Cristobal v. Siegel

Opinion

6 IN THE SUPERIOR COURT OF GUAM 7

8 ADRIAN L. CRISTOBAL, CONCEPCION ) Civil Case No. CV0442-88 F. CRISTOBAL, JORGE E.U. ) 9 CRISTOBAL, BEATRIZ CRISTOBAL, ) 10 E.C. LEON GUERRERO, ALBERTO C. ) DECISION AND ORDER LAMORENA III, trustee, and FE C. II LAMORENA, ~ 12 Plaintiffs, ) ) 13 vs. ) ) 14 JEFFREY SIEGEL, FRACIS L. GILL, and ) CORAL PIT, INC., ) 15 ) Defendants, 16 ) ______________________________) 17

18 INTRODUCTION 19 This matter is before the Honorable Judge Michael J. Bordallo. Pursuant to Rule 7.1 of 20 the Local Rules of the Superior Court of Guam, Defendant's motions for the Court to issue an 21 order to show cause, amended order and for clarification were taken under advisement by the 22

23 Court on September 11 and October 15, 2014 respectively. Defendants were represented by

24 Attorney William C. Bischoff. Plaintiff was represented by Attorney Anthony R. Camacho. 25 After having carefully received and reviewed the papers, arguments and the file herein, the 26 Court hereby grants in part Defendant's requests; granting its motion to amend and denying its 27

28 motion for order to show cause and motion for clarification.

Page 1 of14 BACKGROUND 2 I. 3 This case arises out of a June 1, 1988 complaint for fraud damages and cancellation of 4 instruments. Plaintiffs sought a declaration that a 1986 lease agreement between themselves 5

6 and the Defendants was void. After many years of litigation, on or about January 16, 1996, the

7 parties executed a Settlement Agreement to resolve the claims herein. 8 Pursuant to the Settlement Agreement, on March 14, 1996, the Court signed a 9 Stipulation and Order for the Settlement and Compromise of Claims containing five numbered IO

II paragraphs: 1) incorporating by reference the parties' Settlement Agreement; 2) ordering the

I2 parties to perform their respective obligations pursuant to the terms and conditions of the I3 settlement agreement; 3) dismissing the matter with prejudice; 4) retaining jurisdiction to I4 enforce the terms and conditions of the Settlement Agreement; and 5) directing the entry of 15 judgment. Attached to the order was a paper identified as Exhibit 1 and entitled, Settlement I6

I7 Agreement.

18 The parties subsequently engaged in a series of negotiations to perform their obligations I9 under the Settlement Agreement; the negotiations ultimately collapsed. Defendant Bottomless 20 Pit, LLC, the successor to Defendant Coral Pit Inc. (hereafter Defendant) thereafter filed a 2I motion pursuant to Rule 70 of the Guam Rules of Civil Procedure requesting that the terms of 22

23 the Settlement Agreement conveying an interest in property be enforced. On February 21,

24 2011, the Court granted Defendant's request. Nearly six months later, Plaintiffs Concepcion 25 and Jorge Cristobal, pursuant to Rule 60(b) filed a motion to reconsider. Plaintiffs' request for 26 reconsideration was denied on February 2, 2012. The decision was appealed and on December 27

Page 2 of 14 3, 2012, the Guam Supreme Court reversed and remanded the Court's decision. Cristobal v. 2 Siegel, 2012 Guam 16. 3 In its decision the higher court found that this Court had abused its discretion when it 4 found that its March 14, 1996, Stipulation and Order was a judgment within the meaning of 5

6 rule 70 ofthe Guam Rules of Civil Procedure. !d. at~ 12. Citing section 21101 oftitle 7 ofthe

7 Guam Code and a California Supreme Court case interpreting section 211 01 's California 8 counterpart, the Guam Supreme Court reasoned that because the Stipulation and Order did not 9 directly contain the terms of the Settlement Agreement, it was not a final judgment within the 10

II meaning of rule 70. !d.

12 Accordingly this Court on July 30, 2013, rather than incorporating the terms of the 13 settlement agreement by reference, amended its 1996 final judgment to directly include the 14 terms of the parties' Settlement Agreement. Additionally, in an effort to comply with the 15 Guam Supreme Court's instructions on remand, on the same day the Court entered a decision 16

17 and order denying Defendant's rule 70 request and finding that it's 1996 stipulation and order

18 did not fall within the parameters of that rule. Plaintiffs, the Estate of Jorge E.U. Cristobal, the 19 Trustee for Alberto C. Lamorena III, and the Estate of Fe C. Lamorena, (hereafter Plaintiffs) 20 appealed the Court's amended judgment and on July 7, 2014, the Guam Supreme Court 21 reversed and vacated this Court's amended judgment. Cristobal v. Siegel, 2014 Guam 16 ~ 33. 22

23 The Guam Supreme Court found that the Court had abused its discretion through its sua

24 sponte amendment to its final judgment. !d. The higher court explained that the amended order 25 fell outside the purview of any clerical amendments contemplated by rule 60(a), there being no 26 evidence that this Court in 1996 intended to directly include the terms of the Settlement 27

28 Agreement, and that the amended order failed to contain the other material parts of the 1996

Page 3 of14 Stipulation and Order. !d. at~ 21-22. The Guam Supreme Court also found that the amended 2 order failed to fall within the permissive scope of rule 60(b); it did not provide a notice and an 3 opportunity to be heard by the parties and it did not list any extraordinary circumstances 4 justifications or reasons justifying relief from the operation of judgment. !d. 5

6 II.

7 a) 8 On July 23, 2014, Defendant filed a Motion for the Court to Issue an Order to Show 9 Cause as to Why Plaintiffs Should not be Held in Contempt for Failure to Perform their 10

11 Obligations Under Section Seven of the Settlement Agreement; and for the Court to Make

12 Findings that will Render GRCP 70 Applicable. Mot. at 1. Citing to the Guam Supreme 13 Court's 2012 decision Defendant emphasizes that the Court's 1996 order requiring the 14 enforcement of the parties' settlement agreement was not invalidated and remains in effect. !d. 15 at 2. Accordingly it first requests that the Court make two findings of fact to assist and support 16

17 an order of enforcement: 1) the sale contemplated in section two of the Settlement Agreement

18 did not take place; and 2) the Plaintiffs were paid the amounts due them under section four. !d. 19 at 4-6. 20 In support of the first finding of fact Defendant cites to its attached declaration and 21 Plaintiffs 2011 appellate brief admitting the same. !d. at 6. In support of the second finding of 22

23 fact Defendant cites to Plaintiff Alberto C. Lamorena III's February 1999 declaration as well as

24 Plaintiffs' February 25, 1999 motion paper and an August 6, 1999 letter memorializing a 25 $200,000.00 payment to Cristobals' attorney. !d. Defendant argues that these findings are 26 sufficient to support an order mandating, pursuant to the Settlement Agreement, that the 27

28 Plaintiffs' show cause why they should not be held in contempt of section seven of the same.

Page 4 ofl4 !d. Alternatively Defendant also argues that these finding are sufficient to support a property 2 conveyance under rule 70 ofthe Guam Rules of Civil Procedure. Id. at 13. 3 b) 4 •t: i!'i Plaintiffs filed their opposition to Defendant's motions on August 20, 2014. Opp. at 1. 5

6 Plaintiffs begin by reciting a version of the factual and procedural history of the case. Id. 2-10.

7 They next argue that Defendant's motion is barred by the Court's July 30, 2013 decision 8 denying a similar motion through the codified doctrine of res judicata. !d. at 10-11; 6 GCA § 9 4209 (2013). Plaintiffs also argue that neither Defendant nor its predecessor in interest have 10

II any standing to bring the motion. !d. at 11. Plaintiffs, reason that Defendant's standing expired

12 when Defendant failed to renew the lease on January 1, 1992. Id. at 12. Additionally, Plaintiffs 13 argue that the Court was unable to retain jurisdiction after the case was dismissed; the 14 underlying claims arising from a separate action for breach of contract and any cause of action 15 for breach of contract is time barred. !d. at 12-14. 16

17 As to Defendant's request that the Court enter a second amended final judgment,

18 Plaintiffs argue that this request should be analyzed under the rules regulating requests for a 19 new trial. Id. at 14. They accordingly assert that this request is similarly time barred and well 20 outside of the respective ten day and one year limits. !d. 21

Addressing Defendant's request for an order to show cause Plaintiffs argue that there is 22

23 no evidence of a valid order. !d. at 15. Alternatively they argue that Plaintiffs were not able to

24 comply with the terms of the Settlement Agreement and therefore did not willfully fail to 25 comply with its terms. Id. As to the validity of the order, Plaintiffs' assert that there is 26 absolutely no order mandating the parties to comply with the terms of the order. !d. Citing to 27

28 the Settlement Agreement Plaintiffs argue that the preconditions to their conveying title to

Page 5 of 14 Defendant were: securing a buyer for a specific property, opening an escrow guaranteeing the 2 payment of $2,000,000.00, providing them $400,000.00 in consideration for entering into the 3 Settlement Agreement and providing them $300,000.00 in back rent for the lease. Id. Plaintiffs 4 assert that Defendant has not performed these preconditions and argue that accordingly they 5

6 have no duty to act under the Settlement Agreement. Id. 7 c) 8 Defendant filed its reply on August 29, 2014. Reply at 1. In it Defendant begins by 9 citing the Guam Supreme Court's July 7, 2014 finding herein, that the Court's March 14, 1996 10

II final judgment is a judgment. !d. at 1, citing, Cristobal v. Siegel, 2014 Guam 16 ~ 14.

12 Defendant argues that this finding meets the majority of Plaintiffs' arguments in opposition. !d. 13 at 2. As to Plaintiffs' res judicata argument Defendant asserts Plaintiffs have failed to properly 14 support it and it should therefore be rejected under the precedent established by Lamb v. 15 Hoffman, 2008 Guam 2 ~ 35. Id. Alternatively it argues that the doctrine does not apply to a 16

17 court's decisions and orders, only its final judgments, specifically when a court's decisions do

18 not reach the merits. Id. 19 As to the Plaintiffs' standing arguments Defendant argues and asserts that these issues 20 were part of the Plaintiffs 1996 original claims and that they were mooted by the parties' 21

Settlement Agreement. Id. at 3. Regarding the jurisdictional argument the Defendant asserts 22

23 and reasons that settlement agreements are routinely incorporated into judgments and cites two

24 Guam Supreme Court cases, as well as the instant, where the higher court recognized these 25 judgments without invalidating them. Id. at 4. 26 Defendant summarily rejects Plaintiffs' characterization ofhis requests as requests for a 27

28 new trial or judgment, as well as their argument that there is no valid order upon which

Page 6 of14 Plaintiffs might be in contempt. !d. at 5. Lastly Defendant argues that Plaintiffs' arguments of 2 inability to comply mix the obligations required of the parties in section two, three, and four of 3 the Settlement Agreement with those of an independent section seven. !d. at 6-7. 4

5 III.

6 a)

7 On September 3, 2014, Defendant filed a motion for clarification of the number of 8 defendants. Mot. at 1. In its motion it asserts it is the only entity that has rights to the real 9 property in question. !d. at 2. Defendant request that the Court accordingly find that it is the 10

11 one Defendant or Counterclaimant in the ongoing enforcement of Settlement Agreement

12 proceedings. 13 b) 14 Plaintiffs filed their opposition to Defendants request on October 1, 2014. Opp. at 1. 15 After citing a version of the history of events herein, Plaintiffs assert that Defendant has failed 16

17 to cite to or analyze any authority authorizing the relief requested. !d. at 1-7. Specifically the

18 Plaintiffs' cite to a 2008 Guam Supreme Court case where the higher court reversed the 19 Superior Court's granting of a motion to clarify. !d. citing Hart v. Hart, 2008 Guam 11 ~~ 8-14. 20 Plaintiff argues that in addition to finding that Guam's declaratory relief statute governed, the 21 Guam Supreme Court observed that an appellant had failed to cite any rule allowing the 22

23 Superior Court to enter an order of clarification. !d. It further argues that the Court, having

24 entered a final judgment, retains the limited jurisdiction to enforce the settlement agreement 25 and that granting Defendant's request would exceed the Court's limited jurisdiction. !d. at 7. 26 Citing a 1995 case from the U.S. Federal District Court in Florida, Plaintiffs argue that 27

28 rule 25 of the Guam Rules of Civil Procedure, governs the substitution of parties and is limited

Page 7 of 14 to transfers of interest that take place during the pendency of an action. !d. at 8. Lastly 2 Plaintiffs argue that Defendants have no transferable interest to convey, the terms of the 3 Settlement Agreement having expired on May 7, 1997. 4

5 c)

6 Defendant filed its reply on October 9, 2014. Reply at 1. In it Defendant argues that it

7 would make better sense to clarify this issue now. !d. Acknowledging the Guam Supreme 8 Court's 2008 decision in Hart, the Defendant asserts that this matter is factually distinguishable 9 and further reasons that there is no rule against a court providing clarity. !d. at 2. 10

11 Defendant further argues that it is not its intention to request substitution, rather to

12 clarify by order that the other named Defendants never had an interest in the land at issue in 13 their personal capacities, and as shareholders of Defendant Coral Pit, any further interest was 14 made meaningless in Coral Pit's transfer of all its interests herein to Defendant. !d. at 3-4. In 15 support of this argument Defendant asserts that this motion was served upon Defendant Gill's 16

17 legal counsel. !d. at 4. Lastly, as to Plaintiffs' argument that there was no interest to transfer,

18 Defendant asserts that this argument was raised in Plaintiffs opposition to its motion for order 19 to show cause and refers, by reference to its arguments in reply to that motion. 20 DISCUSSION 21 I. Amended Final Judgment 22

23 On March 14, 1996, this Court, signed and entered two papers in this matter, a

24 Stipulation and Order and a Final Judgment. Cristobal v. Siegel, CV0442-88, Final Judgment, 25 at 1 (Super. Ct. Guam March 24, 1996); Cristobal v. Siegel, CV0442-88, Stipulation and 26 Order, at 1 (Super. Ct. Guam March 24, 1996). Both papers dismissed the parties' claims and 27

28 defenses with prejudice. !d. Additionally, pursuant to the Court's ancillary and inherent

Page 8 of 14 authority to enforce its orders an to fulfill its inherent functions, the Court retained jurisdiction 2 over the settlement agreement for the express purpose of enforcing its terms. 1 !d.; Kokkonen v. 3 Guardian Life Ins. Co. of Americai, 511 U.S. 375, 380 (1994)(a court may retain ancillary 4 jurisdiction for two separate purposes: (1) to permit disposition by a single court of claims that 5

6 are, in varying respects and degrees, factually interdependent, and (2) to enable a court to

7 function successfully, that is, to manage its proceedings, vindicate its authority, and effectuate 8 its decrees), citing, Julian v. Central Trust Co., 193 U.S. 93, 112 (1904)(In cases, where the 9 Federal court acts in aid of its own jurisdiction and to render its decree effectual, it may, 10

II notwithstanding, restrain all proceedings in a state court which would have the effect of

12 defeating or impairing its jurisdiction). 13 Here both of these papers were prepared by the attorney for Defendants and as noted 14 above, signed by the Court together and on the same day. Cristobal, CV0442-88, Final 15 Judgment, at 1; Cristobal, CV0442-88, Stipulation and Order, at 1. It is clear from the plain 16

17 language of the papers that the terms of the parties' Settlement agreement were a specific and

18 integral part of this Court's order and final judgment; its intention was to provide a mandatory 19 medium for those terms to be enforced. !d. It is as clear that the incorporation of these terms 20 and the Court's judicial oversight of them were a material part of the consideration for the 21 parties' agreement to sign the Settlement Agreement and submit it to the Court. !d. The 22

23 unintentional omission of these terms from the Final Judgment clearly arose out of misplaced,

25 1 In making this finding and conclusion the Court addresses Plaintiffs' arguments of Defendant's 26 lack of standing and the Court's lack of jurisdiction. Opp. to OSC at 11-14. As to Plaintiffs' argument that the matter is time barred the Court is not persuaded that it should treat Defendant's 27 request as a motion for new trial. Rather the Defendant has allowed for the notice requirements 28 discussed by the Guam Supreme Court in Cristobal v. Siegel, 2014 Guam 16 ~ 19, to be met and the Court's review of Defendant's request shall likewise be considered under the rules discussed in that opinion. Cristobal v. Siegel, 2014 Guam 16. Page 9 ofl4 brevity and a desire to avoid unnecessary redundancy --- the Settlement Agreement's terms 2 having already been stipulated, included by reference, attached and mandated in the Court's 3 2 Stipulation and Order and the Stipulation cited in the Court's Final Judgment. !d. 4 As recently explained by the Guam Supreme Court herein, Rule 60(a) allows for 5

6 clerical errors to be amended at any time. Siegel, 2014 Guam 16 ,-[,-[ 20-22. The 2014 Seigel

7 Court explained that rule 60(a) allows for the correction of errors in execution as opposed to 8 instances where the court, after re-consideration, has changed its mind. Id. at ,-[ 21. Under this 9 standard the Court finds that the omission of the terms of the Settlement Agreement and a 10

II specific order requiring the parties to comply was clerical. Id.

12 Additionally and alternatively the Court finds that under the standard explained by the 13 Siegel Court, as to Rule 60(b)(6), omitting the terms of the Settlement Agreement from the 14

15 2 16 The Court's Stipulation and Order in part provides,

17 The above-captioned parties, through counsel, hereby stipulate as follows: 1. The parties have reached a settlement agreement of their disputes in this action 18 and have memorialized their agreement in that certain Settlement Agreement 19 attached hereto as Exhibit 1 and incorporated herein by reference. 2. The Court hereby orders the parties to perform their respective obligations 20 pursuant to and under the terms and conditions of the Settlement Agreement. 21 4. The Court shall retain jurisdiction over the Settlement Agreement to enforce 22 the terms and conditions thereof. 5. Let Judgment enter accordingly. 23 Cristobal v. Siegel, CV0442-88, Stipulation and Order, at 1 (Super. Ct. Guam March 24, 24 1996). Referring to the same settlement agreement the Court's final judgment in part 25 provides,

26 2. This Court shall retain jurisdiction over the Settlement Agreement to enforce 27 the terms and conditions thereof.

28 Cristobal v. Siegel, CV0442-88, Final Judgment, at 1 (Super. Ct. Guam March 24, 1996)

Page 10 of 14 Court's final order would be inequitable. Id. at~~ 29-31. It is clear from the Court's review of 2 the record, the terms of the Settlement Agreement and the parties' prepared and stipulated 3 papers, that the Court's continued enforcement of the same was a material consideration upon 4

which the parties relied. Additionally and of salient note is the Defendant's assertions of post 5

6 March 14, 1996 actions in reliance upon these very terms. 3 Mot. for OSC at 6. Defendant

7 asserts and Plaintiffs do not dispute the offer and receipt of monies directed at complying with 8 the contingent and alternative terms of section seven of the Settlement Agreement. Inherent to 9 this Court's jurisdiction herein, is its power to protect its proceeding and vindicate its authority. 10

II Kokkonen, 511 U.S. 375 at 380. Disallowing amendment here may likely significantly

12 prejudice the Defendant and diminish the authority ofthe Court. Id. 13 II. Order to Show Cause 14 In Guam the precluding effect of a final order is well established by statute and case law 15 through the doctrines of res judicata and law of the case. 6 GCA § 4209; In The Matter Of 16

17 Aguon, 2013 Guam 4 ~ 23 (The doctrine of res judicata is a rule of fundamental and substantial

18 justice, of public policy and of private peace, which should be cordially regarded and enforced 19 by the courts); Guam v. Rios, 2011 Guam 6 ~~ 21, 33 (Under the 'law of the case' doctrine, a 20 court is generally precluded from reconsidering an issue that has already been decided by the 21 same court, or a higher court in the identical case). While the doctrines of res judicata and the 22

23 law of the case, vary in scope and application, once applicable departure from these doctrines is

24 prohibited in the first instance and strictly limited in the second, to a court's "clear conviction 25

27 3 28 As set forth above, Defendant asserts that: 1) the Plaintiffs were paid the amounts due them under section four and 2) the sale contemplated in section two of the Settlement Agreement did not take place. Id. at 4-6. Page II ofi4 of error with respect to a point of law." !d. Reviewing the above standards and in consideration 2 that the orders in question and the issues raised fall within the scope of the same case, the Court 3 finds the doctrine of the law of case to be applicable here. !d. 4 The question of whether an order to show cause should issue in this matter was decided 5

6 by this Court on July 30 of this past year. Cristobal v. Siegel, CV0442-88, Decision and Order

7 (Super. Ct. Guam July 30, 2013). In that decision the Court interpreting its reversal and 8 remand in Cristobal v. Siegel, 2012 Guam 16, found that because its stipulation and order did 9 not contain the specific terms of the settlement agreement it could not initiate contempt 10

II proceedings. !d. at 4. However upon review the Court finds that its decision was, for the

12 potentially prejudicial reasons described above, critically over broad. Rios, 2011 Guam 6 ~ 33; 13 Guam R. Civ. P. 60(b). While the Guam Supreme Court in Siegel, found that the Court's 14 stipulation and order was not a judgment as described in rule 70 of the Guam Rules of Civil 15 procedure, it did not find that it was invalid or its incorporation of the terms of the settlement 16

17 agreement into its order by reference, improper. Cristobal v. Siegel, 2012 Guam 16; Cristobal

18 v. Siegel, 2014 Guam 16 ~ 14. Accordingly the Court finds it is now able to consider 19 Defendant's motion. !d. 20 Section 34101 of title 7 of the Guam Code regulates a Court's contempt powers and its 21 issuance of orders to show cause. In 2003 the Guam Supreme Court, reviewing a trial Court's 22

23 findings in a domestic case explained that, "[t]he elements of contempt are generally: 1) a valid

24 order, 2) knowledge of the order, 3) ability to comply with the order, and 4) willful failure to 25 comply with the order." Rodriguez v. Rodriguez, 2003 Guam 8 ~ 15. While this issue has yet to 26 specifically addressed by the Guam Supreme Court the U.S. Federal Circuit Federal Courts 27

28 have consistently held that "[a] party seeking civil contempt bears the initial burden of proving,

Page 12 of 14 by clear and convincing evidence, that the alleged contemnors violated a court order." Chicago 2 Truck Drivers v. Brotherhood Labor Leasing, 207 F.3d 500, 505 (8th Cir. 2000). 3 Under the above standard a movant bears the burden of first clearly outlining the terms 4 which were ordered. !d. After reviewing the Defendant's motion the Court is unable to find it 5

6 has met this first step. It is clear to the Court that in its March 14, 1996 Order, the Court

7 ordered the parties to perform their respective obligations under the terms of the settlement 8 agreement. However absent from Defendant's papers is any organized outline of those 9 obligations, mandatory and contingent, that either Party either met or failed to meet. Mot. 1-14; 10

II Reply 1-8. Absent this the Court is unable to begin any consideration of whether there is clear

12 and convincing evidence that either party failed to comply with their mandated obligations. In 13 re Estate of Concepcion, 2003 Guam 12 (A party's failure to assert the grounds for its request 14 may warrant denial). 15 III. Motion for Clarification 16

17 In 2008 the Guam Supreme Court reversed a Guam Superior Court's decision to clarify

18 a distribution of property issue in a final decree of divorce. Hart v. Hart, 2008 Guam 11 ~~ 8- 19 15. In its opinion the Court cited to the mandates of section 26801 title 7 ofthe Guam code and 20 ordered that the declaratory judgment statute was the appropriate method for regulating relief 21 and granting jurisdiction. !d. 22

23 In this case Defendant requests that the Court declare that its other named Defendants

24 never had an interest in the land at issue in their personal capacities, and that, as shareholders of 25 Defendant Coral Pit LLC, any further interest was made meaningless when Coral Pit LLC 26 transferred all interests to Defendant. Reply for Clarification. at 3-4. Reviewing this request 27

28 under the standards established by Hart, the Court finds it necessitates a request for declaratory

Page 13 of 14 relief. Hart, 2008 Guam 11 ,-r,-r 8-15. Absent this it is unable to consider Defendant's request. 2 CONCLUSION 3 Based on the foregoing, the Court grants in part Defendant's requests. Defendant's 4 motion to amend final judgment is hereby, granted. Accordingly an amended final judgment 5

6 shall enter nunc pro tunc, as of March 14, 1996. It shall include the following terms: a recital

7 of the terms of the Settlement Agreement, ordering the parties to comply with their respective 8 obligations; dismissing this action with prejudice; and retaining jurisdiction over the Settlement 9 Agreement to enforce its terms and conditions. Defendant's requests for an order to show 10 cause and request of clarification is denied. II

13 SO ORDERED, this /9 day of /l/~ 2014. 14

23 SERVICE VIA COURT BOX I acknowledge that a copy of the 24 original hereto was placed in th r ~{)f:

Page 14 ofl4