Marianas Properties v. Estate of Lujan

• Court: Superior Court of Guam
• Decided: January 8, 2013
• Docket: SP0019-11
• Status: Unknown

Opinion

IN THE SUPERIOR COURT OF GUAM 2

3 MARIANAS PROPERTIES, LLC, ) Special Proceedings No. SP0019-11 4 ) Plaintiff, ) 5 V. ) DECISION AND ORDER re: Motion to Remove Arbitrator 6 THE ESTATE OF SOLEDAD ANDERSON ) LUJAN aka SOLEDAD A. LUJAN and ) 7 FIRST HAWAIIAN BANK ) ) 8 Respondent. ) ) 9

II INTRODUCTION

12 This matter came before the Honorable Judge Michael J. Bordallo on September 21, 2012.

13 Plaintiff was represented by Attorney Louie J Yanza. Defendant Estate of Soledad Anderson

14 Lujan was represented by Attorney Curtis Van de Veld. Defendant First Hawaiian Bank was

15 represented by Richard L Johnson. Having reviewed the memorandum and papers presented, 16 the court now issues the following granting Plaintiff's motion to remove Douglas Moylan as 17 arbitrator. 18

19 BACKGROUND 20 The instant matter arises from dispute over a July 1, 1982 ground lease agreement. 21 Marianas Properties, LLC is the Lessee and the Estate possesses an undivided interest in the 22 property and it currently acting as the Lessor. First Hawaiian Bank ("FHB") is a party in interest 23 as the leasehold mortgagee of the property. On September 30, 2010, Estate issued Notice of 24 Default to Marianas Properties. On December 29,2010, the Estate issued and recorded with the 25 Department of Land Management, a Notice of Termination of Ground Lease Agreement, under 26 Instrument No. 813315. 27 On February 16, 2011, the Plaintiff appointed Mitchell F. Thompson as its arbitrator. On 28 January 20, 2012, the Estate appointed L. Francis Gill as its arbitrator. Shortly thereafter, Page 1 of5 Plaintiff filed a motion to remove Mr. Gill as arbitrator arguing that circumstances exist that 2 give rise to material justifiable doubts as to Mr. Gill's impartiality or independence. The Court 3 agreed and removed Mr. Gil as arbitrator. 4 Subsequently, the Estate appointed Douglas B. Moylan as its arbitrator. On July 31, 2012, 5 Plaintiffs filed their objection to the appointment of Douglas B. Moylan. On September 12, 6 2012, Estate filed its opposition. The Court hereby REMOVES Douglas B. Moylan as arbitrator 7 based on the following analysis. 8

9 DISCUSSION 10 Under Guam law, Guam's Arbitration Act 1 permits a party to challenge an arbitrator's 11

12 qualifications. A party who intends to challenge an arbitrator shall send a written statement of

13 the reasons for the challenge, within fifteen (15) days of becoming aware of his or her 14 appointment as an arbitrator, to the arbitral tribunal. 7 GCA § 42304(b). An arbitrator may be 15 challenged only if circumstances exist that give rise to material justifiable doubts as to his or her 16 impartiality or independence. 7 GCA § 42303(b). 17

18 "[T]he party asserting evidence partiality has the burden of proof, and if requesting

19 vacatur by alleging that a business relationship was not disclosed, must prove that the 20 relationship is substantial, rather than casual or perfunctory. Under this formulation, the alleged 21 interest or bias must be 'direct, definite, and capable of determination rather than remote, 22 uncertain, or speculative'" (citing Health Servs. Mgmt. Corp. v. Hughes, 975 F.2d 1253, 1264 23 1 24 (7th Cir. 1992) (quoting Tamari v. Bache Halsey Stuart Inc., 619 F2d 1196, 1200 (7 h Cir. 1980))

25 In other words, arbitrators should not be disqualified unless the relationship is non-trival. See 26 Univ. Commons-Urbana, 304 F.3d at 1339 (quoting this standard has been applied in cases 27

Page 2 of5 specifically involving legal professionals). 2 "[C]urrent or prospective financial dealings with a party are well recognized as ground for 3 an arbitrator's disqualification." Gebers v. State Farm General Ins. Co., 38 Cal.App.41h (1648, 4

5 1653 (Cal. Ct. App. 1995). The California Court reasons the existence of a present or past

6 business relationship between the arbitrator and a party is a frequent cause for possible bias.

7 Such a relationship suggests a pecuniary interest for the arbitrator and gives reason to favor the 8 party for reasons unrelated to the merits of the arbitration. Betz v. Pankow, 31 Cal. App. 4th 9 1503, 1508-1509 (Cal. Ct. App. 1995). Moreover, An arbitrator who was employed by one of 10

II the parties and engaged in business interests with the party is not disinterested or impartial and

12 is disqualified to act as an arbitrator. Palmer Plastics, Inc. v. Rubin, 108 N.Y.S. 2d 514, 518 13 (N.Y. Sup. Ct. 1951). 14 Plaintiffs hold the burden of proof of showing Douglas Moylan's partiality and biasness. 15 Mr. Moylan and the Estate's attorney, Curtis C. Van de veld, are currently working together in 16

17 two on going cases before the Superior Court of Guam: Civil Case No. CV 1527-09 and

18 CV706-11. Mr. Moylan represents Mr. Van de veld and his law office. See Exhibit 1, Marianas 19 Properties, LLC's objection to the Appointment of Douglas Moylan B. Moylan as its Arbitrator. 20 Furthermore, Mr. Van de veld and Mr. Moylan not only have a present relationship, but a 21

22 history of representing each other in the following cases before the Superior Court of Guam:

23 Delvin Moylan v. Dongbu Insurance Company, Ltd. (CV800-1 0), Carl T.C. Gutierrez v.

24 Vincent Akimotor, M.D., et a! (CV-0415-12). Doris L.G. Moylan v. Douglas B. Moylan 25 (DM0457-97), Douglas B. Moylan v. John Ryan, et al., (CV1363-00), Vicente M. San Nicolas 26

1 28 Pursuant to 7 GCA § 4210l(d), the Guam International Arbitration Chapter applies "to international commercial arbitration and domestic arbitration, subject to any agreement in force between Guam and any other State or States." Rong Chang Company. Ltd., Inc. v. M2P, Inc., et al., 2012 Guam I. Page 3 of5 v. Van de veld Law Offices, et al., (CV0295-0l) and James B. Tolan, et al. v. Curtis Van de 2 veld (CV0236-0l ). Plaintiffs submit a reasonable person could perceive Mr. Moylan and Mr. 3 Van de veld's relationship to be substantial and a cause for potential bias and impartiality. 4 Defendant argues there is no basis for removal of Mr. Moylan because there is a lack of 5

6 reasonable appearance of partiality. With respect to the current representations, Mr. Van de

7 veld represents as co-counsel Richard Moylan, Douglas Moylan's father in a guardianship 8 matter, and has not appeared in court nor filed a pleading for a while; and in Sontag Martin et 9 al. v. Francis Gill, et al., this matter has reached a settlement agreement and the case will end up 10 being dismissed. Defendant contends the circumstances are insufficient to require removal. The 11

12 Court disagrees and finds the relationship between Mr. Van de veld and Mr. Moylan to be

13 substantial and goes beyond a mere appearance of partiality. The history between both parties 14 independently constitutes a substantial relationship, such that a reasonable person could 15 perceive Mr. Moylan to have a direct and definitive bias as an arbitrator in the instant matter. 16

17 The Court is cognizant of Plaintiff's argument that the appointment of Mr. Gil and

18 subsequently, Attorney Moylan, are part of Defendant's purposeful effort to delay the 19 arbitration of this matter. While very persuasive, the Court will give the Defendant one last 20 opportunity to appoint an arbitrator. If the Court finds that the next arbitrator is disqualified for 21 bias, then the Court will consider sanctions against the Defendant. Although the Defendant's 22

23 motion to dismiss remains under advisement, the Defendant is ordered to identify its arbitrator

24 within ten days of this order. 25

Page4of5 CONCLUSION 2 Based on the foregoing, the court grants Plaintiffs motion to remove Douglas B. Moyla 3 as the Estate's arbitrator. 4

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10 Ho'NOR,')J.n:f MICHAEL J. BORDALLO Judge, S)iperior Court of Guam 11 I 12

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