Arceo v. CULGUAM, Inc.

Opinion

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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

ORIGINAL

v

CV0397-20 AMENDED DECISION DECISION AND

AND ORDER GRANTING MOTION Page 5 Page

FOR WRIT OF EXECUTION

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

\

RHGHNMa

CV0397-20 AMENDED DECISION AND ORDER GRANTING MOTION Page Page 6

FOR WRIT OF EXECUTION

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<M. IRIARTE

Judge, Superior Court of Guam Judge, Superior

ORIGINAL URIGINAL