2025AUG 20 PM 2: OS 2 CLER!( OF COURT 3
7 CHRISTOPHER A. TORRES, ELAINE D. CIVIL CASE NO. CV0379-22 8 ULLOA Executrix of the Estate of Steven L. 9 Ulloa, and LISA ULLOA,
Plaintiffs, II vs. 12 CHAMORRO EQUITIES, INC. ROBERT V. 13 ULLOA, GERALD D. HARTWICK, and 14 KENNETH E. THOMPSON, Decision and Order Re: Defendants Robert V. Ulloa, Gerald D. 15 Defendant. Hartwick and Kenneth E. Thompson's Motion for Summary Judgment 16
18 Counterclaim- Plaintiff, 19
20 vs.
ULLOA Executrix of the Estate of Steven L. 22 Ulloa, and LISA ULLOA, 23 Counterclaim- 24 Defendants. 25
26 This matter came before the Honorable Arthur R. Barcinas on May 13, 2025 for a 27
28 hearing on Defendants Robert V. Ulloa, Gerald D. Hartwick and Kenneth E. Thompson's
(collectively, "CEI Officers") Motion for Summary Judgment ("Motion"), filed on September 3, Decision and Order Civil Case No. CV0379-22
2024. Present at the hearing were Attorney Braddock Huesman, for Plaintiffs Christopher A.
2 Torres, Steven L. Ulloa, and Lisa Ulloa (collectively, "Plaintiffs"); Attorney Bill R. Mann, for
3 Defendant and Counterclaim-Plaintiff Chamorro Equities, Inc. ("CE!"); and Attorney Mitchell 4 F. Thompson for the CE! Officers. 5 BACKGROUND 6 CEI is a closely held Guam corporation with share transfer restrictions codified in 7
8 Article 5.1 of its Articles of Incorporation. On February 28, 2022, and March 11, 2022,
9 respectively, Plaintiff Torres entered into agreements with Plaintiffs Steven and Lisa Ulloa to 10 purchase their CE! shares. CE! contends that neither of the Ulloas tendered their shares to CE! II prior to the execution of the agreements, as required under Article 5 .1. 12
13 Upon receiving notice of the transaction, CE!, via Defendant Robert Ulloa, objected to
14 the sale on the basis that it violated CEI's right of first refusal under Article 5.1. The CE! Board 15 subsequently adopted resolutions certifying Defendant Ulloa and the other CEI Officers' actions 16 and authorizing indemnification of said actions. Plaintiff Torres then sued, asserting causes of 17 action against the CE! Officers for tortious interference with contract, breach of fiduciary duty, 18
19 and aiding and abetting breach of fiduciary duty. Torres also sought a permanent injunction
20 compelling the transfer of shares. 21 On September 3, 2024, the CE! Officers filed the instant Motion, seeking judgment as a 22 matter oflaw on all claims asserted against them by Plaintiff. On September 27, 2024, Plaintiffs 23
24 filed their opposition to the Motion, arguing that the CE! Officers intentionally interfered with
25 valid contracts for the sale of shares that CE! misapplied Article 5 .I to block the transfer
26 unfairly. On October 14, 2024, the CEI Officers filed their reply, maintaining that they acted 27 properly under Article 5.1, that their actions were ratified by the CE! Board, and that they had 28
Page2of7 Decision and Order Civil Case No. CV0379-22
no duty to Plaintiff Torres. They further argued that there was no valid contract between the
2 Plaintiffs and no evidence of improper conduct.
3 On May 13, 2025, the Court took the matter under advisement. 4 DISCUSSION 5 Under Rule 56 of the Guam Rules of Civil Procedure ("GRCP"), summary judgment is 6 appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, 7
8 together with the affidavits, if any, show that there is no genuine issue as to any material fact
9 and the moving party is entitled to judgment as a matter of law. The court must view the IO evidence and draw inferences in the light most favorable to the non-moving party Edwards v. 11 Pacific Financial Corp., 2000 Guam 27. 12
13 Under Guam law, a claim for tortious interference with contract requires the existence of
14 a valid and enforceable contract, knowledge by the defendant, intentional acts to disrupt the 15 contract, actual disruption, and resulting damages. Lujan v. J.L.H. Trust, 2016 Guam 24 ~ 30. A 16 contracting party generally has no cause of action against the other party for conspiring to 17 breach their own contract or for wrongfully interfering with their own contract, as the tort cause 18
19 of action for interference only lies against outsiders to the contract. Id. ~ 31. "In the corporate
20 context, 'ownership and control of an entity do not by themselves relieve a defendant from tort 21 liability for interfering with the entity's contracts, and agents of corporations can be held 22 liable," but "[t]he determination of liability centers on whether the owner, director or manager 23 was acting to protect the interests of the entity." Id. ~ 38. Corporate fiduciary duties are 24
25 generally owed to the corporation and not to individual shareholders with respect to their
26 personal shares. Id. ~ 20. 27
Page 3 of7 Decision and Order Civil Case No. CV0379-22
The CEI Officers assert that the Court's March 6, 2025 Decision and Order, which held
2 that CEI was not obligated to recognize the disputed share transfers under Article 5.1, precludes
3 a finding ofliability against them. The Court disagrees. The Court's prior ruling only addressed 4 CEI's contractual obligations and defenses. It did not address whether the CE! Officers, in their 5 personal capacities, acted within the bounds of the law when they interfered with the transaction 6
7 or whether they may be held liable for breach of fiduciary duties.
8 The standards governing corporate liability and officer liability are distinct. Even if CEI
9 was legally justified in rejecting the share transfer, the CEI Officers may still be subject to
liability if they acted beyond the scope of their authority, acted in bad faith, or acted with an II improper motive. The Court's previous finding for CEI thus does not indicate that the Officers' 12
13 actions were legally privileged or otherwise insulated from scrutiny in this matter.
14 The CE! Officers invoke their status as managing officers as a defense to Plaintiffs 15 tortious interference claim, asserting that the tort cause of action for interference only lies 16 against outsiders to the contract. Motion, at 7 (citing Lujan, 2016 Guam 24 ,r 31). They further 17 argue that corporate officers are generally not liable for interference with a contract if they act 18
19 in good faith to protect the interest of the corporation. Id. (citing Halvorsen v. Aramark Uniform
20 Servs., Inc., 77 Cal.Rptr.2d 383, 388 (1998). However, Halvorsen also holds that where a 21 manager's privilege is not absolute, "the trier of fact must determine whether there is a proper 22 motive ... and, in some cases, whether the proper motive predominates over an improper 23
24 motive." Id.
25 The CEI Officers have not provided sufficient proof that their privilege is absolute. To
26 the contrary, their argument that they are insulated from liability if they act in good faith speaks 27 to their actions being contingent upon motive. Per Halvorsen, this creates a genuine issue of 28
Page4 of? Decision and Order Civil Case No. CV0379-22
material fact that the Court cannot resolve as a matter oflaw, and thus the CEI Officers are not
2 entitled to summary judgment on the tortious interference claim.
3 In regard to the breach of fiduciary duty claims, Plaintiff has asserted in his Third Party 4 Complaint that the CE! Officers breached their fiduciary duty by allegedly acting in their own 5 self-interests and not consulting the CE! Board or seeking its authority. The CEI Officers argue 6
7 that they owed no fiduciary duty to Plaintiff as an individual shareholder. While corporate
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2025AUG 20 PM 2: OS 2 CLER!( OF COURT 3
7 CHRISTOPHER A. TORRES, ELAINE D. CIVIL CASE NO. CV0379-22 8 ULLOA Executrix of the Estate of Steven L. 9 Ulloa, and LISA ULLOA,
Plaintiffs, II vs. 12 CHAMORRO EQUITIES, INC. ROBERT V. 13 ULLOA, GERALD D. HARTWICK, and 14 KENNETH E. THOMPSON, Decision and Order Re: Defendants Robert V. Ulloa, Gerald D. 15 Defendant. Hartwick and Kenneth E. Thompson's Motion for Summary Judgment 16
18 Counterclaim- Plaintiff, 19
20 vs.
ULLOA Executrix of the Estate of Steven L. 22 Ulloa, and LISA ULLOA, 23 Counterclaim- 24 Defendants. 25
26 This matter came before the Honorable Arthur R. Barcinas on May 13, 2025 for a 27
28 hearing on Defendants Robert V. Ulloa, Gerald D. Hartwick and Kenneth E. Thompson's
(collectively, "CEI Officers") Motion for Summary Judgment ("Motion"), filed on September 3, Decision and Order Civil Case No. CV0379-22
2024. Present at the hearing were Attorney Braddock Huesman, for Plaintiffs Christopher A.
2 Torres, Steven L. Ulloa, and Lisa Ulloa (collectively, "Plaintiffs"); Attorney Bill R. Mann, for
3 Defendant and Counterclaim-Plaintiff Chamorro Equities, Inc. ("CE!"); and Attorney Mitchell 4 F. Thompson for the CE! Officers. 5 BACKGROUND 6 CEI is a closely held Guam corporation with share transfer restrictions codified in 7
8 Article 5.1 of its Articles of Incorporation. On February 28, 2022, and March 11, 2022,
9 respectively, Plaintiff Torres entered into agreements with Plaintiffs Steven and Lisa Ulloa to 10 purchase their CE! shares. CE! contends that neither of the Ulloas tendered their shares to CE! II prior to the execution of the agreements, as required under Article 5 .1. 12
13 Upon receiving notice of the transaction, CE!, via Defendant Robert Ulloa, objected to
14 the sale on the basis that it violated CEI's right of first refusal under Article 5.1. The CE! Board 15 subsequently adopted resolutions certifying Defendant Ulloa and the other CEI Officers' actions 16 and authorizing indemnification of said actions. Plaintiff Torres then sued, asserting causes of 17 action against the CE! Officers for tortious interference with contract, breach of fiduciary duty, 18
19 and aiding and abetting breach of fiduciary duty. Torres also sought a permanent injunction
20 compelling the transfer of shares. 21 On September 3, 2024, the CE! Officers filed the instant Motion, seeking judgment as a 22 matter oflaw on all claims asserted against them by Plaintiff. On September 27, 2024, Plaintiffs 23
24 filed their opposition to the Motion, arguing that the CE! Officers intentionally interfered with
25 valid contracts for the sale of shares that CE! misapplied Article 5 .I to block the transfer
26 unfairly. On October 14, 2024, the CEI Officers filed their reply, maintaining that they acted 27 properly under Article 5.1, that their actions were ratified by the CE! Board, and that they had 28
Page2of7 Decision and Order Civil Case No. CV0379-22
no duty to Plaintiff Torres. They further argued that there was no valid contract between the
2 Plaintiffs and no evidence of improper conduct.
3 On May 13, 2025, the Court took the matter under advisement. 4 DISCUSSION 5 Under Rule 56 of the Guam Rules of Civil Procedure ("GRCP"), summary judgment is 6 appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, 7
8 together with the affidavits, if any, show that there is no genuine issue as to any material fact
9 and the moving party is entitled to judgment as a matter of law. The court must view the IO evidence and draw inferences in the light most favorable to the non-moving party Edwards v. 11 Pacific Financial Corp., 2000 Guam 27. 12
13 Under Guam law, a claim for tortious interference with contract requires the existence of
14 a valid and enforceable contract, knowledge by the defendant, intentional acts to disrupt the 15 contract, actual disruption, and resulting damages. Lujan v. J.L.H. Trust, 2016 Guam 24 ~ 30. A 16 contracting party generally has no cause of action against the other party for conspiring to 17 breach their own contract or for wrongfully interfering with their own contract, as the tort cause 18
19 of action for interference only lies against outsiders to the contract. Id. ~ 31. "In the corporate
20 context, 'ownership and control of an entity do not by themselves relieve a defendant from tort 21 liability for interfering with the entity's contracts, and agents of corporations can be held 22 liable," but "[t]he determination of liability centers on whether the owner, director or manager 23 was acting to protect the interests of the entity." Id. ~ 38. Corporate fiduciary duties are 24
25 generally owed to the corporation and not to individual shareholders with respect to their
26 personal shares. Id. ~ 20. 27
Page 3 of7 Decision and Order Civil Case No. CV0379-22
The CEI Officers assert that the Court's March 6, 2025 Decision and Order, which held
2 that CEI was not obligated to recognize the disputed share transfers under Article 5.1, precludes
3 a finding ofliability against them. The Court disagrees. The Court's prior ruling only addressed 4 CEI's contractual obligations and defenses. It did not address whether the CE! Officers, in their 5 personal capacities, acted within the bounds of the law when they interfered with the transaction 6
7 or whether they may be held liable for breach of fiduciary duties.
8 The standards governing corporate liability and officer liability are distinct. Even if CEI
9 was legally justified in rejecting the share transfer, the CEI Officers may still be subject to
liability if they acted beyond the scope of their authority, acted in bad faith, or acted with an II improper motive. The Court's previous finding for CEI thus does not indicate that the Officers' 12
13 actions were legally privileged or otherwise insulated from scrutiny in this matter.
14 The CE! Officers invoke their status as managing officers as a defense to Plaintiffs 15 tortious interference claim, asserting that the tort cause of action for interference only lies 16 against outsiders to the contract. Motion, at 7 (citing Lujan, 2016 Guam 24 ,r 31). They further 17 argue that corporate officers are generally not liable for interference with a contract if they act 18
19 in good faith to protect the interest of the corporation. Id. (citing Halvorsen v. Aramark Uniform
20 Servs., Inc., 77 Cal.Rptr.2d 383, 388 (1998). However, Halvorsen also holds that where a 21 manager's privilege is not absolute, "the trier of fact must determine whether there is a proper 22 motive ... and, in some cases, whether the proper motive predominates over an improper 23
24 motive." Id.
25 The CEI Officers have not provided sufficient proof that their privilege is absolute. To
26 the contrary, their argument that they are insulated from liability if they act in good faith speaks 27 to their actions being contingent upon motive. Per Halvorsen, this creates a genuine issue of 28
Page4 of? Decision and Order Civil Case No. CV0379-22
material fact that the Court cannot resolve as a matter oflaw, and thus the CEI Officers are not
2 entitled to summary judgment on the tortious interference claim.
3 In regard to the breach of fiduciary duty claims, Plaintiff has asserted in his Third Party 4 Complaint that the CE! Officers breached their fiduciary duty by allegedly acting in their own 5 self-interests and not consulting the CE! Board or seeking its authority. The CEI Officers argue 6
7 that they owed no fiduciary duty to Plaintiff as an individual shareholder. While corporate
8 officers generally owe duties only to the corporation itself, not to individual shareholders, 9 exceptions exist in the context of closely held corporations, where shareholders often occupy IO dual roles as officers or directors. See Ngirangesil v. Kim, 2021 Guam 28 (highlighting the 11 intertwined nature of parties who are both shareholders and officers of a closely held 12
13 corporation).
14 Within such an interrelated corporate structure, situations may arise where majority 15 shareholders can exercise control in ways that could harm minority shareholders, potentially 16 giving rise to fiduciary liability. Even where parties "were acting as directors, not majority 17 shareholders, they still owed certain fiduciary duties" and "a director's use of control of a 18
19 corporation to obtain an advantage that is not available to all stockholders, without regard to the
20 detriment to minority stockholders and without a compelling business purpose is inconsistent 21 with directors' duty of good faith and inherent fairness to minority stockholders." NTD 22 Architects v. Baker, 950 F.Supp.2d 1151, 1158 (S.D. Cal. 2013). "As a general rule, corporate 23
24 decisions which reflect the management's 'business judgment' will not be disturbed by the
25 courts in the absence of fraud or bad faith [... ] In certain limited situations, however, 26 management actions which injure minority shareholders will be held to violate management's 27
Page 5 of7 Decision and Order Civil Case No. CV0379-22
fiduciary duties unless a 'compelling business reason' for the actions can be shown." Shivers v.
2 Amerco, 670 F.2d 826, 832 (9th Cir. 1982).
3 Plaintiff Torres alleges that the Officers acted not simply to enforce corporate policy, but 4 to exclude a fellow shareholder from acquiring a greater interest, thereby consolidating personal s or familial control. While the ultimate merit of those allegations may be contested, they do raise 6
7 legitimate concerns under the fiduciary standards applicable to closely held corporations.
8 Accordingly, the Court cannot conclude as a matter of law that the Officers' conduct was
9 consistent with their fiduciary obligations, or whether the Officers exercised their discretion for
a proper purpose on in a manner unfairly prejudicial to Plaintiff Torres. II Finally, the Officers assert that Plaintiff's claim for injunctive relief fails as a matter of 12
13 law. However, injunctive relief is a remedy, not a stand-alone cause of action. Whether such
14 relief is appropriate depends on the resolution of the underlying legal claims and the equities IS present. Nothing in the Court's March 6, 2025 Decision precludes the availability of injunctive 16 relief against the Officers, should Plaintiff ultimately prevail on his claims. 17 The Court found that CEI had no obligation to honor the share purchase agreements 18
19 because the right of first refusal under Article 5.1 was never triggered. However, that decision
20 does not necessarily preclude Torres's broader claims for equitable relief against the Officers 21 based on their alleged conduct in blocking the transfer for improper reasons. 22 Where the contracts between Plaintiffs may be unenforceable as to CEI, Plaintiff 23
24 Torres's claims against the Officers do not depend solely on contract enforcement, but sound in
25 tort and equity. Thus, if the Officers are found to have disrupted the transaction with improper 26 motive, Torres may be entitled to equitable relief that would prevent the Officers from 27 interfering with a renewed or lawful future transfer. 28
Page 6 of7 Decision and Order Civil Case No. CV0379-22
3 Based on the foregoing, the Court DENIES the CEI Officers' Motion for Summary 4
5 Judgment.
6 IT IS SO ORDERED 7
IO HONO~BLEARTHUR R. BARCINAS II Judge, Su/t!rior~:c~·urt of Guam 12
Page 7 of7