Marianas Properties v. Estate of Lujan

Opinion

IN THE SUPERIOR COURT

OF GUAM

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3 MARIANAS PROPERTIES, LLC, ) Special Proceedings No; SPOO 19.. 11 4 )

Plaintiff, )

5 v. ) DECISION AND ORDER re: Motion to Dismiss

6 THE ESTATE OF SOLEDAD ANDERSON )

LUJAN aka SOLEDAD A. LUJAN and )

7 FIRST HAWAllAN BANK )

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8 Respondent. )

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II INTRODUCTION

12 This matter came before the Honorable Judge Michael J. Bordallo on October 30, 2012 on

13 Defendant Soledad Anderson Lujan's motion to dismiss. Plaintiff was represented by Attorney

14 Louie J Yanza. Defendant Estate of Soledad Anderson Lujan was represented by Attorney

15 Curtis Van de Veld. Defendant First Hawaiian Bank was represented by Richard L Johnson. 16 Having reviewed the memorandum and papers presented, the Court now issues the following 17 denying Defendant's motion to dismiss because Marianas Property did not impliedly waive 18 their right to arbitrate.

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20 BACKGROUND

21 The instant matter arises from dispute over a July 1, 1982 ground lease agreement.

22 Marianas Properties, LLC is the Lessee and the Estate possesses an undivided interest in the 23 property and it currently acting as the Lessor. First Hawaiian Bank ("FHB") is a party in interest 24 as the leasehold mortgagee of the property. On September 30, 20 I 0, Estate issued Notice of 25 Default to Marianas Properties. On December 29, 2010, the Estate issued and recorded with the 26 Department of Land Management, a Notice of Termination of Ground Lease Agreement, under 27

28 Instrument No. 813315.

On February 16, 2011, the Plaintiff appointed Mitchell F. Thompson as its arbitrator. On Page I of4

January 20, 2012, the Estate appointed L. Francis Gill as its arbitrator. Shortly thereafter, 2 Plaintiff filed a motion to remove Mr. Gill as arbitrator arguing that circumstances exist that 3 give rise to material justifiable doubts as to Mr. Gill's impartiality or independence. The Court 4 agreed and removed Mr. Gil as arbitrator.

5 Subsequently, the Estate appointed Douglas B. Moylan as its arbitrator. On July 31, 2012, 6 Plaintiffs filed their objection to the appointment of Douglas B. Moylan. On September 12, 7 2012, Estate filed its opposition. On January i\ the Court removed Douglas B. Moylan as 8 arbitrator.

9 On August 15, 2012, the Estate filed a motion to dismiss. On October 16, 2012, Plaintiffs 10 filed their opposition. The Court now issues its decision and order DENYING Defendant's 11

12 motion to dismiss.

13 DISCUSSION

14 Generally, a case may be dismissed due to lack of subject-matter jurisdiction, lack o

15 personal jurisdiction, improper venue, insufficient process, insufficient service of process, failur

16 to state a claim upon which relief can be granted, and/or failure to join a party. The Defense ha

17 not cited to any of the Guam Rules of Civil Procedure Rule 12 sections that would provide fo

18 dismissal. The Court only has case law for guidance in issuing a decision.

19 Defendant's motion to dismiss is based on two arguments: 1) that Marianas Property ha

20 waived its right to arbitrate and 2) Marianas Property's litigation efforts in the First Hawaii

21 Bank Action has been prejudicial to the estate. The Estate contends Plaintiffs canno

22 simultaneously arbitrate its dispute with the Estate while at the same time litigate in Superio

23 Court. As such, the Estate argues Mariana's Property have impliedly waived their right t

24 arbitrate by seeking judicial resolution of its claims in the FHB Action through summar

25 judgment and by its Complaint in Intervention. Moreover, by failing to ask the FHB court to sta

26 that action pending the outcome of the arbitration it seeks for the same claims in this Court, th

27 Plaintiffs have impliedly waived their right to arbitrate.

28 Plaintiffs argue this motion is the Estate's latest campaign of delay and obfuscation.

Waivers of arbitration are disfavored and will only be found in the clearest of circumstances.

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Doctors Associates, Inc. v. Thomas, 898 So. 2d 159 (Fla. App. 2005); LJA Engineering an 2 Surveying, Inc. v. Richfield Investment Corp., 211 S.W.3d 443 (Tex. App. 2006). The Courts wil 3 not lightly infer a waiver of the right to compel arbitration; thus, the burden on the party seekin 4 to prove waiver is a heavy one. Zedot Constr., Inc., v. Red Sullivan's Conditioned Air Service, 5 Inc., 947 So. 2d 396 (Ala. 2006). Doubts regarding defenses against arbitrability, such as waive 6 of delay, should be resolved in favor of arbitration. In re Toyota Motor Corp. Unintende 7 Acceleration Marketing, Sales Practices, and Products Liability Litigation, 838 F. Supp. 2d 96 8 (C.D. Cal. 2012). 9 Nor does mere participation in litigation by itself amount to a waiver. DFC Homes o IO Florida v. Lawrence, 8 So. 3d 1281 (Fla. App. 2008); Weis Builders, Inc. v. Complet II Contracting, Inc., 247 S.W.3d (Ky. App. 2008); Century 21 Maselle and Associates, Inc. v. I2 Smith, 965 So. 2d 1031. 13 Plaintiffs' argue their participation in the FHB lawsuit is purely a defensive measure. I I4 the FHB lawsuit, the Estate filed a motion to dismiss claiming necessary and indispensabl I5 parties, such as Marianas Property, were not included in the declaratory judgment case. As I6 result, Marianas Property was forced to seek intervention as a defensive measure to protect thei I7 interests in the subject property, in the event of a foreclosure action. Thus, Plaintiffs contend I8 defensive intervention does not amount to a voluntary waiver of the right to arbitrate. The Cou I9 agrees and finds Plaintiffs action to intervene in the FHB lawsuit was to protect their interest i 20 the subject property, not an implied waiver of their right to arbitration. 2I The Estate contends these litigation efforts on the part of FHB have unfairly prejudice 22 the Defendants in the instant matter. The 7th Circuit Court reasoned the prejudice is one of th 23 factors in the waiver analysis and that the Courts may look to the surrounding circumstances o 24 which a claim of waiver is based. St. Mary's Medical Center of Evansville, Inc. v. Disc 25 Aluminum Products Co., Inc., 969 F.2d 585, 590 (ih Cir. 1992) "But where it is clear a party ha 26 forgone its right to arbitrate, a court may find waiver even if that decision did not prejudice th 27 non-defaulting party." !d. This rational, however, does not apply to the facts in the instant cas 28 because it is not clear whether or not Plaintiffs have foregone their right to arbitrate.

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To the contrary, the Court finds the Plaintiffs actions have been in favor of arbitration. I 2 is the Defendants actions that have delayed arbitration through two attempts to appoint biase 3 arbitrators. The alleged prejudice against the Estate has been self-inflicted. If the Estate ha 4 named an unbiased arbitrator and proceeded to arbitration, then Marianas Property would no 5 have been forced to intervene in the FHB litigation. In addition, the Estate has alread 6 voluntarily litigated the FHB case during the arbitration process. On November 8, 2011, in th 7 FHB lawsuit, Marianas Property filed a motion to consolidate and to dismiss for failure to ad 8 indispensable parties. Ex. 1 to Yanza Dec. The Court finds the Estate cannot seek for Mariana 9 Property to intervene in the FHB litigation, and then claim Plaintiffs impliedly waived their righ IO to arbitration. Accordingly, the Court denies Defendant's motion to dismiss. II

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13 CONCLUSION

I4 Based on the foregoing, the court DENIES Defendant's motion to dismiss and find I5 Marianas Property did not impliedly waive their right to arbitrate.

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I8 SO ORDERED, this!__!___ day I9

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23 Judge, Superior Court of Guam

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