Hawaiian Rock Prods. Corp. v. Ocean Hous., Inc., (2016)

• Court: Guam Supreme Court
• Writing for the Court: CARBULLIDO, J.
• Citation: Hawaiian Rock Prods. Corp. v. Ocean Hous., Inc., 2016 Guam 4, Supreme Court Case No.: CVA14-025 (Guam Feb 05, 2016)
• Docket Number: Supreme Court Case No.: CVA14-025
• Decision Date: 05 February 2016
• Parties: HAWAIIAN ROCK PRODUCTS CORPORATION, Plaintiff, v. OCEAN HOUSING, INC., DONALD and TERESITA WILSON, KI DO CHA, EMSCO, SEUING LEE, KORANDO CORP., MOON SIK YOON, JIN HEE LEE, and DOES I through X, Defendants. KORANDO CORPORATION, Cross-Claimant, v. OCEAN HOUSING, INC., DONALD WILSON and TERESITA WILSON, KI DO CHA, EMSCO, SEUING LEE, MOON SIK YOON, JIN HEE LEE, Cross-Defendants. DONALD E. WILSON and TERESITA S. WILSON, Cross-Claimants-Appellees, v. OCEAN HOUSING, INC., KI DO CHA, MOON SIK YOON, JIN HEE LEE, and DOES I through X and all other persons unknown claiming any right, title, estate, lien or interest in the real property described in the Cross-Claim adverse to Cross-Claimants' ownership, or any cloud on Cross-Claimants' title, Cross-Defendants-Appellants. OCEAN HOUSING, INC. and JIN HEE LEE, Cross-Claimants-Appellants, v. DONALD E. WILSON and TERESITA S. WILSON, Cross-Defendants-Appellees.

2016 Guam 4

HAWAIIAN ROCK PRODUCTS CORPORATION, Plaintiff, v. OCEAN HOUSING, INC., DONALD and TERESITA WILSON,KI DO CHA, EMSCO, SEUING LEE, KORANDO CORP.,MOON SIK YOON, JIN HEE LEE, and DOES I through X, Defendants.

KORANDO CORPORATION, Cross-Claimant, v. OCEAN HOUSING, INC., DONALD WILSON and TERESITA WILSON,KI DO CHA, EMSCO, SEUING LEE, MOON SIK YOON, JIN HEE LEE, Cross-Defendants.

DONALD E. WILSON and TERESITA S. WILSON, Cross-Claimants-Appellees, v. OCEAN HOUSING, INC., KI DO CHA, MOON SIK YOON,

JIN HEE LEE, and DOES I through X and all other persons unknown

claiming any right, title, estate, lien or interest in the real property

described in the Cross-Claim adverse to Cross-Claimants' ownership,

or any cloud on Cross-Claimants' title, Cross-Defendants-Appellants.

OCEAN HOUSING, INC. and JIN HEE LEE, Cross-Claimants-Appellants, v. DONALD E. WILSON and TERESITA S. WILSON, Cross-Defendants-Appellees.

Supreme Court Case No.: CVA14-025

SUPREME COURT OF GUAM

Argued and submitted: August 7, 2015

February 5, 2016

Superior Court Case No.: CV0327-03

OPINION

Appeal from the Superior Court of Guam

Argued and submitted on August 7, 2015

Hagåtña, Guam

Appearing for Cross-Claimants-Appellants

Ocean Housing, Inc. and Jin Hee Lee:

Peter C. Perez, Esq.

Law Office of Peter C. Perez

238 Archbishop Flores St., Ste. 802

Hagåtña, GU 96910

Appearing for Cross-Defendants-Appellees

Donald E. Wilson and Teresita S. Wilson:

William B. Pole, Esq.

Law Offices of Gumataotao & Pole

115 San Ramon St., Ste. 301

Hagåtña, GU 96910 BEFORE: F. PHILIP CARBULLIDO, Presiding Justice;¹ KATHERINE A. MARAMAN, Associate Justice; ALBERTO E. TOLENTINO, Justice Pro Tempore.

CARBULLIDO, J.:

[1] This case comes before the court as an appeal by Cross-Claimants-Appellants Ocean Housing, Inc. ("OHI") and Jin Hee Lee (collectively, "OHI and Lee"). At issue on appeal is the trial court's grant of summary judgment to Cross-Defendants-Appellees Donald E. Wilson and Teresita S. Wilson (collectively, "the Wilsons") for their cross-claims to quiet title, for expungement of a lis pendens, and for a writ of possession. OHI and Lee assert that the trial court committed reversible error by granting summary judgment without issuing a reasoned decision weighing the factors necessary for such judgment. Additionally, OHI and Lee claim that summary judgment was improper due to the remaining disputes of material facts regarding their affirmative defenses and the Wilsons' establishment of a prima facie case. OHI and Lee seek to have this court vacate the grant of summary judgment and remand to the trial court for resolution of remaining factual disputes.

[2] For the reasons stated herein, we affirm the grant of summary judgment on the Wilsons' cross-claims and remand for determination of the appropriate award of attorney's fees.

I. FACTUAL AND PROCEDURAL BACKGROUND

[3] The case involves the parties' competing interests in approximately eight acres of real property located in Dededo, Guam (hereinafter "Property"). On May 8, 1995, the Wilsons and OHI entered a Joint Venture Agreement ("JVA") for the purpose of constructing and marketing residential units on the Property which was to be contributed by the Wilsons. The JVA stated that OHI would perform the acts necessary for construction of 54 residential units on theProperty. Under the JVA, the Wilsons were obligated to contribute the Property upon which the units would be constructed.

[4] The JVA specified several facts relevant to the present dispute. It stated that the parties would divide the profits and losses of the venture in the following manner: OHI - 85.22% and the Wilsons - 14.78%. Each party was solely responsible for its contribution; OHI for all aspects of residential units and construction and the Wilsons for the Property. Further, the property value contributed to the venture by the Wilsons was represented by subsequent agreement addendum as $1,000,000.

[5] Two important events occurred prior to the enactment of the JVA. First, the Wilsons had previously conveyed a portion of the Property included in the JVA, Lot No. 10111-10-11, to Joann Nauta in July 1978. Secondly, in September 1990, the Wilsons and Joann Nauta leased several lots on the Property, including Lot No. 10111-10-11, to Anna Wang Kao for 99 years. Neither of these facts was disclosed to OHI at the time of the JVA, and Lee became aware of them five years after the enactment of the JVA. As to the latter, disputes arose regarding the lease agreement, culminating in litigation between the Wilsons and Da Yu Overseas, Inc. That dispute was ultimately resolved in January 2001, when the court terminated the Wilson-Kao lease agreement nunc pro tunc to August 2, 1994.

[6] On February 5, 2001, following the resolution of litigation regarding the Wilson-Kao lease agreement, the parties to the JVA entered into a Release and Settlement Agreement ("OHI-Wilson Release"). Among other things, the OHI-Wilson Release specified that OHI would release the Wilsons and their agents from any liabilities and waive any claims or causes of action in connection with the JVA, and would indemnify the Wilsons and defend them in any suits asserted in connection with the JVA. In exchange, the parties to the OHI-Wilson Release agreed to subdivide the Property, granting the right, title, and interest of Lots 13 through 34 ("Phase I Lots") to OHI along with any homes and improvements thereon. However, this grant of interest in the specified Property was explicitly made contingent on OHI's removal of liens on the Property held by Hawaiian Rock Products Corporation ("Hawaiian Rock") and others specifically identified in the "Schedule I" document attached to the OHI-Wilson Release. RA, tab 255, Ex. F at 2-3, 12 (Release & Settlement Agreement, Feb. 5, 2001). As further specified in the OHI-Wilson Release, failure by OHI to remove the liens would constitute a default and result in forfeiture of OHI's title and interest in the Phase I Lots granted by the OHI-Wilson Release.

[7] In November 2001, the parties entered into an amended release and settlement agreement ("Amended Release"). The Amended Release stated that OHI had failed to complete its obligations within the timeframe specified in the original OHI-Wilson Release. However, the Amended Release voided the provision of the original OHI-Wilson Release which would have triggered OHI and Lee's default and forfeiture of their interest in the Property. In exchange for additional consideration to the Wilsons, the Amended Release granted additional time for OHI to fulfill its obligation of removing the Property liens specified in the Release. The Amended Release also specified that if OHI had not satisfied these obligations by the extended completion date, their interest in the Phase I Lots, granted by the OHI-Wilson Release, would be voided.

[8] The present litigation initially arose via a Complaint filed in March 2003 by Hawaiian Rock against the Wilsons, OHI, and Lee seeking to quiet title and compel transfer of title for breach of warranty and fraud. The Complaint was based on an alleged breach of a settlement agreement and mutual release of claims between Hawaiian Rock, the Wilsons, OHI, and Lee ("Hawaiian Rock Settlement"). The Hawaiian Rock Settlement resolved earlier disputes between these parties litigated in a separate lawsuit. The litigation stemming from the Hawaiian Rock Complaint resolved the claims of Hawaiian Rock and another party, Korando Corporation. However, during the course of this proceeding, the Wilsons filed a cross-claim in April 2006 against OHI and Lee to quiet title on the basis of violations of the OHI-Wilson Release and the Amended Release.

[9] OHI and Lee responded, filing an answer which denied the cross-claim allegations of the Wilsons and asserted several affirmative defenses. In addition to their answer, OHI and Lee filed several cross-claims against the Wilsons, including Recission/Reformation of Contract, Breach of Fiduciary Duty, Breach of Contract, Mental Distress, and Abuse of Process. The Wilsons moved to dismiss OHI and Lee's cross-claims. OHI and Lee opposed dismissal and filed several exhibits in support of their position.

[10] On September 9, 2013, the trial court dismissed OHI and Lee's claims against the Wilsons. The trial court found that all of OHI and Lee's claims stemming from the JVA were barred by the release and indemnification provision of the OHI-Wilson Release and that the remaining claim for mental distress was barred by the applicable statute of limitations. OHI and Lee moved for reconsideration on September 23, 2013, claiming that the trial court had overlooked outcome-determinative facts. The Wilsons filed their opposition to the motion for reconsideration and in the same pleading filed a cross-motion for summary judgment on their claims against OHI and Lee. On November 18, 2013, OHI and Lee filed an opposition to the Wilsons' motion for summary judgment.

[11] On March 31, 2014, the trial court issued a Decision and Order that denied reconsideration of these claims, definitively resolving all substantive disputes OHI and Lee claimed against the Wilsons. However, the trial court also denied the Wilsons' motion for summary judgment, explaining that because the dispute remained pending through the conclusion of appeal or exhaustion of the right to appeal, it could not expunge the lis pendens, precluding the perfection of title necessary to grant judgment on a quiet title action or issue a writ of possession. Thus, the court explicitly declared its decision a final judgment, which triggered the 30-day window for appeal under Guam Rules of Appellate Procedure 4(a). OHI and Lee declined to appeal within this period, and the Wilsons thereafter renewed their motion for summary judgment. In response, the trial court issued judgment granting the Wilsons' requested relief to quiet title and expunge OHI and Lee's lis pendens, RA, tab 300 (Judgment, July 15, 2014), and subsequently gave the Wilsons a writ of possession. OHI...