FtLED
?l9 NOV 25 : 2
2 SUPERIOR COUR 3 OF GUAM 4
6 IN THE SUPERIOR COURT OF GUAM
7 TAI’S BROS. CORPORATION, ) Case No. CV119-18 8 ) Plaintiff, 9 ) ) DECISION AND ORDER ) 11 AQUA BREEZE, INC and BLUE OCEAN 12 SPORTS GUAM, INC., ) 13 Defendants. ) ) 14 ) ) 15 AQUA BREEZE, INC., ) ) 16 Cross-Claim Plaintiff, 17 v. ) ) 18 ) BLUE OCEAN SPORTS GUAM, INC., ) 19 ) Cross-Claim Defendant. ) 20
21 INTRODUCTION 77
23 This matter came before the Honorable Alberto C. Lamorena, III on October 7, 2019 on
24 submission of Defendant Aqua Breeze Inc.’s (“Aqua Breeze”) Motion for Summary Judgment. 25 Plaintiff Tai’s Bros. Corporation (“Plaintiff’) is represented by Attorney Zachary 0. Damian. 26 Aqua Breeze is represented by Attorney Louie J. Yanza. Defendant Blue Ocean Sports, Inc. 27 (“Blue Ocean”) has not appeared. After considering the arguments of the parties and the 28 Decision and Order CV! 119-18, Tai’s Bros. Corp. v. Aqua Breeze, Thc. et al.
applicable law, the Court now issues its Decision and, Order granting Defendant Aqua Breeze’s
2 Motion for Summary Judgment.
BACKGROUND
In June 2016, Plaintiff and Blue Ocean entered into an Automobile Lease Agreement 5 (“Lease Agreement”). The Lease Agreement had a term of four (4) years. Plaintiff alleges that 6 Blue Ocean subsequently changed its name to Aqua Breeze. Aqua Breeze allegedly returned
8 the vehicles to Plaintiff in August 2018, entitling Plaintiff to an early return fee pursuant to the
terms of the Lease Agreement. Additionally, Plaintiff alleges Aqua Breeze failed to pay lease 10 payments for June and July 2018. Blue Ocean has not appeared in this action. Aqua Breeze ii filed an Answer, asserting an affirmative defense that Aqua Breeze is not a successor in interest 12
13 to Blue Ocean or to any entity. Aqua Breeze argues Blue Ocean is the responsible party for
14 Plaintiff’s damages. 15 Plaintiffs filed its Complaint on November 27, 2018. Aqua Breeze filed its Answer on 16 December 20, 2018. Aqua Breeze filed its Motion to Summary Judgment on August 23, 2019. 17 Plaintiff did not file an opposition. At the hearing set for this matter, Plaintiff indicated it did
19 not oppose Aqua Breeze’s Motion for Summary Judgment. Minute Entry (Oct. 7, 2019). After
20 hearing the arguments of the parties on October 7, 2019, the Court took the matter under 21 advisement. 22 DISCUSSION 23 A court may grant summary judgment “if the pleadings, depositions, answers to 24
25 interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
26 genuine issue as to any material fact” and that the moving party is entitled to a judgment as a 27 matter of law. Guam R. Civ. P. 56(c); see also Izt,ka Corp. v. Kawasho Int’l (Guam), Inc., 28
Page2of6 Decision and Order . CVI119-1$, Tai’s Bros. Corp. v. Aqua Breeze, Jnc. et al.
1997 Guam 10 ¶ 7; Bank of Guam v. ftores, 2004 Guam 25 ¶ 8. The movant bears the burden of
2 demonstrating that there are no genuine issues of material fact. See Izuka Coip., 1997 Guam 10
3 ¶ 8. A genuine issue is exists if there is significant evidence establishing a factual dispute which must be resolved by a fact finder. Id. A material fact is “one that is relevant to an element of a 5 claim or defense and whose existence might affect the outcome of the suit.” Id. Disputes over 6 irrelevant or immaterial facts does not preclude a grant of summary judgment. Id. In rendering
8 its decision, the Court must examine the evidence in the light most favorable to the non-moving
party. Bank of Gttam, 2004 Guam 25 ¶ 7. If the moving party establishes a lack of genuine issue l of material fact, the non-moving party must present specific facts showing there is a genuine
issue for trial. Celotex Coip. v. Catrett, 477 U.S. 317, 325 (1986). 12
13 A. There is no genuine issue of material fact.
14 The pleadings and declarations reveal the factual issue presented: did Aqua Breeze take 15 any actions which would constitute an assumption of the terms of the Lease Agreement between 16 Plaintiff and Blue Ocean? Aqua Breeze asserts neither the President of Aqua Breeze, Dominic 17 Soumetaw, nor anyone else at Aqua Breeze assumed the terms of the lease agreement between
19 Blue Ocean and Plaintiff. Soumetaw Dec. at 2 (Aug. 23, 2019). In interrogatories, Aqua Breeze
20 asked Plaintiff to provide the following information: (1) the name of the person that changed 21 Blue Ocean’s trade name to Aqua Breeze; (2) the name of the person who acted on behalf of
Aqua Breeze to assume the terms of the Lease Agreement; and (3) the name of the person from 23 Tai’s Bros. Corporation who agreed or consented to Aqua Breeze alleged assumption of the 24
25 terms of the Lease Agreement. Yanz Decl., Exh. A at 3 (Aug. 23, 2019). Plaintiff responds in
26 the interrogatories, noting it was unaware of any person who purportedly changed Blue Ocean’s 27 . . trade name to Aqua Breeze. Id. In response to the interrogatories about assuming the terms of 28
Page 3 of6 Decision and Order . CV 1119-18, Tal ‘s Bros. Corp. v. Aqua Breeze, Inc. et at.
the Lease Agreement, Plaintiff points to one email from Tsutomo Kinoshita of Aqua Breeze to
2 change the company name on the invoice as evidence of an assumption of the terms (and the
3 subsequent consent to the assumption). Id. Aqua Breeze asserts “Kinoshita is not a shareholder,
director, or officer of Aqua Breeze.” Motion for Summary Judgment at 2. Plaintiff, however, 5 did not directly address the question of naming a person who assumed the terms of the Lease 6 Agreement on behalf of Aqua Breeze.
8 Plaintiff did not file an opposition to Aqua Breeze’s Motion for Summary Judgment. At
hearing on Aqua Breeze’s motion, Plaintiff indicated it does not oppose Aqua Breeze’s motion. I0 As such, the Court accepts the asserted facts in Aqua Breeze’s motion and declarations, finding 11 no genuine issue or dispute of material fact. The burden then shifted to Plaintiff to “present 12
13 specific facts showing there is a genuine issue for trial.” Celotex, 477 U.S. at 325. Plaintiff
14 chose not to do so.
B. Aqua Breeze is entitled to judgment as a matter of law. 16 “[WJhen a corporation purchases or otherwise acquires the assets of another corporation, ]7 the acquiring corporation does not ordinarily assume the selling corporation’s debts and 18
19 liabilities.” Wilson v. Metals, USA, Inc., No. 2:12-cv-56$-KJM-DB, 2017 WL 2972608, at *6
20 (E.D. Cal. July 12, 2017) (citing Fisher v. Allis-Chalmers Corp. Prod. Licth. Tr., 95 Cal. App. 21 4th 1182, 118$ (2002)). There are four well recognized exceptions to this rule, under which the
purchasing corporation becomes liable for the debts and liabilities of the selling corporation: 23
74 (1) Where the purchaser expressly or impliedly agrees to assume such debts; (2) where the transaction amounts to a consolidation or merger of the corporations; 25 (3) where the purchasing corporation is merely a continuation of the selling corporation; and (4) where the transaction is entered into fraudulently in order to 26 escape liability for such debts. 27 Pierce ij’. Riverside Mortg. Sec. Co., 25 Cal. App. 2d 24$, 255 (1938). 28
Page4of6 Decision and Order CV11I9-18, Tai’sBros. Corp. v. Aqua Breeze, Inc. etat.
The Complaint alleges “Defendant Blue Ocean Sports Inc. subsequently changed its
2 trade name to Aqua Breeze, Inc. and assumed the terms of the Agreement.” Compl aint at 1.
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FtLED
?l9 NOV 25 : 2
2 SUPERIOR COUR 3 OF GUAM 4
6 IN THE SUPERIOR COURT OF GUAM
7 TAI’S BROS. CORPORATION, ) Case No. CV119-18 8 ) Plaintiff, 9 ) ) DECISION AND ORDER ) 11 AQUA BREEZE, INC and BLUE OCEAN 12 SPORTS GUAM, INC., ) 13 Defendants. ) ) 14 ) ) 15 AQUA BREEZE, INC., ) ) 16 Cross-Claim Plaintiff, 17 v. ) ) 18 ) BLUE OCEAN SPORTS GUAM, INC., ) 19 ) Cross-Claim Defendant. ) 20
21 INTRODUCTION 77
23 This matter came before the Honorable Alberto C. Lamorena, III on October 7, 2019 on
24 submission of Defendant Aqua Breeze Inc.’s (“Aqua Breeze”) Motion for Summary Judgment. 25 Plaintiff Tai’s Bros. Corporation (“Plaintiff’) is represented by Attorney Zachary 0. Damian. 26 Aqua Breeze is represented by Attorney Louie J. Yanza. Defendant Blue Ocean Sports, Inc. 27 (“Blue Ocean”) has not appeared. After considering the arguments of the parties and the 28 Decision and Order CV! 119-18, Tai’s Bros. Corp. v. Aqua Breeze, Thc. et al.
applicable law, the Court now issues its Decision and, Order granting Defendant Aqua Breeze’s
2 Motion for Summary Judgment.
BACKGROUND
In June 2016, Plaintiff and Blue Ocean entered into an Automobile Lease Agreement 5 (“Lease Agreement”). The Lease Agreement had a term of four (4) years. Plaintiff alleges that 6 Blue Ocean subsequently changed its name to Aqua Breeze. Aqua Breeze allegedly returned
8 the vehicles to Plaintiff in August 2018, entitling Plaintiff to an early return fee pursuant to the
terms of the Lease Agreement. Additionally, Plaintiff alleges Aqua Breeze failed to pay lease 10 payments for June and July 2018. Blue Ocean has not appeared in this action. Aqua Breeze ii filed an Answer, asserting an affirmative defense that Aqua Breeze is not a successor in interest 12
13 to Blue Ocean or to any entity. Aqua Breeze argues Blue Ocean is the responsible party for
14 Plaintiff’s damages. 15 Plaintiffs filed its Complaint on November 27, 2018. Aqua Breeze filed its Answer on 16 December 20, 2018. Aqua Breeze filed its Motion to Summary Judgment on August 23, 2019. 17 Plaintiff did not file an opposition. At the hearing set for this matter, Plaintiff indicated it did
19 not oppose Aqua Breeze’s Motion for Summary Judgment. Minute Entry (Oct. 7, 2019). After
20 hearing the arguments of the parties on October 7, 2019, the Court took the matter under 21 advisement. 22 DISCUSSION 23 A court may grant summary judgment “if the pleadings, depositions, answers to 24
25 interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
26 genuine issue as to any material fact” and that the moving party is entitled to a judgment as a 27 matter of law. Guam R. Civ. P. 56(c); see also Izt,ka Corp. v. Kawasho Int’l (Guam), Inc., 28
Page2of6 Decision and Order . CVI119-1$, Tai’s Bros. Corp. v. Aqua Breeze, Jnc. et al.
1997 Guam 10 ¶ 7; Bank of Guam v. ftores, 2004 Guam 25 ¶ 8. The movant bears the burden of
2 demonstrating that there are no genuine issues of material fact. See Izuka Coip., 1997 Guam 10
3 ¶ 8. A genuine issue is exists if there is significant evidence establishing a factual dispute which must be resolved by a fact finder. Id. A material fact is “one that is relevant to an element of a 5 claim or defense and whose existence might affect the outcome of the suit.” Id. Disputes over 6 irrelevant or immaterial facts does not preclude a grant of summary judgment. Id. In rendering
8 its decision, the Court must examine the evidence in the light most favorable to the non-moving
party. Bank of Gttam, 2004 Guam 25 ¶ 7. If the moving party establishes a lack of genuine issue l of material fact, the non-moving party must present specific facts showing there is a genuine
issue for trial. Celotex Coip. v. Catrett, 477 U.S. 317, 325 (1986). 12
13 A. There is no genuine issue of material fact.
14 The pleadings and declarations reveal the factual issue presented: did Aqua Breeze take 15 any actions which would constitute an assumption of the terms of the Lease Agreement between 16 Plaintiff and Blue Ocean? Aqua Breeze asserts neither the President of Aqua Breeze, Dominic 17 Soumetaw, nor anyone else at Aqua Breeze assumed the terms of the lease agreement between
19 Blue Ocean and Plaintiff. Soumetaw Dec. at 2 (Aug. 23, 2019). In interrogatories, Aqua Breeze
20 asked Plaintiff to provide the following information: (1) the name of the person that changed 21 Blue Ocean’s trade name to Aqua Breeze; (2) the name of the person who acted on behalf of
Aqua Breeze to assume the terms of the Lease Agreement; and (3) the name of the person from 23 Tai’s Bros. Corporation who agreed or consented to Aqua Breeze alleged assumption of the 24
25 terms of the Lease Agreement. Yanz Decl., Exh. A at 3 (Aug. 23, 2019). Plaintiff responds in
26 the interrogatories, noting it was unaware of any person who purportedly changed Blue Ocean’s 27 . . trade name to Aqua Breeze. Id. In response to the interrogatories about assuming the terms of 28
Page 3 of6 Decision and Order . CV 1119-18, Tal ‘s Bros. Corp. v. Aqua Breeze, Inc. et at.
the Lease Agreement, Plaintiff points to one email from Tsutomo Kinoshita of Aqua Breeze to
2 change the company name on the invoice as evidence of an assumption of the terms (and the
3 subsequent consent to the assumption). Id. Aqua Breeze asserts “Kinoshita is not a shareholder,
director, or officer of Aqua Breeze.” Motion for Summary Judgment at 2. Plaintiff, however, 5 did not directly address the question of naming a person who assumed the terms of the Lease 6 Agreement on behalf of Aqua Breeze.
8 Plaintiff did not file an opposition to Aqua Breeze’s Motion for Summary Judgment. At
hearing on Aqua Breeze’s motion, Plaintiff indicated it does not oppose Aqua Breeze’s motion. I0 As such, the Court accepts the asserted facts in Aqua Breeze’s motion and declarations, finding 11 no genuine issue or dispute of material fact. The burden then shifted to Plaintiff to “present 12
13 specific facts showing there is a genuine issue for trial.” Celotex, 477 U.S. at 325. Plaintiff
14 chose not to do so.
B. Aqua Breeze is entitled to judgment as a matter of law. 16 “[WJhen a corporation purchases or otherwise acquires the assets of another corporation, ]7 the acquiring corporation does not ordinarily assume the selling corporation’s debts and 18
19 liabilities.” Wilson v. Metals, USA, Inc., No. 2:12-cv-56$-KJM-DB, 2017 WL 2972608, at *6
20 (E.D. Cal. July 12, 2017) (citing Fisher v. Allis-Chalmers Corp. Prod. Licth. Tr., 95 Cal. App. 21 4th 1182, 118$ (2002)). There are four well recognized exceptions to this rule, under which the
purchasing corporation becomes liable for the debts and liabilities of the selling corporation: 23
74 (1) Where the purchaser expressly or impliedly agrees to assume such debts; (2) where the transaction amounts to a consolidation or merger of the corporations; 25 (3) where the purchasing corporation is merely a continuation of the selling corporation; and (4) where the transaction is entered into fraudulently in order to 26 escape liability for such debts. 27 Pierce ij’. Riverside Mortg. Sec. Co., 25 Cal. App. 2d 24$, 255 (1938). 28
Page4of6 Decision and Order CV11I9-18, Tai’sBros. Corp. v. Aqua Breeze, Inc. etat.
The Complaint alleges “Defendant Blue Ocean Sports Inc. subsequently changed its
2 trade name to Aqua Breeze, Inc. and assumed the terms of the Agreement.” Compl aint at 1. 3 Aqua Breeze asserts it did not assume the terms of the Lease Agreement, and Plainti ff was unable to point to specific events, in responding to Aqua Breeze’s interrogatorie s, which 5 indicated an assumption of terms by Aqua Breeze. See Soumetaw Deci. at 2; Yanz Deci., 6 Exh. A at 3. The only evidence of assumption of the terms of the Lease Agreement Plaintiff offered
was that Tsutomo Kinoshita from Aqua Breeze asked the name on an invoice to be changed from Blue Ocean to Aqua Breeze. As established, Kinoshita is not a shareholder, directo r, or 10 officer of Aqua Breeze. There is further no document presented showing an assumption of 11 liabilities and debts between Blue Ocean and Aqua Breeze. 12
13 Absent an express or implied assumption of Blue Ocean’s liabilities and debts, Aqua
it Breeze does not, by law, assume Blue Ocean’s liabilities and debts. The Court does not find 15 that Kinoshita’s request to change the name on an invoice from Blue Ocean to Aqua Breeze 16 sufficiently constituted an express or implied assumption of Blue Ocean’s liabilities. From a 17 review of pleadings and declarations, it does not appear that Plaintiff suggests the latter 18 three
19 recognized exceptions to successor liability apply.
20 As Plaintiff did not file an opposition and indicated at hearing that it does not oppose 21 Aqua Breeze’s motion, the Court finds Aqua Breeze is entitled to judgment as a matter of law. 22 CONCLUSION 23
24 For the reasons stated above, Aqua Breeze’s Motion for Summary Judgment is
25 GRANTED. Aqua Breeze has established there is no genuine issue of material fact, and 26 Plaintiff has not submitted specific facts which would tend to show a genuine issue for trial. 27 Based on successor liability principles and a lack of showing that Aqua Breeze expres sly or 28
Page5of6 Decision and Order CV1 119-18, Tai’s Bros. Corp. v. Aqua Breeze,Inc. et at.
impliedly assumed the terms of the Lease Agreement, Aqua Breeze is also entitled to judgment
2 as a matter of law.
4 IT IS SO ORDERED this 25th day of November, 2019. 5
9 HONORABLE ALBERTO C. LAMORENA III 10 Presiding Judge, Superior Court of Guam 11
‘4
‘9
23 acknn r a that a copy of 24 orsuna hcroto was placed e th’
4—’ 25
26 Date:JLi
27 Ceputv C-!erk, Supenor Court ot C-oar
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