Govt. of Guam and Guam Waterworks Authority v. Core Tech International Corp.

Opinion

FF LE D SUPERIOR CUURT OFGUAM 2u22 sEp.-9 PH L: 26 CLERK GF COURT

BY= . H E IN THE SUPERIOR COURT OF GUAM

GOVERNMENT OF GUAM, MICHAEL J. Superior Court Case No. C V l 1 9 8 - 1 8 B. BORJA, in his capacity as Director of Land Management, ,

Plaintiff, DECISIQN AND ORDER DENYING CORE TECH INTERNATIONAL and CORPORATION'S MOTION FOR SUMMARY JUDGMENT AGAINST GUAM WATERWORKS AUTHORITY, a GOVERNMENT OF GUAM AND THE Guam Public Corporation, DIRECTOR OF THE DEPARTMENT OF LAND MANAGEMENT Plaintiff-Intervenor,

vs.

CORE TECH INTERNATIONAL CORPORATION, YOUNEX ENTERPRISES CORPORATION,

Defendants.

The Court here considers Defendant Core Tech International Corporation's Motion for

Summary Judgment against Plaintiff Government of Guam and the Director of the Department of

Land Management (DLM). Having reviewed the briefs and the parties' arguments, the Court

determines that neither the Government's nor DLM's claims are barred by the doctrine of res

judicata as codified in 6 GCA § 4209. Core Tech's Motion is therefore DENIED.

1. PROCEDURAL BACKGROUND

The motion requires a review and comparison of this case with an earlier lawsuit filed by

the Government--Government of Guam v. Tories, et al., CV1124-09. CVl 198-18 DECISION AND ORDER DENYING CORE TECH INTERNATIONAL Page 2 CORPORATION'S MOTION FOR SUMMARY JUDGMENT AGAINST GOVERNMENT OF GUAM AND THE DIRECTOR OF LAND MANAGEMENT

A. cv1124-09

In 2009, the Government of Guam sued the Estate of lose Martinez Tories and Kil Koo

Yoon to quiet title to Lot AL-002 and other lots. This followed an earlier attempt by the

Government to intervene in In the Matter of the Estate of Jose Martinez Tories, PR0220-50. The

Government asserted that in 2006, the Guam Ancestral Lands Commission (GALC) awarded the

properties to the Tories Estate but imposed a condition that a court reviews the evidence of title

and make a final decision. CVl124-09 (Comal. 119 (July 24, 2009)). The Government alleged

that the Tories Estate's lawyers drafted and presented a deed to the GALC but omitted this

condition. Id. W 11-17. The Government sought reformation of the executed deed on this basis.

Id. It acknowledged, however, that the Torres Estate already sold the lots to Yoon. Id. 1[22.

Later in the litigation, the Government withdrew its claim against Yoon and instead alleged that

he was a bona fide purchaser. CVl 124-09 (Second Am. Comal. (Feb. 16, 2010)).

In a July 29, 2010 Decision and Order, the court dismissed the reformation claim

regarding Lot AL-002. The court determined that the Government had not pled a cause of action

to support a revision or reformation of the deed to Lot AL-002. Moreover, unlike the other lots

at issue, because the Government admitted that Yoon was a bona fide purchaser of Lot AL-002,

leave to amend would be futile. CVI 124-09 (Dec. and Order at 14 (July 29, 2010)). In other

words, the Court dismissed the cause of action as to Lot AL-002 without leave to amend. The

Government did not appeal this ruling. The court preserved other causes of action for a

declaratory judgment, quiet title, and a constructive trust. The remaining causes of action were

eventually dismissed after an appeal. In its opinion, the Guam Supreme Court noted that the

Government attempted to raise other arguments for the first time on appeal. Gov 't of Guam u

Gutierrez ex rel. Tories, 2015 Guam 8 W21-22. The court rejected those efforts. Id. CV1198-18 DECISION AND ORDER DENYING CORE TECH INTERNATIONAL Page 3 CORPORATION'S MOTION FOR SUMMARY JUDGMENT AGAINST GOVERNMENT OF GUAM AND THE DIRECTOR OF LAND MANAGEMENT

B. CV1198-18

In 2018, the Government and DLM filed the present Petition seeking to cancel and

amend Certificates of Title (COTs) regarding existing COTs pertaining to Lot 10184, Dededo.

Pet. (Dec. 17, 2018). Lot 10184 is derived from Lot AL-002. Pet. 11 18, see also Dec. and Order

at 8-9 (Nov. 30, 2021) (acknowledging the same as an undisputed fact). The Government and

DLM listed as adverse parties Core Tech and Younex Enterprises Corporation. Id.

DLM's Petition contends that in 20] 0, the registrar erroneously issued a series of COTs.

First, he erroneously created COT 124964 indicating that the title ro Lot lol84 was in the United

States. Pet. ii 23. Second, he erroneously created COTs 124965-124972 indicating title under

the Torres Estate. Pet. 'H 25. Third, he erroneously created COTs 124977-124984 indicating title

under Kil Yoo Yoon. Pet. 'U 26. Fourth, he erroneously created COTs 124988-124995, 133787,

and 133790 indicating title under Young. Pet. W 27, 28.

DLM asks to cancel, amend and rescind the COTs because they fail to consider various

interests, easements, rights of way, and other restrictions. Pet. W 29, 37. Such omissions include

but are not limited to easements, rights of way, and other restrictions in the GALC deed to the

Tories Estate. Pet. 1] 16.

Upon motion and non-opposition by DLM and Core Tech, GWA intervened and filed a

Petition to Quiet Title. GWA alleged that Core Tech's claim of ownership of Lot 10184 is

adverse to its own claim. Pet. Quiet Title 1130 (Apr. 17, 2019). GWA sought a declaration omits

interests in Lots 10184, 10193, and 10194. Core Tech later counterclaimed for inverse

condemnation and declaratonyjudgment. Am. Answer (Jan. 10, 2020), Second Am, Answer

(July 6, 2020). CV1198-18 DECISION AND ORDER DENYING CORE TECH INTERNATIONAL Page 4 CORPORATION'S MOTION FOR SUMMARY JUDGMENT AGAINST GOVERNMENT OF GUAM AND THE ` DIRECTOR OF LAND MANAGEMENT

Core Tech now moves for summary judgment on the Petition to Cancel and Amend

COTs. It asserts that the Government and DLM are barred from relitigating the ownership of the

properties. In response, the Government and DLM contend that this action is merely to correct

the COTs and not to litigate ownership interests. They also point to earlier efforts to dismiss

Core Tech's counterclaims and drop GWA as a party--an effort denied by this Court. Dec. and

Order Re DLM's Mot. Dismiss and Mot. Strike (June 22, 2020). It also asserts that there is no

resjudicata or section 29 I95 bar stemming from CVI 124-09.

11. LAW AND DISCUSSION

A. Summary Judgment Standard

Under Guam Rule of Civil Procedure 56(c),1 summary judgment is proper "if the

pleadings, depositions, answers to interrogatories, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any material fact and that the moving

party is entitled to judgment as a matter of law." Summary judgment is proper only where

there is no genuine "dispute as to any material fact." GRCP 56(c). The "materiality" of

particular facts is determined by the pleadings and the substantive law. Anderson v. Liberty

Lobby Inc., 477 U.S. 242, 248 (1986). Finally, the Court must view the evidence and draw

inferences in the light most favorable to the non-movant. Edwards M Paeu'ic Fin. Corp., 2000

Guam 27 117.

B. The Test for Res Judicata Preclusion

Core Tech contends that summary judgment must be rendered against DLM and the

Government because of their involvement in a prior related lawsuit. As a preliminary note, Core

Tech did not raise res judicata as an affirmative defense, in violation of Guam Rule of Civil

1 In 2022, the Guam Rules of Civil Procedure were modified. This Decision and Order references the earlier version in place at the time the motion was taken under advisement. CVI 198-18 DECISION AND ORDER DENYING CORE TECH INTERNATIONAL Page 5 CORPORATION'S MOTION FOR SUMMARY JUDGMENT AGAINST GOVERNMENT OF GUAM AND THE DIRECTOR OF LAND MANAGEMENT

Procedure 8(c). See generally Second Am. Answer. Failure to raise resjudicata as an

affirmative defense may amount to its waiver. See In the Application of Leon, 2001 Guam 22 11

19. However, the Government and DLM do not oppose the motion based on Core TecI1's failure

to list resjudicata as an affirmative defense. Therefore, the Court will not address whether Core

Tech waived this affirmative defense and instead will analyze the issue on its merits.

"Resjudicata ... expresses no more than the fundamental principle that once a matter

has been fully and fairly litigated, and finally decided, it comes to rest." Wheeler u Eeachcrofl,

LLC, 129 A.3d 677 (Conn. 2016). Guam codified the principles ofresjudicata in 6 GCA §

4209. The Guam Supreme Court requires that to establish resjudicata claim preclusion, a

movant must demonstrate an identity of the parties or their privies in the two suits, an identity of

the causes of action among the two cases, and a final judgment on the merits in an earlier suit.

Perez u First Net Insurance Co., 2009 Guam 17 1[20.

1. One of Two Plaintiffs Is an Identical Party.

The Court first addresses whether the parties or their privies are identical in the ho suits.

"Claim preclusion applies only to those parties who were adversaries in the first lawsuit." Presto

u L i za r d , 2012 Guam 24 1132. On this point, the Court finds a distinction between the two

plaintiffs: DLM and the Government. While both are plaintiffs here, only the Government

participated in CVI 124-09, making it an identical party in this lawsuit.

In contrast, DLM did not have any role in CV] 124-09. In this case, DLM acts as the

registrar who has standing to file this action under section 29125:

A registered owner or other person in interest or the registrar, may at any time apply by petition to the court, upon the ground that registered interests of any description, whether vested, contingent, expectant, or inchoate, have terminated and ceased, or that new interests have arisen or memorial has been made, entered, endorsed, issued or cancelled by mistake, ... or upon any other reasonable ground, for an order summoning all persons registered as interested in the lands to CV] 198-18 DECISION AND ORDER DENYING CORE TECH INTERNATIONAL Page 6 CORPORATION'S MOTION FOR SUMMARY JUDGMENT AGAINST GOVERNMENT OF GUAM AND THE DIRECTOR OF LAND MANAGEMENT

which such certificate or memorial relates, to ... show cause why such omission or mistake or change or alteration should not be corrected or made.

21 GCA §29125, Pet. 1[4. Because DLM had no role or participation in CVI 124-09, res

judicata does not bar it from pursuing the present action.

2. The Issues are Not Substantially Identical nor Arise from the Same Nucleus of Facts.

Next, the Court addresses whether there is an identity of the causes of action between the

two cases. Absolute identity is not required, instead, the causes of action can be identical or

substantially identical. Presto, 2012 Guam 24 1132. O11 this factor. Core Tech also argues that

even iflthe issues are not identical, the final judgment issued in CVl124-09 binds this case: "a

final judgment extinguishes all claims with respect to all or any part of the transaction, a series of

connected transactions out of which the previous action arose." Mot. at 10 (Mar. 3 I, 2021)

(citing Trans. Pay. Export Co. v Oka Towers Corp., 2000 Guam 3 1]20). Dans. Pac. Export Co.

references the Restatement (Second) of Judgments §24, which dictates a pragmatic inquiry into

whether the causes of action are identical.

In Gill nor VI Family Link, LLC, 284 P.3d 622 (Utah 20 l2), the Utah Supreme Court

adopted this same pragmatic approach to examining whether res judicata precluded a quiet title

action. Under this method, the court examines whether the two cases are related in time, space,

origin, or motivation, though no single factor is determinative. Id. Ar 627. Using these factors,

the court in Gill nor found that a second litigation involving the same property was not barred by

res judicata, even though some of the claims could have been raised in the first suit. Id. at

628-29. See also Wheeler, 129 A.3d 677 (following the Restatement and holding that there must

be a "significant overlap" of issues to bar a later action).

Using the Restatement's pragmatic approach as elaborated upon in other jurisdictions, the

Court finds that this case and CVI 124-09 differ on at least two factors. The first is the CV1198-18 DECISION AND ORDER DENYING CORE TECH INTERNATIONAL Page 7 CORPORATION'S MOTION FOR SUMMARY JUDGMENT AGAINST GOVERNMENT OF GUAM AND THE DIRECTOR OF LAND MANAGEMENT

motivations underlying the two lawsuits. CV1124-09 pertained to a narrow aspect of Lot

AL-002's chain of title--specifically, whether the GALC deed was incomplete without the

condition that a court reviews the Torres Estate's claims. CV1124-09, however, did not appear to

involve the myriad of other issues pertinent to title that the Government (and now GWA and

even Core Tech) raise. Also, the prior action sought to re flo1°m a deed, not to correct or amend

COTs.

The cases also differ with respect to time. CV1 l 24-09 solely concerns the completeness

of GALC's deed in 2006. In contrast, the present Petition asks the Court to consider the full

chain of title, going back to 1980 (if not earlier) when the United States initially leased the

property to the Government of Guam. Even if the Government could have raised these issues in

CVI 124-09, there was not enough of an overlap of issues between the two cases for the court's

decisions in CV1124-09 to bind the present parties.

Core Tech also cites Petition of Govern/neni of Guam u Cruz, 869 F.2d 1326 (9th Cir.

1989) as controlling. In Cruz, the Government and Ramon Cruz owned adjoining properties and

had COTs indicating overlapping boundaries. Cruz succeeded in a petition to correct one of his

certificates, and the Government did not appeal. Cruz filed a second action to establish title to a

different tract. The Government initially objected to certain maps but withdrew its petition. The

court granted the second petition, which the Government appealed but lost due to a failure to

prosecute the appeal. Id. at 1326-27.

Subsequently, the Government bulldozed and constructed buildings on a portion of the

disputed land. Cruz filed a formal complaint, and the Government responded by filing an action

to amend various COTs. The Ninth Circuit held that the statutory provisions allowing a CV1I98-l8 DECISION AND ORDER DENYING CORE TECH INTERNATIONAL Page 8 CORPORATION'S MOTION FOR SUMMARY JUDGMENT AGAINST GOVERNMENT OF GUAM AND THE DIRECTOR OF LAND MANAGEMENT

certificate to be corrected do not allow a party to challenge a decision made in a prior registration

proceeding in which that party appeared and filed objections. Id. at 1327.

Unlike in this case, the earlier lawsuits in Cruz directly concerned the underlying

certificates of title. In those cases, the Government had the opportunity and the obligation to

bring forth its arguments disputing Cruz's title. Its later petition to amend the COTs was

prohibited because of the earlier foregone opportunities.

The instant case presents a different set of circumstances, however. CV1124-09

concerned the reformation of a deed based on certain GALC-imposed conditions, it did not

pertain to an amendment or rescission of a certificate of title. The Court does not find that the

Government's participation in CVI 124-09 amounted to its waiver of any rights to participate in

this C2lS8.2

3. It is Not Necessary to Review the Existence of a Final Judgment.

The third factor of the resjudicata test is whether there was a final judgment on the

merits. There appears to be no dispute that the court in CVI 124-09 issued a Decision and Order

on July 29, 2010, dismissing the cause of action of reformation regarding LotAL-002. There

being no further prosecution of a claim regarding Lot AL-002, the Decision and Order resulted in

a final judgment on the merits. However, having determined that DLM is not a party to the prior

action, and that there is not a substantial identity of issues, this final factor does not change the

Court's analysis.

C. A Separate 21 GCA §29195 Relitigation Analysis is Unnecessary.

2 While the Government may not be precluded from litigating this action, it may nonetheless be stopped from taking positions contrary to those asserted in CVl124-09, such as the status of Yoon as a bone fide purchaser. CV1198-18 DECISION AND ORDER DENYING CORE TECH INTERNATIONAL Page 9 CORPORATION'S MOTION FOR SUMMARY JUDGMENTAGAINST GOVERNMENT OF GUAM AND THE DIRECTOR OF LAND MANAGEMENT

Core Tech raises an additional argument for preclusion of the current case under 21 GCA

§29195, relying on the Ninth Circuit's holding in Cruz. However, as discussed above, Cruz

merely involved applying resjudicata to a prior version otl21 GCA § 29 l95. ld at 1328.

Therefore, all necessary discussion related to this claim is included under the resjudicata

analysis above.

D. The Government's Counter-Motion f or Summary Judgment

In its Opposition, the Government counter-moves for summary judgment on the basis

that Core Tech is not a bona fide purchaser and, therefore, not entitled to a Certificate of Title.

The Court does not fully understand this request as Core Tech has not received a Certificate of

Title nor requested one in its Second Amended Complaint. Nonetheless, the state of title remains

an issue in active litigation following the Court's November 30, 2021 Decision and Order on

GWA's motion for summary judgment and pending motions addressing GWA's pleadings. The

Court therefore defers a ruling on the counter-motion.

IV_ _CONCLUSION AND ORDER

Because DLM was not involved in prior litigation involving the property at issue, it is not

precluded from pursuing its Petition under resjudicata. Additionally, because the claims in

CV1 l 24-09 and the present case are different, the Government is not barred by res judicata.

Core Tech's motion against DLM and the Government is therefore DENIED.

SO ORDERED this 9th day of September 2022.

SERVICE vIA E-MAIL ELYZE M. IRIARTE I acknowledge that an electronic copy 01 the original was e-mailed 10: Judge, Superior Court of Guam #f v. Zlln #wma T WW, v. Af.-//,>.,.-, Datezq' 4.22 lime: f /14 DepLrry Clerk, Superior Court it Guam CV1198-18 DECISION AND ORDER DENYING CORE TECH INTERNATIONAL Page 10 CORPORATION'S MOTION FOR SUMMARY JUDGMENT AGAINST GOVERNMENT OF GUAM AND THE DIRECTOR OF LAND MANAGEMENT

Appearing Attorneys : James L. Canto, II, Esq., Assistant Attorney General, Office of the Attorney General, for the Government of Guam and the Director of Land Management Theresa G. Rojas, Esq., Guam Waterworks Authority, and Vincent Leon Guerrero, Esq., Law Office of Vincent Leon Guerrero, for Guam Waterworks Authority Vanessa L. Williams, Esq., Law Office of Vanessa L. Williams, for Core Tech International Corporation