Lujan v. McCreadie

Opinion

IN THE SUPERIOR COURT OF GUAM 2

3 GALEN LUJAN, JOSE OKADA, and )

ALICIA L. OKADA, ) CIVIL C,ASE Ne~V0831-10 4 )

5 Plaintiffs, )

) DECISION AND ORDER 6 vs. )

)

7 BRANT T. McCREADIE, and DINA C. )

8 McCREADIE, )

)

9

10

__________________________

Defendants.

)

)

)

II BRANT T. McCREADIE, and DINA C. )

McCREADIE, )

12 ) 13 Counterclaim Plaintiffs, )

)

I4 vs. )

)

15 GALEN LUJAN, JOSE OKADA, and )

I6 ALICIA L. OKADA, )

)

I7 Counterclaim Defendants. )

)

IS ---------------------------------

INTRODUCTION

I9 This matter came before the Court on Defendants' motion to dismiss for failure t 20 prosecute, filed October 28, 2011. Oral arguments were heard on February 27, 2013. Attome 21 Jacques G. Bronze appeared on behalf of Plaintiffs and Attorney Minakshi V.

22 represented Defendants. Having considered the parties' briefs, oral arguments, and th 23 applicable law, the Court now issues the following Decision and Order granting the motion.

24 BACKGROUND

25 On June 2, 2010, Plaintiffs filed a complaint to allege that Defendants breache 26 promissory notes which they executed to purchase Plaintiffs' business, ASPAC Distributors, Inc.

27 (Compl. 2-3.) On June 22, 2010, Defendants tiled an answer and counterclaim to allege tha 28 Plaintiffs misrepresented the value and past performance of the business. (Answer an

Page I of6

Countercl. 2-4.) Defendants further allege that Plaintiffs continue to borrow against a line o

2 credit for ASP AC Distributors, Inc. although they no longer own or control the business. Id. 3 On October 7, 2010, Plaintiffs submitted a proposed scheduling order which the Cou 4 entered on April 18, 20 II. The parties participated in discovery and on May 23, 2011, Plaintiff 5 filed a motion for summary judgment. The motion was not presented with a hearing date via a 6 "Agreement of Hearing Date," attachment "CVR 7.1A," pursuant to the Local Rules of th 7 Superior Court CVR 7.1(b) and (e)(2). 8 On September 20, 2011, the case was reassigned to the Hon. Judge Arthur R. Barcinas

9 On October 28, 2011, Defendants filed the present motion to dismiss for the failure to prosecut IO pursuant to Guam R. Civ. P. 41(b). II On December 29, 2011, the case was reassigned to the Hon. Judge Anita A. Sukola. 0

12 January 18, 2012, the case was reassigned to the Hon. Judge Michael J. Bordallo. On March 7

13 2012, the case was reassigned to the Hon. Judge Elizabeth Barrett-Anderson. On May 22, 2012

14 the case was reassigned to the Hon. Judge James L. Canto II. 15 On June 28, 2012, ASPAC Distributors, Inc. entered a consent judgment with Firs 16 Hawaiian Bank in Civil Case No. CV0071-12 in order to settle the line of credit that Plaintiff

17 continued to use after they sold the business and filed suit on the promissory notes. (Defs.'

18 Reply 4-5, Feb. 20, 2013.) On October 30, 2012, the case was reassigned to the present Court. 19 In opposition to the motion to dismiss, Plaintiffs' counsel argues that the delay is excuse

20 by the following causes: 1) efforts to schedule a hearing on Plaintiffs' motion for summ 21 judgment before it was filed; 2) judicial disqualifications and reassignments; and 3) ongoin

22 settlement negotiations until October 25,2011. (Decl. of Jacques G. Bronze, Feb. 13, 2013; Pis.'

23 Opp'n 7-9, Feb. 13, 2013.) These assertions are discussed as a part of factor 1, infra. 24 DISCUSSION 25 Under Guam law, "a defendant may move for dismissal of an action," for want o

26 prosecution. Guam R. Civ. P. 41(b). The following factors are considered in order to determin 27 whether the sanction of dismissal is appropriate for the failure to prosecute: 1) the public'

28 interest in expeditious resolution of litigation; 2) the court's need to manage its docket; 3) th

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risk of prejudice to the defendants; 4) the public policy favoring the disposition of cases on thei 2 merits; and 5) the availability of less drastic sanctions. Santos v. Carney, 1997 Guam 4 , 5 3 (quoting In re Eisen, 31 F .3d 144 7, 1451 (9th Cir. 1994) ). These factors will be considered i

4 order. 5 1. Public's interest in expeditious resolution of litigation and the court's need t 6 manage its docket 7 The expeditious resolution of litigation and docket management are ordinarily considere 8 together. Santos, 1997 Guam 4 at , 7. The, "public's interest in expeditious resolution o 9 litigation always favors dismissal." Petition ofQuitugua v. Flores, 2004 Guam 19, 18 (quotin 10 Yourish v. Cal. Amplifier, 191 F.3d 983,990 (9th Cir. 1999)). "Proper docket management lead 11 to more efficient administration of justice which is in the public's interest." In re Estate o 12 Concepcion, 2003 Guam 12, 17. 13 In this case, Plaintiffs did not pursue their motion for summary judgment after it was file 14 on May 23, 2011. The Court did not schedule a hearing because Plaintiffs did not file a 15 "Agreement ofl-Iearing Date," attachment "CVR 7.1 A," as required by Local Rules of the Super. 16 Ct. CVR 7.1(e)(2). Plaintiffs allege that efforts were made to schedule a hearing before th 17 motion was filed. These efforts do not excuse inactivity after the motion was filed. Plaintiffs di 18 not file a motion to request a hearing date or seek to schedule a status conference. Compar 19 Quitugua, 2004 Guam 19 at, 19. Without any progress in the case, the Court heard Defendant' 20 motion to dismiss on February 27, 2013, more than one year after the motion for summ 21 judgment was filed. 22 Plaintiffs argue that this delay is excused by settlement negotiations. 23 may constitute excusable delay under Rule 41 (b) .... [However] 'the pendency of negotiations i 24 not an excuse where the delay is unreasonably long ... or if it continues after it is apparent tha 25 the negotiations would not be fruitful."' Park v. Kawashima, 2010 Guam 10, 16 (quoting Co 26 v. Cox, 976 So.2d 869, 875 (Miss. 2008)). Settlement negotiations ended on October 25, 2011 27 when Defendants withdrew a counteroffer. (Decl. of Jacques G. Bronze, Feb. 13, 2013.

Efforts to negotiate did not resume. !d. In other words, settlement negotiations do not excus 2 the delay after October 25, 2011. 3 Plaintiffs contend that judicial disqualifications and reassignments excuse their delay. 4 However, judicial delay does not excuse a plaintiffs duty to prosecute an action. Ward v. Reyes 5 1998 Guam 1 , 23. See also McClenithan v. Lovato, 432 P.2d 836, 83 8 (N .M. 1967 6 (disqualification of trial judge does not defeat ability of plaintiff to bring case to fina 7 determination). Judicial disqualifications do not defeat Plaintiffs' ability to prosecute or excus 8 the duty to prosecute. 9 Furthermore, the delay violates the Supreme Court's time standards for the expeditiou 10 resolution of litigation and the efficient administration of justice. See Supreme Court of Gua 11 Administrative Rule 06-001 (Sep. 15, 2006) (civil claims must be adjudicated within 18 month 12 of inception). For all of these reasons, the delay is unreasonable and it harms the public' 13 interests. The first two factors weigh in favor of dismissal. 14 2. Risk of prejudice to Defendant 15 A plaintiff bears the burden to show, "that the delay is reasonable and that the defendan 16 is not prejudiced by the delay." Santos, 1997 Guam 4 at, 5 (citing Franklin v. Murphy, 745 17 F.2d 1221, 1232 (9th Cir. 1984)). Once a delay is determined to be unreasonable, prejudice t 18 the Defendant is presumed. Park, 2010 Guam 10 at, 21 (quoting Santos, 1997 Guam 4 at, 8). 19 "Presumed prejudice is sufficient to support a dismissal under GRCP 41 (b)." Santos, 199 20 Guam 4 at, 8. 21 In the present case, Plaintiffs have failed to show that the delay from October 25, 2011 22 until February 27, 2013 is reasonable. Prejudice to Defendants is presumed. See discussio 23 supra. Moreover, Defendants' counterclaim and motion to dismiss allege that Plaintiff: 24 continued to borrow against ASP AC Distributors, Inc. during the delay although they no Ionge 25 own or control the business. ASP AC Distributors, Inc. entered a consent judgment to pay thi 26 debt to First Hawaiian Banlc In this manner, it appears that Plaintiffs unreasonable delay rna 27 have caused actual prejudice to Defendants. For these reasons, the prejudice suffered b 28 Defendants weighs in favor of dismissal.

3. Public policy favoring disposition on the merits 2 The public policy favoring disposition on the merits ordinarily weighs against dismissal 3 Santos, 1997 Guam 4 at~ 9. Although this factor does not favor dismissal, "[t]he public polic 4 of determining cases on their merits should not be used defensively as a shield by a passiv 5 Plaintiff who has failed in his obligation to prosecute the defendants with the vigor expected of

6 plaintiff." !d. 7 In order to determine whether dismissal is appropriate in light of the public policy 8 favoring disposition on the merits, this fourth factor is weighed against the first two factors. See 9 e.g., Kawashima, 2010 Guam 10 at ~ 22; Concepcion, 2003 Guam 12 at ~ 23 ("[I]t must b IO weighed against the first two factors, the expeditious resolution of litigation and the court's nee II to manage its docket."). The fourth factor should also be weighed against the third factor i 12 prejudice is suffered. Santos, 1997 Guam 4 at~ 9 ("This factor is weighed against the prejudic 13 suffered by the Defendants."). The fourth factor is weighed against all of the other factors.

14 Quitugua, 2004 Guam 19 at~ 20. 15 4. Availability of less drastic sanctions 16 Under the final factor, "[t]he trial court is not required to impose lesser sanctions, whe 17 the rules do not so provide, and when to do so would encourage neglect and noncompliance wit 18 the Guam Rules of Civil Procedure." Santos 1997 Guam 4 at~ 10. An action may be dismisse 19 without advance warnings or lesser sanctions. !d. 20 Here, the imposition of lesser sanctions, like an award of expenses, shall no 21 meaningfully remedy more than a year of substantive inactivity. Plaintiffs do 22 reasonable alternative sanctions and any lesser sanction shall encourage neglect and further dela 23 in this case. For these reasons, the unavailability of less drastic sanctions weighs in favor o

24 dismissal. 25 Ill 26 Ill 27 Ill

CONCLUSION

2 In consideration of these factors, only the fourth factor, the interest in disposition on th 3 merits, does not weigh in favor of dismissal. Dismissal is supported by the public interest i 4 expeditious resolution of litigation, the Court's need to manage its docket, the prejudice suffere 5 by Defendants and the unavailability of less drastic sanctions. For this reason, dismissal is 6 appropriate remedy and Defendant's motion is granted. See Park, 2010 Guam 10 at ~ 1 7 ("Dismissal is appropriate if at least four factors favor dismissal or three factors 'strongly' 8 support dismissal."). 9 Based upon the foregoing, Defendants' motion to dismiss for the failure to prosecut 10 under Guam R. Civ. P 41(b) is hereby GRANTED and Plaintiffs' claim for breach ofpromisso 11 notes is hereby DISMISSED upon its merits and with prejudice. 12 Pursuant to Guam R. Civ. P. 54(b), the Court determines that there is no just reason t 13 delay final judgment against the Plaintiffs' claims and it hereby directs the entry of a fina 14 judgment accordingly. 15

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19 RICHARD H. BENSON Judge Pro Tempore, Superior Court of Guam 20

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25 SERVICE VIA COUk r Bl I acknowledge that a copy of th0 26 ~glnal hereto was ,p,laced in th0

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Clerk, Supfirior of Gwrn