Peter v. Gill

• Court: Superior Court of Guam
• Decided: September 30, 2021
• Docket: CV0426-18
• Status: Unknown

Opinion

FfLED SUP1:RIOR URT ~ G

IN THE SUPERIOR COURT OF GUAM

JOSHUA F. PETER, ET AL., Superior Court Case No. CV0426-18

Plaintiffs, DECISION AND ORDER RE vs. PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT RE FRAUD FRANCIS GILL, ET AL., DEFENSE Defendants.

The Court here considers Plaintiffs' March 25, 2021 Motion that the Court award

summary judgment against Defendants Cyfred, Ltd. and Francis Gill on their defense of fraud.

Having reviewed the briefing, the Court DENIES the Motion.

I. PROCEDURAL BACKGROUND

Plaintiffs' motion concerns the pled defense of fraud. According to their Answer to the

Fourth Amended Complaint, Defendants assert that Wong committed fraud upon Defendants

when he represented that he had the authority to enter into certain agreements. Answer to Fourth

Am. Compl. ~ 13 (July 28, 2020). Based on their assertion, Defendants contend that all of

Plaintiffs' claims should be estopped for fraud. !d.~ 65.

In a related case, Wong v. Cyfred, Ltd., CV0425-18, the Court examined this same alleged

fraud in its May 16, 2019 Decision and Order re Plaintiff's Motion for Partial Summary

Judgment and Defendants' Counter-Motion for Partial Summary Judgment. In CV0425-18,

Wong sought to collect on a Promissory Note executed by Cyfred in Wong's favor. Cyfred

moved for partial summary judgment on fraud grounds, claiming that Wong misrepresented his CV0426-18 DECISION AND ORDER REMOTION FOR PARTIAL SUMMARY Page2 WDGMENT AGAINST DEFENDANTS' FRAUD DEFENSE

authority to sign an October 29, 2012 Settlement Agreement on behalf of certain clients. In

denying the motion, the Court found that Wong presented sufficient evidence to establish a

factual dispute concerning his knowledge about the circumstances surrounding the signing of the

October Settlement Agreement and his intent to deceive when he signed it on behalf of his

clients.

In this case, Plaintiffs now move for partial summary judgment on Cyfred and Gill's

defense that it cannot be liable for Plaintiffs' claims due to the alleged fraud committed by

Wong. In support of their Opposition to the Motion, Defendants rely on Gill's Declaration filed

during the summary judgment briefing in CV0425-18. See CV0425-18 (Decl. Frances Gill (Jan.

18, 2019) (hereinafter referred to as "Decl. Gill"). Defendants further ask the Court for

additional time to file affidavits in support of their positions.

II. FACTUAL BACKGROUND/UNDISPUTED FACTS

1. On February 8, 2012, the following persons and entities signed a Settlement Agreement

for the Gill-Baza Cases ("Initial Settlement Agreement"): Gill; Cyfred; United Pacific

Islanders Corporation ("UPIC"); sixty-two persons and/or the estates of such deceased

persons ("Homeowners" or "Homeowner Plaintiffs"); and Geraldo and Mariefe Abalos

(collectively the "Abaloses"). Compl., Ex. 1 (Apr. 30, 2018).

2. In the Initial Settlement Agreement, UPIC provided certain guarantees on behalf of

certain homeowners:

16. UPIC May Sign this Agreement for Certain Homeowners. Because the Homeowners have agreed in writing that the majority of them may settle CV1448-02 and CV1511-06, Mr. Gill and Cyfred agree that iftwo-thirds ofthe Homeowners have personally signed this Agreement, then UPIC may sign on behalf of those Homeowners who have not been available to sign this Agreement, are deceased or even disagree with this Agreement, but UPIC will use good faith efforts to try to have all of the available Homeowners review, CV0426-18 DECISION AND ORDER REMOTION FOR PARTIAL SUMMARY Page3 JUDGMENT AGAINST DEFENDANTS' FRAUD DEFENSE

approve and sign this Agreement by March 6, 2012, and try to have each representative of the each deceased Homeowner's estate obtain an order from the Guam probate court authorizing each to sign this Agreement and any other documents related to it on behalf of such estate. UPIC and each of the Homeowners who personally sign this Agreement, jointly and severally, will indemnify Mr. Gill and Cyfred from any and all claims, including but not limited to all reasonable attorney's fees and costs incurred as a result of any necessity to defend against any claim made by any Homeowner or any Homeowner's estate for any matter covered in this Agreement, if such Homeowner's or deceased Homeowner's estate's claim arises in any way firm his or its contention that UPIC was not authorized to sign this Agreement for him or it. For any and all purposes of this Agreement, due signature ofUPIC for any Homeowner or his estate pursuant to the provisions of this paragraph will be deemed the signature of that Homeowner or his estate.

17. The Parties' Attorneys May Sign Certain Other Documents for Them. Except for this Agreement, any other documents needed to effect the intent of the parties to it and/or any provision of it may be signed for Mr. Gill; Cyfred; Geraldine Mendiola, Bobbie Reyes; Stephanie Mendiola; Ina Gill, individually, and for the Estate of Peter Gill, Deceased, Vema Bozo, individually and for the Estate of Enrique Bozo, Deceased; and Eleanor Perez by their attorney, inching Curtis Van De veld, Esq., and for UPIC and the Homeowners, by their attorney, including attorney Wong. Mr. Gill will indemnify UPIC, the Homeowners and the Abaloses from any and all claims, including but not limited to all reasonable attorney's fees and costs incurred as a result of any necessity to defend against any claim brought against one or more of them by Cyfred; Geraldine Mendiola; Bobbie Reyes; Stephanie Mendiola; Ina Gill, individually, and for the Estate of Peter Gill, Deceased; Vema Baza, individually and for the Estate of Enrique Baba, Deceased; and/or Eleanor Perez which should have been released under due Mutual Release of Claims, if such claim arises in any way from his, her or its contention that his, her or its attorney was not authorized to release such claim. UPIC and the Homeowners who personally sign this Agreement, jointly and severally, will indemnify Mr. Gill, Cyfred and all of the others limed under the heading of "The Defendants" in Exhibit "A" attached, from any and all claims, including but not limited to all reasonable attorney's fees and costs incurred as a result of any necessity to defend against any claim made against one or more of them by any Homeowner or any deceased Homeowner's estate which should have been released under the Mutual Release of Claims, if such Homeowner's or deceased Homeowner's estate's claim arises in any way from his or its contention that such Homeowner's attorney was not authorized to sign this Agreement for him or it.

Compl., Ex. 1.

3. The Bankruptcy Court did not approve the Initial Settlement Agreement. Decl. Gill~ 10. CV0426-18 DECISION AND ORDER REMOTION FOR PARTIAL SUMMARY Page4 JUDGMENT AGAINST DEFENDANTS' FRAUD DEFENSE

4. On October 29, 2012, Gill and Wong as "Attorney for UPIC, the Homeowners and the

Abaloses" signed a revised settlement agreement titled Reconfirmed and Amended

Settlement Agreement for the Gill-Baza Cases (referred to as "Revised Settlement

Agreement"). Compl., Ex. 2. The Revised Settlement Agreement reconfirmed the Initial

Settlement Agreement as remaining in full force and effect.

5. Wong assured Gill that he had the authority on behalf of all clients to sign the Revised

Settlement Agreement. DecI. Gill '1!17.

6. This caused Gill to believe that Wong secured all ofhis clients' authority in writing to

settle. !d. '1f19.

7. Gill claims that he would not have signed the Revised Settlement Agreement without

Wong's assurances. Id. '1!20. According to Gill, this is because "Wong required Cyfred

to transfer numerous parcels of property to third parties who were not settling parties in

order for Mr. Wong to obtain a first mortgage secured by the transferred property to

secure payment attorney's fees owed to him by the deceased client." Id. '1!23.

8. On or about February 22,2013, Gill and Wong, as the attorney for UPIC, Homeowners

and Abaloses, executed Second Amended Escrow Instructions for the Settlement of the

Gill-Baza Cases. Compl., Ex. 3.

9. Sometime in the course ofCV0073-16, Cyfred learned that Wong did not have written

authority from some or most of his clients to enter into the Revised Settlement

Agreement. Decl. Gill '1!24.

III. LAW AND DISCUSSION

A. Summary Judgment Standard

The Court may grant summary judgment on particular issues within a case if there is no CV0426-18 DECISION AND ORDER REMOTION FOR PARTIAL SUMMARY Page 5 WDGMENT AGAINST DEFENDANTS' FRAUD DEFENSE

genuine issue as to any material fact. GRCP 56(c), (d). In determining whether a genuine issue

of material fact exists, the admissible evidence provided by the parties must be viewed in a light

most favorable to the non-moving party. Edwards v. Pac. Fin. Corp., 2000 Guam 27 ,-r 7.

B. Interpretation of the contracts

Although the Court is analyzing a fraud defense, what the parties understood depends on

contractual interpretation principles. The Court must examine the four comers of the contract to

determine the parties' intentions. If the "language within the four comers of the contract is

unambiguous, then a court does not resort to extrinsic evidence of the contract's meaning, and a

court determines the parties' intentions from the plain meaning of the contractual language as a

matter of law." Wasson v. Berg, 2007 Guam 16 ,-r 16 (quoting Guam United Warehouse Corp. v.

DeWitt Transp. Servs., 2003 Guam 20 ,-r 24). Here, since the Revised Settlement Agreement

reconfirmed the Initial Settlement Agreement as remaining in full force and effect, the Court

examines both Agreements.

In the Initial Settlement Agreement, the parties recognized that not all Homeowners may

have been available to sign the document: "Mr. Gill and Cyfred agree that if two-thirds of the

Homeowners have personally signed this Agreement, then UPIC may sign on behalf of those

Homeowners who have not been available to sign this Agreement, are deceased or even disagree

with this Agreement, but UPIC will use good faith efforts to try to have all of the available

Homeowners review, approve and sign this Agreement." Compl., Ex. 1, ,-r 16. In exchange for

UPIC taking on this responsibility, UPIC agreed to indemnify Cyfred and Gill. Compl., Ex. 1, ,-r

16.

The parties then agreed that Wong could sign other documents on behalf of the

Homeowners: "Except for this Agreement, any other documents needed to effect the intent of CV0426-18 DECISION AND ORDER REMOTION FOR PARTIAL SUMMARY Page 6 JUDGMENT AGAINST DEFENDANTS' FRAUD DEFENSE

the parties to it and/or any provision of it may be signed for ... UPIC and the Homeowners, by

their attorney, including attorney Wong." Compl., Ex. 1, ~ 17. Again, the parties agreed to

indemnify Cyfred and Gill in the event there was no such authority. Compl., Ex. 1, ~ 17.

Upon reviewing these provisions from the Initial Settlement Agreement, the Court finds

it undisputed that Cyfred and Gill had knowledge that not every single Homeowner may have

agreed to the Initial Settlement Agreement (though most had). In addition, Cyfred and Gill

(along with other parties) understood that further agreements may have been necessary to

effectuate the settlement and agreed that Wong could sign any further agreement for the

Homeowners. Lastly, the parties agreed Cyfred and Gill would be indemnified if Wong did so

absent authorization.

C. Fraud

Turning to the issue of fraud, there are five elements: (1) a misrepresentation; (2)

knowledge of falsity (or scienter); (3) intent to induce reliance; (4) justifiable reliance; and (5)

resulting damages. Trans Pac. Exp. Co. v. Oka Towers Corp., 2000 Guam 3 ~ 23.

Plaintiffs argue that, based on the evidence before the Court, Defendants cannot prove the

elements of misrepresentation, justifiable reliance, and/or damages. As to the element of

misrepresentation, Plaintiffs further argue that the misrepresentation must be as to a material

fact; Defendants do not oppose that concept. Wilhelm v. Pray, 186 Cal. App. 3d 1324, 1331 (Cal.

App. 1986); Opp. (May 17, 2021 ). Finally, Plaintiffs contend that the elements for a fraud claim

are the same when a party asserts fraud as a defense; again, Defendants do not oppose that

concept. TfYrick v. Bus. Bank of Tex., NA., 577 S.W.3d 336, 347 (Tex. App. 2019); Wilson v.

Byrd, 288 P.2d 1079, 1083 (Ariz. 1955); Opp. CV0426-18 DECISION AND ORDER REMOTION FOR PARTIAL SUMMARY Page7 JUDGMENT AGAINST DEFENDANTS' FRAUD DEFENSE

Moving to the merits of Plaintiffs' motion, the issue before the Court is whether, after

examining the record in a light most favorable to Defendants, there are any genuine issues of

material fact concerning the elements of misrepresentation, justifiable reliance, and/or damages

ofWong's alleged fraud.

The Court first turns to the element of misrepresentation of a material fact. According to

Gill, Wong misrepresented numerous times that "he had authority to sign it from ALL his

clients." Decl. Gill~ 17. Gill contends that he believed Wong's statements to mean that he

secured all of his clients' authority in writing and that he would not have signed the Revised

Settlement Agreement had he known that Wong did not secure all signatures. !d.~~ 19-20

Wong counters that he had the indirect authority to represent all Homeowners, per the language

of the Initial Settlement Agreement. In other words, Wong contends that it does not matter

whether he had actual, direct consent from all Homeowners because the Initial Settlement

Agreement gave him indirect consent.

The Court does not find that the Initial Settlement Agreement granted Wong the authority

he claims. The Initial Settlement Agreement granted UPIC the indirect authority to sign the

Initial Settlement Agreement on behalf of the Homeowners who were not available to sign, are

deceased or even disagree with this Agreement. Compl., Ex. 1 ~ 16. Wong, on the other hand,

was granted authority to sign any other document for UPIC or the Homeowners; the provision

granting Wong this authority, however, did not include language authorizing him to sign for

Homeowners that are not available, deceased, or do not consent. !d. ~ 17. Accordingly, the

Court finds that an issue of material fact exists as to whether Wong had the authority to sign the

Revised Settlement Agreement on behalf of Homeowners absent universal consent. CV0426-18 DECISION AND ORDER REMOTION FOR PARTIAL SUMMARY Page 8 JUDGMENT AGAINST DEFENDANTS' FRAUD DEFENSE

Moving on to the "justifiable reliance" prong, there must be reliance and the reliance

must be justifiable. Wilhelm, 231 Cal. Rptr. at 359. For reliance to be justifiable, the

circumstances must have been reasonable for the party to accept the other party's statements

without an independent inquiry or investigation. Wong points to South Tahoe Gas Co. v.

Hofmann Land Improv. Co., 25 Cal. App. 3d 750 (1972), for the principle that the party asserting

fraud must prove that it relied on the alleged misrepresentation to consent to the contract. In

other words, the alleged misrepresentation must have induced Defendants to agree to the Revised

Settlement Agreement. Wong asserts that the alleged misrepresentation--that he did not have

indirect authority to sign for the Homeowners--did not induce Defendants into signing the

Revised Settlement Agreement because they would have signed whether or not Wong had

indirect authority.

According to Gill, however, he relied upon Wong's statements that he had authority on

behalf of all his clients. Furthermore, Gill stated that he would not have signed the Revised

Settlement Agreement if he knew that Wong did not have universal consent because "Wong

required Cyfred to transfer numerous parcels of property to third parties who were not settling

parties in order for Mr. Wong to obtain a first mortgage secured by the transferred property to

secure payment attorney's fees owed to him by the deceased client." Id. ,-r 23. Accordingly, the

Court is satisfied that an issue of material fact exists as to whether the alleged misrepresentation

induced Defendants' reliance. The Court also notes that, because Wong's statements concerned

representations between himself and his clients--which, due to attorney-client privilege, Gill

could not have independently verified--Gill justifiably relied on those statements.

Finally, the Court turns to the element of damages. To satisfy this element, Defendants

must demonstrate that they suffered damages or harm as a result of the alleged fraud. Wong CV0426-18 DECISION AND ORDER REMOTION FOR PARTIAL SUMMARY Page 9 JUDGMENT AGAINST DEFENDANTS' FRAUD DEFENSE

argues that the record establishes that Defendants cannot prove damages; however he does not

point to any portion of the record to substantiate his claim. Defendants claim various types of

damages, including the avoidance of the obligation in the Promissory Note executed in Wong's

favor, which is the central issue in CV0425-18. They also generally seek compensatory and

punitive damages. The avoidance ofthe obligation, alone, constitutes sufficient evidence of

damages resulting from the alleged fraud. Accordingly, the Court finds that summary judgment

is not appropriate on this element.

IV. CONCLUSION

For the foregoing reasons, the Court DENIES Plaintiffs Motion for Summary Judgment

on Defendants' fraud defense. Since the Court is resolving the Motion in Defendants' favor, the

Court also DENIES Defendant's request for additional time to file affidavits in support of their

positions.

SO ORDERED this 30th day of September 2021.

~jl_Je ~ELYZE M. IRIARTE SEIJVICE VIA E-MAIL Judge, Superior Court of Guam I. aCknowledge that an electronic copy of the original was e-mailed to: w -~a -··- ONe) V1<.1 1 ;... 5 · nt.p?Q drv--4 Date: . Time: 1b P/Z+ Joseph Bar:Rba Jr Deputy Clerk, Superior Court of13u!lm •

Appearing Attorneys: Wayson W.S. Wong, Esq., Law Offices of Wayson Wong, APC, for Plaintiffs Joshua F. Peter, et al. Curtis C. Van de veld, Esq., The Van de veld Law Offices, P.C., for Defendants Francis Gill, et al. Stephanie Mendiola, Esq., self-represented