Wirges v. Robertson

Opinion

2 2018HAY -I PH 3: 14 3 CLERK OF COURT 4

6 7 8 IN THE SUPERIOR COURT OF GUAM 9 10 MICHAEL J. WIRGES, CIVIL CASE NO.: CV0775-16

11 PLAINTIFF, 12 FINDINGS OF FACT AND vs. CONCLUSIONS OF LAW 13 (re Complaint for Breach of Contract JOHN M. ROBERTSON and HERNAN & Related Tort Claims) 14 BONSEMBIANTE, 15 DEFENDANTS. 16

18 INTRODUCTION 19 This matter came before the Honorable Anita A. Sukola for a Bench Trial on November 21, 20 22, and December 7, 19, and 20, 2017; and January 2, 2018. Attorney Bill R. Mann appeared on 21 behalf of Michael J. Wirges. Attorney Thomas M. Tarpley Jr. appeared on behalf of John M. 22 Robertson and Heman Bonsembiante. After considering the evidence and testimony presented at the 23 Bench Trial, and the Parties' arguments, the Court issues the instant Findings of Fact and 24 Conclusions of Law.

CV0775-16 Wirges v. Robertson et al. Page 1 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 FINDINGS OF FACT

2 The Court finds the following facts by a preponderance of the evidence: 3 1. Michael J. Wirges ("Plaintiff') is a resident of Guam. The Plaintiff works in the construction and 4 real estate development industries, and is the owner of Sterling Design, Inc., a Guam 5 corporation. 6 2. John M. Robertson ("Robertson") and Heman Bonsembiante ("Bonsembiante") (collectively 7 "Defendants") are residents of Guam.

8 3. Robertson is a civil engineer registered with the Guam Board of Registration for Professional 9 Engineers, Architects, and Land Surveyors.

10 4. Robertson is the majority shareholder of J.M. Robertson, Inc., a Texas Corporation doing 11 business on Guam as AmOrient Engineering ("AmOrient Engineering"). Robertson is also 12 majority shareholder of AmOrient Contracting, Inc ("AmOrient Contracting"). 13 5. Heman Bonsembiante ("Bonsembiante") is the Vice President of Operations of AmOrient 14 Engineering.

15 6. In 2012, Robertson sold forty percent (40%) of the shares in both AmOrient Engineering and 16 AmOrient Contracting to Coffman Engineers, Inc., a mainland U.S. based Corporation 17 ("Coffman"). Robertson retained the law firm of Carlsmith Ball to review the 2012 Stock 18 Purchase Agreements between Robertson and Coffman for the sale. 19 7. As part of the Agreements to sell stock in both AmOrient Engineering and AmOrient 20 Contracting, Coffman had Put Options on the shares of stock purchased from Robertson in 2012. 21 The Put Options provided, inter alia. that in the event of a transfer by any Shareholder, other 22 than Coffman, of any Shares in AmOrient Engineering or AmOrient Contracting, Coffman may 23 provide written notice to the Company and each shareholder, within sixty (60) days from such 24 transfer, that Coffman is electing to sell a specified number of shares. AmOrient Engineering or 25 AmOrient Contracting were then required to redeem the specified shares at a price equal to the 26 Company Enterprise Price. The method for calculating the Company Enterprise Price was laid 27 28

CV0775-16 Wirges v. Robertson et al. Page 2 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 out in the Coffman-AmOrient Engineering and Coffman-AmOrient Contracting Stock Purchase 2 Agreements.

3 8. Robertson currently owns sixty percent (60%) of the outstanding shares of AmOrient 4 Engineering and AmOrient Contracting, with Coffman owning the remaining forty percent 5 (40%) of outstanding shares in each corporation.

6 9. Frederick W. Schmidt ("Schmidt") served as the Contracts Administrator of AmOrient

7 Engineering until July 2016. Schmidt was employed with AmOrient Engineering through the 8 entity FS Development Inc. 9 10. Schmidt introduced the Plaintiff to the Defendants.

10 11. In 2015, Robertson and the Plaintiff began negotiating the sale of Robertson's shares in

11 AmOrient Engineering and AmOrient Contracting to the Plaintiff, because Robertson planned to 12 retire to Houston, Texas.

13 12. On June 10, 2015, Robertson and the Plaintiff signed an Outline of Terms and Conditions for the 14 Sale of Stock in AmOrient Engineering and AmOrient Contracting. The Outline of Terms was

15 admitted into evidence at trial as Defendants' Exhibit A. 16 13. The Outline provided that the sale was contingent on the mutual agreement of formal Stock 17 Purchase Agreements for the sale and purchase of the shares of each corporation. The Outline 18 also provided the sale was contingent on the agreement of Hernan Bonsembiante to remain 19 employed with AmOrient Engineering for a period up to three (3) years. Finally, the Outline 20 provided that the sale was subject to the approval of the terms of the purchase by Coffman. 21 .1 ~· The Outline laid out inter alia the following terms: 22 a. Robertson would sell and the Plaintiff would purchase Sixty Percent (60%) of the

23 shares of AmOrient Engineering and AmOrient Contracting in two installments. The 24 first Fifty-Five Percent (55%) of Robertson's shares would be conveyed at closing, 25 and the remaining Five Percent (5%) would pass on the death, disability or retirement 26 of Robertson, whichever came first. 27

CV0775-16 Wirges v. Robertson et al. Page 3 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 b. The price for Robertson's sixty percent (60%) of share ownership was set at Five

2 Hundred Thousand Dollars ($500,000..00), 1 plus an annual One Hundred Thousand

3 Dollar ($100,000.00) salary to Robertson, provided he continued to work for

4 AmOrient Engineering for five years and for a minimum number of hours. The

5 closing was set for September 1, 2015. 2

6 15. On June 17, 2015, Robertson sent an email to David Gardner, Chief Executive Officer and

7 Managing Engineer of Coffman ("Gardner"). The email attached the Outline for Terms of Sale

8 of Stock in AmOrient Engineering and AmOrient Contracting executed by Robertson and the

9 Plaintiff on June 10, 2017. The email and attached outline were admitted at trial as Plaintiffs

10 Trial Exhibit Four.

11 16. On August 10, 2015, Schmidt sent an email to Gardner and 'Jim Ivers,' with a courtesy copy to

12 the Defendants. Schmidt states in the email that he attached the drafts of Stock Purchase

13 Agreements for AmOrient Engineering and AmOrient Contracting for the sale of 95% of John's

14 shares in both companies to the Plaintiff. The first attachment was a document titled, "AmOrient

15 Engineering Stock Purchase Agreement." The second attachment was a document titled,

16 "AmOrient Contracting, Inc. Stock Purchase Agreement." Schmidt's email and the drafts of the

17 Stock Purchase Agreements were admitted into evidence at trial as Plaintiffs Exhibit Five. 18 17. On August 12, 2015, Schmidt forwarded an email from Gardner dated August 12, 2015, to the 19 Plaintiff with a courtesy copy to the Defendants. In the forwarded message, Gardner proposed

20 several terms from Coffman regarding the sale of Robertson's shares in AmOrient Engineering 21 and AmOrient Contracting. The email was admitted into evidence at trial as Plaintiffs Exhibit

22 Six. Coffman Engineers proposed inter alia the following:

23 24 1 The sale price was broken down to One Hundred Thousand Dollars ($1 00,000.00) due at closing, and Three Hundred Fifty Eight Thousand Dqllars ($358,000.00) payable over eight (8) years at the rate of Forty-Four Thousand Seven 25 Hundred and Fifty Dollars ($44,750.00) per year, and a lump sum of Forty Two Thousand Dollars for the remaining Five Percent (5%) due at the expiration of the fifth year, or the death, disability or retirement of Robertson, whichever 26 came first.

27 2 The Outline also provided for consideration of an Employee Stock Purchase plan, an Amendment to the Articles of Incorporation for AmOrient Engineering and AmOrient Contracting, and Robertson's employment benefits during his 28 continued period of employment after closing of the sale.

CV0775-16 Wirges v. Robertson et al. Page 4 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 a. A loan from Coffman to AmOrient Engineering was to be paid off in full immediately. 2 b. Reduction of Coffman's Forty Percent (40%) share of ownership to Twenty Percent . '~~ 3 (20%) ownership, with Twenty Percent.(20%) of the outstanding shares redeemed using 4 the same valuation3 as Robertson's agreement with Wirges. 5 c. Additionally, in the email Coffman also gave notice of its exercise of the Put Option. 6 18. On August 17, 2015, Robertson responded to Gardner's email. Robertson stated he wanted to 7 hold off on any deal with Wirges and Coffman until an impending Indefinite Delivery Indefinite 8 Quantity (IDIQ) Contract with Naval Facilities Engineering Command Marianas was executed. 9 Robertson's email was admitted into evidence at trial as Plaintiffs Exhibit Seven. In the email, 10 Robertson stated, 11 a. AmOrient Engineering's cash flow would not support a full repayment of the loan from 12 Coffman at the time. 13 b. Robertson also disagreed with the valuation of Coffman's shares of the companies at One 14 Hundred Fifty Thousand Dollars ($150,000.00). 15 19. On August 19, 2015, Robertson and the Plaintiff allegedly executed a document entitled "Option 16 to Purchase Stock Agreement." The Plaintiff also tendered a cashier's check for Twenty-Five 17 Thousand Dollars ($25,000.00) to Robertson as consideration for the Option. The Option 18 Agreement was admitted into evidence at trial as Plaintiff's Exhibit 8. The terms of the Option 19 Agreement provided inter alia, 20 "Robertson agrees to sell and Wirges agrees to purchase an irrevocable 21 option to purchase Robertson's capital stock in both John M. Robertson Inc., dba AmOrient Engineering and AmOrient Contracting, Inc., in accordance 22 with the terms and conditions of the Stock Purchase Agreements attached hereto as Exhibits 'A' and 'B. "' 23 24 PI's Trial Ex. 8 (emphasis added).

25 26 3 Coffman proposed redemption at One Hundred Fifty Thousand Dollars ($150,000.00) with Fifty Thousand Dollars 27 ($50,000.00) down and the remaining One Hundred Dollars ($100,000.00) financed over three years at Four Percent (4%) interest payable in monthly installments of principal and interest. 28

CV0775-16 Wirges v. Robertson et al. Page 5 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 20. While the Option Agreement was allegedly signed on August 19, 2015, the Court finds that no

2 meeting between the Parties took place on that date. The Court further finds there was no review

3 of the Stock Purchase Agreements referenced in the Option Agreement as Exhibits "A" and "B" 4 prior to the execution of the Option Agreement. 5

5 21. The Court finds that there were no final and agreed upon Stock Purchase Agreements attached as

6 Exhibits "A" and "B" to the Option Agreement. The Court further finds the Parties had not 7 5 8 The Court's findings in Paragraph 19 are compelled by preponderance of the following evidence: a. There was no conclusive testimony as to when and how the Option Agreement was signed. Schmidt testified that 9 the Option was signed at a meeting on August 19, 2015 with Robertson, Bonsembiante, Schmidt, and the Plaintiff all present. The Plaintiff similarly testified that Robertson, Bonsembiante, the Plaintiff, and Schmidt were all 10 present at a meeting at AmOrient Engineering on August 19, 2015. The Plaintiff testified that each individual had an identical stack of documents that Schmidt walked everyone through. The Plaintiff further testified that he went 11 through the documents page by page, while Schmidt went through the documents with the group generally. Finally, the Plaintiff testified that the Stock Purchase Agreements, Employment Agreement, and Promissory 12 Notes for AmOrient Engineering and AmOrient Contracting, were all in the stack of documents reviewed at that meeting, and no one objected to the documents. The Plaintiff testified that the Shareholders' Agreement was also 13 reviewed prior to the execution of the Option Agreement and that no one raised any objections to that document. b. Due to the following reasons, the Court does not find Schmidt to be a credible witness. First, the Court finds that a 14 $1.3 million dollar Judgment was entered against Schmidt in a Colorado State Court for fraud. Second, Schmidt testified that he did not make any substantive edits to documents concerning the sale of AmOrient Engineering 15 and AmOrient Contracting after August 19, 2015. Schmidt further testified that the reason the 'date modified' date recorded on the AmOrient Server where the documents were saved showed dates after August 19, 2015 was 16 because he had a habit of hitting save regularly even when he was just viewing and not changing the documents. The Defendants' offered demonstrative testimony during the direct examination of Bonsembiante which 17 demonstrated Schmidt's explanation was impossible because the 'date modified' date does not change if no changes are made and the document is saved. Instead, the demonstrative testimony showed only a change to the 18 document, and subsequent saving of the document changes the 'date modified' date. Thus, Schmidt was either intentionally being untruthful, or had forgotten the work he was doing on the documents. Therefore, the Court rejects Schmidt's accounting of the events surrounding the execution ofthe Option Agreement. 19 c. The Defendants both testified that no meeting took place on August 19, 2015. Robertson testified that he signed the Option Agreement in his office with only Schmidt present. Robertson testified that he signed the document 20 quickly and Schmidt likely took the document to the Plaintiff to execute on the same day. Robertson testified that he did not go over any other documents with Schmidt, and that there were no documents attached to the Option 21 Agreement. d. The Defendants also offered the, testimony of Mary Jo Pablo, the Business Manager of AmOrient Engineering, 22 whose workspace is adjacent to the door of the AmOrient conference room where the alleged meeting took place. Ms. Pablo testified that she did not see or have knowledge ofthe alleged meeting on August 19, 2015. 23 e. The Defendants also offered testimony and evidence which demonstrated that Robertson regularly noted times and dates of his meetings with the Plaintiff regarding the planned sale of the companies on his weekly timesheet. 24 A series of the Robertson's timesheets were admitted into evidence at trial as Defendants' Exhibit B. Further, the timesheet for the week ending on August 23, 2015 and thus including August 19, 2015 was admitted into evidence 25 as Defendants' Exhibit P. The Defendants showed there was no indication on Robertson's time sheet for the week including August 19, 2015 that a meeting regarding the sale of stock to the Plaintiff took place on August 19, 26 2015 in the AmOrient Conference Room. f. Thus, the Court is not convinced with Schmidt's and the Plaintiffs recitation of events surrounding the execution 27 of the Option Agreement when considering the Defendants' account, the credibility of witnesses, and the weight of the evidence discussed above. 28

CV0775-16 Wirges v. Robertson et al. Page 6 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 agreed on the final form of the Stock Purchase Agreements prior to the alleged execution of the

2 Option Agreement on August 19, 2015. 6

3 4 6 The Court's findings in Paragraph 20 are compelled by preponderance of the following evidence: 5 a. Both the Plaintiff and Schmidt testified that the Stock Purchase Agreements for AmOrient Engineering and AmOrient Contracting were not marked as Exhibit A and B, nor were they attached to the Option Agreement. 6 However, the Plaintiff and Schmidt both testified that the Stock Purchase Agreements were in a stack of documents that were reviewed during the alleged August 19, 2015 meeting. Because the Court finds that no 7 meeting took place, the Court views the testimony that the Stock Purchase Agreements were discussed, and that no one objected to them, with suspicion. 8 b. Further, neither of the versions of the Stock Purchase Agreements admitted at trial were marked as Exhibits "A" or"B." 9 c. Robertson testified that there were no attachments to the Option Agreement, and that he did not review any Stock Purchase Agreements when he executed the Option .Agreement. Bonsembiante testified that no meeting took 10 place, and that he never attended a meeting where the Plaintiff and Robertson reviewed the Stock Purchase Agreements page by page. 11 d. The Defendants also introduced a rebuttal exhibit into evidence as Defendants' Exhibit 0. Exhibit 0 is an email from the Plaintiff to Schmidt dated July 18, 2016. In the email, the Plaintiff asks Schmidt "what are exhibits a and f2 b." This demonstrates to the Court that even the Plaintiff was not clear as to what the exhibits A and B referenced in the Option Agreement were. 13 e. The Defendants also introduced testimony of Mary Jo Pablo, who testified that she retrieved the word document versions of the Stock Purchase Agreements from the AmOrient Server and compared the documents to the August 14 19, 2015 versions. In the AmOrient Contracting Stock Purchase Agreement as of September 28, 2015, the references to an Employment Agreement in Section Four were deleted sometime after August 19, 2015. While 15 Schmidt testified this was because AmOrient Contracting had no employees and he was fixing an error pasted over from the AmOrient Engineering Stock Purchase Agreement, the Court finds that this fact weighs against 16 finding that the August 10, 2015 version of the Stock Purchase Agreements sent to Coffman were (1) final drafts in agreed on form and (2) were reviewed by Robertson and the Plaintiff prior to execution of the Option Agreement on August 19, 2015. 17 f. The language of the Stock Purchase Agreements does not demonstrate that they were final documents the Plaintiff and Robertson had reviewed and agreed on. Page 12 of the AmOrient Engineering Stock Purchase Agreement 18 provides that the Agreement may be terminated by any Party if the closing did not occur by October 1, 2015. Further, the AmOrient Contracting Stock Purchase Agreement had a similar provision allowing for termination 19 should the Parties not close by October 1, 2015. Both Stock Purchase Agreements similarly provide for termination pursuant to Section 15(a) when neither document contains a Section 15(a). These provisions for 20 termination would be rendered meaningless by the signing of a valid one year irrevocable option agreement. Thus, these facts cut against finding the Stock Purchase Agreements were in an agreed on, final form as of August 19, 21 2015. g. The Stock Purchase Agreements also referenced Robertson's employment agreement with AmOrient. However, 22 there was testimony at trial that after August 19,2015 Robertson had issues with the billable hours language in the draft of the employment agreement and language about Robertson's alcohol use. The Court finds that these issues 23 support the finding that the Agreements were not in a final, agreed on form. h. Robertson testified that he would not have signed the Agreement without having an Attorney go over the 24 Agreement with his, his wife's, and the corporations' interests all taken into account. Robertson also testified that he put up his condo to guarantee obligations of the Corporations. He also testified that he was guarantor for letters 25 of credit for the corporations. Robertson testified that he would not have signed a Stock Purchase Agreement without the guarantees of AmOrient Engineering's and AmOrient Contracting's obligations being taken on by the 26 new owner. The August 10, 2015 draft versions of the Stock Purchase Agreements and all subsequent versions did not address Robertson's guarantees of the corporations' obligations and the use of his condo for the same. 27 i. Robertson also testified that he would not have agreed to Paragraph W on Page 9 of the AmOrient Engineering Stock Purchase Agreement (PI's Exhibit 16) which stated that all key employees would remain employed with 28 AmOrient. Robertson testified he had no such power over his employees, and thus he could not agree to that term.

CV0775-16 Wirges v. Robertson et al. Page 7 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 22. Robertson and the Plaintiff executed an Amendment to the Option to Purchase Stock Agreement 2 on November 10, 2015. The Amendment increased the option price to Eighty Five Thousand

3 Dollars ($85,000.00). The November 10, 2015 Amendment to the Option to Purchase Stock 4 Agreement was admitted into evidence at trial as Plaintiffs Exhibit Eighteen. The Plaintiff also 5 tendered a cashier's check to Robertson for the additional Sixty Thousand Dollars ($60,000.00). 6 Robertson testified that he told the Plaintiff that he would not sign any final document until they

7 were reviewed by a lawyer. 8 23. The Plaintiff testified that at the time of the execution of the Amendment to the Option to

9 Purchase· Stock Agreement, the Plaintiff informed Robertson that he would personally be 10 responsible for buying out Coffman's shares if they did not agree to let the sale go forward. The 11 Defendants also testified the Plaintiff offered to be personally responsible for the buyout of 12 Coffman's ownership in AmOrient Engineering and AmOrient Contracting.

13 24. In January 2016, representatives from Coffman came to Guam and met with the Plaintiff and 14 Robertson. Robertson, Bonsembiante, Schmidt, and the Plaintiff all testified that subsequent to

15 16 j. Further, the Defendants also provided evidence that Robertson retained and paid the law firm of Carlsmith Ball 17 approximately Eight Thousand Dollars ($8,000.00) to review the relatively smaller transfer of forty percent (40%) of Robertson's ownership to Coffman in 2012. Therefore, the Court finds there is evidence that supports 18 Robertson's testimony that he had intended that a lawyer review the Stock Purchase Agreements before the Agreements were finalized. 19 k. Both of the Stock Purchase Agreements similarly had signature lines for Robertson's wife, Vannapha Khaika Robertson ("Mrs. Robertson"). Robertson testified that his wife and independent counsel needed to review the 20 Stock Purchase Agreements before they were finalized. Robertson further testified that his wife would likely need the Agreements explained to her since Mrs. Robertson's first language is not English. These facts support a 21 finding that the Stock Purchase Agreements were not finalized as of August 19, 2015. 1. The Defendants also introduced evidence that Schmidt continued to work on documents related to the sale of the 22 shares in the companies after August 19, 2015. See supra Note 5. While Schmidt and the Plaintiff did try to rebut this evidence, the Court would again note that Schmidt is not a credible witness. Schmidt's lack of credibility and 23 the weight of the evidence discussed above cut against the Court accepting the Plaintiff's version of events. m. Finally, in Schmidt's August 10, 2015 email to Gardner, Schmidt uses the word 'drafts' to describe the attached 24 versions of the Stock Purchase Agreements. Further, Schmidt testified that when the Outline of the Terms of the Sale were drafted, "it had been assumed all along based on comments by Coffman by Dave Gardner that they 25 wouldn't stand in the way, that they would own 40% of the stock." Bench Trial Proceedings, Testimony of Fred Schmidt 2:36:45 p.m.-2:37:02 p.m. (Nov. 21, 2017). These facts again cut against finding that the same 26 documents emailed to Coffman on August 10, 2015, were the final versions of the Stock Purchase Agreements agreed to by the Parties. Especially, in light of Coffman's notice of exercise of the Put Option by the email from 27 Gardner that Schmidt forwarded to Robertson on August 12, 2015, and Coffman and Robertson's further negotiation of the terms of the redemption of Coffman's shares under the Put Option after August 19, 2015. 28

CV0775-16 Wirges v. Robertson et at. Page 8 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 that meeting, it was clear that Coffman would not accept the Plaintiff as the new owner of the 2 AmOrient Engineering and AmOrient Contracting.

3 25. A January 20, 2016 email from Robertson to Gardner was admitted at trial as Plaintiffs Exhibit 4 Twenty. The email was responding to an offer7 from Coffman for AmOrient Engineering and

5 AmOrient Contracting to buy out all of Coffman's shares. In the email, Robertson stated he was 6 disappointed that Coffman intended to redeem all of Coffman's Forty Percent (40%) of the 7 outstanding shares in AmOrient Engineering and AmOrient Contracting. Robertson made clear

8 Coffman's terms were not viable from AmOrient's standpoint. 9 26. On April 18, 2016, the Plaintiff and Robertson executed a Notice of Exercise of Option. The 10 Notice was admitted into evidence at trial as Plaintiffs Exhibit Twenty-Four. The Plaintiff and

11 Robertson testified that they had lunch the day the notice was signed. To prepare for closing, 12 Robertson wrote in a target closing date of July 15, 2016.

13 27. Anticipating the closing, the Parties also moved forward on a plan to share offices. Sometime 14 after the notice of option was executed, the Plaintiffs company Sterling began renovating space

15 at the KG Plaza in Tamuning in anticipation of sharing space with AmOrient Engineering and a 16 GoPro Distributing Business owned by the Plaintiff and Schmidt. The Defendants offered

17 testimony of Bonsembiante, Gregory Cantello ("Cantello") the Managing Engineer of AmOrient 18 and Uli Lenckowski ("Lenckowski") an AmOrient Construction Manager, all of whom stated 19 that the renovation work performed by Sterling was defective. 8 20 7 Coffman offered to sell the forty percent (40%) shares in AmOrient Engineering and Am Orient Contracting for Two 21 Hundred Sixty Thousand Dollars ($260,000.00) payable over 18-24 months, and with immediate repayment of Coffman's loan to AmOrient Engineering. 22 8 Bonsembiante's, Cantello's and Lenckowski's testimony is summarized below. 23 a. Bonsembiante testified that he was not pleased with way renovation was handled and had several concerns. In his opinion, the renovation work was not run in an efficient way, with too many stops and goes, and some quality 24 issues. Bonsembiante also testified that certain things had to be redone or reworked. Specifically, Bonsembiante mentioned the drywall finish was not up to what he expected, and the partition walls were out of line. Bonsembiante 25 also testified that the walls were painted without removing the staples. Finally, Bonsembiante testified that some electrical work had to be reworked. 26 b. Cantello testified that the quality of work performed, overall fit and finish, and attention to detail for the renovation was not up to what Cantello was normally used to seeing. Cantello specifically testified that the way the partition 27 walls were constructed resulted in the walls not being level. He further testified the dry wall finishing was not done properly, and that you could see staples and mesh tape in the dry wall after the walls were painted. Cantello testified 28 that the mesh tape and staples should have been removed prior to the walls being painted. Cantello further testified

CV0775-16 Wirges v. Robertson et al. Page 9 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 28. In June of 2016, while Robertson was vacationing m Houston, Texas, Bonsembiante was 2 returning from a trip to South America. On June 14, 2016, Bonsembiante visited Robertson in

3 Texas to update Robertson on the trip to South America and to discuss the sale of AmOrient. 4 Robertson and Bonsembiante had what Robertson later called a 'Special Meeting.' Robertson

5 prepared a Report of Special Meeting which summarized what Bonsembiante and Robertson 6 discussed. The Report of Special Meeting was admitted into evidence at trial as Plaintiffs 7 Exhibit Twenty-Five. Robertson and Bonsembiante testified that the document was prepared by 8 Robertson, in his own words, and did not contain the exact words Bonsembiante used.

9 29. Bonsembiante testified that he and Robertson had a conversation. He further testified that he was

10 beginning to have doubts about the sale prior to the Special Meeting. Bonsembiante further 11 testified that he knew Robertson was selling so he could retire, and thus Bonsembiante did not 12 express his doubts to Robertson prior to the Special Meeting. At the meeting, Bonsembiante 13 informed Robertson that if the sale went through, he would resign. Bonsembiante testified that 14 Robertson then asked him why he would resign and their conversation, as summarized by

15 Robertson, is what appears in the Report of Special Meeting. 9 During his testimony,

16 Bonsembiante addressed each of the paragraphs of Robertson's Report of Special Meeting. 17 Bonsembiante's testimony is summarized below. 18 19

20 about defects in the type of wood used for certain parts of Sterling's work. Because of the poor quality of the wood, sap ran and was visible where there were defects. Further, Cantello testified that there are knots on several of the 21 partition walls and workspaces. These knots make the surfaces unlevel. Cantello also stated he instructed Sterling employees about painting and priming, and even with such instruction, the resulting work shows that Sterling did 22 not follow his instructions. Cantello also testified that certain drawing tabletops and work surfaces are currently becoming detached from the ~ails because they were not secured well during the initial construction. Finally, 23 Cantello testified that while he did not personally redo any work performed by Sterling, he did indicate that work needed to be redone. After being informed, Sterling did redo some of the work. Cantello specifically remembered 24 having electrical circuitry-related work redone. c. Lenckowski testified that he compiled a list of things in the office that one could observe as having poor 25 workmanship in their construction. Specifically, Lenckowski testified that wood used to build several desks are loose. He testified that if one presses on one side of the desk, the entire table comes up. Lenckowski further testified 26 that wood boards used for the top of workspaces were not prepared correctly. He testified that Sterling did not remove a portion of wood which was improper and now those portions of wood are coming out. He also testified 27 that several tiles are out of line and as a result they are not flat.

28 9 The Plaintiff did not refute Bonsembiante's testimony that Robertson asked Bonsembiante why he would resign.

CV0775-16 Wirges v. Robertson et al. Page 10 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 a. Bonsembiante said that if Robertson sold to the Plaintiff, Bonsembiante did not think he

2 would be given latitude to control the company. Bonsembiante also testified that his and

3 the Plaintiffs management styles were different and he was not prepared to work with

4 someone whom he did not see eye to eye with.

5 b. Bonsembiante further testified that his impression was that the Plaintiff intended to use

6 AmOrient to provide engineering for Sterling at low, or no cost. whatsoever.

7 Bonsembiante thought that would hurt AmOrient. He further testified that he thought the

8 business would falter and fall under the Plaintiff, which is why he would seek work

9 elsewhere. Bonsembiante testified that that was his opinion of what would occur.

10 c. Bonsembiante also testified that he expressed his concerns to Robertson about the

11 renovation work by Sterling on the shared office space. See supra Note 8.

12 d. Bonsembiante also testified that he was promoting AmOrient Business and was

13 attempting to sign Hansell Phelps as a client for engineering services. Bonsembiante

14 thought the Plaintiff as the potential owner should be aware and thus told the Plaintiff

15 about his efforts. The Plaintiff told Bonsembiante not to use his name with Hansell

16 Phelps. Bonsembiante informed Robertson of this sequence of events at the Special

17 Meeting. While Robertson wrote in the Report that there seemed to be "more than a mere

18 misunderstanding" related to the Hansell Phelps issue, Bonsembiante made clear that

19 those were Robertson's words, not his.

20 e. Bonsembiante stated that the discussion about businessmen and the Plaintiffs comments

21 in South America about a private jet did occur; though again Bonsembiante clarified

22 Robertson summarized the conversation in his own words. Bonsembiante testified that he

23 remembered the businessmen in South America stated in Spanish that they did not

24 believe the Plaintiffs statement about flying from Guam with such a small company for a

25 retreat. Bonsembiante testified that the businessmen were joking in Spanish, which he

26 speaks and understands. He also offered testimony that the Plaintiff did not speak

27 Spanish, which the Plaintiff did not dispute.

CV0775-16 Wirges v. Robertson et al. Page 11 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 f. Bonsembiante also testified that with regard to the Plaintiffs purchase of property in

2 Manila, Robertson summarized the discussion in his own words. Bonsembiante testified

3 that he told Robertson that in his opinion, from the time the property became available to

4 the time the Plaintiff purchased the property in a foreign country was too fast.

5 Bonsembiante stated that he made this comment in the context of telling Robertson that

6 in the way he thinks and operates, he could not work with someone who makes decisions

7 that quickly because it would be very stressful for him.

8 g. With regard to the lavish-lifestyle related comment, Bonsembiante testified that the

9 Plaintiff accompanied him on trips to South America, including Uruguay, Paraguay and

10 Argentina. Bonsembiante stated that the Plaintiff was interested in development projects

11 in South America. Bonsembiante testified that Robertson's summary of the lavish

12 lifestyle comment was not precisely what he said. He stated that what he told Robertson

13 was that AmOrient is a small company and always tried to reduce expenses, including as

14 an example, travelling coach. He stated that in his opinion he would not spend that

15 amount of money the Plaintiff spent for business class travel on their trips, and he

16 worried the impact such travel habits would have on AmOrient's finances. Bonsembiante

17 testified he told Robertson this in the context of discussing how AmOrient's size as a

18 small business and his management style of keeping expenses low would not work well

19 together with the Plaintiffs spending as demonstrated during tWir time travelling

20 together.

21 h. Bonsembiante stated that Robertson and he had a misunderstanding because Robertson's

22 special report states the Plaintiff told Bonsembiante that all future payments for the sale

23 of AmOrient would come from AmOrient profits. Bonsembiante stated that Schmidt told

24 him that, not the Plaintiff. Bonsembiante further testified that this statement was made in

25 the context of informing Robertson that he and Cantello could not continue to work with

26 AmOrient if this were true because they would be working for a company with a bad

27 financial position which would not have funds for bonuses and pay raises for example.

CV0775-16 Wirges v. Robertson et al. Page 12 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 1. Finally, Bonsembiante stated that he told Robertson in different words than were used in

2 the Report of Special Meeting that if the Plaintiff exerted influence and Bonsembiante

3 did not have full control of the Company, he did not see that it would work and would

4 quit. Bonsembiante testified that Cantello expressed the same thing to him. Cantello and

5 Lenckowski also both testified that they told Bonsembiante they would quit if the

6 Plaintiff became the owner of AmOrient Engineering.

7 30. The Report of Special meeting also stated,

8 "Robertson observed that the Option for Wirges to buy shares in the two AmOrient companies was the only document executed between the parties. 9 The other supporting documents had never been agreed to and Wirges had 10 been informed that the drafts prepared by Fred Schmidt had to be amended following further review by himself and then required scrutiny by an 11 attorney of Robertson's choosing since Schmidt is not an attorney. The Option is thus not enforceable because the various terms and conditions 12 were never agreed to." 13 Pl' s Trial Ex. 25.

14 31. On July 5, 2016, Robertson informed the Plaintiff by letter that he would not consider the sale of

15 his stock in AmOrient Engineering and AmOrient Contracting any further. The Letter from

16 Robertson to the Plaintiff was admitted into evidence as Plaintiffs Exhibit Twenty-Seven. The

17 letter states that the Option Purchase Agreement dated August 19, 2015 makes reference to

18 Exhibits 'A' and 'B' which were anticipated to contain material terms of the Stock Purchase but

19 that they did not exist in any agreed upon form and therefore the agreement was unenforceable.

20 Robertson also offered that Coffman's Put Option has severe consequences should he sell any of

21 his shares without Coffman's concurrence. Coffman's failure to concur, according to the Letter

22 was a principal reason for the delay in closing the sale. Finally, Robertson offered to return the

23 amounts advanced to him as consideration for the Option Agreement.

24 32. The Plaintiff responded to Robertson's Letter, by Letter dated July 8, 2016. The Plaintiffs Letter

25 was admitted into evidence at trial as Plaintiffs Exhibit Twenty-Nine.

26 Ill 27 Ill

CV0775-16 Wirges v. Robertson et al. Page 13 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 CONCLUSIONS OF LAW 2 The First Amended Complaint in this matter pleads the following claims for relief: ( 1)

3 Specific Performance [Breach of Contract]; (2) Damages [Breach of Contract]; (3) Refund; (4)

4 Inducing Breach of Contract against Bonsembiante; and (5) Interference with Prospective Economic 5 Advantage against Bonsembiante. First Am. Compl. 11 1-47 (June 16, 2017). Prior to trial, the 6 Plaintiff withdrew the claim for Specific Performance. See PI's Notice of Election of Remedies

7 (Aug. 31, 2017). Thus the Court will address claims two through five separately below. 8 i. Damages for Breach of Contract

9 The Plaintiff posits that the Option Agreement was a fully enforceable and binding 10 agreement on the Parties. The Plaintiff further posits that because Robertson did not convey his 11 shares in AmOrient Engineering and AmOrient Contracting after Plaintiff gave notice of his exercise 12 of the Option, Robertson is liable to the Plaintiff for breach of contract. The Defendant argues there

13 is no enforceable agreement because the Parties did not agree on the terms of the Stock Purchase 14 Agreements for AmOrient Engineering and AmOrient Contracting.

15 To prevail on a breach of contract claim, the "plaintiff must prove (1) the existence of the 16 contract, (2) the plaintiff's performance or excuse of nonperformance, (3) the defendant's breach, 17 and (5) resulting damages to the plaintiff." Hemlani v. Hemlani, 2015 Guam 16 119. Here the Court 18 need look no further than the first element, the existence of a contract. 19 Under Guam law, a contract is "an agreement to do or not do a certain thing." 18 GCA § 20 85101 (2017). For a contract to exist, Guam law requires there be (1) parties capable of contracting, 21 (2) consent, (3) a lawful object, and (4) a sufficient cause or consideration. See 18 GCA § 85102. 22 Section 85102 mirrors the language in the California Civil Code for the requirements of a contract. 23 See Cal. Civ. Code § 1550 (West 2018). Thus, California case law is highly persuasive to the 24 Court's analysis herein. See Sumitomo Constr. Co. v. Zhang Ye, Inc., 1997 Guam 8117 (reasoning 25 "[g]enerally when a legislature adopts a statute which is identical or similar to one in effect in 26 another jurisdiction, it is presumed that the adopting jurisdiction applies the construction placed on 27 the statute by the originating jurisdiction"). 28

CV0775-16 Wirges v. Robertson et al. Page 14 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 The requirement of consent in contract formation is also referred to as 'mutual consent' or 2 'mutual assent.' Mutual consent is usually accomplished through the process of offer and

3 acceptance. See DeLeon v. Verizon Wireless, LLC, 143 Cal.Rptr.3d 810, 820 (Cal. Ct. App. 2012).

4 Mutual assent is required for the formation of a contract. See e.g., Bias v. Cruz, 2009 Guam 12

7 see also, Banner Entertainment, Inc., v. Superior Court (Alchemy Filmworks, Inc.), 72 Cal.Rptr.2d

8 598, 604 (Cal. Ct. App. 1998) (holding "the failure to reach a meeting of the minds on all material

9 points prevents the formation of a contract even though the parties have orally agreed upon some of 10 the terms, or have taken some action related to the contract." (italics in original)). When a Court is

11 determining whether a valid contract is formed, the Court looks to objective manifestations of 12 mutual assent. See Marin Storage & Trucking. Inc. v. Benco Contracting and Engineering. Inc., 107

13 Cal.Rptr.2d 645, 651 (Cal. Ct. App. 2001). If there is no evidence presented "establishing a 14 manifestation of assent to the same thing by both parties, then there is no mutual consent to contract 15 and no contract formation." Bustamante v. Inuit, Inc., 45 Cal.Rptr.3d 692, 698-99 (Cal. Ct. App. 16 2006). Where the existence of a contract is at issue and where there is conflicting evidence, "it is for 17 the trier of fact to determine whether the contract actually existed." ld. at 699. 18 Here, the Plaintiff brings the breach of contract related action for damages for an alleged 19 breach of an Option Agreement between the Plaintiff and Robertson. An option contract is 20 comprised of "two contracts, the option contract and the contract to which it relates." City of Orange 21 v. San Diego County Employees Retirement Assn., 126 Cal. Rptr. 2d. 405, 410 (Cal. Ct. App. 2002). 22 An option is a specific type of agreement "which is a continuing offer to sell, [and] may be revoked

23 prior to being accepted unless the option is supported by consideration." Mobil Oil Guam, Inc. v. 24 Tendido, 2004 Guam at

25 App. 1991)). The Supreme Court of Guam has discussed the two separate agreements as "(1) the 26 underlying contract that is not binding until accepted; and (2) a covenant to hold open to the

27 optionee the opportunity to accept." Mobil Oil Guam, Inc., 2004 Guam at

CV0775-16 Wirges v. Robertson et al. Page 15 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 option empowers the holder of the option "to compel a sale of the property on the stated terms 2 before the expiration of the option." ld. at

3 stated terms underlying the option agreed on by the parties, then the option is unenforceable. 4 Therefore, the Court concludes to succeed on the alleged breach of an Option Agreement 5 claim advanced by the Plaintiff, the Plaintiff must demonstrate both a valid option agreement, and a

6 valid underlying agreement. Here neither exists. The Court concludes the Option Agreement, by its

7 own terms is too indefinite to render the agreement a legally enforceable contract. The Supreme 8 Court of Guam has made clear that for an agreement to be enforceable; the Parties must mutually 9 assent to the same terms.

10 The Plaintiff has the burden to prove each element of breach of contract. A required element 11 is the existence of an enforceable agreement. Here the Plaintiff has not demonstrated the existence of

12 an enforceable agreement. The Plaintiff has not shown that Robertson and the Plaintiff mutually 13 assented to the terms of the Stock Purchase Agreements underlying the Option Agreement. The only 14 evidence of Robertson and the Plaintiff agreeing to terms related to the sale is that they both 15 executed the Outline for Terms of Sale of AmOrient Engineering and AmOrient Contracting. 16 However, the Outline itself expressly provided that "the execution of this document is expressly

17 contingent upon the mutual agreement to and execution of formal Stock Purchase Agreements by 18 both parties for the sale and purchase of the shares of each corporation." PI's Trial Ex. 4 cited supra 19 'li 12. (emphasis added). 20 Here, there were no Stock Purchase Agreements attached to the Option Agreement when the 21 Agreement was executed on August 19, 2015. Further, the Court has already found that no meeting 22 took place on August 19, 2015 to review the Stock Purchase Agreements. The Option Agreement 23 provided that the Parties agreed that Robertson would sell and the Plaintiff would buy, Robertson's 24 shares of AmOrient Engineering and AmOrient Contracting "in accordance with the terms and 25 conditions of the Stock Purchase Agreements attached hereto as Exhibits 'A' and 'B."' PI's Trial Ex. 26 8. 27

CV0775-16 Wirges v. Robertson et al. Page 16 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 Importantly, the outline for the terms of sale included, among other items, that the sale was

2 conditioned on approval from Coffman. There is no evidence that Coffman approved the terms of 3 the Stock Purchase Agreements prior to August 19, 2015. Further, the approval of Coffman was not 4 provided for in the Stock Purchase Agreements, which supports the Defendant's position that as of

5 August 19, 2015, the Stock Purchase Agreements were still in draft form and had not been finalized. 6 Additionally, after August 19, 2015, Robertson continued to negotiate with Coffman about the

7 redemption of their shares. In January 2016, Coffman gave notice of the intent to redeem all of its 8 shares in AmOrient Engineering and AmOrient Contracting. While the Plaintiff testified that he was

9 willing to be personally liable for the shares, the Court notes that AmOrient was obligated pursuant 10 to the 2012 shareholder's agreement to redeem shares at the enterprise price. Therefore the Plaintiff

11 may have intended to purchase the shares, but if Coffman rejected his offers and the sale of the

12 Robertson's stock went through, then the Corporations were obligated to redeem, not the Plaintiff. 13 Thus, the lack of approval of Coffman, and the failure to provide for such contingency in the Stock 14 Purchase Agreements similarly demonstrates Robertson and the Plaintiff had not reached a final

15 agreement as of August 19, 2015.

16 The Court finds the evidence introduced by the Defendants to be convincing. Robertson had 17 not reached the point where he was ready to accept the offer of the Plaintiff to buy his shares. The 18 Court finds the argument that Robertson would want an attorney to review the Stock Purchase 19 Agreement prior to agreeing to convey his majority interest is reasonable because that is precisely 20 what he did when he conveyed a minority interest in AmOrient Engineering and AmOrient 21 Contracting to Coffman. 22 Further, internal inconsistencies in the Stock Purchase Agreements also demonstrate to the 23 Court that the documents had not been agreed upon in any final form. Schmidt himself described the 24 documents as drafts when he sent the documents to Coffman. Further, Schmidt continued to work on

25 the Stock Purchase Agreements for both companies, and other documents related to the sale after 26 August 19, 2015. 27

CV0775-16 Wirges v. Robertson et al. Page 17 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 The Plaintiff argued during closing that Robertson's terms of employment were sufficiently

2 laid out in the Outline for the Sale of Terms. The draft stock purchase agreements introduced as 3 Plaintiffs Exhibits Sixteen and Seventeen provided for an attached employment agreement for 4 Robertson. Robertson disputes that he ever agreed to the terms of the employment agreement. The 5 Court notes that even after August 19, 2015, Robertson raised issues about the language tying his

6 compensation to billable hours. There was also testimony that Robertson took issue with language

7 related to his alcohol use. Thus the Court finds that the terms of Robertson's employment had not 8 been fully agreed on in any final form.

9 Finally, during closing arguments the Plaintiff argued that whether the documents were 10 attached to the Option Agreement when it was signed or not is not critical to this matter. The Court 11 disagrees. An Option Agreement, as discussed above is comprised of two agreements, an agreement 12 to keep an offer open, and the underlying agreement created by the offer kept open by the option. If

13 the Parties did not have a clear understanding of the terms of the underlying agreement, then the 14 Option Agreement itself is unenforceable because the Option Agreement lacks mutual assent. The

15 Court finds that is what occurred here. The Option Agreement was entered into and the Parties had 16 not finalized the terms of the underlying agreements for the sale of AmOrient Engineering and 17 AmOrient Contracting. 18 Were this Court to attempt to enforce, or award damages based on the, Option to Purchase 19 based on the draft Stock Purchase Agreements, the Court would have to determine which version of 20 terms to enforce because there is insufficient evidence of the terms Robertson agreed to. The Parties 21 chose the language that the Option was an Option to purchase based on the Stock Purchase 22 Agreements attached as Exhibits A and B. Because there were no Exhibits A and B attached to the

23 Option Agreement, and because the court finds the Stock Purchase Agreements were not agreed to 24 in any final form, the Court is unclear of what terms would constitute an agreement. Thus, the Court 25 cannot find that a valid contract was formed by Robertson and the Plaintiff because the Plaintiff has 26 failed to show the requisite mutual assent to the terms of an agreement. Therefore, without a valid, 27 28

CV0775-16 Wirges v. Robertson et al. Page 18 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 enforceable agreement, the Court cannot find that the Robertson is liable to the Plaintiff for damages

2 arising from breach of contract. 3 ii. Refund 4 In the First Amended Complaint the Plaintiff pleads that if he is denied damages for breach 5 of contract, "he is nevertheless entitled to a refund from Robertson of his $85,000.00 in payments

6 made to Robertson pursuant to the Option Agreement." First Am. Compl. ')[ 35. During closing

7 arguments, the Plaintiff did not address his claims for a 'refund.' However the Court finds the legal 8 conclusion that the Option Agreement is unenforceable above requires this Court to invoke its

9 powers of equity. 10 Recovery in quantum meruit as discussed by the Supreme Court of Guam in Tanaguchi-Ruth

11 & Associates v. MDI Guam Corp., 2005 Guam 7 ')[ 27, is appropriate here. In Tanaguchi-Ruth, the

12 Supreme Court reasoned "the essence of quantum meruit liability is the receipt of a benefit by one

13 party which would be inequitable for that party to retain." Tanaguchi-Ruth, 2005 Guam 7 at')[ 27. 14 The Supreme Court held the "elements of quantum meruit liability distilled from this essence are the

15 (1) performance of services by the plaintiff, (2) the receipt of the benefit of those services by the

16 defendant and (3) the unjustness of the defendant's retention of that benefit without compensating 17 the plaintiff." Tanaguchi-Ruth & Associates v. MDI Guam Corp., 2005 Guam 7 ')[ 27 (citing 18 Midcoast Aviation, Inc., v. Gen. Elec. Credit Corp., 907 F.2d 732, 737 (7th Cir. 1990)). The Guam 19 Supreme Court also made clear that "[r]ecovery should be allowed even where the parties have 20 attempted to make a contract which is void because its terms are too indefinite, but where one party 21 has, in good faith, and believing that a valid contract existed, performed part of the services which 22 he had promised in reliance upon it." Tanaguchi-Ruth, 2005 Guam 7 at')[ 40 (citing Coleman Eng'g 23 Co. v. North American Aviation, Inc., 65 Cal.2d 396,419-20 (Cal. 1966)). 24 Here, the Plaintiff performed under the Option Agreement by tendering the initial Twenty- 25 Five Thousand Dollars ($25,000.00) and the additional Sixty Thousand Dollars ($60,000.00) to 26 Robertson in consideration for what the Plaintiff thought was a valid Option to purchase Robertson's 27 stock in AmOrient Engineering and AmOrient Contracting. Because this Court found the Option 28

CV0775-16 Wirges v. Robertson et al. Page 19 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 Agreement unenforceable, Robertson's retention of the Eighty Five Thousand Dollars ($85,000.00) 2 would amount to an unjust retention of his benefit of the bargain under the invalid Option 3 Agreement. Thus, the Court concludes that the Eighty Five Thousand Dollars ($85,000.00) should 4 be returned to the Plaintiff.

5 iii. Inducing Breach of Contract Against Bonsembiante

6 The Supreme Court of Guam recognized a cause of action for interference with contractual 7 relations in, Lujan v. J.L.H. Trust, 2016 Guam 24. The elements of this cause of action are, "(1) a 8 valid contract between plaintiff and a third party; (2) defendant's knowledge of this contract; (3)

9 defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; 10 (4) actual breach or disruption of the contractual relationship; and (5) resulting damage." Lujan v. 11 J.L.H. Trust, 2016 Guam 24 ')[ 30 (citing CRST Van Expedited, Inc. v. Werner Enters., Inc., 479 12 F.3d 1099, 1105 (9th Cir. 2007) (internal quotations and citations omitted)).

13 The Plaintiff points to the Restatement (Second) of Torts § 766, and argues that the 14 restatement does not require a valid contract to succeed on an inducement to breach a contract claim.

15 The Court notes that the Supreme Court cited positively to, CRST Van Expedited, Inc., 479 F.3d 16 1099 (9th Cir. 2007), which was a Federal Ninth Circuit Court of Appeals applying California law 17 in a diversity action. Having found that Guam looks to California case law as highly persuasive in 18 the area of contract law, the Court concludes that California law and the elements in J.L.H. Trust, 19 govern this Court's inquiry. Thus, having found that the Option Agreement was not a valid and 20 enforceable contract, the Plaintiffs claim against Bonsembiante for interference with contractual 21 relations is barred as a matter of law because there is no valid enforceable contract here. 22 iv. Intentional Interference with Prospective Economic Advantage Against Bonsembiante. 23 Finally, in the First Amended Complaint, the Plaintiff pleads a claim for Intentional 24 Interference with Prospective Economic Advantage against Defendant Bonsembiante. The Plaintiff 25 posits that "on or about June 14, 2016, the Defendant intentionally interfered with Wirges' 26 prospective economic advantage by communicating false and malicious statements regarding Wirges 27 to the Defendant Robertson." First Am. Compl. ')[ 45. The Plaintiff further posits that "as a result of 28

CV0775-16 Wirges v. Robertson et at. Page 20 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 said false and malicious statements by Bonsembiante to Robertson, Robertson breached said Option 2 Agreement by letter dated July 5, 2016." ld.

3 The Supreme Court of Guam has cited positively to, Korea Supply Co. v. Lockheed Martin 4 Corp., 63 P.3d 937, 950 (Cal. 2003), in a discussion surrounding the tort of Intentional Interference 5 with Prospective Economic Advantage. See JWS Refrigeration & Air Conditioning, Ltd. v. Cain,

6 2013 Guam 9 'li 31. In Korea Supply Co., the Supreme Court of California recognized the following 7 elements of Interference with Prospective Economic Advantage, "(1) an economic relationship 8 between the plaintiff and some third party, with the probability of future economic benefit to the

9 plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the 10 defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) 11 economic harm to the plaintiff proximately caused by the acts of the defendant." Korea Supply Co., 12 63 P.3d at 950. However, the Supreme Court of California has also made clear that "a plaintiff

13 seeking to recover damages for interference with prospective economic advantage must plead and

14 prove as part of its case-in-chief that the defendant's conduct was "wrongful by some legal measure

15 other than the fact of interference itself." Della Penna v. Toyota Motor Sales, U.S.A., Inc. 902 P.2d 16 740, 751 (Cal. 1995). This requirement has been interpreted to mean that the conduct must be 17 independently actionable conduct. See Korea Supply Co., 63 P.3d at 953-54. An act is independently 18 wrongful, and therefore actionable, if "it is proscribed by some constitutional, statutory, regulatory, 19 common law, or other determinable legal standard." ld. The Plaintiff has the burden of proving the 20 elements of Intentional Interference with Prospective Business Advantage. Della Penna, 902 P.2d at 21 751. 22 The Restatement (Second) of Torts § 772 provides for defenses to the tort of intentional 23 interference with prospective economic advantage. Section 772 provides that a defendant who 24 causes a third person not to perform a contract does not interfere improperly with the plaintiffs 25 contractual relation by giving the third person either truthful information or honest advice within the 26 scope of request for advice. At least two California cases have cited positively to Restatement 27 (Second) of Torts§ 772. See Savage v. Pacific Gas & Electric Co., 26 Cal.Rptr.2d 305, 315 (Cal. Ct. 28

CV0775-16 Wirges v. Robertson et al. Page 21 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 App. 1993); see also, Francis v. Dun & Bradstreet, Inc., 4 Cal.Rptr.2d 361, 346 n. 4 (Cal. Ct. App.

2 1992). Thus this Court can look to the defenses in Restatement § 772 to dispose of the instant case.

3 The Plaintiff argues "Robertson would probably have completed the sale of his stock to 4 Wirges as planned but for Bonsembiante's false and misleading statements regarding Wirges." PI's

5 Trial Brief 16 (Nov. 1, 2017). However the Court again disagrees. As the Plaintiff bears the burden 6 of establishing the elements of Intentional Interference with Prospective Economic Advantage, the

7 Court finds the Plaintiff has not met his burden here. The Plaintiff has failed to put on sufficient 8 evidence that the Report of the June 14, 2016 Special Meeting was exactly what Bonsembiante said 9 to Robertson. Instead, Robertson and Bonsembiante testified that Bonsembiante told Robertson he 10 would quit if the sale of stock to the Plaintiff went through. First, the Court would note that

11 Bonsembiante was free to end his employment for any reason, as there was no evidence of a binding

12 agreement for him to remain employed with AmOrient or otherwise. Second, the statement about

13 resigning was not independently wrongful because there is no cause of action that the Plaintiff 14 asserts against Bonsembiante based on his intent to resign from AmOrient. 15 After Robertson asked why Bonsembiante intended to quit if the sale went through, then 16 Bonsembiante made several comments about his reasons for quitting. See supra Findings of Fact <][<][

17 29 a. - i. The Plaintiff did not present any evidence which demonstrated that Robertson had recorded 18 Bonsembiante's comments verbatim. Instead, the only testimony before the Court is Bonsembiante's 19 testimony that Robertson used different phrasing than what Bonsembiante told him at the Special 20 Meeting. Further, the evidence shows that in the context of Robertson asking Bonsembiante why he 21 would resign, Bonsembiante shared several opinions about why he could not work for a company 22 owned by the Plaintiff. Thus, under § 772, Bonsembiante has demonstrated that his comments were 23 his opinion, in response to Robertson's inquiry as to why Bonsembiante would quit if the sale went 24 through. The Court finds that the Plaintiff has failed to show that any of the statement made by 25 Bonsembiante, when viewed in the context of the conversation Robertson and Bonsembiante were 26 having, is independently actionable apart from the alleged interference with prospective economic 27 28

CV0775-16 Wirges v. Robertson et al. Page 22 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims) 1 advantage. Thus the Plaintiff has not met his burden on the Intentional Interference with Prospective

2 Economic Advantage Claim.

3 CONCLUSION & ORDER

4 Based on the Findings of Fact and Conclusions of Law laid out above, the Court ORDERS:

5 1. John M. Robertson shall return the sum of Eighty Five Thousand Dollars ($85,000.00) to 6 Michael J. Wirges.

8 A status hearing is set for May 17, 2018 at 9:00 a.m.

10 SO ORDERED _ _ _ _ _ _ __ MAY 0 l 2018 11

12 The Honorable Anita A. Sukola 13 Judge, Superior Court of Guam 14

24 SERVICE VIA COURT BOX I acknowledge that a copy of th3 25 original hereto was place~ i~ 'ch:

26 ~~r4~ ;ra.r3r. _ 27 Date~·\-li T:me: ~:/g,lh 28 Deputy Clerl!,/l:::;;; Court of Guam

CV0775-16 Wirges v. Robertson et al. Page 23 of23 FINDINGS OF FACT AND CONCLUSIONS OF LAW (re Compl. for Breach of Contract and Related Tort Claims)