2ff23 OCT 13 rn [;: 55 CLER!{ OF COURT IN THE SUPERIOR COURT OF GUAM BY:·~~~tM.;_;__~~ RSA-TUMON, LLC, CIVIL CASE NO. CV0453-20
Plaintiff, DECISION AND ORDER vs. RE MOTION FOR SUMMARY JUDGMENT, MOTION FOR PITT COUNTY MEMORIAL HOSPITAL, CONSOLIDATION OF CASES, AND INC., AND SHERIF ANTOUN PHILIPS, MOTION TO DISMISS M.D.,
Defendants.
PITT COUNTY MEMORIAL HOSP ITAL, CIVIL CASE NO. CV0478-18 IN CORPORATED,
Plaintiff,
vs.
SHERIF ANTOUN PHILIPS, M.D.,
Defendant.
The Court here addresses the validity of a levy upon Sherif A. Philips' membership
interest in RSA-Tumon, LLC's (RSA), purchased by Pitt County Memorial Hospital, Inc.
(PCMH). The Court disposes of three motions filed in CV0453-20: (1) RSA's Motion for
Summary Judgment, filed on April 19, 2022; (2) PCMH's Motion for Consolidation of Cases,
filed on July 5, 2022; and (3) PCMH's Motion to Dismiss, filed on April 24, 2023. 1 The Court
1 Other portions of the Motion to Dismiss are disposed in a separate Order issued concurrently herewith.
ORIGINAL DECISION AND ORDER CV0453-20 Page2 RE MOTION FOR SUMMARY JUDGMENT, MOTION FOR CV0478-18 CONSOLIDATION OF CASES, AND MOTION TO DISMISS
GRANTS a consolidation of the levy discussion as raised in CV0453-20 with CV0478-18 as it
affects the relief provided in the latter case. The Court also GRANTS in part PCMH's Motion to
Dismiss as PCMH cannot be enjoined for its completed conduct oflevying and purchasing Dr.
Philips' interest in RSA. Moreover, the Court GRANTS summary judgment in favor of RSA on
its claim for prospective injunctive relief.
I. PROCEDURAL BACKGROUND
In CV0478-18, PCMH received a Judgment against Dr. Philips and levied upon his
membership interest in RSA, a Delaware Limited Liability Company registered to do business in
Guam. CV0478-I8 (Judgment (Jan. 24, 2019); Writ of Execution (Oct. 24, 2019); (Not. Levy
(Oct. 25, 2019); Am. Not. Levy (Oct. 30, 2019)); see also CV0453-20 (Deel. Jocelyn Saccamago
,r,r 2-3 (Apr. 19, 2022)). PCMH issued a Notice of Execution Sale of Personal Property, which indicated an intent to sell Dr. Philips' "capital, equity or membership interest" in RSA. Not.
Execution Sale (Oct. 25, 2019). The Marshals returned the sale and stated that PCMH was the
highest bidder and had bid $4,000.00. CV0478-18 (Return of Marshal Sale (Nov. 25, 2019)).
In response to the levy, RSA provided Letters of Undertaking (LOUs) and filed CV0453-
20, an interpleader action. The interpleader complaint seeks an injunction against PCMH "from .
. . selling, purchasing, levying, or transferring the Membership Interest." CV0453-20 (Comp!.
Interpleader at 1-4 (July 7, 2020)). As to the LOUs, the Court subsequently found them to be
insufficient. CV0478-18 (Dec. and Order Denying PCMH's Mot. Dismiss Claim Filed by RSA
at 6 (July 10, 2023)).
Meanwhile, in CV0478-18, this Court granted PCMH's Motion for a Charging Order.
CV0478-18 (Order Granting Mot. Charging Order (May 16, 2023); Charging Order (May 17,
2023)). The Court found that PCMH was entitled to a post-judgment Charging Order, which
ORIGINAL DECISION AND ORDER CV0453-20 Page 3 RE MOTION FOR SUMMARY JUDGMENT, MOTION FOR CV0478-18 CONSOLIDATION OF CASES, AND MOTION TO DISMISS
requires RSA to tender Dr. Philips' share of distributions issued by RSA until the full amount of
the Judgment is paid and satisfied.
II. CONSOLIDATION OF THIS CLAIM WITH CV0478-18
Guam Rule of Civil Procedure 42 permits the Court broad discretion to consolidate
claims. The Court finds that the injunctive relief sought by RSA in CV0453-20 pertains to relief
sought by PCMH exclusively in CV0478-18. The Court therefore consolidates this single
issue-RSA's request for injunctive relief.-with CV0478-18. Based on this Court's Order
Dismissing Interpleader Claim issued simultaneously with this Decision and Order, Dr. Philips'
accounting counterclaim against RSA remains the sole live issue under CV0453-20.
III. INJUNCTION CLAIM
RSA contends that its Operating Agreement, Guam law, and Delaware law all prohibit
PCMH from asserting an ownership interest in RSA. RSA moves for summary judgment on its
claim that PCMH be enjoined "from ... selling, purchasing, levying, or transferring the
Membership Interest." CV0453-20 (Comp!. Interpleader at 4). RSA asks that the Court undo the
sale and prevent future transfers by PCMH. CV0453-20 (Pl. 's Reply to PCMH's Opp. to Mot.
Summ. J. at 4 (May 31, 2022)). PCMH moves to dismiss the injunction claim as moot because
PCMH has already levied on Dr. Philips' interest, and the Operating Agreement does not bind
PCMH.
A. RSA Cannot Enjoin a Past Act.
PCMH argues that the Court may not issue an injunction because the levy and sale
already occurred. See Putnam v. Fortenberry, 589 N.W.2d 838,842 (Neb. 1999) ("The purpose
of an injunction is to restrain actions that have not yet been taken."). RSA responds that the
ORIGINAL DECISION AND ORDER CV0453-20 Page4 RE MOTION FOR SUMMARY JUDGMENT, MOTION FOR CV0478-18 CONSOLIDATION OF CASES, AND MOTION TO DISMISS
LOUs released the levy; however, as the court has already detennined, the LOUs were
insufficient. RSA offers no other argument at present which would undo the Marshal's sale. For
this reason, the Court GRANTS in part PCMH's Motion to Dismiss RSA's request for an
injunction, as the time for RSA to seek such relief as to the initial sale has passed.
B. RSA Is Entitled to an Injunction Against Further Sales of the Acquired Interest.
Although the Court cannot enjoin a past act, it can examine whether future transfers of
RSA's interest are entitled to protection. In seeking a permanent injunction, a plaintiff must
demonstrate: (I) that it has suffered an irreparable injury; (2) that remedies available at law,
such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the
balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and
(4) that a permanent injunction would not disserve the public interest. Monsanto Co. v. Geertson
Seed Farms, 561 U.S. 139, 156-57 (2010).
The Court first recognizes the following provisions within RSA's Operating Agreement:
1. Members may not transfer their units;
2. Any transfer of units that is not pennitted shall be "null and void and ofno effect
whatsoever;"
3. RSA may be required to recognize a transfer unpermitted by the Operating
Agreement, in which case, the transferred interest is strictly limited to the
transferor's economic interest and any allocations and distributions of such
interest; and
4. In the event of an unpermitted transfer, RSA can purchase the units that are the
subject of the transfer.
OR!G!NAL DECISION AND ORDER CV0453-20 Page 5 RE MOTION FOR SUMMARY JUDGMENT, MOTION FOR CV0478-18 CONSOLIDATION OF CASES, AND MOTION TO DISMISS
CV0453-20 (Deel. Jocelyn Saccamago, Ex. A at§§ 5.1, 5.1.3, 5.3.3).
Next, the Court reviews the legal authorities governing a judgment against RSA. Guam's
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2ff23 OCT 13 rn [;: 55 CLER!{ OF COURT IN THE SUPERIOR COURT OF GUAM BY:·~~~tM.;_;__~~ RSA-TUMON, LLC, CIVIL CASE NO. CV0453-20
Plaintiff, DECISION AND ORDER vs. RE MOTION FOR SUMMARY JUDGMENT, MOTION FOR PITT COUNTY MEMORIAL HOSPITAL, CONSOLIDATION OF CASES, AND INC., AND SHERIF ANTOUN PHILIPS, MOTION TO DISMISS M.D.,
Defendants.
PITT COUNTY MEMORIAL HOSP ITAL, CIVIL CASE NO. CV0478-18 IN CORPORATED,
Plaintiff,
vs.
SHERIF ANTOUN PHILIPS, M.D.,
Defendant.
The Court here addresses the validity of a levy upon Sherif A. Philips' membership
interest in RSA-Tumon, LLC's (RSA), purchased by Pitt County Memorial Hospital, Inc.
(PCMH). The Court disposes of three motions filed in CV0453-20: (1) RSA's Motion for
Summary Judgment, filed on April 19, 2022; (2) PCMH's Motion for Consolidation of Cases,
filed on July 5, 2022; and (3) PCMH's Motion to Dismiss, filed on April 24, 2023. 1 The Court
1 Other portions of the Motion to Dismiss are disposed in a separate Order issued concurrently herewith.
ORIGINAL DECISION AND ORDER CV0453-20 Page2 RE MOTION FOR SUMMARY JUDGMENT, MOTION FOR CV0478-18 CONSOLIDATION OF CASES, AND MOTION TO DISMISS
GRANTS a consolidation of the levy discussion as raised in CV0453-20 with CV0478-18 as it
affects the relief provided in the latter case. The Court also GRANTS in part PCMH's Motion to
Dismiss as PCMH cannot be enjoined for its completed conduct oflevying and purchasing Dr.
Philips' interest in RSA. Moreover, the Court GRANTS summary judgment in favor of RSA on
its claim for prospective injunctive relief.
I. PROCEDURAL BACKGROUND
In CV0478-18, PCMH received a Judgment against Dr. Philips and levied upon his
membership interest in RSA, a Delaware Limited Liability Company registered to do business in
Guam. CV0478-I8 (Judgment (Jan. 24, 2019); Writ of Execution (Oct. 24, 2019); (Not. Levy
(Oct. 25, 2019); Am. Not. Levy (Oct. 30, 2019)); see also CV0453-20 (Deel. Jocelyn Saccamago
,r,r 2-3 (Apr. 19, 2022)). PCMH issued a Notice of Execution Sale of Personal Property, which indicated an intent to sell Dr. Philips' "capital, equity or membership interest" in RSA. Not.
Execution Sale (Oct. 25, 2019). The Marshals returned the sale and stated that PCMH was the
highest bidder and had bid $4,000.00. CV0478-18 (Return of Marshal Sale (Nov. 25, 2019)).
In response to the levy, RSA provided Letters of Undertaking (LOUs) and filed CV0453-
20, an interpleader action. The interpleader complaint seeks an injunction against PCMH "from .
. . selling, purchasing, levying, or transferring the Membership Interest." CV0453-20 (Comp!.
Interpleader at 1-4 (July 7, 2020)). As to the LOUs, the Court subsequently found them to be
insufficient. CV0478-18 (Dec. and Order Denying PCMH's Mot. Dismiss Claim Filed by RSA
at 6 (July 10, 2023)).
Meanwhile, in CV0478-18, this Court granted PCMH's Motion for a Charging Order.
CV0478-18 (Order Granting Mot. Charging Order (May 16, 2023); Charging Order (May 17,
2023)). The Court found that PCMH was entitled to a post-judgment Charging Order, which
ORIGINAL DECISION AND ORDER CV0453-20 Page 3 RE MOTION FOR SUMMARY JUDGMENT, MOTION FOR CV0478-18 CONSOLIDATION OF CASES, AND MOTION TO DISMISS
requires RSA to tender Dr. Philips' share of distributions issued by RSA until the full amount of
the Judgment is paid and satisfied.
II. CONSOLIDATION OF THIS CLAIM WITH CV0478-18
Guam Rule of Civil Procedure 42 permits the Court broad discretion to consolidate
claims. The Court finds that the injunctive relief sought by RSA in CV0453-20 pertains to relief
sought by PCMH exclusively in CV0478-18. The Court therefore consolidates this single
issue-RSA's request for injunctive relief.-with CV0478-18. Based on this Court's Order
Dismissing Interpleader Claim issued simultaneously with this Decision and Order, Dr. Philips'
accounting counterclaim against RSA remains the sole live issue under CV0453-20.
III. INJUNCTION CLAIM
RSA contends that its Operating Agreement, Guam law, and Delaware law all prohibit
PCMH from asserting an ownership interest in RSA. RSA moves for summary judgment on its
claim that PCMH be enjoined "from ... selling, purchasing, levying, or transferring the
Membership Interest." CV0453-20 (Comp!. Interpleader at 4). RSA asks that the Court undo the
sale and prevent future transfers by PCMH. CV0453-20 (Pl. 's Reply to PCMH's Opp. to Mot.
Summ. J. at 4 (May 31, 2022)). PCMH moves to dismiss the injunction claim as moot because
PCMH has already levied on Dr. Philips' interest, and the Operating Agreement does not bind
PCMH.
A. RSA Cannot Enjoin a Past Act.
PCMH argues that the Court may not issue an injunction because the levy and sale
already occurred. See Putnam v. Fortenberry, 589 N.W.2d 838,842 (Neb. 1999) ("The purpose
of an injunction is to restrain actions that have not yet been taken."). RSA responds that the
ORIGINAL DECISION AND ORDER CV0453-20 Page4 RE MOTION FOR SUMMARY JUDGMENT, MOTION FOR CV0478-18 CONSOLIDATION OF CASES, AND MOTION TO DISMISS
LOUs released the levy; however, as the court has already detennined, the LOUs were
insufficient. RSA offers no other argument at present which would undo the Marshal's sale. For
this reason, the Court GRANTS in part PCMH's Motion to Dismiss RSA's request for an
injunction, as the time for RSA to seek such relief as to the initial sale has passed.
B. RSA Is Entitled to an Injunction Against Further Sales of the Acquired Interest.
Although the Court cannot enjoin a past act, it can examine whether future transfers of
RSA's interest are entitled to protection. In seeking a permanent injunction, a plaintiff must
demonstrate: (I) that it has suffered an irreparable injury; (2) that remedies available at law,
such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the
balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and
(4) that a permanent injunction would not disserve the public interest. Monsanto Co. v. Geertson
Seed Farms, 561 U.S. 139, 156-57 (2010).
The Court first recognizes the following provisions within RSA's Operating Agreement:
1. Members may not transfer their units;
2. Any transfer of units that is not pennitted shall be "null and void and ofno effect
whatsoever;"
3. RSA may be required to recognize a transfer unpermitted by the Operating
Agreement, in which case, the transferred interest is strictly limited to the
transferor's economic interest and any allocations and distributions of such
interest; and
4. In the event of an unpermitted transfer, RSA can purchase the units that are the
subject of the transfer.
OR!G!NAL DECISION AND ORDER CV0453-20 Page 5 RE MOTION FOR SUMMARY JUDGMENT, MOTION FOR CV0478-18 CONSOLIDATION OF CASES, AND MOTION TO DISMISS
CV0453-20 (Deel. Jocelyn Saccamago, Ex. A at§§ 5.1, 5.1.3, 5.3.3).
Next, the Court reviews the legal authorities governing a judgment against RSA. Guam's
LLC law permits a court to charge an LLC member's interest toward a judgment creditor's
unsatisfied amount. 18 GCA § 15 l l 7(C). However, "[t]o the extent so charged, the judgment
creditor has only the rights of an assignee of the membership interest." Id. Guam law further
states that a foreign LLC's organization, internal affairs, and the authority of its managers and
members shall be governed by the law of the state under which it is organized. 18 GCA § 7301.
It is undisputed that RSA is an LLC organized under the laws of Delaware; thus, under section
7301, Delaware's laws apply to the governance of RSA.
Delaware law limits a creditor seeking to enforce a monetary judgment to the entry of a
charging order; "attachment, garnishment, foreclosure or other legal or equitable remedies are
not available to the judgment creditor .... " Del. Code Ann. tit. 6, § 18-703 (eff. 2013).
Moreover, "No creditor of a member or of a member's assignee shall have any right to obtain
possession of, or otherwise exercise legal or equitable remedies with respect to, the property of
the limited liability company." Id.
PCMH contends that as a third-party creditor, it is not bound by the Operating Agreement
nor Delaware law. In support, PCMH cites RTM Capital Partners, Inc. v. Barnes, 2021 WL
5630019 (D. Conn.), which concerns whether an operating agreement's arbitration provision
applies to third parties. Recognizing that the agreement's arbitration provision "applies only to
'parties,"' the court determined that the term did not bind non-signatories. Id. *7.
The operating agreement provision at issue here does not concern arbitration but relates
to transferring membership interests. RTM Capital Partners therefore has questionable
applicability. In contrast, a series of cases directly apply operating agreement provisions beyond
OR!Gil~AL DECISION AND ORDER CV0453-20 Page 6 RE MOTION FOR SUMMARY JUDGMENT, MOTION FOR CV0478-18 CONSOLIDATION OF CASES, AND MOTION TO DISMISS
the agreements' signatories. In In re Marriage ofSchlichting, 19 N.E.3d 1055 (Ill. App. Ct.
2014), for example, the appellate court reversed a lower court's detennination to transfer one
spouse's interest to the other spouse in a divorce proceeding. The appellate court found that this
involuntary, court-mandated transfer required the member spouse to violate the operating
agreement and amounted to an abuse of discretion. Id. at 1066-68. Equating LLC operating
agreements to contracts, the Court held, "a court should not interfere with the terms of a contract
that parties entered into freely." Id. at 1067. Finally, the Court noted that the operating
agreement offered another remedy (i.e., a valuation process within a divorce proceeding). See
also Castonguay v. Castonguay, 306 N.W.2d 143, 146 (Minn. 1981); Kloppenburg v.
Kloppenburg, DM0055-08 (Dec. and Order (May 27, 2016)) (court abided by transfer restriction
in a stock acquisition agreement).
While this is admittedly not a marital dissolution proceeding, the policies underlying
these cases are that courts should not force violations of operating agreements, particularly when
other remedies are at hand. The Court adopts this approach and finds that RSA is entitled to a
permanent injunction. RSA has established an irreparable injury in the transfer of a membership
interest in RSA, which is contrary to its Operating Agreement and governing legal standards.
There are no monetary damages that can replace that interest. Because a Charging Order
continues to require that PCMH receive Dr. Philips' distributions, RSA has a greater hardship in
being forced to recognize an unpermitted transfer. Lastly, the public interest is not implicated or
disserved by a permanent injunction.
RSA having satisfied all four elements of a permanent injunction, the Court grants RSA's
request and enjoins PCMH from further transferring the interest it acquired at the Marshal's sale. DECISION AND ORDER CV0453-20 Page 7 RE MOTION FOR SUMMARY JUDGMENT, MOTION FOR CV0478-18 CONSOLIDATION OF CASES, AND MOTION TO DISMISS
IV. CONCLUSION
First, the Court consolidates the injunction issue in CV0453-20 with CV04 78-18. Future
motions relative to the remedies sought by PCMH shall be filed in CV0478-18 only. Second, the
Court GRANTS in part PCMH's Motion to Dismiss and rules that RSA is untimely in attempting
to enjoin PCMH from receiving Dr. Philips' membership interest. Third, the Court GRANTS
RSA's Motion for Summary Judgment and determines that PCMH may not further transfer Dr.
Philips' membership interest in RSA and is enjoined from doing so.
SO ORDERED, 13 October 2023.
ZE M. IRIARTE Judge, Superior Court of Guam
Appearing Parties: Anita P. Arriola, Esq., and William B. Brennan, Esq., Arriola Law Finn, for PlaintiffRSA- Tumon, LLC Daniel J. Berman, Esq., Berman Law Firm, for Defendant Pitt County Memorial Hospital, Incorporated Sherif Antoun Philips, M.D.,pro se Defendant
ORIGINAL