Port Authority of Guam v. Guam Industrial Services, Inc. dba Guam Shipyard

2026 Guam 2
Supreme Court of Guam·Decided March 20, 2026·No. CVA25-006·Published

Opinion

IN THE SUPREME COURT OF GUAM

PORT AUTHORITY OF GUAM, Plaintiff-Appellee,

v.

GUAM INDUSTRIAL SERVICES, INC. dba GUAM SHIPYARD, Defendant-Appellant.

Supreme Court Case No. CVA25-006 Superior Court Case No. CV0095-25

OPINION

Appeal from the Superior Court of Guam Argued and submitted on August 29, 2025 Hagåtña, Guam

Appearing for Defendant-Appellant: Appearing for Plaintiff-Appellee: George Neil P. Valdes, Esq. James L. Canto II, Esq. Law Office of Louie J. Yanza, P.C. Port Authority of Guam 862 S. Marine Corps Dr., Ste. 203 Aturidat I Puetton Guåhan Tamuning, GU 96913 1026 Cabras Hwy., Ste. 201 Piti, GU 96915 Port Auth. of Guam v. Guam Indus. Servs., Inc., 2026 Guam 2, Opinion Page 2 of 41

BEFORE: ROBERT J. TORRES, Chief Justice; F. PHILIP CARBULLIDO, Associate Justice; KATHERINE A. MARAMAN, Associate Justice.1

TORRES, C.J.:

[1] This appeal arises from an unlawful detainer action between Plaintiff-Appellee Port

Authority of Guam (“PAG” or the “Port”) and Defendant-Appellant Guam Industrial Services,

Inc., dba Guam Shipyard (“GSY”). The dispute centers on possession of two locations at the Port:

Hotel Wharf and the old Dong Yang site (“Dong Yang”). Following a hearing and summary

unlawful detainer proceeding, the Superior Court entered judgment awarding possession of both

locations to PAG. GSY now challenges (1) the denial of its motion to dismiss, (2) the court’s

handling of its alleged rent overpayments, (3) the application of unlawful detainer statutes to a

license, and (4) the denial of an opportunity to file an answer after its motion to dismiss was denied.

[2] The court did not err in denying GSY’s motion to dismiss or entering judgment for PAG

on its unlawful detainer claim. Although the Superior Court erred by proceeding directly to trial

without allowing GSY to answer PAG’s complaint, GSY has not demonstrated prejudice as

required under Guam’s civil procedure statutory framework. See 7 GCA § 15802 (2005).

[3] We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Factual Background

1. PAG leases Hotel Wharf to GSY

[4] On May 5, 2017, GSY and PAG entered into a written Open Space Lease Agreement (the

“Lease”) for GSY to occupy PAG property initially covering approximately 20,000 square feet at

Hotel Wharf for a 120-day term at a monthly rate of $10,710. The Lease stated that “[t]he Lessor

1 The signatures in this opinion reflect the titles of the Justices at the time this matter was argued and submitted. Port Auth. of Guam v. Guam Indus. Servs., Inc., 2026 Guam 2, Opinion Page 3 of 41

[PAG] or Lessee [GSY] shall have the right to terminate this Lease whether or not Lessee is in

default upon thirty (30) days written notice in accordance with 21 G.C.A. §§ 5101 and 21105,”

and that “[GSY] shall vacate the Property [Hotel Wharf] upon termination of the Lease.” Record

on Appeal (“RA”), tab 1 (V. Compl., Feb. 12, 2025), Ex. A at 8 (Open Space Lease, May 5, 2017).

[5] The parties executed a written amendment to the Lease (the “Amendment”), changing the

term to a month-to-month tenancy beginning on September 2, 2017, and ending no later than

December 31, 2017. The Amendment “provided that Lessor [PAG] may terminate this lease upon

giving thirty (30) days written notice in accordance with 21 G.C.A. §§ 5101 and 21105.” RA, tab

1 (V. Compl.), Ex. B at 1 (Amendment to Lease Agreement, Sep. 2017).

[6] Upon the expiration of the amended Lease term, GSY remained on Hotel Wharf for seven

years without a new executed lease agreement or amendment. During that time, GSY paid invoices

for an increased monthly rental amount of $11,760 without written protest.

[7] GSY is engaged in a U.S. Navy project to construct two aircraft carrier camels for a floating

camel fender system,2 and due to the camels’ sheer size and weight, GSY asserts that the work can

be performed only on PAG’s premises—specifically at Hotel Wharf. Appellant’s Br. at 3 (June

23, 2025).

2. PAG gives GSY permission to use Dong Yang

[8] From February 28, 2022, until December 20, 2024, GSY also occupied Dong Yang with

PAG’s permission “to use as a lay-down area for a crane demolition project contract with the Port.”

RA, tab 1 at 3 (V. Compl.); Appellee’s Br. at 7 (July 22, 2025); Transcript (“Tr.”) at 70–72

(Unlawful Detainer Hr’g, Feb. 19, 2025). By letter dated February 28, 2024, PAG approved an

2 According to GSY, a camel fender system functions as a bumper system to protect large ships—such as

aircraft carriers—from impact and damage when contacting a dock, wharf, or pier. Appellant’s Br. at 3 n.1 (June 23, 2025). GSY asserts that these systems are “critical” for safely berthing large naval vessels, particularly in ports not originally designed for ships of that size. Id. Port Auth. of Guam v. Guam Indus. Servs., Inc., 2026 Guam 2, Opinion Page 4 of 41

extension of the crane demolition project and memorialized the license agreement, setting the term

of GSY’s occupancy of Dong Yang to expire on May 31, 2024 (“License Agreement”). See RA,

Admitted Exs. (Unlawful Detainer Hr’g, Feb. 19, 2024), Def. Ex. 3 at 1–2 (PAG Letter, Feb. 28,

2024). The letter also permitted PAG to terminate the License Agreement at PAG’s discretion,

“with or without cause, upon thirty days (30) notice.” Id. at 1–2. According to PAG, the crane

demolition project “is not complete, but the period of performance has since expired.” Tr. at 73.

3. PAG serves GSY with notices to quit

[9] On December 20, 2024, PAG served GSY with a 47-day notice to quit (“Notice to Quit”),

terminating GSY’s month-to-month tenancy effective February 5, 2025, and directing GSY to

vacate Hotel Wharf and all other occupied areas of PAG property, including Dong Yang.

[10] When GSY did not vacate, on February 6, 2025, PAG served a notice to quit and vacate

(“Notice to Vacate”) demanding immediate surrender of possession under 21 GCA § 21103(a).

4. PAG’s intent to lease Hotel Wharf to Black Construction

[11] On January 23, 2025, PAG’s Board of Directors resolved to imminently lease Hotel Wharf

to Black Construction Corporation (“Black Construction”) in connection with a $330.6 million

U.S. Navy contract to repair the three most critically failed parts of the Glass Breakwater (“Glass

Breakwater Repair Project”),3 which sustained significant damage from Typhoon Mawar and is

critical to maintaining Port access.

3 PAG provides context for the Glass Breakwater Repair Project:

Glass Breakwater is an off-shore concrete and stone barrier structure that bounds the northern side of Apra Harbor and serves as vital protection against tides, currents, and storm surges into Apra Harbor; however, the breakwater suffered major damage from Typhoon Mawar, subjecting it to imminent breaching as assessed by the Army Corps of Engineers, and the failure of Glass Breakwater would catastrophically affect the ability of ships to enter and exit both the Jose D. Leon Guerrero Commercial Port and the Naval Base Guam. Opp’n Mot. Stay at 13 (Apr. 23, 2025). Port Auth. of Guam v. Guam Indus. Servs., Inc., 2026 Guam 2, Opinion Page 5 of 41

[12] Although the record reflects that no lease existed between PAG and Black Construction

when this court took the matter under advisement, PAG’s Board of Directors declared that the

“entirety of Hotel Wharf” is needed for the Glass Breakwater Repair Project. See RA, tab 1 (V.

Compl.), Ex.

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