F SUPER OF ZIJI8 2 CLERK 3
6 IN THE SUPERIOR COURT OF GUAM
7 PETERS. CHUNG, ) Case No. CV0447-14 8 ) Plaintiff, ) 9 ) vs. ) 10 ) FINDINGS OF FACT AND ) CONCLUSIONS OF LAW 11 BLAIR CONSTRUCTION CO., LTD., ) ) 12 ) Defendant. ) 13 ) ______________________________) 14
16 This matter came before the Honorable Alberto C. Lamorena, III for a bench trial on 17 October 30, 2017, October 31, 2017, and November 1, 2017 concerning a complaint for 18 malicious prosecution by Peter S. Chung ("Plaintiff' or "Mr. Chung") against Blair 19
20 Construction Co., Ltd. ("Defendant" or "BCC"). 1 Attorney Phillip Torres represents Plaintiff
21 and Attorney Michael J. Berman represents Defendant. Having duly considered the parties' 22 briefs, oral arguments, evidence and testimony received during trial, and the applicable law, the 23 Court now issues the following Findings of Fact and Conclusions of Law ("Findings"). 2 24
26 1 27 Plaintiff and Defendant are collectively referred to as the "Parties" throughout these Findings of Fact and Conclusions of Law. 2 28 The Court took the matter under advisement on December 12, 2017, which was the deadline for the filing of replies/oppositions to the Parties' proposed findings.
ORIGINAL Findings of Fact and Conclusions of Law CV0447-14, Chung v. Blair Construction Co.
FINDINGS OF FACT 3
2 1. At all relevant times, Mr. Chung was the principal real estate broker of a company doing
3 business on Guam as Expo Realty. 4 2. In January 2008, BCC - a corporation based in the Republic of Korea- inquired with 5 Mr. Chung about finding property that was suitable for a housing development. 6
7 Following this inquiry, Mr. Chung showed representatives of BCC, specifically, Mr.
8 Heung Koo Lee ("Mr. Lee"), President of BCC, and Ms. Ja Young Yim ("Ms. Yim"), 9 Mr. Lee's duly-authorized representative and agent, a property identified as Lot 7134, 10 which was located in Yigo, Guam. 11 3. Lot 7134 was owned by David Lujan ("Mr. Lujan") at the time Mr. Lee and Ms. Yim 12
13 were shown the property by Mr. Chung.
14 4. On February 1, 2008, Earth Road, Inc. ("Earth Road") entered into a Land Purchase 15 Agreement to purchase Lot 7134 from Mr. Lujan for $1,650,000 ("Earth Road 16 Transaction"). 17 5. Some time prior to March 10, 2008, Mr. Chung informed Ms. Yim that there was 18
19 already an existing sales contract for the purchase of Lot 7134 to Earth Road from Mr.
20 Lujan. 21 6. Some time prior to March 10, 2008, BCC expressed interest in purchasing Lot 7134 and 22 began negotiations with Earth Road regarding a purchase price. 23
24 7. On March 10, 2008, Mr. Lee entered into a Land Purchase Agreement to purchase Lot
25 7134 from Earth Road for $2,450,000 ("BCC Transaction"). (See Pl.'s Ex. 1, Oct. 30,
3 28 Placement of a fact under a particular section herein is not controlling; a finding of fact may state legal conclusions and a conclusion of law may include statements of fact. Page 2 of7 Findings of Fact and Conclusions of Law CV0447-14, Chung v. Blair Construction Co.
2017.) Ms. Yim and Mr. Lee signed the agreement as buyers and Kwon Jung Do and
2 Mr. Chung signed the agreement as sellers. (ld.)
3 8. The Earth Road Transaction closed immediately prior to the BCC Transaction on the 4 same day. 5 9. At the time that BCC agreed to purchase Lot 7134, they were not aware that Earth Road 6
7 would realize an $800,000.00 gain on the land purchase and sale.
8 10. After knowledge of the details of the Earth Road Transaction were revealed to Mr. Lee, 9 representatives of BCC, specifically Ms. Yim, Chan Ho Kim, and Jong Choi, met with 10 Mr. Chung during a meeting on Guam to attempt to recover Earth Road's gains from 11 their purchase and sale of Lot 7134. 12
13 11. On November 24, 2009, BCC filed a civil complaint against Mr. Chung- Civil Case
14 No. CV1753-09 - alleging various causes of action related to the BCC Transaction, 15 including fraud, misrepresentation, breach of fiduciary duty, and conspiracy ("2009 16 Lawsuit"). See Blair Construction Co. v. Chung et al., Civil Case No. CV1753-09, 17 Complaint (Nov. 24, 2009). 4 BCC cited in their complaint to a 2007 annual report of 18
19 Earth Road which purported to show that Mr. Chung was an officer and/or general
20 manager of the entity. ld. at<][ 11. 21 12. Following a bench trial in CV1753-09, judgment was entered in favor of Mr. Chung 22 after a determination that he properly disclosed all facts and circumstances relative to the 23
24 sale of Lot 7134 to BCC and that he did not engage in fraud. See Blair Construction Co.
25 v. Chung et al., Civil Case No. CV1753-09, Findings of Fact and Conclusions of Law
26 (Feb. 28, 2013); Judgment (May 6, 2013). 27
4 28 The Court herein takes judicial notice of the Judgment, Findings of Fact and Conclusions of Law, and the underlying complaint filed in CV1753-09.
Page 3 of7 Findings of Fact and Conclusions of Law CV0447-14, Chung v. Blair Construction Co.
13. Mr. Chung closed Expo Realty after the 2009 Lawsuit ensued.
2 14. Mr. Chung filed the current action on April 24, 2014 stating in its complaint that BCC
3 acted with malicious intent in bringing forth CV1753-09, and that BCC brought the 4 2009 Lawsuit without probable cause. 5 15. According to the annual reports of Earth Road for 2004-2007 filed with the Department 6
7 of Revenue and Taxation, Mr. Chung declared to be the president, treasurer, or secretary
8 for the entity. (See Def.'s Ex. A, Oct. 31, 2017.) Mr. Chung also signed Earth Road's 9 2007 annual report as their general manager. (Id.) 10
12 A. To establish malicious prosecution, Mr. Chung must demonstrate that the 2009 Lawsuit 13 (1) was initiated by or at the direction of BCC and legally terminated in his favor, (2) 14
15 was brought without probable cause, and (3) was initiated with malice. See Siebel v.
16 Mittlesteadt, 161 P.3d 527, 530 (Cal. 2007); Sheldon Appel Co. v. Albert & Oliker, 47 17 Cal. 3d 863, 871 (1989). 5 18 B. It is undisputed that the 2009 Lawsuit was initiated by BCC and that it legally 19
20 terminated in Mr. Chung's favor. See Blair Construction Co., Civil Case No. CV1753-
21 09, Judgment (May 6, 2013). 22
24 5 Neither Guam statute nor the Supreme Court of Guam has defined the elements for a malicious 25 prosecution claim. Nonetheless, the common law definition of a malicious prosecution action as adopted 26 by the California courts aligns with the majority approach. See, e.g., Willis v. Parker, 814 So. 2d 857, 863 (Ala. 2001); Kollodge v. State, 757 P.2d 1024, 1026 (Alaska 1988); Bah v. Mac's Convenience 27 Stores, LLC, No. 49A02-1407-CT-512, 2015 WL 3965781, at *6 (Ind. Ct. App. June 30,2015); MacDermid, Inc. v. Leonetti, No.36750, 2015 WL 3855044,at *3 (Conn. App. Ct. Mar. 11, 2015). See 28 also Lujan v. Howard Trapp Inc., Civil Case No. 1518-07 (Feb.21, 2011) (applying the elements of malicious prosecution adopted herein).
Page 4 of7 Findings of Fact and Conclusions of Law CV044 7-14, Chung v. Blair Construction Co.
C. The only question before this Court is whether the 2009 Lawsuit was brought without
2 probable cause and was initiated with malice.
3 D. To determine whether there was probable cause to bring the 2009 Lawsuit, the Court 4 must determine whether a reasonable attorney would have thought the prior action was 5 tenable in light of the facts known to BCC at the time the suit was filed. See Sheldon 6
7 Appel Co., 46 Cal. 3d at 878-879 ("the probable cause element calls on the trial court to
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F SUPER OF ZIJI8 2 CLERK 3
6 IN THE SUPERIOR COURT OF GUAM
7 PETERS. CHUNG, ) Case No. CV0447-14 8 ) Plaintiff, ) 9 ) vs. ) 10 ) FINDINGS OF FACT AND ) CONCLUSIONS OF LAW 11 BLAIR CONSTRUCTION CO., LTD., ) ) 12 ) Defendant. ) 13 ) ______________________________) 14
16 This matter came before the Honorable Alberto C. Lamorena, III for a bench trial on 17 October 30, 2017, October 31, 2017, and November 1, 2017 concerning a complaint for 18 malicious prosecution by Peter S. Chung ("Plaintiff' or "Mr. Chung") against Blair 19
20 Construction Co., Ltd. ("Defendant" or "BCC"). 1 Attorney Phillip Torres represents Plaintiff
21 and Attorney Michael J. Berman represents Defendant. Having duly considered the parties' 22 briefs, oral arguments, evidence and testimony received during trial, and the applicable law, the 23 Court now issues the following Findings of Fact and Conclusions of Law ("Findings"). 2 24
26 1 27 Plaintiff and Defendant are collectively referred to as the "Parties" throughout these Findings of Fact and Conclusions of Law. 2 28 The Court took the matter under advisement on December 12, 2017, which was the deadline for the filing of replies/oppositions to the Parties' proposed findings.
ORIGINAL Findings of Fact and Conclusions of Law CV0447-14, Chung v. Blair Construction Co.
FINDINGS OF FACT 3
2 1. At all relevant times, Mr. Chung was the principal real estate broker of a company doing
3 business on Guam as Expo Realty. 4 2. In January 2008, BCC - a corporation based in the Republic of Korea- inquired with 5 Mr. Chung about finding property that was suitable for a housing development. 6
7 Following this inquiry, Mr. Chung showed representatives of BCC, specifically, Mr.
8 Heung Koo Lee ("Mr. Lee"), President of BCC, and Ms. Ja Young Yim ("Ms. Yim"), 9 Mr. Lee's duly-authorized representative and agent, a property identified as Lot 7134, 10 which was located in Yigo, Guam. 11 3. Lot 7134 was owned by David Lujan ("Mr. Lujan") at the time Mr. Lee and Ms. Yim 12
13 were shown the property by Mr. Chung.
14 4. On February 1, 2008, Earth Road, Inc. ("Earth Road") entered into a Land Purchase 15 Agreement to purchase Lot 7134 from Mr. Lujan for $1,650,000 ("Earth Road 16 Transaction"). 17 5. Some time prior to March 10, 2008, Mr. Chung informed Ms. Yim that there was 18
19 already an existing sales contract for the purchase of Lot 7134 to Earth Road from Mr.
20 Lujan. 21 6. Some time prior to March 10, 2008, BCC expressed interest in purchasing Lot 7134 and 22 began negotiations with Earth Road regarding a purchase price. 23
24 7. On March 10, 2008, Mr. Lee entered into a Land Purchase Agreement to purchase Lot
25 7134 from Earth Road for $2,450,000 ("BCC Transaction"). (See Pl.'s Ex. 1, Oct. 30,
3 28 Placement of a fact under a particular section herein is not controlling; a finding of fact may state legal conclusions and a conclusion of law may include statements of fact. Page 2 of7 Findings of Fact and Conclusions of Law CV0447-14, Chung v. Blair Construction Co.
2017.) Ms. Yim and Mr. Lee signed the agreement as buyers and Kwon Jung Do and
2 Mr. Chung signed the agreement as sellers. (ld.)
3 8. The Earth Road Transaction closed immediately prior to the BCC Transaction on the 4 same day. 5 9. At the time that BCC agreed to purchase Lot 7134, they were not aware that Earth Road 6
7 would realize an $800,000.00 gain on the land purchase and sale.
8 10. After knowledge of the details of the Earth Road Transaction were revealed to Mr. Lee, 9 representatives of BCC, specifically Ms. Yim, Chan Ho Kim, and Jong Choi, met with 10 Mr. Chung during a meeting on Guam to attempt to recover Earth Road's gains from 11 their purchase and sale of Lot 7134. 12
13 11. On November 24, 2009, BCC filed a civil complaint against Mr. Chung- Civil Case
14 No. CV1753-09 - alleging various causes of action related to the BCC Transaction, 15 including fraud, misrepresentation, breach of fiduciary duty, and conspiracy ("2009 16 Lawsuit"). See Blair Construction Co. v. Chung et al., Civil Case No. CV1753-09, 17 Complaint (Nov. 24, 2009). 4 BCC cited in their complaint to a 2007 annual report of 18
19 Earth Road which purported to show that Mr. Chung was an officer and/or general
20 manager of the entity. ld. at<][ 11. 21 12. Following a bench trial in CV1753-09, judgment was entered in favor of Mr. Chung 22 after a determination that he properly disclosed all facts and circumstances relative to the 23
24 sale of Lot 7134 to BCC and that he did not engage in fraud. See Blair Construction Co.
25 v. Chung et al., Civil Case No. CV1753-09, Findings of Fact and Conclusions of Law
26 (Feb. 28, 2013); Judgment (May 6, 2013). 27
4 28 The Court herein takes judicial notice of the Judgment, Findings of Fact and Conclusions of Law, and the underlying complaint filed in CV1753-09.
Page 3 of7 Findings of Fact and Conclusions of Law CV0447-14, Chung v. Blair Construction Co.
13. Mr. Chung closed Expo Realty after the 2009 Lawsuit ensued.
2 14. Mr. Chung filed the current action on April 24, 2014 stating in its complaint that BCC
3 acted with malicious intent in bringing forth CV1753-09, and that BCC brought the 4 2009 Lawsuit without probable cause. 5 15. According to the annual reports of Earth Road for 2004-2007 filed with the Department 6
7 of Revenue and Taxation, Mr. Chung declared to be the president, treasurer, or secretary
8 for the entity. (See Def.'s Ex. A, Oct. 31, 2017.) Mr. Chung also signed Earth Road's 9 2007 annual report as their general manager. (Id.) 10
12 A. To establish malicious prosecution, Mr. Chung must demonstrate that the 2009 Lawsuit 13 (1) was initiated by or at the direction of BCC and legally terminated in his favor, (2) 14
15 was brought without probable cause, and (3) was initiated with malice. See Siebel v.
16 Mittlesteadt, 161 P.3d 527, 530 (Cal. 2007); Sheldon Appel Co. v. Albert & Oliker, 47 17 Cal. 3d 863, 871 (1989). 5 18 B. It is undisputed that the 2009 Lawsuit was initiated by BCC and that it legally 19
20 terminated in Mr. Chung's favor. See Blair Construction Co., Civil Case No. CV1753-
21 09, Judgment (May 6, 2013). 22
24 5 Neither Guam statute nor the Supreme Court of Guam has defined the elements for a malicious 25 prosecution claim. Nonetheless, the common law definition of a malicious prosecution action as adopted 26 by the California courts aligns with the majority approach. See, e.g., Willis v. Parker, 814 So. 2d 857, 863 (Ala. 2001); Kollodge v. State, 757 P.2d 1024, 1026 (Alaska 1988); Bah v. Mac's Convenience 27 Stores, LLC, No. 49A02-1407-CT-512, 2015 WL 3965781, at *6 (Ind. Ct. App. June 30,2015); MacDermid, Inc. v. Leonetti, No.36750, 2015 WL 3855044,at *3 (Conn. App. Ct. Mar. 11, 2015). See 28 also Lujan v. Howard Trapp Inc., Civil Case No. 1518-07 (Feb.21, 2011) (applying the elements of malicious prosecution adopted herein).
Page 4 of7 Findings of Fact and Conclusions of Law CV044 7-14, Chung v. Blair Construction Co.
C. The only question before this Court is whether the 2009 Lawsuit was brought without
2 probable cause and was initiated with malice.
3 D. To determine whether there was probable cause to bring the 2009 Lawsuit, the Court 4 must determine whether a reasonable attorney would have thought the prior action was 5 tenable in light of the facts known to BCC at the time the suit was filed. See Sheldon 6
7 Appel Co., 46 Cal. 3d at 878-879 ("the probable cause element calls on the trial court to
8 make an objective determination of the "reasonableness" of the defendant's conduct, i.e., 9 to determine whether, on the basis of the facts known to the defendant, the institution of 10 the prior action was legally tenable"); Ross v. Kish 51 Cal. Rptr. 3d 484, 495 (Cal. Ct. II Ap. 2006). 12
13 E. Moreover, "probable cause to bring an action does not depend upon it being meritorious,
14 as such, but upon it being arguably tenable, i.e., not so completely lacking in apparent 15 merit that no reasonable attorney would have thought the claim tenable." Paiva v. 16 Nichols, 85 Cal. Rptr. 3d 838, 849 (Cal. Ct. App. 2008) (citations omitted). 17 F. Here, the 2009 Lawsuit was based upon allegations that Mr. Chung engaged m a 18
19 fraudulent land flip scheme by acting as the broker for the sale of Lot 7134 from Earth
20 Road to BCC, while also being an agent of Earth Road. See Blair Construction Co., 21 Civil Case No. CV1753-09, Complaint at
25 ultimately determined that Mr. Chung "perpetuated no fraud", BCC had reason to
26 believe at the time of the filing of the 2009 Lawsuit that Mr. Chung had engaged in 27 potentially fraudulent activity because of his dual role as the broker or agent for the 28
Page 5 of7 Findings of Fact and Conclusions of Law CV0447-14, Chung v. Blair Construction Co.
parties in the BCC Transaction. This belief was fueled by the 2007 annual report of
2 Earth Road, which was referred to in BCC's complaint in the 2009 Lawsuit, that shows
3 that Mr. Chung was an officer and/or the general manager of Earth Road. Blair 4 Construction Co., Civil Case No. CV1753-09, Complaint at
7 regarding the nature of Mr. Chung's role in the BCC Transaction.
8 H. The substantial gain earned by Earth Road, when it sold the property to BCC, as well as
9 the fact that the Earth Road Transaction and BCC Transaction closed on the same day 10 are also facts that a reasonable attorney could construe as circumstantial evidence of 11 fraud. 12
13 I. The 2009 Lawsuit also hinged on what fiduciary duties Mr. Chung owed to BCC and its
14 representatives, including Mr. Lee and Ms. Yim, in disclosing the details of the Earth 15 Road Transaction and his relationship with Earth Road. This too was a valid concern as 16 a broker "is charged with the duty of fullest disclosure of all material facts concerning 17 the transaction that might affect the principal's decision." Roberts v. Lomanto, 5 Cal. 18
19 Rptr. 3d 866, 872 (Cal. Ct. App. 2003) (quoting Batson v. Strehlow, 441 P.2d 101 (Cal.
20 1968). A reasonable attorney could have also deemed it tenable to file the 2009 Lawsuit 21 based on information that Mr. Chung may have failed to completely discharge the 22 fiduciary duties he owed to BCC (and any of its duly authorized agents) in disclosing all 23 material facts regarding the Earth Road Transaction given his relationship to the parties 24
25 in the BCC Transaction.
26 J. In determining that the 2009 Lawsuit was not instituted without probable cause, it is not 27 necessary for the Court to determine if the lawsuit was initiated with malice. Rather, the 28
Page 6 of7 Findings of Fact and Conclusions of Law CV0447-14, Chung v. Blair Construction Co.
determination herein that there was probable cause to support the 2009 Lawsuit shows
2 that it was not initiated with malice.
3 CONCLUSION 4
5 For the reasons stated above, the Court finds that there was probable cause to bring the
6 2009 Lawsuit. Accordingly, Mr. Chung's action for malicious prosecution must fail and 7 Judgment shall be entered in favor of the Defendant. 8
13 HONORABLE ALBERTO C. LAMORENA, III Presiding Judge, Superior Court of Guam 14
Page 7 of7