Ulloa v. Ulloa

Opinion

LED

IN THE SUPERIOR COURT OF GUAM , r

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3 ROBERT V. ULLOA, GERALD D. )

HARTWICK, PRISCILLA J. HARTWICK, )

4 CIVIL CASE NO. <rVi782-11 and KENNETH E. THOMPSON, ) i ~ t <"

5 )

Petitioners, )

6 ) DECISION AND ORDER vs. )

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8 WALTER D. ULLOA, VIVIAN U. )

McCURDY, and LISA A. ULLOA, )

9 )

Respondents. )

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11 INTRODUCTION

12 This matter came before the Honorable Judge James L. Canto II on the Petitioners'

13 motion for appointment of receiver, filed March 21, 2012. Oral arguments were heard on Apri 14 26, 2012. Attorney Bill R. Mann represented the Petitioners, Attorney Carlos L. Taitan 15 appeared on behalf of the Respondents, and Attorney Rawlen M. T. Mantanona represente 16 proposed intervenor Chamorro Equities, Inc. ("CEI"). Having considered the parties' briefs, ora 17 arguments, and the applicable law, the Court now issues the following Decision and Order.

18 BACKGROUND

19 This dispute involves the direction and control of CEl, a small family corporation wit 20 approximately fifteen (15) shareholders. On February 2, 2012, the Court entered a stay 0 21 proceedings on the basis of abatement and the prior pending action doctrine. (Decision an 22 Order, Feb. 2, 2012.) Civil Case No. CVI431-11, currently on appeal in Civil Appeal No 23 CVAI1-020, shall determine the underlying validity of a substitute CEl election before thi 24 action may proceed to confirm that election. Id 25 On March 21, 2012, the Petitioners filed the present motion to appoint receiver or fo 26 alternative relief. Petitioners contend that a receiver is necessary, "by the usages of courts 0 27 equity," because CEl's competing shareholder factions dispute how to collect and distribut 28 corporate rental income between themselves. 7 GCA § 20501(7). If a receiver is not appointed

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the Petitioners move for orders that all CEI rental income be deposited into its frozen ba 2 account. At oral argument, the Petitioners acknowledged that they did not consider th 3 availability of identical relief in the prior pending action, and further stated that it could be mqr 4 difficult to obtain relief in that case. (Record Log at 10:17, Apr. 26, 2012.) 5 DISCUSSION 6 The power of a court to stay proceedings is incidental to the power inherent in eve 7 court to control the disposition of cases before it with economy of time and effort for the court 8 for counsel and for litigants alike. Landis v. North American Co., 299 U.S. 248,254-55,57 S.Ct 9 163 (1936); see Clinton v. Jones, 520 U.S. 681, 706-707, 117 S.Ct. 1636 (1997). Guam law doe 10 not exact a standard for a court to lift its stay, although "[l]ogically, the same court that impose II a stay oflitigation has the inherent power and discretion to lift the stay." Marsh v. Johnson, 263 12 F.Supp.2d 49, 52 (D.D.C. 2003). 13 In this case, the Petitioners move to condition the stay of proceedings upon receivershi 14 proceedings or other corporate management orders. The Court entered a stay on the basis 0 15 abatement because the management of CEI is at issue in prior pending Civil Case No. CV1431 16 11 and Civil Appeal No. CVAII-020. The Petitioners provide no authority or persuasive reaso 17 for this Court to lift or modify its stay when similar relief may be obtained in the prior pendin 18 action. See e.g. Guam R. App. P. 12, Guam R. Civ. P. 65, 7 GCA §§ 3107 and 20301 et seq 19 The Court entered a stay in order to avoid multiple conflicting orders between two pendin 20 actions. The Court is especially averse to enjoin or direct the management of CEl after i 21 specifically entered a stay in order to avoid conflict with the prior action on this very issue. Fo 22 these reasons, the Court is not inclined to lift or otherwise modify the stay in order to conduc 23 receivership or other corporate management proceedings. However, in an abundance of caution 24 the Court shall address the merits of the motion in order to more diligently exercise its discretion. 25 I. Appointment of a Corporate Receiver 26 Under Guam law, a corporate receiver may be appointed for dissolution, insolvency 0 27 for, "the usages of courts of equity." 7 GCA § 20501. In general, receivership is a drasti 28 remedy of last resort that is used only when injury can be avoided in no other way. Chambers v.

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BUckle Ford Sales, Inc., 313 F.2d 252,260 (2d Cir. 1963); Bracco v. Lackner, 462 F.Supp. 436 2 456 (N.D. Cal. 1978); A.G. Col Co. v. Superior Court in and for Santa Clara County, 238 P 3 926,930 (Cal. 1925). 4 In this case, the Petitioners acknowledge that receivership is a remedy of last resort an 5 offer an alternative remedy.! The Court agrees that a receiver is not appropriate becaus 6 alternative remedies can avoid any harm from income distribution and CEl is not threatened wit 7 insolvency. On this basis, the stay shall not be lifted in order to undertake receivershi 8 proceedings. 9 II. Injunctive Relief IO Under Guam law, injunctive relief may be granted to enjoin an act that violates the right 11 of a party and tends to render a judgment inetlectual. 7 GCA § 20302(3). The purpose of thi 12 equitable remedy, "is always to prevent irreparable injury so as to preserve the court's ability t 13 render a meaningful decision on the merits." Tumon Partners, LLC v. Shin, 2008 Guam 15 ~ 2 14 (quoting Canal Auth. of Fla. v. Callaway, 489 F.2d 567, 576 (5th Cir. 1974)). An irreparabl 15 injury, "typically focuses on categories of harm that do not easily lend themselves to monet 16 compensation." Sule v. Guam Bd Of Examiners for Dentistry, 2011 Guam 5 ~ 12; see also 17 GCA § 20302(4) and (5). In other words, "[r]ecoverable monetary loss may constitut 18 irreparable harm only where the loss threatens the very existence of the movant's business.' 19 Wisconsin Gas Co. v. FE.R.C., 758 F.2d 669, 674 (D.C. Cir. 1985). 20 In this case, the Petitioners alternatively move for an injunctive order that all corporat 21 rental income be placed in CEl's frozen bank account. The alleged monetary loss from harmfu 22 distribution of income is readily ascertainable as money damages. Furthermore, the distributio 23 of rental income does not threaten CEl's very existence or its real property assets. For thes 24 reasons, the Court finds that the injury is not irreparable and the stay shall not be lifted in orde 25 to enjoin the management of CEI. 26

27 I "The Robert Ulloa faction recognizes that under the case law a receiver may be appointed only as a last resort, an 28 have considered the possibility of alternative remedies. One possibility would be for the Court to order th Defendants to place all CEI revenue into the CEI bank account at FHB." (Memorandum in Support of Petitioner' Motion for Receiver, 7, Mar. 21, 2012.)

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CONCLUSION

2 Based upon the foregoing, the Petitioner's motion for receiver or alternative relief i 3 hereby DENIED and the stay of proceedings shall not be lifted or modified pending a fina

4 resolution of Civil Appeal No. CVAII-020. 5

6 SO ORDERED thist1'l'Hday of June, 2012.

Original Signed By:

7 / ?n~e:L. Canto II 8 (~~~

9 HONORABLE JAMES L. CANTO II Judge Superior Court of Guam 10

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