Estate of Sparks v. Sparks

Opinion

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2{i21l DEC -6 PN 148 uh. CLERK OF cou~r OF COURT

IN THE SUPERIOR COURT OF OF GUAM GUAM

ESTATE OF MIN JUNG SPARKS, Mm JUNG CIVIL CIVIL CASE no. CV0409-24 CASE NO.

Plaintiff, DECISION AND ORDER GRANTING vs. MOTION TO DISMISS SAMANTHA SAMANTHACHONG CHONG SPARKS, SPARKS,

Defendant. Defendant.

Plaintiff PlaintiffEstate Estate of ofMin MinJung Jung Sparks Sparks seeks seeks to set aside a transfer transfer of of real property acquired

by Defendant Samantha Chong Sparks Samantha Chong Sparks("Sparks") ("Sparks") from from her her mother, mother, Decedent Decedent Min MinJung Jung Sparks. Sparks.

Sparks moves to Sparks moves to dismiss dismiss this thiscivil civil action based on the the Estate's Estate's non-compliance non-compliance with probate law

procedures. procedures. The The Court Court agrees agrees that that the Estate has hasnot notfollowed followed prerequisites outlined in Guam's

probate law on probate law on filing filing fraudulent conveyance cases, fraudulent conveyance cases,and andGRANTS GRANTS Sparks' Sparks' Motion to Dismiss.

I. 1. FACTUAL AND AND PROCEDURAL BACKGROUND

In a related related probate probatecase, case,Guam GuamRegional RegionalMedical MedicalCity City(GRMC) (GRMC) petitioned petitioned to to appoint appoint

Samuel Samuel N. Sparks, Decedent's husband, Sparks, Decedent's asthe husband, as theadministrator administratorof ofDecedent's Decedent's Estate. In In the Matter

of ofthe the Est. Est. of ofMin Min Jung Sparks, PR0043-23 (Pet. Letters Jung Sparks, Letters Admin. Admin. and and Prob. at 2 (Mar. 16, 2023 (Mar. 16, )). 2023)).

Simultaneously, GRMC filed Simultaneously, GRMC filed aa claim claim against the the Estate Estatefor for$1,049,084.98. $l,049,084.98. PR0043-23 PR0043-23 (Claim (Claim

on Contract at at 11(Mar. (Mar. 16, 16,2023)). 2023)). Rebecca Rebecca Sparks, one of Sparks, one of Decedent's biological biological daughters, daughters,

objected to the appointmentof the appointment ofan anAdministrator. Administrator. PR0043-23 PR0043-23(Obj. (Obj. to toAppointment Appointmentof of Adm'r Adm'r at

11 (May (May 4, 4, 2023)). 2023)). InInresponse, response, GRMC GRMCconsented consentedto toRebcca's Rebeca'sappointment appointment and and again filed a

claim against the the Estate. Estate. PR0043-23 PR0043-23 (Consent to to Appointment of Rebecca Rebecca Sparks at at 11 (May (May 8,

ORIGINAL OREGENAL CV0409-24 DECISION AND ORDER GRANTING MOTION TO DISMISS Page Page2

2023); Claim Ag. Est. Est. at 1 (May 8, 2023)).

Many months later, GRMC again petitioned for Letters of Administration and Probate

because Samuel Sparks had not done so, and requested that Attorney Michael J. Berman serve as

the administrator. PR0043-23 PR0043-23 (Am. (Am. Pet. Pet. Letters Letters Admin. Admin. and andProb. Prob. at at 2-3 2-3 (Mar. 7, 2024)). (Mar. 7,

Rebecca consented to Berman's appointment, and the Court approved. approved. PR0043-23 (Consent of of

Appointment of MichaelBerman Appointment ofMichael Bermanatat11(Apr. (Apr. 16, 16, 2024), 2024); Am. Order Appointing Adm'r at 11 (Jun. Adm'r at

18, 2024)). 18, On August 2024)). On August 21, 21, 2024, GRMC again filed a claim against the the estate. estate. PR0043-23

Est. at I (Aug. 21, 2024)). (Claim Ag. Est.

has now The Estate has now filed this fraudulent conveyance The Estate conveyance action. The Estate states states that that the late

Min Jung Sparks became indebted to GRMC between between 2019 2019 and 2020. Con Comp!. pl. Set Aside Fraud.

Transfer ,r117 (Jul.12, 7 (Jul. 12,2024). 2024).GRMC GRMC made made aa demand demand upon upon Decedent Decedent during her lifetime for

payment, however, she refused to pay. Id ,r 9.9. At Id.#H At the the same same time, time, Decedent Decedent conveyed conveyed seven

parcels of real real property property to to Sparks. Id. ,r1]10. Sparks. ld. 10. The The one one remaining remaining parcel parcel in in the the Estate's Estate's inventory

does not have a sufficient fair market value to satisfy satisfy the the claim claim by by GRMC let alone any possible

additional debts. ,r 12. Id. 1112. debts. Id

In this action, action, the the Estate seeks to Estate seeks to set set aside aside the the transfer, transfer, claiming claiming itit was was fraudulent. fraudulent. Sparks

moves to moves to dismiss alleging there dismiss alleging there was no application was no application made made under under 15 GCA GCA §§221 2211l in in the the probate probate

case before filing this this case. case. Mot. Dismiss at 2 (Aug. 20, 20, 2024); 2024), Reply Reply to to Pl.'s P1.'sOpp'n Opp'n Mem. Men. to

Def.'s Def.'s Mot. Mot. Dismiss ,r 4 (Sept. Dismiss 114 (Sept. 30, 30, 2024). 2024). The Estate requests that if the Court finds merit in

Sparks' claims, claims, the Estate be allowed allowed to amend amend their their complaint complaint or or to to substitute substitute the personal

representative and Estate representative and Estate with with GRMC. GRMC. PI.'s Pl.' Opp'n Opp Mem. Mem. to to De£'s Def.' sMot. Mot. Dismiss Dismiss at at 33 (Sept. (Sept. 17, 17,

2024). 2024).

ORIGI N1\L @Rn@nnAL CV0409-24 DECISION AND ORDER GRANTING MOTION TO DISMISS Page 3

II. 11. LAW AND AND DISCUSSION

Guam's probate Guam's probate law law states, states,

If a decedent, in his lifetime, conveyed conveyed anyany real real or or personal personal property, property, or any interest therein, with intent to defraud his creditors, or to to avoid avoid any obligation due another, or made a conveyance that by law conveyance that law isis void as as against creditors, or made a gift of property in view of of death, and there is a deficiency of of assets in the hands of the personal representative, the personal representative must, on the application ofof any creditor, commence commence and prosecute to final final judgment judgment an action for the the recovery of of the same for for the benefit benefit ofof the the creditors. creditors. A creditor such application must making such must pay such part of the cost and expenses of of the suit, or give such security to the personal representative therefor, as the Superior Court of Guam shall direct. All All property property recovered in an action brought under the provisions of of this subsection must be sold for the the payment payment of debts, in the same manner manner as if the the decedent had died seizedseised or possessed thereof, and the proceeds ofof such sale must be appropriated appropriated in payment of the debts of the decedent decedent in the same manner manner as as other other property in the hands of the personal representative. The remainder remainder of of the proceeds, after all the debts of the decedent have been paid, must be paid to the to the the person person from from whom such property was recovered. property was recovered.

15 GCA §§ 221 15 GCA 221 l(c) 1(c)(emphasis (emphasis added). added). Section Section 221 2211l posits posits that that aa personal personal representative representative must must

fraudulent conveyance prosecute a fraudulent conveyance action to final final judgment judgment "on of any creditor."as "on the application of

Sparks argues argues that that GRMC's GRMC's claim to the Estate does not satisfy the the requirements of of an

"application" to the personal representative, and that there is no no other evidence of of such an

application being made or approved by the probate court. court. Thus, Thus, the question raised by the briefs

is whether such application requires the approval of of the probate court.

The Court starts with with the plain language of of the statute, looking at the statute as a whole. whole.

Aguon v. Gutierrez, 2002 Guam 1416. v. Gutierrez, 1] 6. Using Using that that statutory statutory construction construction tool, tool, the Court Court is

persuaded that the probate court must hear a creditor's application to bring a fraudulent

conveyance conveyance action, particularly because the "Superior Court of Guam shall direct" whether the

creditor pays for the the costs costs and and expenses expenses of the the suit, suit, or or other other sufficient sufficient security. security. The extent of of the

creditor's financial creditor's financial involvement involvement in in the the lawsuit lawsuit is is not not something something the the statute statute authorizes the

OR¥@EN;5XL OR1GiNr\L CV0409-24 DECISION AND ORDER GRANTING MOTION TO DISMISS Page4 Page

personal representative representative to to determine determine alone. Moreover, aa few alone. Moreover, few provisions provisions later, later, the code invites

the personal representative to petition the court for guidance as to the administration, care,

protection estate. See 15 protection and preservation of the estate. 15 GCA GCA §§ 2221. 2221.

if the Court needed Even if needed to to seek seek the the assistance assistance of of external authorities authorities to interpret section

221 l(c), California 2211(c), California caselaw caselaw would would support the the Court's Courl's conclusion. In re Mina 'Trentai Dos Na

Liheslaturan Liheslaturan Goa/tan, 1113("If Guahan, 2014 Guam 24113 ("If a statute is ambiguous as as to to aa certain certain term, term, courts

will look to the the legislative legislative history history in order order to to ascertain ascertain the the legislative legislative intent.") intent.") The source of of 15 15

GCA §§ 221 GCA I(c) is 221 l(c) is sections sections 579 579 and and 580 of the 580 of the California California Probate ProbateCode. Code. Those Those provisions have provisions have

since since been been replaced replaced by by California California Probate Code § 9653, Probate Code§ 9653, which which has, however, retained some of of

the the original original language. Accordingto language. According to California California courts, courts, the the primary primary purpose purpose of of section section 9653 and

its predecessors is is to to enable enable the the personal representative to to reduce an asset to possession and

administer it for the the benefit of creditors "under "under the direction and supervision of of the probate

court." court." Katz v. v. Driscoll, Driscoll, 194 P.2d 822, 822, 825 825 (Cal. (Cal. App. 1948). 1948). As Asaa secondary secondary purpose, purpose, the law

intends to prevent complications if several creditors were to pursue pursue the the remedy and seek to apply

the proceeds of of aa suit suit to to their theirindividual claims. Id. individualclaims. the Court gleans from Kalz What the Id. What Katz is that the

probate court continues to monitor the actions of of the personal representative to ensure a

streamlined process for for handling creditors' claims. This This intent intent isis unfulfilled unfulfilled if if the personal

representative acts without specific court authority.

In summary, the plain language and the the purpose purpose of of section section 2211 2211 requires requirescourt coin

involvement before a fraudulent conveyance action is filed. There being filed. There being no no proof proofof ofthat that step

being taken in the related probate case, this matter is subject to dismissal.

III. 111. CONCLUSION AND ORDER CONCLUSION

IfIfthe the Estate Estate desires to pursue aa fraudulent fraudulent conveyance conveyanceaction action itit must must first seek approval seek approval

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from the probate probate court. court. As As there there is is no no proof proof that this procedure was followed in PR0043-23, the

Court GRANTS Sparks' Motion Motion to to Dismiss Dismiss without prejudice. In In addition, addition, the the Court Court takes no

action on the Estate's request that Estate's request that GRMC GRMC be be substituted substituted in in place place of of the Estate, as the Estate

presents no motion or authority for this procedural relief.

SO ORDERED, ORDERED, 66December December 2024.

~ ~ HON# ELYZE M. IRIARTE IRIARTE Judge, Superior Court of Guam

Appearing Appearing Attorneys Attorneys:: Michael J. Berman, Esq., Berman Law Firm, for Plaintiff Estate of Min Min Jung Sparks William L. Gavras, Esq., Esq., Law Offices of William L. L. Gavras, for for Defendant Defendant Samantha Chong Sparks

ORIGINAL.