Sachdev v. Sachdev, Sachdej, Paul's Guam Inc., and JPR, Inc.

Opinion

FtLED I!! 72 p 1: 59 2

‘r11ID 1 SI_i r D i;1 4

IN THE SUPERIOR COURT OF GUAM 8

9 HARGOPAL S. SACHDEV, CIVIL CASE NO. CV0626-1 1 10 Plaintiff, 11 vs. 12 DECISION AND ORDER AMARJff S. SACHDEV, PICHET 13 SACHDEJ, PAUL’S (GUAM), INC., and 14 JPR, INC.,

15 Defendants.

16 INTRODUCTION This matter came before the Honorable Arthur R. Barcinas on July 1, 2019, for an Evidentiary Hearing upon Plaintiff Hargopal S. $achdev’s Order to Show Cause filed first on 19 May 23, 2018, and again on July 31, 2018. Attorney Daniel I. Berman represents Plaintiff 20 Hargopal S. Sachdev (“Plaintiff’). Defendants Amarjit S. Sachdev, Pichet Sachdej, Paul’s 21 (Guam), Inc., and JPR, Inc. (collectively, “Defendants”) were represented by Attorneys Cesar 2 Cabot and Jon R. Ramos. For the reasons set forth below, having reviewed the pleadings and 23 oral arguments in this matter, the Court issues the following Decision and Order. 24 BACKGROUND The instant case arises from a dispute between three brothers and two corporate 26 defendants. Both the procedural history and facts of this case have been thoroughly outlined in 27 the various pleadings and orders in the record. Thus, the following facts are only those pertinent 28 Decision and Order . Civil Case No. CV0626- 11; Sachdev v. Sachdev, et at.

1 to the Plaintiff’s Order to Show Cause, the remaining issue regarding property credit, and the 2 facts established at the July 1, 2019, evidentiary hearing. 3 On June 21, 2017, the Court executed a Final Judgment (“Judgment”) confirming the 4 arbitration awards in this matter. On December 4, 2017, the Plaintiff filed a Request for Order 5 to Show Cause and Order to Show Cause alleging that the Defendants failed to “make a 6 contribution of $100,000.00 to a licensed tax-exempt charity in the name of Teja Singh 7 Sachdev, and shall provide proof of such contribution to Plaintiff’ pursuant to the Judgment. 8 The Plaintiff argued that instead of a monetary contribution of $100,000.00 to a charity, the 9 Defendants delivered various school uniforms to private schools in the name of Teja Singh 10 Sachdev purportedly valued at that amount. The Defendants, on the other hand, maintained that ii they had fully complied with the Judgment, arguing that the Judgment did not specify that the 12 required charitable contribution must be a cash contribution. 13 On February 9, 2018, the Referee issued a Decision and Recommendation on Plaintiff’s 14 Request for Order to Show Cause, finding the Defendants in contempt for willfully failing to 15 comply with the terms of the Judgment. Thereafter, having yet to satisfy the Judgment, the 16 Plaintiff filed another Request for Order to Show Cause why an Order should not be made 17 finding the Defendants to be in contempt of Court for willfully failing to contribute $100,000.00 18 in cash to a tax-exempt charity. Consequently, the Court ordered the Defendants to appear to 19 show cause why they should not be held in contempt for failing to comply with the terms of the 20 Judgment and the Referee’s Decision. A hearing was held on the Plaintiffs Order to Show 21 Cause on September 27, 2018. 22 On February 1, 2019, the Court issued its Decision and Order affirming the Referee’s

23 Decision and Recommendation on Plaintiffs first Request for Order to Show Cause. Thus, 24 adopting the finding and conclusions contained therein, the Court found the Defendants in 25 contempt for willfully failing to comply with the terms of the Judgment. Further, the Court 26 adopted the Referee’s recommendation and scheduled further proceedings to determine whether

27 and to what extent the Defendants should be given credit for the school uniforms donated to St. 28

Page 2 of 8 Decision and Order . Civil Case No. CV0626-11; Sachdev v. Sachde’, etat.

John’s School and St. Paul Christian School. The Evidentiary Hearing in this matter was held 2 on July 1, 2019. At the conclusion of the hearing, the Court took the matter under advisement. 3 Here, the parties have submitted testimonial evidence, as well as submitted various 4 affidavits and declarations in support of their arguments. Having considered the evidence 5 presented, the Court makes the following findings: 6 1. Pursuant to the 2012 Arbitration Agreement and Judgment entered on June 28, 2017, the 7 Defendants were ordered to make a cash contrthtttion of One Hundred Thousand 8 Dollars ($100,000.00) to a licensed tax exempt charity in the name of Teja Singh 9 Sachdev, and to provide proof of such contribution to the Plaintiff. See Judgment at ¶ 3, 10 p. 2 (Jun. 28, 2017); see also Decision and Order (Feb. 1, 2019) (affirming the Referee’s 11 Decision and Recommendation on Plaintiff’s Request for Order to Show Cause finding 12 the Defendants in contempt for willfully failing to comply with the terms of the 13 Judgment); see also Decision and Recommendation (Feb. 9, 2018) (finding that the 14 Judgment required the Defendants to make a cash contribution). 15 2. In or around July 2017, the Defendants donated approximately 7,124 articles of school 16 uniforms to St. John’s School in the name of Teja Singh Sachdev, purportedly valued 17 over $100,000.00, in satisfaction of the final Judgment. See Def’s Ex. 3 (Jun. 17, 2019);

18 see also Plaintiffs Decl., Ex. 2 (Dec. 4, 2017); see also Amaijit Decl., Ex. E (Jun. 14, 19 2018); see also Amarjit Deci., Ex. B (Dec. 18, 2017). St. John’s School has placed these

20 uniforms for sale within its school community and independently assigned retail prices

21 for the donated school uniforms. See Amarjit Decl., Ex. C (Dec. 18, 2017)

22 3. In or around September 2017, the Defendants also donated approximately 2,055 articles 23 of school uniforms to St. Paul Christian School in the name of Teja Singh Sachdev,

24 purportedly valued around $32,000.00, in satisfaction of the Final Judgment. See Defs

25 Ex. 6 (Jun. 17, 2019); see also Amarjit DecI., Ex. G (Jun. 14, 2018).

26 4. An itemized listing of the St. John’s School uniform articles donated by the Defendants

27 stating the market value and quantity of the items that St. John’s School received are as

28 follows:

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MARKET QUANTITY TOTAL MARKET STYLE VALUE PRICE DELIVERED VALUE St. John Polo Shirts (all sizes/levels) $21.95 4,024 $88,326.80 St. John Sailor Blouse w/ logo $24.00 491 $11,784.00 Oxford Shirt w/ logo $24.00 332 $7,968.00 3 $12.50 775 $9,687.50 P.E. Shirt Lower School (light blue) P.E. Shirt Upper School (gray) $12.50 843 $10,537.50 4 472 $5,900.00 P.E. Short Lower school (dark blue) $12.50 P.E. Short Upper School (red) $12.50 187 $2,337.50 5 TOTAL: 7,124 $136,541.30 6 See Def’s Ex. 3 (Jun. 17, 2019); see also Amarjit Deci., Ex. B (Dec. 18, 2017); see also 7 Amarjit Deci., Ex. I (Jun. 14, 2018). 8 5. An itemized listing of the St. Paul Christian School uniform articles donated by the 9 Defendants stating the market value and quantity of the items that St. Paul Christian 10 School received are as follows: 11 MARKET QUANTITY TOTAL MARKET STYLE VALUE PRICE DELIVERED VALUE 12 Kids Light Blue Polo (all sizes) $20.00 547 $10,940.00 Adults Light Blue Polo (all sizes) $20.00 450 $9,000.00 13 Kids PE Shirt (all sizes) $12.00 505 $6,060.00 Adults PE Shirt (all sizes) $12.00 553 $6,636.00 14 TOTAL: 2,055 $32,636.00

15 See Def’s Ex. 6 (Jun. 17, 2019); see also Evidentiary Hr’g Tr. 2:4 1:20 PM to 2:45:18

16 PM, Jul. 1, 2019.

17 6. At the Evidentiary Hearing on July 1, 2019, the Defendant Amarjit S. Sachdev testified 18 that the direct costs of producing the uniform articles that were contributed to St. John’s

19 School, or cost of goods sold (COGS) totaled approximately $62,000.00. See

20 Evidentiary Hr’g Tr. 3:17:47 PM, Jul. 1, 2019.

21 7. At the Evidentiary Hearing on July 1, 2019, the Defendant Amarjit S. Sachdev also

22 testified that the direct costs of producing the uniform articles that were contributed to

23 St. Paul Christian School, or cost of goods sold (COGS) totaled approximately

24 $22,000.00. See Evidentiary Hr’g Tr. 3:2 1:09 PM, Jul. 1, 2019.

25 8. The retail prices that St. John’s School has marked for the sale of uniform articles

26 received by the Defendants are as follows:

27 a. St. John’s Polo Shirt Red (all sizes) $21.00

28 b. St. John’s Polo Shirt White (all sizes) $17.00

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c. St. John’s Sailor Blouse w/ Logo $15.00

2 d. St. John’s Oxford Shirt w/ Logo $15.00

3 e. St. John’s PE Shirts/Shorts (all sizes) $12.00

4 See Def’s Ex. 2 (June 17, 2019); see also Amarjit Deci., Ex. C (Dec. 18, 2017). 5 9. The retail prices that St. Paul Christian School has marked for the sale of uniform 6 articles received by the Defendants are as follows: 7 a. Kids Light Blue Polo (all sizes) $20.00

$ b. Adult Light Blue Polo (all sizes) $20.00

9 c. Kids PE Shirts (all sizes) $12.00

10 d. Adult PE Shirts (all sizes) $13.00

11 See Def’s Ex. 6 (June 17, 2019); see also Evidentiary Hr’g Tr. 2:38:59, Jul.l, 2019. 12 10. As of March 31, 2019, the monetary value St. John’s School received from the actual 13 sales of the Defendants’ contribution of school uniforms was approximately $36,168.00. 14 See Def’s Lx. 4 (Jun. 17, 2019); see also DecI. of Counsel, Lx. A (Apr. 15, 2019). As of 15 June 30, 2019, the monetary value St. John’s School received from actual sales of the 16 Defendants’ contribution of school uniforms increased to approximately $39,012.00. See 17 EvidentiaryHr’gTr. 2:12:56 PM—2:21:44 PM, Jul. 1,2019.

18 11. The monetary value St. Paul Christian School received for the school year 2017-2019 19 from the actual sales of Defendants’ contribution of school uniforms was approximately 20 $24,447.00. See Def’s Lx. 6 (Jun. 17, 2019); see also Decl. of Counsel, Ex. B (Apr. 15, 21 2019); see also Evidentiary Hr’g Tr. 2:41:14 PM, Jul. 1, 2019. 22 12. On September 28, 2018, St. John’s School revealed a stainless-steel plaque 23 commemorating Teja Singh Sachdev on the St. John’s School Giving Wall in exchange 24 for the Defendants’ contribution of school uniforms. See Notice of Filing, Lx. A, B (Oct. 25 8, 2018). The plaque is approximately 15” x 2 ½” x 1/8” in size. See Evidentiary Hr’g 26 Tr. 2:32:37 PM, July 1, 2019.

27 / 28 II

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1 DISCUSSION 2 Preponderance of the evidence is the burden of proof in a civil trial. See Ukau v. Wang, 3 2016 Guam 26 ¶ 50. Preponderance of evidence means evidence which as a whole shows that 4 the fact sought to be proved is more probable than not. See 19 G.C.A. § 13101(ee); see also 5 Guam Top Builders, Inc. v. Tanota Partners, 2012 Guam 12 ¶ 39 (“Preponderance of the 6 evidence means that evidence has more convincing force than that opposed to it. . . 7 The Defendants advanced three arguments. In determining how much to credit the 8 Defendants for the uniform articles donated to both St. John’s School and St. Paul Christian 9 School, the Defendants ask the Court to consider three categories: 1) fair market value, 2) sales 10 revenue, and 3) cost of goods sold. “Fair market value” is defined as “[tjhe price that a seller is 11 willing to accept and a buyer is willing to pay on the open market.” Black’s Law Dictionary 12 (11th ed. 2019); see also People v. McKinney, 2016 Guam 3 ¶ 26 fn. 1 (Fair market value has 13 been defined as the “highest price obtainable from a willing buyer and a by a willing seller, 14 neither of whom was forced to act.”) (citing People v. Pena, 135 Cal. Rptr. 602, 604 (Ct. App. 15 1977)). Sales revenue or “revenue” is defined as “income from any and all sources.”1 Black’s 16 Law Dictionary (15c) (11th ed. 2019); see also “gross sales,” Black’s Law Dictionary (16c) 17 (“[tjotal sales before deductions for returns and allowances . . . .“); Cf “gross profit,” Black’s 18 Law Dictionary (18c) ([t]otal sales revenue less the cost of the goods sold. . . .“). Finally, “cost

19 of goods sold” is commonly referred to the purchase price only, or “it may include such items as 20 labor, materials, supplies and indirect expenses incident to the production of goods, including 21 freight charges and other costs. . . .“ West’s Tax Law Dictionary § C4270. The Plaintiff, on the

22 other hand, opposes the Court awarding the Defendants any type of credit, arguing that the “in 23 kind” contribution is disingenuous and should not be considered toward the Defendants’ 24 charitable obligation under the Judgment. 25

26 The Defendants use the term “realized value” interchangeably with “sales revenue.” Realized value or “amount 27 realized” is defined as “[t]he amount received by a taxpayer for the sale or exchange of an asset, such as a cash, 11Ji property, services received, or debts assumed by a buyer.” Black’s Law Dictionary (18c) (1 ed. 2019). 28

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Here, the Court, affirming the Referee’s Decision and Recommendation, found that the 2 Judgment required the Defendants to make a cash contribution of $100,000.00 to a tax-exempt 3 charity in the name of Teja Singh Sachdev, and to provide proof of such payment to the 4 Plaintiff. Further, the Court found that Defendants’ interpretation of the Final Judgment, to wit: 5 that another form of charitable contribution could be made so long as it had a value of 6 $100,000.00, was not in good faith because it was inconsistent with the arbitration awards upon 7 which the Judgment was issued. Thus, the Court found that the Defendants failed to satisfy the 8 Judgment because an “in-kind” donation was made instead of a cash donation as previously 9 determined and ordered by the Court. 10 Although the Court has made this technical finding, the Court, in the spirit of the 11 Judgment, will credit the Defendants for the school uniforms donated to both St. John’s School 12 and St. Paul Christian School. Having reviewed the evidence and testimonies of the parties and 13 their witnesses, the Court finds, by a preponderance of the evidence, that it is equitable and just 14 to credit the Defendants the “costs of goods sold” of the school uniforms donated to both 15 schools — that is, Sixty-Two Thousand Dollars ($62,000.00) for the uniform articles donated to 16 St. John’s School, and Twenty-Two Thousand Dollars ($22,000.00) for the uniform articles 17 donated to St. Paul’s Christian School. Thus, the Court will credit the Defendants Eighty-fotcr 18 Thousand Dollars ($84,000.00) toward their satisfaction of the Judgment, and further 19 ORDERS the Defendants to pay the remaining amount due in CASH to a tax-exempt charity in 20 the name of Teja Singh Sachdev, and to provide proof of such payment to the Plaintiff. 21 Continued failure by the Defendants to satisfy the Judgment and comply with the Court’s Order 22 may result in further contempt of court. 23 CONCLUSION 24 Based on the foregoing, the Court finds that it is equitable and just to credit the

25 Defendants the “costs of goods sold” of the school uniforms donated to both schools. Thus, the 26 Court will credit the Defendants Eighty-Four Thousand Dollars ($24,000.00) toward their 27 satisfaction of the Judgment, and further ORDERS the Defendants to pay the remaining amount 28

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due in CASH. Continued failure by the Defendants to satisfy the Judgment and comply with the 2 Court’s Order may result in further contempt of court. 3

5 IT IS SO ORDERED i1L 2 2 2020 6

10 HONORABLE ARTHUR R. BARCINAS Judge, Superior Court of Guam ii

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