Guam Econ. Dev. Auth. v. Crisostomo

Opinion

2025 MAY I 3 Fri I : 58

2 CLEf<K Df CGURT

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6 IN THE SUPERIOR COURT OF GUAM 7

8 GUAM ECONOMIC DEVELOPMENT CIVIL CASE NO. CV0606-22 9 AUTHORITY,

10 Plaintiff, II vs. DECISION AND ORDER 12 Re: Plaintiff's Motion for Summary Judgment DAVID W. CRISOSTOMO DBA 13 MARIANAS IRRIGATION AND 14 LANDSCAPE,

15 Defendant. 16

17 This matter came before the Honorable Arthur R. Barcinas on February 11, 2025 for a 18 hearing on Plaintiff Guam Economic Development Authority's ("GEDA") Motion for Summary 19

20 Judgment ("Motion"). Present at the hearing was Attorney Terrence M. Brooks representing

21 GEDA, and Defendant David W. Crisostomo ("Defendant") appearing pro se. Upon 22 consideration of the record and arguments, the Court hereby GRANTS the Motion for 23 Summary Judgment for the reasons below.

24 BACKGROUND

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26 This matter arises from a dispute regarding the delinquent repayment of a $25,000.00

27 loan that Defendant obtained from GEDA. On or about October 24, 2019, Defendant signed a 28 Promissory Note and Security Agreement ("Note"), after which he received the proceeds of the

Civil Case No. CV0606-22, GEDA v. Crisostomo

loan. The Note required Defendant to make monthly payments of $579.99 commencing on

2 December 5, 2019 and a final payment of $577.00 on November 5, 2023. Interest on the note

3 accrued at the fixed rate of 5.375%. Pursuant to the terms of the loan, a payment----default on the 4 Note would allow GEDA to accelerate or declare due the entire outstanding amount of the loan, 5 including interest.

6 Defendant made approximately three payments on the Note: (1) $800.00 on December 7

8 17, 2019; (2) $1,500.00 on February 7, 2020; and (3) $2,000.00 on March 23, 2021. GEDA 9 asserted that Defendant was found to have to defaulted on the loan as of March 2020, after 10 which GEDA was entitled to declare the outstanding balance due pursuant to the terms of the II Note. However, due to the 2020 pandemic, GEDA did not take any action to pursue repayment 12

13 of the loan until September 2020.

14 On September 8, 2020, GEDA employee Tara Murakami e-mailed Defendant, informing 15 him that a loan modification was available for businesses impacted by the pandemic, and 16 advising him that he should submit a formal request to GEDA if he wanted to apply for the 17 · modification. Defendant did not respond to the e-mail.

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19 On March 17, 2021, GEDA sent an employee to visit Defendant's place of business to

20 speak to him about the delinquent loan, but he was not present. On March 19, 2021, Defendant 21 called GEDA to ask about the visit to his place of business, and to ask about the pandemic loan 22 modification; Defendant further stated that he was planning to submit a letter to GEDA. On 23 March 22, 2021, Defendant met with GEDA staff to discuss the loan delinquency, during which 24

25 he agreed to make a payment of $2,000.00 On March 23, 2021, Defendant tendered $2,000.00

26 to GEDA via ACH, but did not submit any letter requesting a loan modification as he had stated 27 that he would. On April 12, 2021, Murakami spoke to Defendant via phone, asking him to write 28

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Civil Case No. CV0606-22, GEDA v. Crisostomo

a letter addressed to the GEDA CEO/Administrator, in which Defendant was advised to request

2 a restructure of his loan due to relocation of his business and closure due to the pandemic. On

3 the same date, Murakami advised Defendant that most of his $2,000.00 March payment had 4 gone to interest; Defendant argued that his interest should be waived due to the forced 5 lockdown, then asserted that he would include that argument in his letter and asked GEDA to 6

send him a history of his loan. On or about April 20, 2021, GEDA sent Defendant said loan 7

8 history, but Defendant never sent the promised letter requesting a loan modification or

9 restructure.

On February 25, 2022, GEDA referred the matter to legal counsel for collection. On 11 March 3, 2022, GEDA's legal counsel sent Defendant a demand letter, with no response. On 12

13 November 16, 2022, GEDA filed the instant Complaint, demanding judgment against

14 Defendant and his business, jointly and severally, for the following: 15 (1) The principal sum of $23,678.50;

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17 (2) Accrued pre-judgment interest at the rate of 5.375% per annum from the date of charge-off until the date of 18 judgment; 19 (3) An order requiring Defendant to assemble the secured 20 assets so that GEDA may take possession of them and sell them to ameliorate the amount due to GEDA;

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22 (4) Post-judgment interest at the legal rate and post-

judgment costs; and

23 (5) Reasonable attorney's fees.

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25 On September 13, 2023, GEDA filed the instant Motion for Summary Judgment,

26 submitting that there is no genuine issue of material fact regarding Defendant's outstanding debt 27 to GEDA. On July 12, 2024, the Hon. John C. Terlaje issued a Notice of Hearing for a status 28

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hearing in this case. On July 30, 2024, Judge Terlaje held the status hearing, finding that

2 Defendant had not submitted any reply to the Motion; however, due to Defendant's pro se

3 status, Defendant would be granted one (1) week to oppose. On November 19, 2024, Defendant 4 filed a document titled "Response to Motion for Summary Judgment No. CV0606-22 for 5 November 26, 2024" ("Response"); in the Response, Defendant did not posit any discernible 6

7 opposition to GEDA's arguments for summary judgment. On November 26, 2024, the Court

8 held its first hearing on the Motion and, determining that Defendant had not filed an opposition, 9 granted Defendant thirty (30) days to do so. On January 6, 2025, Defendant filed his Statement 10 of Opposition and Counterclaim, 11

12 On February 11, 2025, the Court took the matter under advisement.

13 DISCUSSION GEDA argues for summary judgment, asserting that there is no genuine issue of material 14

15 fact regarding Defendant's outstanding debt. GEDA has asserted the background facts above are

16 undisputed and asserts that it had made efforts to work with Defendant to modify or restructure 17 his loan, but that Defendant did not justify the loan modification or propose any terms, and 18 GEDA was not able to make an agreement because it did not know Defendant's then-present 19 financial condition and could not contact him. GEDA posits that, under 20 GCA § 2112, "[a]ny 20

21 legal rate of interest stipulated by a contract remains chargeable after a breach thereof, as

22 before, until the contract is superseded by a judgment or other new obligation." Thus, GEDA 23 argues that the loan interest rate of 5.375% is ongoing until judgment is entered by the Court.

24 GEDA also asserts that, in the event of default, the provisions of the loan allow acceleration of 25

26 the entire balance due and for the recovery of attorney's fees.

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Civil Case No. CV0606-22, GEDA v. Crisostomo

Under Guam law, a party may move for summary judgment, identifying each claim or

2 defense, or the part of each claim or defense, on which summary judgment is sought. Guam

3 Rule of Civil Procedure ("GRCP") 56(a). The Court shall grant the summary judgment sought if 4 the movant shows that there is no genuine dispute as to any material fact and the movant is 5 entitled to judgment as a matter of law. Id. "Summary judgment is only proper if 'the pleadings, 6

7 depositions, answers to interrogatories, and admissions on file, together with the affidavits, if

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

9 entitled to a judgment as a matter of law." Guam Resorts, Inc. v. G.C. Corp., 2013 Guam 18 ,r

36. "In rendering a decision on a motion for summary judgment, the court must draw inferences 11 and view the evidence in the light most favorable to the non-moving party." Id. If the movant 12

13 can demonstrate that there are no genuine issues of material fact, the non-movant cannot merely

14 rely on allegations contained in the pleadings, but must produce at least some significant 15 probative evidence tending to support the pleadings. Bank of Guam v. Flores, 2004 Guam 25 ,r 16 7. A material fact is one that is relevant to an element of a claim or defense and whose existence 17 might affect the outcome of the suit. Id. ,r 8. The mere existence of some alleged factual dispute 18

19 between the parties will not defeat an otherwise properly supported motion for summary

20 judgment; the requirement is that there be no genuine issue of material fact. Id. "As to 21 materiality, the substantive law will identify which facts are material. Only disputes over facts 22 that might affect the outcome of the suit under the governing law will properly preclude the 23

24 entry of summary judgment." Id. The Court's ultimate inquiry is to determine whether the

25 specific facts set forth by the non-movant, coupled with undisputed background or contextual

26 facts, are such that a rational or reasonable jury might return a verdict in the non-movant's favor 27 based on that evidence. Id. ,r 7.

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Upon review of the record, Defendant has not disputed any genuine issues of material

2 fact, nor has he presented sufficient evidence that GEDA is not entitled to judgment as a matter

3 of law. In his January 6, 2025 Response, Defendant attempts to argue several fact issues, but 4 none of them are material to the Court's adjudication of this case. First, he disputes paragraph 9 5 of the Complaint, alleging that he never received any communication from GEDA to assemble 6

and tum over to GEDA any business assets, and that he was not aware that his loan was in 7

8 default because he allegedly never received any written communication to that effect. Second,

9 he disputes paragraph 10 of the Complaint, alleging that his place of business was not closed, 10 and that he never received nor recalled the calls alleged by GEDA in paragraph 10. Third, he II disputes paragraphs 12-14 of the Complaint regarding the amounts owed, interest, and 12

13 attorney's fees; he bases his dispute on the above allegation that he was never informed that his

14 loan was in default. Fourth, he alleges that the declaration of GEDA employee Claire L. Cruz is 15 "not completely true," but does not specify which parts of the declaration are false. Fifth, he 16 disputes paragraph 6 of GEDA's Statement of Undisputed Facts, which states that "A Payment 17 Default in the Note allowed the Plaintiff to accelerate or declare the entire outstanding amount 18

19 of the loan, including interest, immediately due, which Plaintiff has done"; Defendant asserts

20 that the phrase "which Plaintiff has done" is incorrect because Plaintiff allegedly did not contact 21 him regarding the default. The remainder of his factual disputes, as with these first five, are 22 effectively presented to support one of two arguments: (1) GEDA allegedly failed to 23 communicate with Defendant properly regarding his default; and (2) GEDA allegedly failed to 24

25 inform Defendant that a loan modification request was required to restructure his loan

26 agreement. 27

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While Defendant may dispute the facts in support of these two arguments, neither the

2 arguments nor the facts supporting them are ultimately material to the adjudication of this case.

3 I. Notice of Default 4 Regarding the notice of default, Defendant should have been aware of the default based 5 on the provisions of the Note, particularly as an experienced business owner. The Note 6

7 specifically stated that "[ s ]hould Borrower fail to perform any provision of this agreement to be

8 performed on its part, or should Borrower fail to pay any obligation secured by this agreement

9 or the security interest created by this agreement as it becomes due, then Borrower shall be in

default of this agreement under Division 9 of the UCC." Note., § 12. Further, even if the Court 11 were to find that GEDA did not give Defendant proper notice of it, Defendant expressly waived 12

13 notice upon signing the Note. "[Defendant] waives presentment of payment, demand, notice of

14 nonpayment, notice of protest, and protest of this Note and all endorsers, sureties and guarantors 15 hereof consent to any and all extensions of time, waivers or modifications that may be granted 16 by GEDA." Note, § 5. "[Defendant] hereby WAIVES presentment, demand for payment, notice 17 of dishonor and any and all other notices and demands in connection with the delivery, 18

19 acceptance, performance, default, or enforcement of this Note." Id. § 7. Thus, Defendant's

20 arguments regarding notice of default are immaterial to this case, and the facts supporting said 21 arguments are likewise immaterial even if they are disputed.

22 II. Notification re: Loan Modification 23 Regarding Defendant's assertion that GEDA did not notify him that he was required to 24

25 submit a loan restructuring request or a financial statement to support that request, this is also

26 immaterial. As stated above, Defendant is an experienced business owner, and as a borrower, it 27 is his duty to determine what he needs to do to restructure his loan rather than sit and wait to be 28

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provided the information. More importantly, Defendant cites no document or statute that would

2 establish a duty of care requiring GEDA to guide him through the loan restructuring process

3 step by step. Where a party "seeks a duty that appears to cover everything the lender does 4 during the pendency of a loan modification application - from how it manages to paperwork to 5 how clearly it communicates with borrowers - that would be difficult to adjudicate in any clear 6

7 and consistent way across cases," and such a duty is too indefinite and broad to be recognized.

8 Sheen v. Wells Fargo Bank, NA., 505 P.3d 625, 639-640 (Cal. 2022). Rather, "a lender owes no

9 duty to a borrower in its processing of a loan modification application" and "when the 10 institution's involvement in the loan transaction does not exceed the scope of its conventional 11 role as a mere lender of money," a duty of care to the borrower does not exist. Id. at 636-63 7.

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13 Accordingly, any alleged failure by GEDA to inform Defendant about the restructuring process

14 is immaterial to this case because GEDA had no contractual or common law duty of care to 15 Defendant regarding the loan, and any argument predicated upon such duty is unsupported.

16 Based on the above, all facts that Defendant disputes in support of his arguments are 17 immaterial, even if the issues of fact are genuine. Therefore, the Court finds that there are no I8

19 genuine issues of material fact, and that under the terms of the Note, GEDA is entitled to

20 judgment as a matter oflaw. 21 CONCLUSION

22 Based on the foregoing, the Court hereby GRANTS the Motion for Summary Judgment 23

24 in favor of GEDA and ORDERS Defendant to pay to GEDA:

25 1. The principal loan amount of $22,451.90;

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2. Accrued interest on the Note of $1,282.80 through August 15, 2023, plus additional

2 prejudgment interest at the rate of 5.375% from August 16, 2023 until the date of

3 judgment; 4 3. Attorney's fees;

5 4. Costs of suit;

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5. Post-judgment interest on the judgment amount at the prevailing judgment interest rate 7

8 of 6% per annum; and

9 6. Post-judgment costs of collection. ID

11 IT IS SO ORDERED MA~ 13 2025 .

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