Mendoza III v. AOC Furniture

Opinion

L\brart

4 IN THE SUPERIOR COURT OF GUAM 5

6 ANTONIO C. MENDOZA, III, dba ) CASE NO. CVI030-11 7 TONY'S WORKSHOP, ) ) 8 Plaintiff, ) FINDINGS OF FACTS AND CONCLUSIONS OF LAW vs. ) 9 ) 10 AOC FURNITURE, ) ) 11 Defendant. ) 12

14 INTRODUCTION 15 This matter came before the Honorable Alberto C. Lamorena III for a bench 16

17 trial on March 5, 2012. Attorney William Pole represented Plaintiff, Antonio C. 18 Mendoza III, dba Tony's Workshop. Defendant was given notice of the trial date, 19 but did not appear. The Court now issues its Findings of Facts and Conclusions of 20

21 Law.

22 FINDINGS OF FACT 23 Having heard testimony and upon consideration of the evidence, the Court finds the 24 following facts by a preponderance of the evidence: 25 1. Plaintiff entered into a contract with Defendant to provide construction 26 improvements on a government project and Defendant served as the general 27 contractor. No evidence of a written contract was offered in evidence. 28 Decision and Order Case No. CV1030-11

2. Plaintiff provided Defendant with materials and labor and completed the 2 work agreed to by the parties. 3 3. Plaintiff provided Defendant with an Invoice for all work as agreed by the 4 Parties. 5 4. Defendant agreed to pay Plaintiff the sum of $18, 124.63 for Plaintiffs 6 servIces. 7 5. Defendant submitted various payments to Plaintiff, but there remains 8 outstanding and unpaid a total of $11,624.63. 9 6. Defendant AOC Furniture failed to respond to discovery and failed to attend 10 either the pretrial conference or trial in this matter, despite the fact that 11 Plaintiffs counsel provided notice of these hearings to Defendant. 12

13 CONCLUSIONS OF LAW 14 1. This Court has jurisdiction over this matter under title 7, section 3105 of the 15 Guam Code. 16

17 Attorney's Fees: 18 2. Plaintiff requests attorney fees in the amount of $4,470 dollars. Under Guam 19 law, courts apply the American Rule with respect to attorney fees. Fleming v. 20 Quigley, 2003 Guam 4 ~ 7. "Under the American Rule, parties bear their own 21

22 litigation expenses, including attorney's fees." Id. (citing Alyeska Pipeline 23 Servo Co. V. Wilderness Soc'y, 421 U.S. 240, 247, 95 S. Ct. 1612, 1616 (1975); 24 Guam Radio Servs. v . GEDA, 2000 Guam 23 at ~ 9). However, there are 25

26 several exceptions to the American Rule whereby fee shifting is allowed:

27 "The exceptions to the American rule include where attorney's fees are: (1) 28 authorized by statute, (2) authorized by contract, or (3) allowed in judicially-

-2- Decision and Order Case No. CV lO30-11

established equitable circumstances." Id. (citing Young v. Redman, 128 Cal. 2 Rptr. 86, 91 (Ct. App. 1976». In this case, Plaintiff apparently alleges that 3 attorney fees are authorized by a contract. Plaintiff did not, however, present 4

5 any evidence of a contract provision allowing for payment of attorney fees in

6 this case. The only evidence offered by Plaintiff was an Invoice, which 7 included a fine print provision at the bottom of the document suggesting that 8 in the instance the invoiced party failed to remit timely payment, that party 9

10 may incur costs and fees. (Pl.'s Complain, Exh. B) But this unsigned Invoice 11 does not constitute a contract between the parties and the fees provision is 12 unenforceable as to the Defendant. As such, Plaintiff is not entitled to the 13

14 claimed attorney's fees.

15 Interest Rate: 16 3. Plaintiff seeks to enforce an "interest penalty of 2% per month" until the date 17 of judgment. Like the provision for attorney fees, this interest penalty is also 18

19 provided for in the fine print of the Invoice sent to Defendant. In support of

20 its claim that this penalty is enforceable, Plaintiff looks to title 18, section 21 47106 of the Guam Code, which states: 22 The rate of interest upon the loan or forbearance of any money, 23 goods, or things in action, or on accounts after demand or 24 judgment rendered in any court of the territory, shall be six percent (6%) per annum but it shall be competent for the 25 parties to any loan or forbearance of any money, goods or 26 things in action to contract in writing for a rate of interest not exceeding the rates of interest specified in Title 14 of this 27 Code. 28

-3- Decision and Order Case No. CV 1030-11

Again, Plaintiff apparently suggests that the interest provided for on the 2 Invoice constitutes an enforceable contract provision pursuant to section 3 47106. As this Court has already noted, there is no evidence that the 4

5 unsigned Invoice represented a contract entered into by the parties.

6 Furthermore, this interest provision clearly constitutes a "penalty" rather a 7 liquidated damages provision allowing for reasonable interest. In contract 8 law, penalties are generally not enforceable, and liquidated damages are 9

10 enforceable only in limited circumstances. Title 18, section 88103 of the 11 Guam Code provides: 12 § 88103. Contract Fixing Damages. 13 Every contract by which the amount of damage to be paid, or 14 other compensation to be made, for a breach of an obligation, is 15 determined in anticipation thereof, is to that extent void, except as expressly provided in the next section. 16 18 GCA § 88103. And section 88104 provides: 17 § 88104. Exceptions. 18 The parties to a contract may agree therein on an amount 19 which shall be presumed to be the amount of damage 20 sustained by a breach thereof; when, from the nature of the case, it would be impracticable or extremely difficult to fix the 21 actual damage. 22 18 GCA § 88104. Based on the fact that there is no evidence of a 23 contractual agreement between the parties regarding an alternative 24 interest rate, and general policy against enforcing penalties in 25 contract cases, this Court will not order payment of interest at two 26 percent monthly from June 4, 2010, until the date of judgment as 27 requested by Plaintiff. However, as this case involves quantifiable 28 damages, Plaintiff is, nevertheless, entitled to prejudgment interest.

-4- Decision and Order Case No. CV 1030-11

20 GCA § 2110; Duenas v. George and Matilda Kalingal P.C., 2012 2 Guam 4 (citing U.S. Fid. & Guar. Co. v. Lee Invs. LLC, 641 F.3d 3 1126, 1140 (9th Cir.2011) 4

5 Punitive Damages: 6 4. Plaintiff requests punitive damages in the amount of $5,000. However, it is a

7 well-settled that punitive damages may not be awarded for claims arising

8 from a breach of contract. See 20 GCA § 2120; Restatement (Second) of Contracts, § 355; c.f. Sananap v. Cyfred, Ltd., 2004 Guam 20 (quoting Barrie 9 Sch. v. Patch, 933 A.2d 382, 295 (Md.2007) (Bell, J., dissenting» ("It is a 10 long-held, and well-settled, general principle of contract law that contract 11 remedies are to be compensatory, not punitive."). As the claim is limited to a 12 breach of contract, Plaintiff is not entitled to punitive damages. 13

14 CONCLUSION 15 Based on the foregoing, this Court finds that Plaintiff is entitled to an award 16 $11,624.63 plus 6% interest per annum from June 4, 2010 until the amount is paid 17 in full. Judgment shall enter in accordance with these findings and conclusions. 18

19 It is SO ORDERED this 27th day of July, 20

-5-