Herradura v. Herradura

Opinion

6 IN THE SUPERIOR COURT OF GUAM 7

8 ) 9 ) BONIE JUNIOR P1NAULA ) CWILCASE NO.: CV1375-19 HERRADURA, ) 11 ) Plaintiff, ) 12 DECISION AND ORDER: ) 13 vs. ) Defendant’s Motion to Dismiss ) Pursuant to GRCP Rules 12(b)(6), or for 14 JONIE CRISOSTOMO HERRADURA, ) Summary Judgment ) Defendant. ) 16 INTRODUCTION

17 This matter came before the Honorable Maria T. Cenzon on Defendant’s Motion for 18 Dismissal under Guam Rules of Civil Procedure (“GRCP”) Rule 12(b)(6) or for Summary 19 Judgment filed on May 10, 2021. Attorney Mark Williams represents Plaintiff Bonie Junior 20 Pinaula Herradura (“Plaintiff’) and Attorney Gary Gumataotao represents Defendant Jonie 21 22 Crisostomo Herradura (“Defendant”). The Court took the matter under advisement, without

23 oral argument, pursuant to CVR 7.1 of the Local Rules of the Superior Court of Guam.1 This 24 Decision and Order now follows Granting in part and Denying in Part Defendant’s Motion for 25 Dismissal or for Summary Judgment. 26

28 Oral argument may be denied in the discretion of the judge, except where oral argument is required by statute or the Guam Rules of Civil procedure. Guam Super. Ct. CVR 7.1(e)(1). Herradura v. Herradura, CV 1375-19 DECISION AND ORDER Page 1 of 10 1 BACKGROUND 2 This matter involves a dispute over the ownership of a parcel of real property. Plaintiff 3 seeks to quiet title to certain real property, more particularly described as follows: 4

Lot No. 23, Block No. 19, Tract 232, Municipality of Sinajana, Guam, Urban, as said lot is marked and designated on Map Drawing No. Subdivision of Trat 232, recorded on 6 June 26, 1980 in the Department of Land Management, Government of Guam, under Instrument Number 312990. 7

8 (hereinafter, the “Property”). Complaint to Quiet Title at ¶ 4 (Dec. 4, 2019). The Plaintiff

9 claims title to the Property pursuant to a deed dated March 21, 201$, from Bonie J. Herradura2 10 purportedly recorded under Document No. 919551 in the Department of Land Management, 11 Government of Guam. Compi. ¶J 4, 5. On the other hand, the Defendant disputes the Plaintiffs

claim of ownership of the Property, and claims an interest in the Property as a beneficiary of

14 the BMCH Trust (“Trust”), which Defendant claims continues to own the Property, or,

15 alternatively, as an heir to the estate of Josephine C. Herrera, who died intestate. Answer and 16 Counterclaim ¶J 6—7 (Feb. 19, 2020). Plaintiff denies virtually all of the substantive allegations . . . .

17 in Defendant’s Answer and Counterclaim. 18 On May 10, 2021, Defendant filed a Motion to Dismiss the Complaint for failure to 19 20 state a claim upon which relief could be granted under GRCP Rule 12(b)(6) or, in the

21 alternative, for Summary Judgment. The Plaintiff filed a Response in opposition to the 22 Defendant’s Motion on July 27, 2021, to which the Defendant replied on August 21, 2021. 23 / 24

25 /

27 2 Bonie J. Herradura is the surviving spouse of Josephine C. Herradura, and purported grantor of the subject deed 28 dated March 21, 2018, to Plaintiff. See, Ans. and Counterclaim (Feb. 19, 2020)(Exhibit A). Bonie Mark Crisostomo Herradura is a purported named beneficiary of the BMCH Trust and an individual different from Plaintiff. Id. Herradura v. Herradura, CV 1375-19 DECISION AND ORDER Page 2 of 10 e 1 DISCUSSION 2 A. Defendant’s Motion to Dismiss under GRCP Rule 12(b)(6) Is Converted to a 3 Motion for Summary Judgment.

The Defendant’s Motion to dismiss pursuant to GRCP Rule 12(b)(6), or in the

alternative, for summary judgment motion, will be treated as one for summary judgment

because the court has been presented with and has considered “matters outside of the 7

8 pleadings” in rendering its Decision herein. Core Tech Intern. Corp. v. Hanil Eng. & Constr.

9 Co., Ltd. 2010 Gttam 13 ¶ 29 (citing Newby v. Government of Guam, 2010 guam 4 ¶ 14 10 (quoting Guam R. Civ. P. 12 9b) and citing Carter v. Stanton, 405 U.S. 669, 671 (1972)(”The 11 general nile is that a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which 12 relief can be granted, must be converted into a Rule 56 motion for summary judgment 13 14 whenever ‘matters outside the pleadings’ are presented to and considered by the Court. ...“).

15 The Guam Supreme Court noted an exception to this rule of conversion where the 16 document is one “whose authenticity cannot be questioned and on which plaintiffs complaint 17 “necessarily relies.” Newby, ¶ 15. The Plaintiff did not submit any exhibits to his Complaint 18 which comports to the Newby exception, nor did either party submit any affidavits in support of 19

20 either respective position. However, the court notes that the Defendant, in his Answer and

21 Counterclaim, submitted an exhibit entitled “Amended Preliminary Report” purportedly 77 prepared by Title Guaranty of Guam, Inc. Defendant appears to rely upon this preliminary title 23 report in order to establish his competing claim to the Property. Exhibit A to Answer and 24

25 Counterclaim. Defendant also relies upon Exhibit A to his Motion, which is a document

26 entitled “Declaration of Trust” and which appears to have been recorded at the Department of 27 Land Management on December 23, 1991, under Instrument No. 464349. Additionally, 28 Defendant attaches as Exhibit B a Qmtclaim Deed purportedly transfernng the Property from iferradura v. Herrathera, CV1 375-19 DECISION AND ORDER Page 3 of 10 1 Josephine C. Herradura to the BMCH Trust. It is upon these Trust documents that the 2 Defendant argues that the Plaintiff has no right to the Property. Because the court has 3 considered these extrinsic materials in ruling on Defendant’s motion, it is converted to a 4 summary judgment motion pursuant to Rule 56(c) of the Guam Rules of Civil Procedure.

6 B. Summary Judgment Standard

Summary judgment is appropriate “if the pleadings, depositions, answers to 8 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 a judgment as a 10

matter of law.” Guam R. Civ. P. 56(c); Hawaiian Rock Prod. Corp. v. Ocean Hous., Inc., 2016

12 Guam 4, ¶IJ 26-27. See also, Bank of Guam v. flores, 2004 Guam 25 ¶ 8; Gayle v. Hemlani, 13 2000 Guam 25 ¶ 20. A genuine dispute occurs where there is “sufficient evidence’ which 14 establishes a factual dispute requiring resolution by a fact-finder.” Gavie, 2000 Guam 25 15 ¶ 20 (citing Iizuka Corp. v. Kawasho Int’l, Inc., 1997 Guam 10 ¶ 7). However, the issue must 16 17 encompass a “material fact.” Id. “A ‘material’ fact is one that is relevant to an element of a

18 claim or defense and whose existence might affect the outcome of the suit.... Disputes over 19 irrelevant or unnecessary facts will not preclude a grant of summary judgment.” Id. (alteration 20 in original) (quoting lizuka Corp., 1997 Guam 10 ¶ 7). 21

22 In determining the appropriateness of granting summary judgment, a court “must view

23 the evidence and draw inferences in the light most favorable to the non-movant.” Hawaiian

24 Rock at ¶ 27 (citing Gayle at ¶ 21). If, however, the movant proves that no genuine issues of 25 matenal fact remain, the non-movant may not rely on mere allegations contained in the 26 complaint, but must offer some significant probative evidence supporting such allegations. Id. 27

28 A movant bears the initial burden to show that undisputed facts in the record support a prima

Herradura v. Herradura, CV 1375-19 DECISION AND ORDER Page 4 of 10 . 1 facie entitlement to the relief requested. Id. If such a showing is made, however, the non- 2 movant may not simply deny the allegations to create a factual dispute, but is obligated to set 3 forth specific facts showing there is a genuine issue for trial. Id. See also, Gayle, 2000 Guam 25 4

¶ 21 (citing lizuka Corp., 1997 Guam 10 ¶ 8); Guam R. Civ. P. 56(e). A genuine issue of 6 material fact precluding summary judgment exists “if there is ‘sufficient evidence’ which ‘

establishes a factual dispute requiring resolution by a fact-finder.” Id. (citing li Electric Corp. $ v. Phil-Gets (Guam) mt 1 Tradmg Corp., 2012 Guam 23 ¶ 11).

While the Plaintiff seems to adopt some of the “facts” set forth in the preliminary title

report appended to Defendant’s Answer and Counterclaim, where both parties differ is in the

12 question of whether the BMCH Trust was terminated. Defendant argues that the Trust was not 13 terminated, although attempts were made to do so, because the termination did not provide a 14 Schedule of Beneficiaries, as required under the Trust Documents. Plaintiff, on the other hand, 15 argues that the Trust was in fact terminated by its terms when the trustee and purported 16 ‘7 beneficiaries filed a Notice of Termination of Trust on August 15, 2002. If the Trust

18 terminated, then the property reverted to Josephine C. Herradura and Plaintiff received title 19 through several deeds, including the deed to Plaintiff in 2018. 20 The Court considers whether a material fact exists under the circumstances. 21

22 C. Formation of the BMCH Trust

23 The BMCH Trust was created on December 23, 1991 by Josephine C. Herradura. See Exh.

24 “A” to Mot., Decl. of Trust. After issuing the Declaration of the Trust, Josephine C. Herradura

issued a Quitclaim Deed which transferred the Property to the BMCH Trust and to Josephine C.

Herradura (herself) as Trustee of the BMCH Trust on May 5, 1992. The Declaration of Trust 27

28 makes reference to a “Schedule of Beneficiaries” executed the day of the Declaration, but no

Herradura v. Herradura, CVI 375-19 DECISION AND ORDER Page 5 of 10 I “Schedule of Beneficiaries” was executed along with the Declaration. See Exh. “A” to Mot. ¶ 2 2. The May 5, 1992 Quitclaim Deed indicates that the Property was transferred to the Trust for 3 the benefit of Josephine C. Herradura, Bonie Mark Crisostomo Herradura, or Jonie Crisostomo 4 Herradura. See Exh. “B” to Mot., Quitclaim Deed.

6 B. Whether the Trust was Terminated Is a Material Question of Fact.

On August 16, 2002, Notice of Termination of Trust was filed in the Department of 8 Land Management, signed by Josephine C. Herradura, Bonie Mark Crisostomo Herradura, and 9 Jonie Crisostomo Herradura, as beneficiaries. Under 18 GCA § 66501, a trust is extinguished 10

by the entire fulfillment of its object, or by such object becoming impossible or unlawful.

12 Additionally, under 18 GCA § 66502, a trust cannot be revoked by the trustor after its 13 acceptance, actual or presumed, by the trustee and beneficiaries, except by the consent of all the

beneficiaries, unless the declaration of trust reserves a power of revocation to the trustor, and in 15 that case the power must be strictly pursued. 16 17 Here, according to the Declaration of Trust, the Trustor, Josephine C. Herradura,

18 transferred the property to the Trust and to the Trustee, Josephine C. Herradura, for the sole 19 benefit of the persons listed in the “Schedule of Beneficiaries.” The Declaration of Trust never 20 identified the intended beneficiaries in the referenced Schedule of Beneficiaries, leading to an 21

22 ambiguity in the trust instrument. When interpreting an ambiguous trust instrument, extrinsic

23 evidence may be considered. Ram iro v. White, 2016 Guam 6, ¶ 20 (“Extrinsic evidence is

24 admissible to clarify the terms of a trust or remove ambiguities, particularly when there is a

patent ambiguity in the trust instrument, such as any ambiguities regarding the settlor’s intent

to create a trust. Extrinsic evidence, under these circumstances, may be admitted but used only 27

28 to explain, and not to contradict, the instrument.”)(quoting 76 Am. Jur. 2d Trusts § 635)).

Herradtira v. Herradura, CV1 375-19 DECISION AND ORDER Page 6 of 10 1 Although the trust instrument, the Declaration of Trust, does not indicate the intended 2 beneficiaries, both the Quitclaim Deed from May 5, 1991, which transferred the Property to the 3 Trust, and the Notice of Termination of Trust identify the intended beneficiaries. The intent of 4 the Trustor to create a trust for the benefit of Josephine C. Herradura, Bonie Mark Crisostomo

6 Herradura, and Jonie Crisostomo Herradura may be inferred by these subsequent, related

documents. $ The Declaration of Trust, then, expressly states that the Trust may be terminated at any

time if all the beneficiaries consent by notice in writing to the Trustee and the Trustee consents

in writing to the beneficiaries. further, the Declaration of Trust states the termination shall not

12 take effect until the termination is recorded in the Department of Land Management. Exh. “A” 13 to Mot. ¶ 5. Upon termination of the trust, the Trustee shall transfer and convey the entire trust 14 estate to the beneficiaries. Id. ¶ 6. The Termination of Trust was purportedly filed in the 15 Department of Land Management, Office of the Recorder on August 16, 2002, under 16 17 Instrument Number 661280.

18 Upon termination of the Trust, the Trustee was to transfer the entire trust estate, the 19 Property, to the beneficiaries. 20 E. Interest in the Property after Termination of Trust 21

22 After the purported termination of the trust by the Notice of Termination, Josephine C.

23 Herradura transferred an interest in the Property via a quitclaim deed to Bonie Jimenea

24 Herradura and Josephine C. Herradura as community property. Exh. A to Ans. and

Counterclaim, Preliminary Report, ¶ 8. However, there is no indication that Josephine C.

Herradura, as Trustee to the BMCH Trust, transferred the property to the beneficiaries as 27

28 required upon termination of the trust. This being an issue of first impression in Guam, the

Herradtira v. Herradura, CV 13 75 19 DECISION AND ORDER Page 7 of 10 e e 1 Court looks to other jurisdictions to provide guidance as to the state of the trust property upon 2 termination of the trust but failure of the trustee to distribute the trust property to the 3 beneficiaries. 4

5 According to In re Estate of Barger, a trust terminates at the time at which it becomes

6 the duty of the trustee to wind up administration of the trust, and not at the time when ‘ that winding up period is actually accomplished. After a trust has been terminated, a trustee 8 must expeditiously exercise the powers appropnate to wind up the administration of the trust

and distribute the trust property to the persons entitled to it. 303 Neb. 817, 838—39, 931 N.W.2d

660, 676 (2019). Here, it became the duty of the trustee, Josephine C. Herradura to wind up the

12 administration of the trust and distribute the trust property upon the Trustee and Beneficiaries 13 of the Trust recording their signed Notice of Termination of the Trust. At termination, the 14 powers of the trustee are limited to only those that are reasonable and appropriate to the 15 expeditious distribution of the trust property and preserving the trust property pending the 16

17 winding up and distribution of that property. Id.

18 The Court has the responsibility to ascertain intent of the settlor, and to carry out that 19 intent, by looking at the language and purpose of the trust as a whole document. Wheeler v. 20 Queen, 132 N.C. App. 91, 95, 510 S.E.2d 195, 198 (1999). Unfortunately, other than the Trust 21

22 Documents and Quitclaim Deed transferring the Property to the Trust, the Court does not have

23 any other documents which are self-authenticating under Rule 902 of the Guam Rules of

24 Evidence. Instead the Court has been provided with the preliminary title report which is

hearsay and which was “issued in conjunction with an order for a title insurance policy ... for

the convenience of the title holder, his agent, counsel, purchaser or mortgagee.” Answer and 27

Herradura v. Herradura, CV1 375-19 DECISION AND ORDER Page 8 of 10 e 1 Counterclaim, Exhibit A. It is not evidence of the transfer of title as required to find that there 2 is no material question of fact. 3 Notwithstanding the failure to submit the actual documents purporting to transfer the 4 interest in the Property, if the Court were to assume that the documents set forth in the

6 preliminary title report accurately reflect the transfers of interest identified therein, the Court

might find that the Trust was terminated and make a ruling of law on the effect of such 8 termination. Without these self-authenticating documents, however, the Court is unable to

make such a finding. As indicated herein, the only self-authenticating documents provided to 10

the Court are the documents creating the Trust and placing the Property in the Trust. The Court

12 cannot rely on the preliminary title report as sufficient evidence of any transfers after the 13 creation of the trust, including any purported termination of the trust, as argued by the Plaintiff. 14 F. A Question of Material Fact Exists Due to Lack of Self-Authenticating Evidence. 15 The court cannot make a ruling on a question of law, that is, whether the BMCH Trust 16 17 was terminated, because it has not been provided with Affidavits attesting to the authenticity of

18 any Trust termination along with the title transfer documents referred to in the preliminary title 19 report. The material question of fact then remains: was the BMCH trust terminated? The court 20 cannot rule on this question with the evidence presented to it in support of Defendant’s motion. 21

22 Even if the court found it could rely on the preliminary title report as self-authenticating

23 evidence of the documents abstracted therein, the question as to whether the filing of the Notice

24 of Termination of the Trust did, in fact, terminate the trust, when there is no evidence that the

Schedule of Beneficiaries was ever appended to the Trust, as required under the Trust. Thus,

there remains a material question of fact for adjudication. 27

Herradura v. Herradura, CV 1375-19 DECISION AND ORDER Page 9 of 10 1 CONCLUSION 2 for the foregoing reasons, the Court hereby DENIES the Defendant’s Motion. The 3 parties are Ordered to submit a proposed Scheduling Order and Discovery Plan as mandated by 4 the Guam Rules of Civil Procedure and applicable Local Rules of the Superior Court of Guam.

6 SO ORDERED this 6th day of December, 2021.

HONORABLE MARIA T. CENZON JUDGE, SUPERIOR COURT Of GUAM 10

1$ SERVICE VIA E-MAIL 19 I acknowledge that an copy of the original was electronic e-mail d t 20

-i- -SEN - Date: . jime/Z) 7 22 Joseph Samba J eputy Clerk, Superior Court 23 ofuam

Herradura v. Herradura, CV1 375-19 DECISION AND ORDER Page 10 of 10