Ulloa v. Ulloa

• Court: Superior Court of Guam
• Decided: February 2, 2012
• Docket: CV1782-11
• Status: Unknown

Opinion

IN THE SUPERIOR COURT OF GUAM 2

3 ROBERT V. ULLOA, GERALD D. ) HARTWICK, PRISCILLA J. HARTWICK, ) 4 CIVIL CASE NO. CV1782-11 and KENNETH E. THOMPSON, ) 5 ) Petitioners, ) 6 ) DECISION AND ORDER vs. ) 7 ) 8 WAL TER D. ULLOA, VIVIAN U. ) McCURDY, and LISA A. ULLOA, ) 9 ) Respondents. ) 10 ------------------------------) 11 INTRODUCTION 12 This matter came before the Honorable Judge James L. Canto II on the Respondents \3 motion to abate, filed November 9, 2011. Oral arguments were heard on November 23, 2011 14 Attorney Bill R. Mann represented the Petitioners and Attorney Carlos L. Taitano appeared 0 15 behalf of the Respondents. Having considered the parties' briefs, oral arguments, and th 16 applicable law, the Court now issues the following Decision and Order. 17 BACKGROUND 18 This dispute involves the direction and control of Chamorro Equities, Inc. (hereinafte 19 "CEI"), a small family corporation with approximately fifteen (15) shareholders. (Declaration 0 20 Bill R. Mann, Exhibit "6" (Nov. 14, 2011); Certificate of Respondents' Counsel, Exhibit "D' 21 (Nov. 9, 2011).) On August 24, 2011, shareholder Walter D. Ulloa (hereinafter "Walter" 22 petitioned the Superior Court in Civil Case No. CV1431-11 to order a meeting of CEI pursuan 23 to 18 GCA § 2210 and to hold an annual election of directors pursuant to 18 GCA § 2202 24 (Certificate of Respondents' Counsel, Exhibit "D" at 3, Nov. 9,2011.) 25 Walter's petition was granted and CEI held a meeting on October 4, 2011 wher 26 Respondents Walter, Vivian U. McCurdy and Lisa A. Ulloa were elected directors of CEl. [d. a 27 4; Declaration of Bill R. Mann, Exhibit "14" (Nov. 14, 2011). On October 5, 2011, CEl' 28 directors removed Petitioners Robert V. Ulloa (hereinafter "Robert"), Gerald D. Hartwick an

Page I of9 Kenneth E. Thompson from their positions as officers of the corporation. (Declaration of Bill R

2 Mann, Exhibit "15" (Nov. 14,2011).) 3 On October 21, 201 I, the Court in CV 1431-1 1 granted a motion filed by Robert to: 1 4 vacate its first order to compel a shareholder meeting; 2) invalidate the October 4 election 0 5 directors and the October 5 appointment of new corporate officers; and 3) order that a secon 6 stockholder meeting and election take place on October 25, 2011. Id. at Exhibit "3". Pursuant t 7 that order, CEI held a second meeting and elected the seven (7) Petitioners and Respondents

8 directors. Id. at Exhibit "9". 9 On October 28, 2011, Walter filed Civil Appeal No. CVA11-020 to reverse and vacat 10 the October 21 order in CV 1431 -11 and to declare that the first CEI election was lawful 11 (Certificate of Respondents' Counsel, Exhibits "B" and "D", 27 (Nov. 9, 2011).) The appea 12 names Robert, Gerald D. Hartwick, Kenneth E. Thompson and Priscilla J. Hartwick \3 Respondents. Id. at Exhibit "C", 2. On November 3, 2011, Robert filed the present petition t 14 confinn the validity of the October 25 election pursuant to 18 GCA § 2212. 15 DISCUSSION 16 The Supreme Court of Guam recognizes that "[aJbatement of legal proceedings, ofte 17 referred to as the prior pending action doctrine, may occur when, 'a claim involves the sam 18 subject matter and parties as a previously-filed action so that the same facts and issues ar 19 presented.'" Yokeno v. Sekiguchi, Case No. CVA10-006, Order, 1:24-26 (Sup. Ct. Guam, Oct 20 27, 2010, Torres, c.J.) (quoting Estate of Holtmeyer v. Piontek, 913 S.W.2d 352, 357 (Mo. Ct 21 App.1996». In other words, "the pendency ofa prior suit between the same parties brought t 22 obtain the same end will generally render the latter suit amenable to dismissal, because when tw 23 separate suits are virtually alike, the second suit is deemed unnecessary, oppressive an 24 vexatious." Id. at 1:28-2:3 (internal quotation marks omitted) (quoting Gaudio v. Gaudio, 58

25 A.2d 1212, 1218 (Conn. App. Ct. 1990». 26 In this case, the Respondents move the Court to abate and thus dismiss this action on th 27 basis that Civil Case No. CV 1431 -11 is a prior pending action that is currently on appeal befor 28 the Supreme Court of Guam in Appeal No. CVA 11-020. The Petitioners oppose abatement 0

Page 2 of9 the grounds that the alleged prior pending action does not involve the same subject matter, th 2 same parties, or the same prayers for relief. The Court shall examine both actions to determin 3 whether abatement is appropriate in this case. 4 The Guam Supreme Court acknowledges that a complete identity of the same parties i 5 not necessary in order to abate and dismiss under the prior pending action doctrine. Yokeno 6 CVAlO-006, Order, 2:8 (citing JD. Candler Roofing Co., Inc. v. Dickson, 386 N.W.2d 605,60 7 (Mich. Ct. App. 1986)). It is only necessary that the two actions present a substantial identity 0 8 the same parties. Id at 2:12-13 (citing Barringer v. Zgoda, 458 N.Y.S.2d 42, 43 (N.Y. App. Div 9 1982)). It is "well settled that a dismissal where another case is pending does not require 10 finding that the litigants in the two actions are identical. The 'same parties' requirement is me 11 where the litigants' interests are sufficiently similar, even though the litigants differ in name 0 12 number." Id. at 2:16-19 (internal quotation marks omitted)(citing Skipper Marine Electronics v. 13 Cybernet Marine Products, 558 N.E.2d 324, 326 (Ill. App. Ct. 1990)); see also Annie Gardne 14 Foundation v. Gardner, 375 S.W.2d 705, 708 (Ky. 1964) ("abatement is allowed where th 15 parties are reversed").

16 In the present matter, the parties in the prior pending action are not exactly identical t 17 the case at bar. The parties are reversed: the Respondents in CV1431-11 are the Petitioners i 18 this case and the Petitioner in CV1431-11 is a Respondent in this case. In addition, two mor 19 CEI shareholders are named as Respondents in this case and they are not parties in CV 1431-11 20 On these facts, the parties are sufficiently similar to invoke the prior pending action doctrine 2I The parties are merely reversed, and each litigant in both actions shares a similar interest in CE 22 as a shareholder. Furthermore, the additional shareholders in the present case are similarl 23 situated with Walter in the prior pending action because they are all opponents of the October 25 24 2011 election. For these reasons, the parties in both cases are sufficiently similar to grant 25 motion for abatement.

26 In addition to similar parties, abatement requires that, ''the two suits 'must be based on th 27 same or substantially the same cause of action." Yokeno, CVAlO-006, Order, at 2:8-9 (quotin 28 JD. Candler Roofing Co., Inc. v. Dickson, 386 N.W.2d 605, 608 (Mich. Ct. App. 1986)). I

Page 3 of9 other words, a disparity in the legal theory, issues, burden of proof or relief sought in the tw 2 actions would not bar abatement where the two actions arise out of the same transaction 0 3 occurrence and there is a substantial similarity of issues between them. Perimeter Exhibits, Ltd. 4 v. Glenbard Molded Binder, Inc., 122 Ill.App.3d 504, 508, 461 N .E.2d 44 (Ill.App.Ct. 1984); se 5 People ex reI. Phillips Petroleum Co. v. Gitchoff, 357 N.E.2d 534, 537 (Ill. 1976) ("Neither th 6 parties nor the causes need be identical; a substantial similarity will suffice. "). Therefore, i 7 evaluating whether a subsequent action should be abated, a crucial inquiry includes whether th 8 two actions arise out of the same set of facts, transaction or occurrence, not whether the lega 9 theory, issues, burden of proof or relief sought materially differ between the two actions 10 Terracom Development Group v. Village of Westhaven, 209 IlI.App.3d 758, 762, 568 N.E.2 II 376,378 (1991).1 12 In this matter, the prior pending appeal concerns whether the trial court was correct t I3 invalidate the October 4, 2011 shareholder election and to order a second shareholder electio 14 that took place on October 25, 2011. The appeal seeks to invalidate the October 25 election an 15 to affirm the results of the October 4 election. The issue in the subsequent case presently befor 16 this court is whether the results of the October 25 election are valid or invalid. The issue 17 between the two cases are substantially similar in that they both involve the validity of the tw 18 shareholder elections. The central issue of both cases is a binary proposition: the October 19 election is valid and the October 25 election is invalid, or vice versa. Further, the two cases aris 20 from the same set of facts, transaction or occurrence. The appeal stems from the orde 21 invalidating the October 4 election which simultaneously ordered the occurrence of the Octobe 22 25 election. Meanwhile, the subsequent case arises from the October 25 election which woul 23

24 I See also Philips Electronics, N V. v. New Hampshire Ins. Co., 295 Ill.App.3d 895, 692 N.E.2d 1268, 1277 (1998 25 ("The central inquiry, then, is whether the relief requested rests on substantially the same facts."); Lawyers Title Ins. Corp. v. Superior Court, 151 Cal.App.3d 455, 458 (Ct.App. 1984) ("The pendency of another action growing out 0 26 the same transaction is a ground for abatement of the second action."); Palatine Nat 'I Bank v. Guardian Tamp Limited Partnership, 131 Ill.App.3d 441, 444, 475 N.E.2d 1045 (Ill.Ct.App. 1985) (citations omitted) ("But th 27 same cause element of [abatement] is satisfied when both causes are based on substantially the same underlyin facts or issues. And the fact that the legal theories for the causes are not identical does not destroy the same caus 28 element."); Perimeter Exhibits, Ltd. v. Glenbard Molded Binder, Inc., 122 Ill.App.3d 504, 508, 461 N.E.2d (Ill.App.Ct. 1984) ("Merely because there were other additional issues and questions in [one] case does not destro the substantial similarity of this issue between the two cases.").

Page 4 of9 not have occurred but for the same order currently on appeal. For these reasons, the issues i 2 both cases are sufficiently similar to grant a motion for abatement. 3 In opposition, the Petitioners further argue that abatement is inappropriate because th 4 remedies sought in the two actions are not identical. Petitioners' Opp. To Respondents' Mot. T, 5 Abate Action, page 3, Ins. 12-16. However, the identity of relief sought does not bar abatemen 6 where two actions arise out of the same set of facts, transaction or occurrence. See discussio 7 supra; see also Halpern v. Board of Educ. Of City of Bristol, 495 A.2d 265, 267 (Conn. 1985 8 (dismissal for prior pending action proper where different relief sought over same underlyin 9 rights); Bayer v. Showmotion, Inc., 973 A.2d 381, 399 (Conn. 2009) ("The applicability of th 10 prior pending action doctrine does not turn on whether the two actions seek the same remedy' II but, as we have stated, 'whether they are brought to adjudicate the same underlying rights. ''') 12 As discussed supra, both actions in this matter arise from the same occurrence and they bo I3 seek to adjudicate the underlying right of the CEI shareholders to hold a valid corporate election 14 For these reasons, abatement may be granted even though the remedies sought in the two action 15 are not identical. 16 Abatement and dismissal are also appropriate where the parties, subject matter an 17 remedies sought are substantially the same in both suits such that the outcome of one will affec 18 the adjudication of the other. Centex Home Equity Corp. v. Robinson, 776 N.E.2d 935, 94 19 (Ind.App.Ct. 2002). Put another way, the issues in two cases are substantially the same if a fina 20 judgment in the first action could be pled as a bar to the second action, warranting abatement 0 21 the second action. See Trickey v. City of Long Beach, 101 Cal.App.2d 871, 881-882, 226 P.2 22 694, 700 (Ct.App. 1951); Farmers State Bank of Plymouth v. Germer, 437 N.W.2d 463, 46 23 (Neb. 1989); Plant Insulation Co. v. Fibreboard Corp., 224 Cal.App.3d 781, 786-77 (Ct.App 24 1990); see also Acadian Gas Pipeline System v. Bourgeois, 890 So.2d 634, 638 (La.Ct.App 25 2004). Abatement is also warranted where the outcome of the first action may be pled as 26 defense or justification for the second action. See Illinois Central Gulf RR Co. v. Goad, 16 27 Ill.App.3d 541, 544-45 (App.Ct. 1988); Village of Mapleton v. Cathy's Tap, Inc., 313 Ill.App.3 28 264, 267 (App.Ct. 2000).

Page 5 of9 In this matter, the outcome of the prior pending appeal may affect the outcome of th 2 present action. Walter's appeal asks the Guam Supreme Court to vacate the October 25, 2011 3 election and to validate the October 4,2011 election. A decision in Walter's favor may be use 4 to plead res judicata and to dismiss the present case concerning the October 25 election 5 Conversely, an appellate decision against Walter may be used in this case to defend against 6 motion to dismiss and to justify the October 25 election. For these reasons, the outcome of th 7 prior pending action will affect the adjudication of the present action. 8 Finally, the Court should consider the practical results of abatement by considering th 9 interrelation of the two cases at issue. Dolenz v. Continental Nat. Bank of Ft. Worth, 620 S.W.2 10 572, 575 (Tex. 1981). The practical results of abatement may include judicial efficiency 11 convenience, and the necessity for orderly procedure. Wyatt v. Shaw Plumbing Co., 760 S.W.2 12 245,248 (Tex. 1988); see Hartley v. Coker, 843 S.W.2d 743, 747 (Tex.App.Ct. 1992). 13 In this case, the practical results of an inconsistent ruling without abatement could b 14 irrevocable. It is possible for the present case to confirm the October 25, 2011 election befor 15 CV A 11-020 revokes it and to thereby allow a confirmed CEI board to conduct business an 16 enter into contracts with third parties before all of their actions are revoked and invalidated. Thi 17 consequence is readily avoidable by an orderly procedure that resolves the prior pending actio

18 first in order to avoid an inconsistent ruling. 19 Alternatively, the court may consider a suspension of these proceedings until the Gu 20 Supreme Court issues a decision in Appeal No. CVAI1-020. See Baer v. Fahnestock & Co., 56 21 F.2d 261, 263 (3d Cir. 1977) ("Pleas in abatement have had two distinct meanings under ou 22 legal traditions: 1) at common law, an abatement was an overthrow of a suit, the equivalent of 23 dismissal; 2) in equity, an abatement was an interruption or suspension of a suit, the equivalen 24 of a stay of proceedings."). A stay of proceedings could prevent inconsistent rulings and th 25 relitigation of issues because, as discussed supra, Appeal No. CVA 11-020 will resolve the issu 26 of whether the October 25, 2011 election itself is valid before this action confirms or denies th 27 results of that election. See Ruppel v. Ramseyer, 33 F.Supp.2d 720, 725 (C.D.IlI. 1999); Hartley 28

Page 6 of9 843 S.W.2d at 747. For this reason, the Court shall consider a stay of these proceedings i 2 abatement. 3 A stay is a temporary suspension of procedure in a case until the happening of a define 4 contingency. People v. Santana, 182 Cal.App.3d 185, 190 (Ct.App. 1986). The power ofa cou 5 to stay proceedings is incidental to the power inherent in every court to control the disposition 0 6 cases before it with economy of time and effort for the court, for counsel and for litigants alike 7 Landis v. North American Co., 299 U.S. 248, 254-55,57 S.Ct. 163 (1936); see Clinton v. Jones 8 520 U.S. 681, 706-707, 117 S.Ct. 1636 (1997). It is not necessary for the parties and the issue 9 of two actions to be identical for one action to stay and abide the proceedings of another action IO Landis, 299 U.S. at 254. In the decision to stay a case, a court must weigh the competin II interests of: 1) the possible damage from granting a stay; 2) the hardship or inequity that woul 12 result from denying a stay; and 3) the simplification or complication of issues, proof and lega I3 questions that would result from a stay. CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962) 14 Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005). 15 In the case at bar, the competing interests weigh in favor of granting a stay. 16 possible damage from granting a stay is minimal, as CEI continues to function despite a prio 17 pending appeal over the validity of the election. CEI may also continue to do business under 18 stay with the assistance of a court appointed receiver, if necessary. Second, hardship an 19 inequity will result without a stay because a judgment in this action may render the Respondents 20 prior appeal moot and, more importantly, inconsistent judgments between these two related case 21 may invalidate corporate acts and harm third parties. See discussion supra. Third, the issues 22 proof and legal questions presented by the Petitioners will be simplified by a stay which allow 23 the prior pending appeal to determine whether the October 25, 2011 election is valid before thi 24 action confirms or denies the results of that election under 18 GCA § 2212. 25 A prior pending action calls for a stay where a decision in the initial action settles issue 26 in the subsequent action, or where a decision in the first action is essential to a decision in th 27 second action. Lewis v. Moultree, 627 P.2d 94, 96 (Utah 1981); see Estate of Lanterman v. 28 Lanterman, 462 N.E.2d 46, 51 (IlI.Ct.App. 1984). However, it is not a requirement that th

Page 70f9 issues in the initial action control the subsequent action for a stay to be entered. Leyva v. 2 Certified Grocers of California, Ltd., 593 F.2d 857, 863-64 (9th Cir. 1979); see Mediterranea 3 Enterprises, Inc. v. Ssangyong Corp., 708 F.2d 1458, 1465 (9th Cir. 1983). Indeed, a stay 0 4 proceedings is appropriate where the pending issues in the initial case merely assist th 5 disposition of the subsequent case and a final judgment in the first case is not completely 0 6 necessarily dispositive upon the second case. See Leyva, 593 F.2d at 863-64; CMAX, Inc., 30 7 F.2d at 269; Mediterranean Enterprises, Inc., 708 F.2d at 1465; Schiffv. Metzner, 331 F.2d 963 8 965 (2d Cir. 1964). Furthermore, the issuance of a stay is appropriate even where adjudicatio 9 of the initial action would only affect some but not all of the issues in the subsequent case. 10 Mediterranean Enterprises, Inc., 708 F.2d at 1465. 11 Finally, the stay of a subsequent action is especially appropriate where a prior pend in 12 appeal could impact the second action. See, e.g., Salisbury v. Christian, 891 N.Y.S.2d 830, 83 13 (N.Y.App.Ct. 2009); Illinois Nat 'I Ins. Co. v. Bolen, 53 So.3d 388 (Fla.Ct.App. 2011); Estate 0 14 Bass ex rei. Bass v. Katten, 871 N.E.2d 914 (IlI.Ct.App. 2007). As one court notes: 15 [T]he risk of multiple conflicting orders and the circuit court's potential for 16 undermining the issues currently on appeal to this court are real. ... In these types of cases, courts have recognized the injurious affect [sic] of multiple, conflicting 17 orders and the need for the circuit courts not to interfere with the jurisdiction of 18 the courts of appeal when issues are then pending before them.

19 Bergman v. Kaplan, 922 So.2d 982, 982-83 (Fla.Ct.App. 2005).

20 In this case, a stay of proceedings pending resolution of the prior pending appeal i

21 especially appropriate. The validity of the October 25, 2011 election is at issue in Appeal No 22 CVAII-020. That issue shall necessarily control or assist this Court in the adjudication 0

23 whether the election should be confirmed under 18 GCA § 2212. Regardless of whether th 24 pending appeal is granted or denied, a stay of these subsequent proceedings shall avoid th

25 injurious effect of conflicting orders and generally simplify the issues in both cases. For thes

26 reasons, the Court shall exercise its inherent power to stay these proceedings pending resolutio

27 of the prior pending appeal in Appeal No. CVAII-020. 28

Page 8 of9 CONCLUSION 2 Based upon the foregoing, these proceedings are hereby STAYED pending a tina

3 resolution of Appeal No. eVA 11-020. 4

5 SO ORDERED this ~ day of February, 2012. 6

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

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