statute to the contrary, 'as a general rule ...
6 unliquidated damages cannot be the subject of set-off."' Waathdad, 2021 Guam 24 ,i 20 (citin 7 Winder v. Caldwell, 55 U.S. 434,443 (1852)).
8 In its Reply, GIAA further argues that Waathdad is inapposite to this case becaus 9 "Waathdad did not involve a motion to stay a judgment pending resolution of related claims i ' IO the same' lawsuit or a coO:solidated lawsuit, which i's the situation b~fore' the Court. Rath~r, i 11 involved a motion for summary judgment on the merits of an offset claim." Reply, at 3 (citin 12 Waathdad, 2021 Guam 24 ,i,i 18-25. However, while the facts of Waathdad may not be exact!
13 on point to the facts of this case, its passages regarding offset claims apply generally, no 14 specifically in the context of summary judgment. Thus, the Court finds that the preceden 15 established in Waathdad controls in this instance.
I6 GIAA further argues that, in the Government Claims Action, its counter-claim "is no 17 seeking an offset but is seeking declaratory relief that it was entitled to the unpaid rent as a resul 18 of DFS's holdover in the amount of $2,104,582,582.88 and that GIAA was entitled to dra 19 down $250,000 as partial payment of those outstanding funds." Reply, at 2-3. However, th 20 practical effect of granting declaratory relief on GIAA's entitlement to withdraw $250,000 fro 21 the pool of funds disputed by the parties would be constructively granting an offset.
22 At the hearing on April 26, 2024, the parties stipulated that the principal owed to DFS under th 23 Arbitration Judgment had been paid, though DFS argues that the only funds from the GIA
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1 drawdown remaining in dispute is the $250,000 that GIAA drew down under the Mama Bea 2 Agreement, and GIAA argues that the amount in dispute is higher. In either case, however, i 3 does not sufficiently establish to the Court that a stay is necessary in order to adjudicate who i 4 entitled to the amount remaining in dispute.
5 b. GRCP 62(h) does not apply because the Court's Judgment denying the Motion to Vacate Award was not issued under the conditions stated in GRCP 6 54(b).
7 Second, DFS argues that GRCP 62(h) does not apply to the instant matter because 8 GRCP 54(b) judgment was not issued. According to DFS, 62(h) "expressly applies only when 9 judgment has been issued under Rule 54(b)." Opp., at 7. DFS asserts that "[i]t cannot b 10. genuinely disputed that there was i:io Rule 54(b) judgm~nt fssued in this cas:e" atJ.d "no Ru! 11 54(b) certification" in the Judgment. Id. at 7. 12 GIAA argues that the parties' agreement that Rule 54(b) certification was not necess 13 to appeal the Arbitration Judgment "does not change the fact that this is a consolidated actio 14 with substantial substantive claims that remain unresolved and involve the same funds at issue i 15 the Arbitration Judgment." Reply, at 6. GIAA further argues that the Court has discretion to sta 16 a judgment "where remaining claims concerning the same sum of money are still pending." Id. 17 (citing Hartford Acc. & Indem. Co. v. Boise Cascade Corp., 489 F.Supp. 855, 859-60 (N.D. Ill. 18 1980)). GIAA further cites 3 Motions in Federal Court § 9:91, for the proposition that "[t]h 19 purpose of a partial stay under Rule 62(h) is to preserve the status quo pending disposition o 20 other claims, counterclaims, cross:claims, or third-party claims for relief in the same action." 21 The Court finds that GRCP 62(h) does not apply in this case. The Guam Supreme Cou 22 found on interlocutory appeal of this Court's previous Judgment that it would hear GIAA's 23 appeal because "appeals should be allowed in consolidated cases when there is a final,
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1 appealable result in at least one of the cases." GIAA, 2023 Guam 7 ,i 17. However, the Cou 2 does not find that this in any way abrogates the 62(h) requirement that a court may sta 3 enforcement of a final judgment only if that court ordered that final judgment "under th 4 conditions stated in Rule 54(b)." Guam R. Civ. P. 62(h). The conditions under GRCP 54(b) 5 indicate that the Court "may direct the entry of a final judgment as to one or more but fewer tha 6 all of the claims or parties only upon an express determination that there is no just reason fo 7 delay and upon an express direction for the entry of judgment." Guam R. Civ. P. 54(b). In it 8 Judgment, the Court did not make any express detennination that there is no just reason fo 9 delay, nor any express direction for the entry of judgment. Accordingly, the Court finds that it i 10 not able to stay the' proceedings under GRCP 62(h), because'the Judgment did not. meet th 11 above conditions stated in GRCP 54(b ).
12 c. The Court does not find that DFS would be prejudiced if denied the right to enforce the Judgment immediately, but does find that there are no grounds 13 warranting a stay of enforcement of the Judgment.
14 Third, DFS argues that there are no grounds warranting a stay of enforcement of th 15 Judgment, and that DFS will be prejudiced if it is denied the right to enforce the Judgmen 16 immediately. Opp., at 9. DFS again splits this argument into three sub-arguments, arguing that: 17 • (1) GIAA's request comes too late and its request is now waived; 18 • (2) GIAA has not identified any need justifying a stay of judgment; and 19 • (3) ordering a stay of enforcement of the Judgment would effectively undennine the 20 "strong policy favoring arbitration" in Guam. 21 The Court will address each of these arguments in tum. First, DFS asserts that GIAA's 22 request comes too late and its request is now waived. DFS states that GIAA cites five cases t 23 support its argument that a stay of enforcement under GRCP 62(h) is appropriate pendin
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1 resolution of any remaining claims that may potentially offset the judgment. Opp., at 9 (citin 2 Mot., at 4). DFS argues that one court denied the stay, and in the other four cases, each trial cou 3 ruled on their respective motions to stay concurrently with a decision certifying their judgment 4 as final under Rule 54(b). Id., at 9-10 (citing Robbins Flooring, Inc. v. Fed. Floors, Inc. 445 5 F.Supp. 4, 13-14 (E.D. Pa. 1977); Boise Cascade Corp., 489 F.Supp. 855, 860 (N.D. Ill. 1980). 6 DFS further argues that, in each of the four cases where the stay was granted, the stay was 7 imposed while trial proceedings went on, but in this case, GIAA immediately took the Judgmen 8 up on appeal, obstructing itself by effectively delaying the resolution of GIAA's pending claims. 9 Id., at 10. 10 GIAA argues that it ·Was not necessary fot GIAA to seek ·a di'scretionary stay ~f tl:1 11 Judgment under GRCP 62(h) pending the appeal because GIAA allegedly would have bee 12 entitled to the stay as a matter of right under a combination ofGRCP 62(d) and (e). The Court i 13 not convinced of GIAA's argument. Under 62(d), when an appeal is taken, the appellant ma 14 obtain a stay by giving a supersedeas bond. Guam R. Civ. P. 62(2). "[T]he bond may be given a 15 or after the time of filing the notice of appeal or of procuring the order allowing the appeal," bu 16 the stay only becomes effective "when supersedeas bond is approved by the court." Id. Unde 17 62( e), "[w]hen an appeal is taken by the Government of Guam or an officer or agency thereof o 18 by direction of any department of the Government of Guam and the operation or enforcement o 19 the judgment is stayed, no bond, obligation, or other security shall be required from th 20 appellant." Guam R. Civ. P. 62(e). The Guam Supreme Court has not offered guidance on thi 21 matter, but the Court finds that GRCP 62(d) and (e) cannot function in tandem to giv 22 government agencies an automatic stay every time they take a matter up on appeal. GRCP 62( e 23 dictates that relief from the security requirement for a stay only becomes active when "th
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1 operation or enforcement of the judgment is stayed." GRCP 62( d), in contrast, states that the sta 2 only becomes effective when the supersedeas bond is approved. The Court thus finds that, unles 3 a stay is originally granted by the Court pursuant to another provision of GRPC 62, GIAA woul 4 still be required to give a supersedeas bond and have it approved by the Court before it coul 5 obtain a stay under GRCP 62(d). 6 Second, DFS argues that GIAA has not identified any need justifying a stay o 7 enforcement. DFS asserts that, to obtain a stay of judgment under GRCP 64(h), GIAA mus 8 indicate some equitable reason or other need supporting the stay to enable the court to "balanc 9 the equities" in determining whether a stay of enforcement is warranted. Opp., at 10. (citin to Computech Intefn .. Inc. v. Compaq ·'c;omputer Corp.,' 59>Fed. R. Serv. 3.d 968, 2004 W 11 2291496, at *5 (S.D.N.Y. 2004); JHNY Corp. v. Dana Corp., No. 2:05-CV-02829-LDD, 200 12 WL 8459413, at *1-2 (E.D. Pa., Feb 8, 2006)). In the above cases, particularly JHNY, whic 13 DFS argues that much of GIAA's argument relies upon, the Court's decision to stay th 14 judgment turned upon whether immediate enforcement would affect or be affected by th 15 parties' solvency or lack thereof. Id., at 11. DFS asserts that, rather than presenting any equitabl 16 reason for the stay, GIAA "merely points to the fact that it wants its Mama Bear claims decide 17 first, so that, if it is successful, it can use those claims to offset the Judgment because the 18 'involve the same sum of money."' Id. (quoting Mot., at 4). DFS further asserts that GIAA has 19 not pointed out any potential insolvency to either of the parties, but has instead stated that "th 20 government has the 'unquestionable ability to pay the judgment."' Id. (quoting Mot., at 4, n. l ). 21 In its Reply, GIAA responds that "[w]hile GIAA has committed to making payment 22 pursuant to the Arbitration Judgment and the law presumes that government agencies are able t 23 satisfy monetary judgments," requiring GIAA to pay millions of dollars would drastically affec
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1 GIAA's operations, and DFS "has provided no assurances that it would be able to return th 2 sums of money in the event GIAA prevails on its claims." Reply, at 7. Again, the Court is no 3 convinced, as GIAA has not provided the Court with any basis to suspect that DFS migh 4 become insolvent, particularly in light of GIAA's payment of the principal due under th 5 Arbitration Judgment. 6 Third, DFS argues that ordering a stay of enforcement of the Judgment would effective! 7 undermine the "strong policy favoring arbitration" in Guam, because it would negate th 8 efficiency and speed of the results already reached through arbitration by staying the outcom 9 until all other non-arbitrated claims are complete. Id. (citing Guam YTK Corp. v. Port Auth. o
10 ·Guatn, 2014 Guam 7 ,i 24; AT&T Mobility LL<Jv. Concepcion, 5.63 U.S. 333, 346 (20i l)))DFS 11 argues that, because the remaining claims were raised under a separate agreement not subject to
12 arbitration, they are not appropriately brought in proceedings to confirm or vacate an arbitratio 13 award, as that would inject unnecessary litigation into a proceeding that is intended to b 14 efficient and streamlined. Id., at 12. 15 In the Reply, GIAA argues that it is not challenging the validity of the Arbitratio 16 Judgment, but "there are still remaining claims in this very action that have not been resolved b 17 the Arbitration Judgment and that involve the parties' substantive rights as to the same funds a 18 issue in the Arbitration Judgment." Upon consideration of the arguments, the Court finds that 19 with the principal amount of the Arbitration Judgment paid, there is no real threat of prejudice t 20 DFS. DFS claims that only the $250,000 Mama Bear drawdown remains in dispute, and th 21 Court does not find any prejudice to DFS resulting from that sum remaining in contention. 22 Because that $250,000 is currently in the possession of GIAA, if DFS loses, it will only ever los 23 $250,000 no matter how protracted the litigation becomes. In contrast, if DFS prevails, it wil
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1 gain additional interest accrued over the course of the litigation. Despite the lack of prejudice t 2 DFS, however, the Court does find that, with the matter of the Arbitration Award resolved, th 3 only funds at issue are those in the Mama Bear Agreement, and the funds remaining in disput 4 cannot give rise to an offset that would merit a stay, for the reasons stated herein.
5 II. GIAA argues that the lawsuit involves the same sum of money at issue in the Amended Judgment.
6 GIAA argues that a stay of the Amended Judgment is warranted under GRCP 62(h)
7 "[g]iven the substantial offset that will result from a judgment in GIAA's favor of the remainin 8 claims ... which involve the same sum of money and transaction as the Arbitration Action." Mot., 9 at 5. DFS argues that the Main.Agreement and Mama Bear disputes are entirely separate, and d ) 10 \ ,'!. ,\ ,)
n·ot involve the ·.·same funds.'' Opp.; .at l 3. DFS asse1is that the Guarri Supreme Court has he!
11 that "[t]hough the funds involved in the Arbitration Actions and the Govermnent Claims Action 12 may be the same, the rights to the funds involved in the Arbitration Action and the Govermnen 13 Claims Action may be the same, the rights to the funds involve two separate and distinc 14 contracts." Id. (citing GIAA v. DFS, 2023 Guam 7,r 39.
15 In deciding whether relevant claims arise from the same transaction for offset purposes, 16 trial court may apply the "logical relationship" test outlined by the U.S. Supreme Court. Newber 17 Corp. v. Fireman's Fund Ins. Co., 95 F.3d 1392, 1402 (9th Cir. 1996) (citing Moore v. New Yor 18 Cotton Exchange, 270 U.S. 593 (1926). "In Moore, the Court stated that '[t]ransaction' is a wor 19 of flexible meaning. It may comprehend a series of many occurrences, depending not so muc 20 upon the immediateness of their connection as upon their logical relationship." Accordingly, th 21 Court finds that, while it agrees with the Guam Supreme Court that the rights to the fund 22 themselves are separate and distinct, it also agrees with GIAA that all claims in this matter aris 23 from a single transaction involving the LOC. The Court finds that this remains true even thoug 24 Page 15 ofl7
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1 GIAA has paid the amount under the Arbitration Award, as GIAA has continued to contend tha 2 the holdover rent and the drawdown are effectively part of the same funds and the sam 3 transaction. Hearing Tr., 11 :30:00 (April 26, 2024). 4 However, because the Court finds that all of the claims in these consolidated actions aris 5 from the same transaction, GIAA's offset claim fails as a matter of law because the Guam 6 Supreme Court has held that a mutual debt and claim in an offset cannot arise from the sam 7 transaction. "Unlike the doctrine of recoupment, under which debts between two parties arise ou 8 of the same transaction, 'in setoff, the mutual debts arise from different transactions." Waathdad, 9 2021 Guam 24 ,r 19. "The defining characteristic of setoff is that the mutual debt and claim ... ar IO generally those ari.sing'from different tr~nsadtions." Id. As noted ahove, the Supreru"e Court use 11 "offset" and "setoff' as identical, interchangeable terms in its reasoning. See, e.g., id., at ,r I 8 12 ("Setoff or offset is a doctrine grounded in equity ... "). Thus, because GIAA asserts as a matte 13 of fact that the offset sought will involve the same sum of money and transaction as th 14 Arbitration Action, then the mutual debt and claim would arise from the same transaction, an 15 the Court could not stay these proceedings predicated on the possibility of an offset, because n 16 offset would be possible.
17 III. The Court will not take GIAA's Motion for Summary Judgment into consideration in this Motion.
18 GIAA argues that a stay of the Amended Judgment would be favored because "there 19 should not be an undue delay in resolving the remaining claims." Mot., at 6. DPS argues GIAA 20 is not entitled to summary judgment on its claims under the Mama Bear Agreement. In both 21 instances, the Court will refrain from addressing the arguments in this Order, as the Court is 22 already deliberating on this matter.
23
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1 Accordingly, there being no basis for offset, and thus no reason for delay, the Court 2 DENIES the Motion to Stay.
3 CONCLUSION 4 Based on the foregoing, the Court hereby DENIES the Motion to Stay.
5
6 JUL 2 4 2024 IT IS SO ORDERED _ _ _ _ _ _ __ 7
8 • 9 HONORABLE ARTHUR R. BARCINAS \ Judge, Superior Court ofGu\)m \ 10
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15 sr . . i VIA EMAIL
I ackrk ·11a1 an electronlc 16 copy 01111e c.:1g1na1 was e-malled to:
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