2025 JAN 28 f"M 2: 15 CLERK OF COURT
IN THE SUPERIOR COURT OF GUAM
MICHAEL F. PHILLIPS AND THE LAW CIVIL CASE NO. CV0304-23 OFFICES OF PHILLIPS & BORDALLO, P.C., DECISION AND ORDER DENYING Plaintiffs, MOTION TO DISMISS
vs.
GOVERNMENT OF GUAM, and DOES 1- 10,
Defendants.
Defendant Government of Guam moves to dismiss two breach of contract claims by
Plaintiffs Michael F. Phillips and the Law Offices of Phillips & Bordallo, P.C. Phillips seeks
compensation for legal services rendered on behalf of the Government, but the Government
contends the alleged contracts lack adherence to Guam's procurement laws. Furthermore, the
Government argues that Phillips cannot utilize the doctrine of equitable estoppel to preclude the
Government's procurement law defenses or promissory estoppel to obtain a recovery. Upon
review of the pleadings and arguments, the Court finds that Phillips has pied sufficient
information to survive the dismissal of this case.
I. FACTUALALLEGATIONS
Phillips represented the Government in both Guam, Guam Election Commission, et al. v.
Arnold Davis ("Davis") and United States ofAmerica v. Chamorro Land Trust Commission, et
al. ("CLTC'). In these cases, Phillips states that he was duly retained, had agreements regarding
ORIGINAL CV0304-23 DECISION AND ORDER DENYING MOTION TO DISMISS Page2
his compensation, and ultimately was not paid. The following recites background facts
presented in Phillips' Complaint. Comp!. (May 1, 2023).
A. Guam, Guam Election Commission, et al. v. Arnold Davis, 140 S.Ct. 2739
Phillips alleges that on October 21, 2019, Governor Lourdes Leon Guerrero called him to
represent the people of Guam before the United States Supreme Court. Id. ,i 10. Governor Leon
Guerrero texted him: "mike please call me ASAP. Need to hire you for our Chamorro people.
This is governor lou." Id., Ex. 1. They then agreed over the phone for Phillips to serve as
Guam's attorney in Davis. Id. ,i 11.
After the phone call, Governor Leon Guerrero memorialized her oral agreement with
Phillips:
As we discussed on Monday afternoon on the phone, I am so glad that you have agreed to represent Guam in its appeal of the decision rendered in Davis v. Guam, et al. at the Ninth Circuit Court of Appeals. Your willingness to advance this cause to the United States Supreme Court is a testament to the dedication you have displayed over a lifetime in service to our community.
Id. ,i 34, Ex. 6. She also published a Special Address, announcing Phillips as the new legal
counsel in the case and indicating that she would ask the Attorney General for an official
appointment. Id. ,i 12.
Then-AG Leevin Camacho issued a press release confirming that Governor Leon
Guerrero hired Phillips to handle the proceedings in the nation's highest court. Id. ,i 39, Ex. 8.
The press release further stated: "A designation from the OAG is not needed for attorney
Phillips to move the case forward. The OAG has promptly responded to attorney Phillips'
request for documents. The OAG has and will continue to facilitate the transition of the case."
Id. In line with the AG's press release, Deputy AG James Canto began sharing the extensive
case files with Phillips. Id. ,i 31, Ex. 3.
ORIGINAL CV0304-23 DECISION AND ORDER DENYING MOTION TO DISMISS Page 3
The case Phillips inherited faced a procedural dilemma as the deadline to file a Petition
for Writ of Certiorari had expired. Id. ~ 28. Phillips commenced work immediately and, on
October 28, 2019, applied for an extension to file a Petition for Writ of Certiorari before the U.S.
Supreme Court. Id. ~ 45. On November 6, 2019, Justice Elena Kagan granted the requested
extension, which meant that the Government preserved its right to present its arguments before
the U.S. Supreme Court. Id. ~ 49. When Phillips advised the Governor about this development,
"the Governor offered and Attorney Phillips accepted that Governor Leon Guerrero will pay
Attorney Phillips the flat fee amount of' $25,000.00 for all work performed or to be performed
by Attorney Phillips." Id.~ 50. As Phillips concentrated his efforts to prepare the Petition for
Writ of Certiorari, Governor Leon Guerrero informed Attorney Phillips "it is prudent you
continue this important work. I am appointing you as Special Counsel to represent Guam ... "
Id., Ex. 15.
However, after Phillips already obtained the extension from the U.S. Supreme Court and
began work on the Petition-for which he expected compensation-Governor Leon Guerrero's
legal counsel informed him that the Government "worked to determine a legal way to meet your
compensation requests. However, due to the short tum-around and our previous reliance on your
offer to represent the government on a pro bona basis, we have been unable to find a method that
would be consistent with procurement law." Id. ~ 59, Ex. 16. The letter then informs Phillips
that the Governor intended to use another law firm to represent Guam. 1
Phillips has asked to be compensated and has received assurances of payment, but he has
not been paid. Id. ~~ 61-2, 68. Phillips filed a Government Claim, which the Office of the
1 The U.S. Supreme Court denied the Petition for Writ of Certiorari filed by the replacement
firm. Id.,~ 60.
ORIGINAL CV0304-23 DECISION AND ORDER DENYING MOTION TO DISMISS Page4
Attorney General denied. Id. ,i,i 65, 69.
B. United States ofAmerica v. Chamorro Land Trust Commission, et al., D. Guam Civ. Case No. 17-00113
Phillips' second claim for relief concerns the work provided on CLTC. He states that
former Governor Eddie Baza Calvo utilized his legal authority to hire Phillips. Id. ,i 4.
Governor Calvo, then AG Elizabeth Barrett-Anderson, Senator Therese Terlaje (then Chair of
the Legislative Committee responsible for the CLTC), and G. Pika Fejeran (then Chair of the
CLTC), met and decided to retain Phillips' services. Id. ,i 98.
On October 31, 2017, AG Barrett-Anderson issued an Appointment of Special Assistant
Attorney General designating Phillips as the legal representative for the CLTC. Id. ,i 103, Ex.
24. On the same day, AG Barrett-Anderson sent Phillips the Conditions of Temporary Special
Assistant Attorney General Appointment Contract, which he signed. Id. ,i,i 104-5, Ex. 25. The
Government capped fees at $ I 00,000, which Phillips accepted. Id. ,i 106. For the next three
years, Phillips worked under the direction of the Governor, the Chair of the CLTC, and the AG.
Id. ,i,i 108-9.
Upon conclusion of his work, Phillips invoiced the Government $78,030.00, which went
unpaid. Id. ,i,i 107, 111, 113, 124. Phillips filed a Government Claim, which has been denied.
Id. ,i,i 116, 117, Ex. 33.
II. LAW AND ANALYSIS
The Government moves for dismissal under Guam Rule of Civil Procedure 12(b)(l) and
(6). For motions brought under Rule 12(b)(6), the Court accepts well-pleaded facts as true,
construes the pleadings in a light favorable to the plaintiff, and resolves all doubts in the non-
movant's favor. Cruz v. Cruz, 2023 Guam 20 ,i 10. As for Rule 12(b)(l), which governs
motions to dismiss due to jurisdictional reasons, the Government does not offer a standard to
ORIGINAL CV0304-23 DECISION AND ORDER DENYING MOTION TO DISMISS Page 5
view the allegations. Thus, the Court applies the general federal standard that a Rule 12(b)(l)
motion should be granted if it appears certain that the plaintiff cannot prove any set of facts
entitling him to relief. See Wagstaff v. US. Dep 't ofEduc., 509 F.3d 661, 663 (5 th Cir. 2007).
The Government seeks dismissal for both of Phillips' claims because, even if Phillips'
allegations are true, proper procurement procedures were not followed, amounting to a lack of
waiver of sovereign immunity. In response, Phillips states that there has been a waiver, and
moreover, the doctrine of equitable estoppel applies because the Governor and the Government
of Guam have retained and compensated Phillips, as well as other local law firms and attorneys,
in the past under identical circumstances. Finally, the Government seeks dismissal of Phillips'
attempt for recovery under a promissory estoppel theory. The Court examines these arguments
relative to sovereign immunity, procurement law, equitable estoppel, and promissory estoppel.
A. The Government has waived sovereign immunity.
Guam's courts lack jurisdiction to hear claims against the Government unless the
Government waives sovereign immunity. Wood v. Guam Power Auth., 2000 Guam 1812.
Procurement laws and the Government Claims Act contain such waivers. For example, Guam's
procurement laws grant
the Superior Court of Guam ... jurisdiction over actions between Guam and a bidder, offeror, or contractor, either actual or prospective, to determine whether a solicitation or award of a contract is in accordance with the statutes, regulations, and the terms and conditions of the solicitation. The Superior Court shall have such jurisdiction in actions at law or in equity, and whether the actions are for monetary damages or for declaratory, or other equitable relief.
5 GCA § 5480. Phillips' action here asks the Court to take on that very task-that is, to
determine if the contract he entered is in accordance with Guam law. Accordingly, sovereign
immunity has been waived for the Court to determine this issue and the appropriate relief.
ORIGINAL CV0304-23 DECISION AND ORDER DENYING MOTION TO DISMISS Page 6
Further, under the Government Claims Act, the Government waives immunity from suit
for "all expenses incurred in reliance upon a contract to which the Government of Guam is a
party." 5 GCA § 6105. To the extent Phillips alleges sufficient facts to establish a contract
between himself and the Government (which the Court herein determines he has), a sufficient
waiver of sovereign immunity exists such that the Court has jurisdiction.
B. The application of Guam Procurement Law does not bar Phillips' recovery at this stage.
The Government must follow the Guam Procurement Law when hiring lawyers. 5 GCA
§ 5121(a). The Government raises several aspects that show that the Guam procurement law was
not followed, such as no AG consent; the services solicited do not qualify for sole source
procurement; and the agreements are "impossible" because they are not in compliance with
Guam procurement laws and not in writing. The Court examines each of these objections.
First, section 512 I (b) states that the AG must approve any contract for the Executive
Branch seeking legal services. When working on CLTC, Phillips received an Appointment of
Special Assistant Attorney General, signed by AG Barrett-Anderson. When viewed in a light
favorable to Phillips, the Appointment of Special Assistant General demonstrates AG consent.
As a further indication of AG consent, the AG's Office prepared the document "Conditions of
Temporary Special Assistant Attorney General Appointment," which Phillips signed to cement
his representation of the CLTC.
Additionally, when working on Davis, AG Camacho issued a press release announcing
that Governor Leon Guerrero had hired Phillips to handle the appeal, stated that an official
designation from the Office of the Attorney General was not needed, and provided necessary
files to Phillips. This, similarly, reasonably indicates Phillips has stated a claim showing the AG
consented to hire Phillips. CV0304-23 DECISION AND ORDER DENYING MOTION TO DISMISS Page 7
Second, for sole source procurements, there must only be one source for the required
service, and there must be a package explaining the description of the service and contract
conditions. 5 GCA § 5214(a)(l). When viewed in a light favorable to Phillips and from his
perspective, the contracts at issue could qualify as sole source procurements. Both times, when
Phillips was contacted, he was presented with a description of the needs of the work, the desired
outcomes, deadlines, and payment information. Phillips details in his Complaint that he was
sought out to represent the Government because of his "history of participating in cases with
similar causes and constitutional questions" and that they "required an attorney with the
experience and expertise possessed by Attorney Phillips." Comp!. ,r,r 6, 97. The Court considers
Phillips' unique expertise and background in this area of law, combined with the fact that Davis
required an attorney with immediate availability to meet tight deadlines, and sees that his work
could be a service with arguably no comparable competition.
For the purposes of the present motion, the issues of AG consent and sole source
procurement are analyzed from Phillips' perspective, as is required when the Court reviews a
Rule 12(b) motion. But the Court is cognizant that under the Government's perspective, other
large pieces of the procurement puzzle are missing-things that the Government, and not
Phillips, had control over. Beyond AG consent, that includes issuing a Request for Proposals for
competitive services. 5 GCA § 5216. For sole source procurement, the Government must
prepare a written report detailing the analysis of the Government's needs, detail findings from
market research, and certify a conclusion that there are no other available sources. 5 GCA §
5214(c). The Government contends that ifit does not do its part in completing a procurement,
Phillips cannot recover. CV0304-23 DECISION AND ORDER DENYING MOTION TO DISMISS Page 8
At this point in the litigation, however, dismissal still remains inappropriate. As another
court has determined, government contracts that do not strictly abide by procurement laws could
be implied-in-fact contracts. Then-Judge Katherine A. Maraman reached this conclusion in A.B.
Won Pat Guam Int 'I Airport Authority v. Gerald P. Yingling and Gawon Exhibition and Theme
Park Co., Ltd.. CV0677-03 (Order (Sept. 25, 2009)). The issue was whether GIAA could be
responsible for paying for services rendered without a written contract because the contractor
relied on past payment methods. The court found that the GIAA Executive Manager had the
authority to bind the GIAA, and thus, "it is possible that there was mutual intent to contract,
offer, acceptance, consideration and actual authority to bind the government." Id. at 22. She
also noted that section 5452(a) allows a contract in violation of law to be "ratified and affirmed,
providing it is determined that doing so is in the best interests of Guam." 5 GCA §
5452(a)(l)(A) (cited inA.B. Won Pat Guam Int' Airport Auth., CV0677-03 (Order at 22-23)).
The court found this sufficient to preclude summary judgment and allow the subcontractor to
present this issue at a trial.
Similarly, the Court believes that at this stage, Phillips has presented information that
indicates a contract could have been formed and that the Governors in both claims may have had
the authority to bind the Government of Guam. This is sufficient for Phillips' claims to survive
the Government's Motion to Dismiss.
C. Equitable Estoppel may apply.
Phillips' Complaint references the doctrine of equitable estoppel. He clarifies, however,
that he is not asserting the doctrine as an independent claim. Instead, he says the doctrine should
be applied to prevent the Government from arguing that no contract existed.
OR!G!N/\L CV0304-23 DECISION AND ORDER DENYING MOTION TO DISMISS Page 9
Equitable estoppel is "the doctrine by which a person may be precluded by his act or
conduct, or silence when it is his duty to speak, from asserting a right which he would otherwise
have had." Mobil Oil Guam, Inc., v. Young Ha Lee, 2004Guam9124 (citing Heskett v. Paulig,
722 N.E.2d 142, 145-146 (Ohio Ct. App. 1999)). Guam codified this doctrine in 6 GCA §
5 I 06(3), which states there is a conclusive presumption "whenever a party has, by his own
declaration, act or omission, intentionally and deliberately led another to believe a particular
thing true, and to act upon such belief he cannot, in any litigation arising out of such declaration,
act or omission be permitted to falsify it." Id. As the Guam Supreme Court has held, equitable
estoppel is available only as a shield or defense: "it does not of itself create a new right, impose
an obligation, or give rise to a cause or action; rather, it serves to prevent losses otherwise
inescapable, to prevent an unjust result, and to preserve rights already acquired." Story-
Bernardo v. Gov 't of Guam, 2023 Guam 27138.
There are four elements of equitable estoppel: (!) the party to be estopped must be
apprised of the facts; (2) he must intend that his conduct will be acted upon, or act in such a
manner that the party asserting the estoppel could reasonably believe that he intended his
conduct to be acted upon; (3) the party asserting the estoppel must be ignorant of the true state of
the facts; and (4) he must rely upon the conduct to his injury. Guam Resorts, Inc. v. G.C. Corp.,
2013 Guam 18161.
Phillips' allegations meet these elements. First, the Government was aware of and
involved in all of the relevant facts for both legal services arrangements: the Government
reached out to Phillips, gave him the legal files, and then had the power to complete the
procurements. CV0304-23 DECISION AND ORDER DENYING MOTION TO DISMISS Page 10
Second, the Government intended Phillips to represent the Territory. Phillips alleges the
Government publicly announced that he would be working on these cases, provided him with
resources and assurances of payment, and sent documents enshrining the existence of their
agreement. These actions illustrate an intention and inducement for Phillips to provide his
services.
Also, other facts support Phillips' arguments about the Government's intent. Phillips
alleges that he has previously been solicited in the same manner to provide legal services for the
Governor and the Government and has been compensated for this work. Comp!. ~ 132. He
further states that it is well known the Government used this process to obtain legal services from
other local firms and attorneys. Id. Because of a history of prior dealings between these parties
that resulted in compensation, it is not unreasonable for Phillips to believe the Government
intended for him to act upon their agreements.
Further, the Guam Supreme Court recently stated that "when the Governor determines
that it is necessary for her to act lest the law go unenforced-whether based on the actions or
inactions of the Attorney General-she may act." In Re: Request ofLourdes A. Leon Guerrero,
2024 Guam 18 ~ 78. 2 "[T]he Government of Guam cannot be left without representation....
Thus, we recognize the authority of the Governor to appoint counsel for an agency where the
Attorney General has explicitly 'refuse[d] to act, is incapable of acting, or is unavailable for
2 In its June 17, 2024 Notice of Continued Hearing, the Court advised the parties that In Re: Request ofLourdes A. Leon Guerrero, CRQ24-00 I, likely impacted the Court's analysis on the motion to dismiss. When CRQ24-00 I was resolved, this Court offered the parties an opportunity to brief the pertinent issues. Order (Aug. 6, 2024). Neither party submitted supplemental briefs. However, on November 20, 2024, Phillips asked the Court to consider CRQ24-001, and the Government opposed that request. As originally stated, the Court has found CRQ24-00 I, which resulted in the issuance of2024 Guam 18, pertinent to this case. It is unclear why Phillips did not avail of the Court's original offer to discuss this matter. In any event, the Court finds Phillips' motion to consider CRQ24-00 I to be moot. CV0304-23 DECISION AND ORDER DENYING MOTION TO DISMISS Page 11
some other reason."' Id ~ 72. Given that the Governor has the ability to directly hire
representation for the Government under certain circumstances, it is reasonable for Phillips to
believe the Governors here had the authority to execute these agreements and bind the
Government.
Third, Phillips has pied he would not have acted in both cases had he known that the
Government would not compensate him for his services. Thus Phillips alleges he was
sufficiently ignorant of the true state of the facts.
Fourth, because of Phillips' reliance on the Government's conduct, he was injured and
incurred financial damages for providing unpaid legal services as well as foregoing opportunities
for paid work. Accordingly, the Court finds that Phillips has presented sufficient assertions to
meet the elements of equitable estoppel.
While the Court finds that Phillips' allegations meet the four elements of equitable
estoppel, the present case may demand a deeper analysis. The equitable estoppel framework
submitted by the parties may be incomplete, as the doctrine applies differently when a
government entity is involved. In federal cases, for example, the "federal government may not
be estopped on the same terms as other litigants." Rider v. US. Postal Serv., 862 F.2d 239,240
(9 th Cir. 1988). When examining whether and how equitable estoppel can be used against the
government, the U.S. Supreme Court has developed a test examining a government official's
"affirmative misconduct." See Montana v. Kennedy, 366 U.S. 308 (1961); INS v. Hibi, 414 U.S.
5 (1973); Schweiker v. Hansen, 450 U.S. 785 (1981); see also Heckler v. Cmty. Health Servs.,
Inc., 467 U.S. 51 (1984). Lower courts interpret these decisions to mean that to successfully use
equitable estoppel against the government, the proponent of equitable estoppel must first
illustrate that the government engaged in affirmative misconduct and separately must meet the CV0304-23 DECISION AND ORDER DENYING MOTION TO DISMISS Page 12
elements of equitable estoppel. See Bartlett v. US. Dep 't ofAgriculture, 716 F.3d 464, 475 (8th
Cir. 2013) (citing Charleston Haus. Auth. v. US. Dep't ofAgriculture, 419 F.3d 729, 739 (8th
Cir. 2005) ("to succeed on a claim of equitable estoppel against the government, a plaintiff must
not only prove all the elements of equitable estoppel, but also that the government committed
affirmative misconduct")). Also, the Ninth Circuit adds an additional prong to this test:
"estoppel will only apply where the government's wrongful act will cause a serious injustice, and
the public's interest will not suffer undue damage by the imposition of the liability." Watkins v.
US. Army, 875 F.2d 699, 707 (9 th Cir. 1989).
While the Guam Supreme Court has analyzed equitable estoppel cases involving the
government, it has not referenced, specifically adopted, or even rejected, this framework
established by federal courts. However, the Guam Supreme Court applied equitable estoppel
against a government entity, noting with approval the following language from an Appellate
Division decision: "we are aware that extreme caution must be exercised in applying the
doctrine of equitable estoppel against a sovereign." Limtiaco v. Guam Fire Dep 't, 2007 Guam
10 ,i 63 (citing Mariano v. Guam Civil Serv. Comm 'n, No. CV-81-0052A, 1983 WL 30227). "A
court must employ a balancing test to determine whether the injustice to the private party will far
outweigh the public interest to be protected." Id.
Given that, at the very least, this Court should engage in a further balancing analysis and
potentially examine affirmative misconduct by government officials, dismissal without engaging
these points appears inappropriate.
D. Promissory Estoppel has been adequately pied.
Lastly, the Government moves to dismiss Phillips' promissory estoppel claims on the CV0304-23 DECISION AND ORDER DENYING MOTION TO DISMISS Page 13
grounds that Phillips cannot prove reasonable reliance. 3 Quijano v. Atkins Kroll, Inc., 2008
Guam 14 ,r 3 n.3 (recognizing detrimental reliance as an element of promissory estoppel).
According to the Government, Phillips should have known better: based on his knowledge of
procurement law requirements to form a proper government contract, he knew or should have
known that none had been formed. However, looking at the Complaint in a light favorable to
Phillips, the Court finds he has adequately pied that his reliance on assurances of payment was
reasonable because of the source of such assurances (i.e., Governors and Attorneys General).
In its Reply, the Government further argues that by enacting procurement laws, the
Legislature has displaced quantum meruit and unjust enrichment remedies with statutory ones.
As this argument was raised in a Reply rather than the motion itself, the Court finds it has not
been properly presented.
Finally, like the issue of equitable estoppel, it is uncertain if all considerations
surrounding promissory estoppel have been briefed. For example, in other jurisdictions, when
applied to the government, a promissory estoppel analysis involves questions of public policy
and injustice, see Kajima/Ray Wilson v. Los Angeles Cty. Metro. Transp Auth., 96 Cal. Rptr. 2d
747 (Cal. 2000), extraordinary circumstances, Matthews v. Chicago Transit Auth., 51 N.E.3d
753, 780 (Ill. 2016), or ultra vires conduct, Pilot Oil Corp. v. Ohio Dep 't o/Transp., 656 N.E.2d
1379, 1382 (Ohio App. 1995). In arguments presented thus far in this case, it is unclear whether
any of these additional criteria apply in Guam. The Court finds it proper to defer a decision on
promissory estoppel until a fuller picture of the requisite analysis is provided.
3 The Complaint contains no specifically designated "promissory estoppel" or "quantum meruit" claims. However, the Court finds they have been adequately pied under the liberal notice standards of Guam Rule of Civil Procedure 8. CV0304-23 DECISION AND ORDER DENYING MOTION TO DISMISS Page 14
III. CONCLUSION AND ORDER
Taking all factual allegations in the Complaint as true and drawing all reasonable
inferences in favor of Phillips, the Court finds Phillips has presented sufficient information to
survive the pleadings stage. The Government's Motion to Dismiss is therefore DENIED. A trial
schedule shall reissue.
SO ORDERED, 28 January 2025.
HON. ZE M. IRIARTE , ' \'•I,' ( '\ Judge, Superiorq1mrt of Guam ,., '