Yu v. Liang, Hu and Yu

• Court: Superior Court of Guam
• Decided: June 8, 2018
• Docket: CV0087-16
• Status: Unknown

Opinion

1 -8 Pr.t 3: 0

~U T 2

3 __ ClERK Of ,

5 IN THE SUPERIOR COURT OF GUAM 6

7 HSIAO WEI YU, ) CIVIL CASE NO. CV0087-16 ) ) 8 Plaintiff, ) ) FINDINGS OF FACT AND 9 vs. ) CONCLUSIONS OF LAW ) 10 MEl FEI LIANG, HELEN YU HU, and ) ) HSIAO JUNG YU, ) 11 ) ) 12 ) Defendants. ) 13

14 INTRODUCTION

15 This matter came before the Honorable Michael J. Bordallo on March 28, 2018 for a Bench Trial on Plaintiffs First Amended Complaint. Plaintiff Hsiao Wei Yu ("Hsiao Wei") is 16 represented by Attorney Gary W.F. Gumataotao. Defendants Mei Fei Yu ("Mei Fei"), Helen Yu 17 Hu ("Helen"), and Hsiao Jung Yu ("Hsiao Jung") are represented by Attorney Geri E. Diaz. The 18 parties were ordered to submit their proposed findings of fact and any proposed conclusions of 19 law, as deemed necessary by counsel. Having considered the testimony of the parties and the evidence presented, the Court hereby enters the following Findings of Fact and Conclusions of 20 Law. 1 21

25 1 To the extent that a finding of fact should be deemed a conclusion of law or a conclusion of law deemed a finding 26 of fact, it shall be so considered.

Page 1 of 9 1 BACKGROUND 2 This matter arises out of Plaintiffs February 4, 2016 Verified Complaint, which was 3 subsequently amended on April 13, 2016. Defendant Helen filed her Answer to the First 4 Amended Verified Complaint on May 4, 2016. Defendants Mei Fei and Hsiao Jung filed their

5 Answer to the First Amended Verified Complaint on October 20, 2016. FINDINGS OF FACT 6 By a preponderance of the evidence, the Court makes the following findings of fact: 7 1. Shang-Ho Wu Yu initially held title to units #601 and #705 of Agana Bay 8 Condominium. When she died on February 13, 2013, title passed to her four children: 9 Helen, Mei-Fei, Hsiao Jung, and Hsiao Wei. Each sibling received a one fourth undivided interest in the properties. 10 2. Helen was appointed Administratix of the Estate during the probate proceedings for the 11 Estate of Shang-Ho Wu Yu (PR0098-13). 12 3. After title for the condos was recorded at the Department of Land Management, Helen 13 contacted her siblings, Mei Fei, Hsiao Jung, and Hsiao Wei to discuss the units and whether they should be leased or sold. In her May 28, 2014, June 2, 2014, and June 3, 14 2014 emails, she requested that each sibling advise in writing how he or she would like 15 to proceed. 16 4. On June 5, 2014, Hsiao Wei used You Rong Yu's email account to send a message to 17 Helen in which he advised her that he was agreeable to renting only one of the two units.

18 5. On June 7, 2014, Helen advised her siblings via email that both units would be rented. She also indicated that she would charge a $30.00 monthly fee to manage each unit. 19 6. On June 24, 2014, Hsiao Wei emailed Helen to again indicate that he is only agreeable 20 to leasing unit #601, and not unit #705. He further added that he was only agreeable to 21 leasing unit #601 if it were done with the assistance of Christopher Felix at Century 21. 22 7. Also on June 24, 2014, Helen emailed Mei Fei, Hsiao Jung, and Hsiao Wei, and advised them that Century 21 will charge a management fee of $150.00 per month and if they 23 can decrease their fee to $50.00 per month, she will agree to it. She also discussed the 24 items that had to be either fixed or replaced in the units. 25

Page 2 of9 1 8. On June 26, 2014, Helen emailed Mei Fei, Hsiao Jung, and Hsiao Wei, advising them 2 that a special assessment fee for the condos is due. She discussed a bathtub issue for unit 3 #705 and requested that they all pay for their "1/4 expense of common area fee, property 4 tax fee, court/attorney probate case fee and others, repair fee, assessment fee, etc."

5 9. That same day, Hsiao Wei sent an email to all parties in which he stated that if unit #705 is occupied by tenants, then "once I return to Guam, I have the right to and will 6 prosecute the tenant." 7 10. Helen responded via email on June 27, 2014, advising Hsiao Wei that if he prosecutes 8 the tenants in units #60 1 and #705 upon his return to Guam, she will take legal action 9 against him, including the filing of a lawsuit and pursuit of a restraining order against him. Later that day, Helen sent an email to all parties stating that after considering each 10 owner's answer on how to handle the units, they would be rented out. 11 11. In July 2014, Hsiao Wei and his wife Suping Xu divorced. Hsiao Wei had previously 12 been using his wife's email account to communicate with the other parties. After this 13 date, Suping Xu would sometimes provide Hsiao Wei with communications from the other parties, but sometimes he would not receive them at all. He did not create his own 14 email account until 2017. 15 12. Sometime in early 2015, Helen attempted to apply for a business license for the units. 16 When she discussed her case with the officials at Department of Revenue and Taxation, i 17 was recommended that each sibling apply for a business license on their own.

18 13. On February 11, 2015, Mei Fei and Hsiao Jung issued powers of attorney to Helen to act as their agent regarding the condos. These powers of attorney to act in land were never 19 filed at the Department of Land Management. 20 14. Defendants Mei Fei and Hsiao Jung ratified all acts and omissions of Helen with regards 21 to the condos. 22 15. Helen obtained business licenses for herself, Mei Fei, and Hsiao Jung for the period of March 2015 through June 30, 2015 and for the period of June 2015 through June 2016. 23 16. On July 30, 2015, Helen sent an email to Suping Xu's email address, hoping to reach 24 Hsiao Wei. In the email, Helen asked Hsiao Wei to apply for a business license. Helen 25 sent another email to this effect on November 1, 2015. 26

Page 3 of9 1 17. Plaintiff filed complaints with the Government of Guam Department of Revenue and 2 Taxation, alleging: (i) Defendants leased the condos without a proper business license; 3 and (ii) Scott Campbell charged a commission for leasing units without a contract signed 4 by all four owners of the condos.

5 18. After Plaintiff initiated this lawsuit, Defendants provided Plaintiff with an accounting of the income and expenses for the rental of the condos. Plaintiff accepts the rendered 6 accounting with the exception of four objections: 7 a. Alleged charges for probate expenses in PR0098-13; 8 b. Any commissions paid to Scott Campbell, et al. for leasing the condos; 9 c. Fees charged by Helen for real estate management; d. Expenses for Defendants' business licenses. 10 19. The tenants in unit #601 moved out in March 2017. The tenants in unit #705 moved out 11 in July 2017. 12 20. The rental funds for the property were used to pay for maintenance of the condos, 13 including the assessment fee, common area fee, property taxes, etc. Leftover money is

14 paid to the siblings. To date, each sibling has received a total of approximately $16,000.00. 15 21. Plaintiff cashed the rent checks sent to him, but marked the checks "under protest." 16 22. Both units are currently vacant, and Helen pays a power bill each month to keep the air 17 conditioning running in order to prevent mold. The monthly bill for each unit is

18 approximately $40 to $50. CONCLUSIONS OF LAW 19 Plaintiff is a tenant in common with Defendants. 20 Under the laws of Guam, the ownership of real property by several persons is joint 21 interest. 21 GCA § 1214. Absent a written agreement among owners providing otherwise, co- 22 owners have certain rights in the real property they own. Although tenants in common can own unequal interests, unless agreed otherwise in writing, all tenants in common have an equal right 23 to possess and use the entire jointly owned property. Cardoza v. Machado, 46 Cal. App. 2d 809,_ 24 811 (1941). This being so, such a tenant has no right to exclude his co-tenant from any portion 25 of the common lands. 26

Page 4 of9 1 Defendants wrongfully leased condos without Plaintiff's express approval 2 Defendants leased unit #705 despite an express objection by Plaintiff. Additionally, 3 Defendants leased unit #601 with the assistance of Scott Campbell of Coral Sea Realty, which 4 Plaintiff did not agree to. It is settled law that a co-tenant has no power to lease an entire estate,

5 or any specific portion ofthe estate, unless he is authorized to do so by all other tenants. Carr v. Deking, 52 Wash. App. 880, 884 (1988); Chosar Corp. v. Owens, 235 Va. 660, 663 (1988); 6 Brewer v. Washington RSA No.8 Ltd. P'ship, 145 Idaho 735, 738-9 (2008). 7 Ouster 8 The Supreme Court of California held in Zaslow v. Kroenert, 29 Cal.2d 541, 548 (1946) 9 that "an ouster, in the law of tenancy in common is the wrongful dispossession or exclusion by one tenant of his co-tenant or co-tenants from the common property of which they are entitled to 10 possession. The ouster must be proved by acts of an adverse character, such as claiming the 11 whole for himself, denying the title of his companion, or refusing to permit him to enter." 12 Additionally, intent is a critical element in establishing an ouster. Wood v. Henley, 88 Cal.App. 13 441, 454 (1928). Defendants argue that there is insufficient evidence to show that Defendants intended to 14 oust Plaintiff. The court notes that communications among the parties have been strained during 15 the relevant period. Plaintiffs lack of a personal email account separate from that of his ex-wife 16 is partly to blame for the problems in communication. However, Plaintiff told Defendants 17 unequivocally that he refused to lease unit #705, and that he refused to use the assistance of

18 Scott Campbell in leasing unit #601. Defendants leased the units over his objections, and in doing so prevented Plaintiff from exercising his right to enter the unit. Further, Defendants 19 acted with intent to deprive Plaintiff of his property rights in the units. 20 Plaintiff's share of rents 21 Plaintiff acknowledges his receipt of his share of rents, but contends that he is still owed 22 damages due to amounts being taken from his share of the profits to pay for various expenses associated with maintaining and renting the units. The Court notes that Plaintiff would have 23 been liable to pay his share for certain fees associated with maintaining the units regardless of 24 whether they had been leased. Plaintiff cashed the checks he received from Defendants under 25

Page 5 of9 1 protest in order to preserve his right to file suit, but this does not change the fact that he received 2 the correct amount to which he was entitled. 3 Scott Campbell's contract 4 Despite Plaintiffs express objections, Defendants entered into a contract with Scott

5 Campbell of Coral Sea Realty to lease the condos. The contract with Scott Campbell was reasonable and necessary in order for the parties to lease the units. Plaintiff paid the same 6 amount as each Defendant paid for this contract, and Plaintiff benefited from this contract in 7 that he received his share of the profits from renting the units. Plaintiff is therefore not entitled 8 to any damages as a result of this contract being entered into without his consent.

9 Disgorgement for management fees paid to Helen Plaintiff seeks damages based upon the fees paid to Helen for her management of the 10 units. These fees were taken out of the checks paid to the four co-tenants from the profits earned 11 by the rental units. 12 21 GCA § 104102(d)(1) provides that the licensing requirements for a real estate broker 13 do not apply to a person who, as an owner or lessor of the property, sells, rents, or leases real estate or collects rents for the use of the real estate. This is further supported by 21 GCA § 14 104105, which states that this division is inapplicable to persons who are dealing with their own 15 property. For this reason, the Court disagrees with Plaintiffs position that Helen was acting 16 illegally in leasing the units without a real estate license. 17 Helen charged a management fee of $30 per month for each unit. This fee was for

18 management work, such as dealing with rental tenants, obtaining repairs, and collecting rent on behalf of the other co-tenants. These activities were necessary in order for the units to be leased 19 and were expected in the normal course of business. Plaintiff benefited from the management 20 services and the fee was reasonable. The Court finds that Plaintiff is not entitled to 21 disgorgement of the management fees paid to Helen.

22 Disgorgement for the business license fees The Defendants obtained business licenses to engage in the leasing of the units. These 23 licenses required fees, which were paid for out of revenue generated from renting the units. 24 Plaintiff did not agree that these licenses be obtained and argues that he should not be obligated 25 to pay for them. As with the Helen's management services, the units could not be leased without 26

Page 6 of 9 1 the obtaining of business licenses and Plaintiff therefore benefited as a result of Defendants 2 obtaining these licenses and paying the necessary fees. The Court finds that Plaintiff is not 3 entitled to disgorgement of the business license fees. 4 Fraud

5 The elements of fraud are: "(1) a misrepresentation; (2) knowledge of falsity (or scienter); (3) intent to defraud to induce reliance; (4) justifiable reliance; and (5) resulting 6 damages." Transpacific Export Co. v. Oka Towers Com., 2000 Guam 3 ~ 23. 7 Plaintiff alleges that Helen's threats of criminal prosecution and civil litigation were 8 misrepresentations and that Helen's testimony that she did not intend to act on these threats 9 proves her knowledge of their falsity. While Plaintiff had a right to his 25% interest in the units, he did not have a right to harass anyone living in either unit. His correct remedy would be to use 10 the judicial process to seek a remedy. Defendant Helen was therefore not making a 11 misrepresentation when she stated that she could inform authorities if Plaintiff harassed the 12 renters of the units. 13 Further, Plaintiff argues that he justifiably relied upon such threats, as he testified that Chinese and Taiwanese police would beat people and make them disappear. This argument 14 fails, as Plaintiff's attempts to contact and harass the renter demonstrates that he did not rely 15 upon Defendants' statements. 16 Lastly, Plaintiff argues that he suffered damages as a result of this alleged fraud, as he 17 was prevented from exercising legal action with regards to the units. However, Plaintiff

18 received checks from the Defendants to compensate him for what he was entitled based on his ownership of the units. Plaintiff cashed these checks under protest in order to preserve his right 19 to file suit, but this does not change the fact that he received the correct amount to which he was 20 entitled. Plaintiff has not otherwise demonstrated that he was subject to damages as a result of 21 Defendants' alleged fraudulent conduct. 22 Punitive Damages Guam law requires evidence of oppression, fraud, or malice to award punitive damages. 23 20 GCA. §2120 states that in an action for breach of an obligation not arising from contract, 24 where the defendant has been guilty of oppression, fraud, malice, express or implied, the 25 plaintiff, in addition to the actual damages, may recover damages for the sake of example and 26

Page 7 of9 1 by way of punishing defendant. Further, oppression, fraud, or malice must be proven by 'clear 2 and convincing' evidence. Spinks v. Equity Residential Briarwood Apartments, 171 Cal. App. 3 4th 1004, 1052 (2009). 4 Having already found that Defendants have not engaged in fraud, the Court will now

5 examine whether Defendants have engaged in oppressive or malicious conduct towards Plaintiff. Oppression has been defined as "despicable conduct that subjects a person to cruel and 6 unjust hardship in conscious disregard of that person's rights." Park v. Mobile Oil Guam, Inc., 7 2004 Guam 20, fn. 4. Malice is conduct which is intended by the defendant to cause injury to 8 the plaintiff or despicable conduct which is carried on by the defendant with a willful and

9 conscious disregard to the rights or safety of others. Id. The Court finds that Defendants' actions infringed upon Plaintiffs property rights in the units, but that Defendants made a reasonable 10 effort to involve Plaintiff in the process of leasing the units. Defendants' actions did not 11 constitute either oppression or malice. 12 Plaintiff argues further that he is entitled to punitive damages from all parties based on 13 the doctrine of respondeat superior. Plaintiff contends that, in engaging in tortious conduct, Helen was acting as an agent for the other Defendants, who were acting as principles. Plaintiffs 14 argument that he is entitled to punitive damages is based upon his complaint for fraud, which he 15 has not proven by a preponderance of the evidence. Because Plaintiff has not proven that 16 Helen's conduct is fraudulent, he is therefore not entitled to punitive damages from the other 17 Defendants based on respondeat superior.

18 Partitioning by sale Plaintiff seeks a partition of the property with proceeds of the sale to be distributed to 19 Plaintiff and the Defendants based on their equal ownership shares. Partition is provided by 7 20 GCA § 24401, which provides the following: 21 § 24401. Who May Bring Actions for Partition. When several co-tenants own real property as joint tenants, or tenants in common 22 . . . an action may be brought by one or more of such persons . . . for a partition thereof according to the respective rights of the persons interested therein, and for 23 a sale of such property, or a part thereof, if it appears that a partition cannot be 24 made without great prejudice to the owners.

Page 8 of9 1 The subject property is comprised of two condos. It would be of great prejudice to the owners 2 for any partitioning ofthe condos among the four co-tenants. Therefore, Plaintiff is entitled to 3 the remedy of sale as provided by § 2440 1. Both parties have consented to partition by judicial 4 sale, and will now have sixty days to decide which, if not both, of the units are to be sold. This

5 Court will hold further proceedings if the parties cannot agree as to the sale of the units. Attorney's fees 6 Under the American Rule, "parties bear their own litigation expenses, including 7 attorney's fees." Fleming v. Quigley, 2003 Guam 4. There are several recognized exceptions to 8 this rule which allow for the payments of fees if it is 1) authorized by statute, 2) authorized by

9 contract, or 3) allowed in judicially-established equitable circumstances. Id. None ofthese three exceptions are applicable to this case. 10 Plaintiff argues that he is entitled to attorney's fees for partition pursuant to 7 GCA § 11 24445, which reads as follows: 12 § 24445. Costs of Partition. The costs of partition, including reasonable counsel fees, expended by the 13 plaintiff or any of the defendants, for the common benefit, fees of referees, and other disbursements, must be paid by the parties respectively entitled to share in 14 the lands divided, in proportion to their respective interests therein, and may be 15 included and specified in the judgment ... 7 GCA § 24445.

16 The Court reads this section as only applying to a partition of the property. Because the units are to be sold in this case, Section 24445 does not apply. 17 ORDER 18 Both parties have consented to a partition by sale. Parties are given sixty days to 19 determine which unit, if not both, is to be sold. The Court will hold further proceedings if the 20 parties cannot agree. Neither party is entitled to any additional damages or attorney's fees.

of----,1<~'-------'------=-2017. 21 SO ORDERED, t h i s _ £ day 22 / 23 '--c·;r.~P:: VIA COURT that art' 24 wasrl

25 0~~~0 26 !/)~ JT' '~c,·J, :.,·" (Ll tCJ, <. , , . "

Page 9 of9