Arceo v. CULGUAM, Inc.

Opinion

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2U25i*iA'R 2025 HAR 2525PMPH3:3:~8 58 CLERK CLERK OFifFCOURT mum

OF GUAM IN THE SUPERIOR COURT OF GUAM sv-

ARCEO, JUANITA ARCEO, CIVIL CASE NO. no. CV0397-20

Plaintiff; Plaintiff, AMENDED vs. DECISION AND ORDER GRANTING GRANTING MOTION MOTION FOR WRIT OF EXECUTION FOR WRIT CULGUAM, CULGUAM,INC.INC.doing doingbusiness business as as COST- U-LESS and JOHN JOHNDOEDOEINSURANCE INSURANCE COMPANY COMPANY,

Defendants. Defendants.

The Court here here considers considersPlaintiff Plaintiff Juanita JuanitaArceo Arced's December3, 's December 3,2024 2024Motion Motionfor for Writ Writ of

Execution or, Alternatively, Alternatively, to to Require Require Posting Posting of ofSupersedeas Bond. Having Supersedeas Bond. Having reviewed the

parties' briefs, the Court finds that issuing a writ writ of execution or requiring requiring the the posting of a bond

is proper, andthus, proper, and thus,GRANTS GRANTSArceo's Arceo's Motion.

I. PROCEDURAL BACKGROUND PROCEDURALBACKGROUND

Following Following aa jury jurytrial trialand and verdict verdictininfavor favorofofArceo, Arceo,the theCourt Courtrendered renderedaa Judgment Judgment

against Defendant Culguam, Inc., in in the the amount amount of of$2,751,170.00 $2,751,170.00 plus plus post~judgment post-judgment interest at

rate of the rate of 6% per annum. annum. Judgment (Dec. 28, Judgment (Dec. 28, 2023). 2023). The Court has also also denied Culguam Culguarn's

attempt at aanew attempt at newtrial trial and andaastay stayof of the theexecution executionof of the theJudgment. Judgment. Dec. Dec. and andOrder OrderDenying Denying Mot. Mot.

New Trial (Apr. (Apr. 23, 23, 2024).

Upon discoveringin in post-trial post-trial proceedings proceedings that Culguam had hadgeneral generalliability liability

insurance-a insurance-areversal reversalininCulguarn's Culguam 'srepresentations representations to to Arced Arceo and and this this Court Court throughout the

litigation-Arceo litigation-Arceo moved movedtotoamend amendher hercomplaint complaintand andreopen reopen discovery. Magistrate Magistrate Judge Judge

ORIGINAL CV0397-20 AMENDED DECISION AND ORDER GRANTING GRANTING MOTION Page Page2 FOR WRIT OF EXECUTION

Jonathan Quan Quan denied denied those thoserequests requestsbut butimposed imposedsanctions sanctionson onCulguam Culguam and andits itstrial trial counsel counsel in

of $75,000.00 the amount of $75,000.00 for for litigation litigation costs costs and and $20,000.00 $20,000.00 for forattorney's attorney's fees. Order Re fees. Order Re P1.'s PL

Mot. Mot. Compel Compel Disc. Disc. &&Leave LeaveAm. Am.Comal. Comp!.atat15 15(Jan. (Jan. 21, 21, 2025). 2025). InInassessing assessing sanctions sanctions under

Guam Rules Rules of of Civil CivilProcedure Procedure 11, 11, 26, 26, and and 37, 3 7, Magistrate Magistrate Judge Judge Quan noted the thirteen times

Culguam ardor and/ori tits s atattorneys misrepresented orneys mi srepresent ed tthe existence he exi st of insurance of nsurance coverage. Id. at coverage. Id. at 4.

and its attorneys seek reconsideration, which is pending before Magistrate Judge Culguam and

Quan. 1l Quam.

Also pending is Culguam's appeal appeal of of the the Judgment. Judgment. Not. Not. Appeal Appeal (May (May 24, 24, 2024). 2024). The

Guam Supreme SupremeCourt Court stayed stayedthe theappeal appealpending pendingthe theresolution resolutionof ofArceo's Arceo's post-trial post-trial motions,

then extended the stay pending the reconsideration motions. motions. Arceo v. v. Culguam, Culguam, Inc., Inc., CVA24-

008 (Order (June 7, 2024), Orders2 (Jan. 7, 2024); (Jan. 28, 28, 2025)). 2025)).33 Meanwhile, Culguam Meanwhile, Culguam has has appealed

Magistrate Magistrate Judge Judge Quan's Quan's Order Order awarding awarding sanctions. sanctions. CVA25-003 _ CVA25-003.

The issue now presented presented to the Court by Arceo is whether a Writ of Execution may be

issued issued on the the Judgment, Judgment,and andifso, if so,whether whetherCulguam Culglam may post aa supersedeas supersedes bond bond and in what

amount. amount. Culguam Culguam posits posits that execution execution must must await the outcome of of the reconsideration reconsideration motions.

11 The TheCourt Court notes notes Culguam Culguam separately separatelymoves movesfor for aa Superior Superior Court Court judge judge to to hear hear the the motions motions for for reconsideration, reconsideration. Def.'s Def. 's Mot. Mot.Review Reviewbybyand andHr'g Hr'gBefore BeforeaaSuper. Super. ct. Ct.Judge Judge (Mar. (Mar. 12, 12, 2025). 2 In 2 January 28, 28, 2025 2025 Order, the Guam Supreme Supreme Court Court referenced In the January referenced this Court's Court's January January 23, 2025 Order toto Arceo Arceo to to pay pay the the balance balanceof thejury of the jury demand demandfee.fee. As As of of the date date of of this Decision Decision and Order, Order, the thejury jury demand demand feefee has hasbeen beenfully fully paid. 3 The January 28, 2025 Order stated that Culguam and its insurers were "considering filing a 3 The January 28, 2025 Order stated that Culguam and its insurers were "considering filing motion motion for for reconsideration reconsideration to to challenge challenge the sanctions, which motion sanctions, which motion maymay not not be be filed filed until the judgment ofofthe the Superior Superior Cout Cont has has been been entered, entered; as of the time ofof the the Status Status Report, that had yet to occur." occur." Id. Id. at at 2. 2. As As this this Court Court isis not not privy privyto tothe the Status filed in CVA24-008, it is Status Reports filed unclear if if the the Guam Supreme SupremeCourt Court was wasreferencing referencing thetheentry entryof ofjudgment judgment as having not yet occurred. Based Based on on this this Court's Court's review, review, its its Judgment Judgment was entered entered on on December December 28,28,2023. 2023. Not. Not. Entry Entry on on Docket Docket (Dec. (Dec. 28, 2023).

ORIGINAL CV0397-20 AMENDED DECISION DECISION AND AND ORDER ORDER GRANTING MOTION Page3 Page FOR WRIT OF EXECUTION

Furthermore, under under its its policy policy with with Allianz AllianzCommercial, Commercial, Culguam Culguam contends contends itit has indemnity

coverage for the the full fullamount amount of ofthe theJudgment, Judgment, and and thus, the Court should set a lesser lesserbond. bond. The

Court took took the the issue under advisement advisement without without oral argument. argument.

II. 11. LAW AND DISCUSSION

A. The TheMagistrate MagistrateJudge's Judge'sOrder Orderfor forsanctions sanctionsdoes does not not affect affect the the Judgment against Culguam Culguam as as issued. issued.

The Court first reviews reviews what impact the sanctions order has has on on the the Judgment. Judgment. For

example, as one of the original arguments in in its Opposition Opposition to to the Motion Motion for for a Writ of

Execution, Execution, Culguam Culguam contended contended that a Writ of ofExecution Execution isis premature premature because Arceo moved to because Arceo

amend her Complaint. However, However, Magistrate Magistrate Judge Judge Quan Quan has since denied the portion of Arceo's has since Arceo's

motion motion seeking the Complaint-an seeking to amend the Complaint-an issue issueno noparty partyhas has sought sought to to reconsider reconsider or or appealed. appealed.

Accordingly, there will be no further Accordingly, expansion of filrther expansion of Arceo's Arced's claims, making this argument moot.

Additionally, this Additionally, this Court does not find the the sanctions sanctions issue issue impacts impacts the the Judgment. Judgment. Post-

judgment Rule 11 sanctions are 11 sanctions areviewed viewed as ascollateral collateral to to aajudgment. judgment. Cooper v. Salomon Bros.,

nd Ina, Inc., 1I F.3d 82, 85 (2"d Cir. 1993). Cooper Cir. Cooper relied on the collateral order doctrine in Bzzdinich Budinich v. v.

Benton Dickinson and Co., Co., 486 U.S. 196 196 (1998), which which the the Guam Supreme Court adopted adopted in

Data Data Management Management Resources, LLCv.v. Office Resources, LLC Ojice of ofPub. Pub. Accountability Accountability, 2013 Guam 27,r,r W 38-41.

Under the collateral order doctrine, a collateral order does not suspend the finality of a judgment. judgment.

Magistrate Judge Quan's Order Order imposing imposing sanctions does not alter or revise the jury's sanctions does jury's verdict and

award against against Culguam, Culguam, and and thus, thus, is collateral collateral to to further action by Arceo to collect upon the

Judgment. Judgment.

Evenmore, Arceo has has not asked asked this Court Court to to increase increase the supersedesbond supersedeas bond amount

above the Judgment so as to to cover cover the the sanctions. In other sanctions. In other words, the matter may proceed to the

ORIGINAL CV0397-20 AMENDED DECISION DECISION AND ORDER ORDER GRANTING MOTION Page4 Page FOR WRIT OF EXECUTION

execution phase basedsolely phase based solely on on the theJudgment Judgmentamount-separate amount-separate and apart from any amount that

may be imposed as sanctions.

B. AAreduction reductionin iuthe the bond boud amount amount is unwarranted.

Given that the Judgment Judgment as asissued issuedshall shallstand, stand,aawrit writof of execution execution is is appropriate appropriate or, in the

alternate, Culguam Culguam isis required required to to post post aasupersedeas supersedes bond bond to toavail avail of of a stay. stay. GRCP 62(d) (court

in its in its discretion discretion may may suspend suspend execution "upon such execution "upon terms as to bond or otherwise as it considers such terms

proper for the security of the the security the rights rights of the adverse party").

Culguam argues that this Court should should use use its its discretion discretion to to set set the the bond bond at at aa lesser amount

than the than thefull Judgment.InInJ.J. fullJudgment. .ll Moving Moving Services, Services, Inc. Inc. v. v. Santo SankoBusman Bussan Co., Ltd., the Guam

Supreme Court examined examined whether aa trial trial court court could couldrelease release aa posted bond as a partial partial

satisfaction of ofaa judgment. 1998 1998 Guam Guam 19 ,i 38. 19 'II 38. The court cited Dillon Dillonv.v. City City of ofChicago, Chicago, 866 866

F.2d th Cir. 1988), approving a F .2d 902, 904 (7th lesser amount, Cir. 1988), approving bond at a lesser amount,upon uponreview review of of factors such

as the the complexity complexity of the the collection collection process; process; the amount of of time required to obtain obtain a judgment

after affirmation on appeal; appeal, the degree of confidence the the court court has has in in the the availability availability of funds, of funds;

whether the ability to to pay pay is is so so plain plain that that the the cost of aa bond would would be be a waste of money, money; and

whether the defendant is in such a precarious financial situation whether situation that the requirement requirement to post a

bond would would place other creditors of the defendant defendant in in an aninsecure insecureposition. position. Id. Id at at 904-05.

In applying these factors, Culguam explains that the collection process is simple and

should take thirty days, days; its insurance provider Allianz Allianzhas has already already appropriated appropriated the the necessary necessary

funds to satisfy the judgment, the the judgment; the cost cost of ofaa bond bond would wouldbe be steep steep and a waste of money since Ir it

can easily be paid paid through through the the issuance issuanceof of aacheck checkor orwire wire transfer; transfer, and and that that Culguam Culguam and andAllianz Allianz

are not in precarious financial positions positions to to place place other creditors in an an insecure position. Opp'n to

P1.'s Mot. for Pl.'s Mot. for Writ of ofExecution Execution at at 5-7 5-7 (Dec. (Dec. 31, 31, 2024). Arceo counters that that financial financial stability

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does not negate the need for a bond bond and and that that Allianz Allianz remains remains an unnamed defendant because of of

Culguam's misrepresentations. Culguam's misrepresentations. P1.'s Pl. 'sReply ReplyininSupp. Supp. Mot. Mot. for for Writ Writ of of Execution Execution at at 22 (Jan. (Jan. 6,

2025). She She further further states "given the significant states that "given significant judgment judgment amount, amount, the bond provides

assurance thatAllianz, assurance that Allianz, as the the insurer, insurer, stands standsready readyto tomeet meetits itsfinancial financial obligations obligations and and protects

against the risk of delayed or incomplete incomplete payment due to to ongoing Id. at ongoing litigation or appeals." Id. at 3.

Here, a bond bond is is warranted given the size of the warranted given the judgment, judgment, but but more more significantly, significantly,

questions remain about Allianz, an an unnamed unnamed party. Culguam' sprior party. Culguam's prior insistence insistence to to this this Court Court that

it lacked lacked insurance calls calls into into question the the credibility credibility ofCulguam's Culguam's current current assertions assertions regarding

its insured status. status. Moreover, Moreover, the Court Court notes notesthe theinformation informationprovided providedabout aboutAllianz's Allianz's financial financial

health appeared to be appeared to be printouts printouts submitted submitted by by counsel, counsel,and andnot notby byCulguam Culguamor orAllianz's Allianz's

representatives, let alone verified or sworn under oath in any fashion. swam under fact, the Court has In fact, fashion. In

reviewed prior prior post-judgment post-judgment filings filings by by Culguarn Culguam and sees seesno noverified verified information information supporting its

insured status, status, the thelevel level of of insurance, insurance,or orthe thefinancial financialhealth healthof of itself itself and and its its insurer. insurer. To that end,

Culguam has has not not provided provided credible evidence to to support its picture of a simple and easy easy collection collection

process. process.

Accordingly, in Accordingly, incontrast contrast to to unverified unverifiedstatements statements regarding regarding aa questionable questionable insurance

level, a fills full bond bond assures that the assures that the Judgment Judgmentwill will be be paid paid if if affirmed affirmed upon upon appeal appeal and and that, indeed,

will be there will be no no issue issue on on a payout upon upon the conclusion conclusion of ofthe the case. case.

III. 111. CONCLUSION AND ORDER

The Court finds that Arceo is entitled to a writ writ of of execution execution to to enforce enforce the judgment

entered against against Culguam, Culguam,or, or,ininthe thealternative, alterative, Culguam Culguam may may post post a supersedeas supersedes bond bond pursuant

to Rule 62(d). 62(d). The Court GRANTS Arceo's Arceo's motion motion and and will will issue issue aa writ writ of ofexecution execution in in 30 30 days days

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if if Culguam Culguam does not post post aasupersedeas supersedes bond in in the theamount amountof of$2,751,170.00. $2,75l,l70.00. If Ifno no bond bond is

posted, Arceo may may submit submit aa proposed proposedwrit writ of of execution.

S0 SO ORDERED, ORDERED,25 25 March March 2025. 2025.

HON. HON. EILYMVM. IRIARTE ELY

ORIGINAL URIGINAL