IN THE SUPERIOR COURT OF GUAM
||CASE CV0949-15; CV1182-15|
||FINDINGS OF FACT AND|
||CONCLUSIONS OF LAW|
|DR. JOEL JOSEPH,||)|
This matter came before the Honorable Alberto C. Lamorena III on April 8, 2016
upon Plaintiffs two Verified Complaints for Unlawful Detainer.
Attorneys Gary W. Gumataotao and William Benjamin Pole represent
Plaintiff Tri-Mani, LLC ("Plaintiff').
Attorney Mitchell F. Thompson represents Defendant
Dr. Joel Joseph ("Defendant").
Upon a review of the pleadings, applicable statutes, case law, testimony and
evidence received during the unlawful detainer hearing,
the Court now issues the following Findings of Fact and Conclusions of Law.
FINDINGS OF FACT
By a preponderance of evidence, the Court makes the following findings of fact:
- At some time prior to July 2015, Plaintiff became the owner of
the property (the "Premises") at dispute in these cases,
which is described as Lot No. 2117-3 and located in Tamuning, Guam.
(Verified Compl. ¶ 7, Oct. 9, 2015.)
- Plaintiff is a registered domestic limited liability corporation
authorized to conduct business in Guam at the Premises for commercial
- Prior to Plaintiff taking ownership of the Premises,
Defendant entered into a written agreement on or around May 10, 2005
with Angelo and Cecilia Gombar (hereinafter, "the Gombars"),
the former owners of the property for rental of said Premises.
- The written agreement consists of two signed documents,
one titled "Lease Agreement" (hereinafter, "Lease Agreement I"),
and the other titled "Commercial Lease and Deposit Receipt"
(hereinafter, "Lease Agreement II"), which includes similar provisions.
(Def.'s Trial Ex. A & B; see also Verified Compl. Ex. A, Oct. 9, 2015.)
- Lease Agreement I was signed contemporaneously with Lease Agreement II
on or around May 10, 2005.
- Both Lease Agreement I and Lease Agreement II (collectively,
"Lease Agreement") defined the term for lease of the Premises as a
period of ten (10) years,
commencing on June 15, 2005 and terminating on December 31, 2015.
(Verified Compl. Ex. A, at 1 ¶ 1, 15 ¶ 1, Oct. 9, 2015.)
- The Premises consists of a building with multiple floors that are being
used for the operation of the Wise Owl Veterinary Clinic and the
residence of Defendant.
- The Lease Agreement contains a provision granting Defendant with an
option to extend the term of the Lease Agreement for an additional
five (5) years, provided that written notice is given to the lessor -
i.e., the Gombars or their successors in interest -
prior to expiration of the lease term and provided that lessee -
i.e., Defendant - is not in default of any term of the lease.
(Verified Compl. Ex. A, at 1 ¶ 1, 17 ¶ 33, Oct. 9, 2015.)
- According to the Lease Agreement,
Defendant was obligated to pay rent in the amount of $3,500 per month for
the relevant time period.
(Verified Compl. Ex. A, at 19 ¶ 4, Oct. 2 9, 2015.)
- The Lease Agreement requires Defendant to maintain the Premises
"in a good and safe condition" and to return the premises at termination
of the lease "in as good condition as received." (Id. at 16 ¶ 8).
Defendant is also responsible for all repairs required during the term of lease,
except for those areas enumerated in the agreement which shall be the
responsibility of the lessor - i.e. Plaintiff. (Id.)
- The Lease Agreement requires Plaintiff to maintain the roof,
exterior walls, structural foundations, parking lot, air conditioning units,
as well as the property adjacent to the Premises. (Id.)
- At some point in June 2015, the Premises were sold to Plaintiff by the
Gombars, thereafter becoming successors in interest with respect to the
Premises and the Lease Agreement.
- From July 2015 through November 2015, Defendant defaulted in the payment
of rent by providing check payments in the amount of $300 for each month,
rather than the monthly rental amount of $3,500 due under the Lease Agreement.
Plaintiff has not cashed or deposited any of these checks due to concerns
that cashing or depositing the checks would constitute an accord and
satisfaction under the Uniform Commercial Code ("UCC").
- On October 2, 2015, Defendant was served by Plaintiff with a notice
stating that he owed $14,000 in back rent for the months of July 2015
through October 2015 ($3,500 x four (4) months).
(Verified Compl. Ex. B, Oct. 9, 2015.)
The notice was delivered to Defendant's place of business and left with a
(Testimony of Mr. Ronald Ponce, April 8, 2016.)
The notice was also sent via mail to Defendant's place of residence.
(Testimony of Mr. Harmohanjit Sachdez, April 8, 2016.)
- After five days elapsed and Defendant failed to pay the rent due for
the period stated in the notice provided on October 2, 2015,
Plaintiff filed a Verified Complaint for Unlawful Detainer
(hereinafter "Tri-Mani I" or "CV0949-15") on October 9, 2015.
- In a Decision and Order issued on October 28, 2015, this Court originally
dismissed Tri-Mani I without prejudice after it was determined that
"Plaintiff [did] not have a business license to lease the premises,
pursuant to 11 G.C.A. § 70131(b)."
(Dec. and Order 3:10-12, Oct. 28, 2015.)
A judgment was contemporaneously filed dismissing the case.
(J. of Dismissal, Oct. 28, 2015.)
This Court later vacated the judgment after Plaintiff submitted evidence of
its newly acquired rental business license.
(Dec. and Order 3:6-9, Feb. 22, 2016.)
- On December 2, 2015, Defendant was inadequately served with a notice
stating that he owed $3,500 in rent for the month of December 2015.
A subsequent Verified Complaint (hereinafter, "Tri-Mani II" or
"CV1139-15") was filed on December 9, 2015.
Tri-Mani II was dismissed without prejudice after a court determined
that service was improper.
See Tri-Mani, LLC v. Dr. Joel Joseph, Civil Case No. 1139-15,
Judgment of Dismissal (Jan. 19, 2016).
- On December 21, 2015,
Defendant was personally served with a notice stating that he owed $3,500
in rent for the month of December 2015.
(Verified Compl. Ex. B-C, Dec. 31, 2015.)
Thereafter, Plaintiff filed a Verified Complaint for Unlawful Detainer
(hereinafter, "Tri-Mani III" or "CV1182-15") on December 31, 2015.
- After service of the notice in Tri-Mani III,
Defendant attempted to make rental payments on December 22, 2015 to
Plaintiff via his attorney for the full amount due for December 2015,
as stated in the notice provided on December 21, 2015,
including rent for the month of January 2016.
(Def.'s Trial Ex. J; see also Testimony of Vanessa Santos-Pinkney,
April 8, 2016.)
- Defendant provided rental payments to Plaintiff in the amount of
$3,500 for the months of February 2016 through April 2016.
(Def.'s Trial Ex. J.)
- For the months after delivery of the notice in Tri-Mani III,
Plaintiff either refused to accept delivery of the checks,
such as for the months of December 2015 and January 2016,
or accepted the checks but have yet to cash or deposit them due to UCC concerns.
- Defendant continues to remain in possession of the Premises despite
Plaintiffs multiple notices concerning unpaid rent.
- At all relevant times Defendant was in possession of the Premises,
there was no functioning sewage system.
Defendant has needed to retain the services of Todu Mauleg for maintenance
of the Premises' septic tank system, primarily for septic tank pumping.
(Def.'s Trial Ex. F.)
- At some time in 2014, the roof of the Premises began to leak water
causing puddling and damage to various areas around the Premises.
(Def.'s Trial Ex. D.)
The roof leakage was reported by Defendant to the Gombars,
as well as to Plaintiff on multiple occasions.
- Plaintiff has not made any known repairs to the roof,
nor taken any measures to rectify the lack of a functioning sewage system.
CONCLUSIONS OF LAW
The Court now issues the following conclusions of law on the matters:
I. Unlawful Detainer
- Plaintiff claims in Tri-Mani I and Tri-Mani III that
Defendant is guilty of unlawful detainer under 21 G.C.A. § 21103(b)
for violating the rental provisions of the Lease Agreement.
- In order to maintain a valid unlawful detainer action,
"[Plaintiff] must establish that the [Defendant] has defaulted in the
payment of rent, is in possession of the property without the [Plaintiff's]
permission, and that the [Defendant] has been served with a valid notice
demanding payment or surrender of possession."
Archbishop of Guam v. G.F.G. Corp., 1997 Guam 12 ¶ 11.
- For the default notice to be valid,
"it must be served at least five days prior to the filing of the action,
must state the amount of rent which is due, and must be served within one
year of the date that the rent became due." Id.;
See generally 21 G.C.A. § 21103(b).
- The five day notice required under the unlawful detainer statute may be
served either by personal service to the Defendant,
or if the Defendant "is absent from his place of residence,
and from his usual place of business,
by leaving a copy with some person of suitable age and discretion
at either place, and sending a copy through the mail
addressed to the [Defendant] at his place of residence." 21 G.C.A. § 21105.
- The Supreme Court of Guam has stated that
"[p]roceedings in an unlawful detainer action are intended to be summary
in nature and are required to be expedited.
Also, because an unlawful detainer action is a summary remedy,
the unlawful detainer statute must be complied with strictly."
Archbishop of Guam, 1997 Guam 12 ¶ 10.
See also 21 G.C.A. § 21120.
- In applying these legal principles, the Court finds that service relative to Tri-Mani I was
adequate. Defendant argues that personal service of the notice is required under the
unlawful detainer statute. Defendant, however, fails to acknowledge that the statute
contemplates service of the required notice by means other than personal service. See 21
G.C.A. § 21105. Here, the Court received evidence that the notice dated October 2, 2015
was served by Plaintiff to Defendant not by personal service, but by delivery to
Defendant's place of business with someone of suitable age and discretion and then
through subsequent mailing of the notice to Defendant's place of residence. Such service
was appropriate and allowable under the statute.
- After service of the notice in Tri-Mani I, Defendant failed to pay the outstanding rent
due pursuant to the Lease Agreement. According to the Lease Agreement, Defendant
was obligated to pay rent in the amount of $3,500 per month for the relevant time period.
(Verified Compl. Ex. A, at 19 ¶ 4, Oct. 9, 2015.)
Rather than paying such amount,
Defendant paid only $300 per month for the months of July 2015 through November 2015.
- After failing to pay the full rent due under the Lease Agreement following proper service
of the notice in Tri-Mani I, Defendant continued to be in possession of the Premises
without Plaintiffs permission. This is undisputed.
- With respect to Tri-Mani III, the Court recognizes that service was adequate as
Defendant was personally served. The Court, however, finds that Defendant attempted to
pay rent subject to the provisions of the Lease Agreement the day after the notice in
Tri-Mani III was served on Defendant.
Therefore, Defendant cannot be said to have defaulted on rent and subsequently
cannot be in unlawful detainer in Tri-Mani III.
- In summary, Plaintiff has been able to demonstrate with respect to Tri-Mani I that the
notice requirements under 21 G.C.A. § 21103(b) were met, that Defendant defaulted on
the payment of rent due pursuant to the Lease Agreement, and that Defendant is still in
possession of the Premises without Plaintiffs permission. Accordingly, Plaintiff has
provided sufficient evidence to support a finding that Defendant is in unlawful detainer
with respect to Tri-Mani I (CV0949-15)
- In summary, Plaintiff has not been able to demonstrate with respect to Tri-Mani III that
Defendant defaulted on the payment of rent due pursuant to the Lease Agreement as
Defendant attempted to make checks payments specifically for the amount contained in
the notice relevant to Tri-Mani III (CV1182-15).
As noted previously, Plaintiff refused,
via their attorney, delivery of the check payments for the amount specifically contained
in the notice relevant to Tri-Mani III.
II. Rent from June 1, 2015 to September 23, 2015.
- Even if there is a basis for unlawful detainer with respect to Tri-Mani I, Plaintiff cannot
collect rent for any period which they did not have a business license.
- In Tri-Mani I, Plaintiff contends specifically that Defendant owes rent in the amount of
$14,000 for the months of July 2015 through October 2015. However, this includes a
period of time for which Plaintiff did not have a valid business license.
- Guam's Business License Law provides that "[a]ny person engaging in ... business on
Guam without a business license . . . may not maintain a proceeding in any Court on
Guam until it obtains a business license." 11 G.C.A. § 70131(b).
business "which consists of a combination of two (2) or more . . . classes . . . shall. be
required to take out a separate license for each such classification," 11 G.C.A. § 70123,
and "[w]here one (1) person operates or conducts businesses in two (2) or more locations
in Guam, the person shall be required to obtain a license for each location," 11 G.C.A. §
- The Supreme Court explained that "if [a] person does not have a business license, then
he is foreclosed from utilizing the courts of Guam to sue for rent or evict anyone from
leased property for any breach during any period of time that the lessor or landlord did
not have a business license." Taijeron v. Kim, 1999 Guam 16 ¶ 10. Accordingly, a
defendant can maintain an action for the breach of a lease that occurred during the time
they were in possession of a business license, however, it cannot sue for breaches that
occurred prior. Arashi & Co., Inc. v. Nakashima Enterprises, Inc.,
2005 Guam 21 ¶ 26 (citing Taiieron, 1999 Guam 16 ¶ 26).
- In light of the aforementioned principles, the Court finds that Plaintiff is unable to
collect rent for any period when Plaintiff ["Defendant" in
did not have any business license whatsoever.
Here, Plaintiff only obtained a business license on September 23, 2015. It
is undisputed that Plaintiff did not have a business license prior to this date.
- Although the business license obtained on September 23, 2015 was not the correct
license, the Court is mindful of its Decision and Order in vacating the Judgment of
Dismissal in Tri-Mani I, which stated that "Plaintiff moreover had a business license at
the time of the case's filing ... and made good faith efforts to obtain the proper license.
Substantial injustice ["justice" in
would thus result were the Court to deny Plaintiffs Motion [to Vacate
Judgment] and it is appropriate for the case to proceed to the merits." (Dec. and Order
3:6-9, Feb. 22, 2016.)
III. Violations of the Implied Warranty of Habitability
- Having found there to be an adequate basis for unlawful detainer with regard to Tri-Mani I,
the Court will now determine whether Defendant can state a defense.
- Generally, "because an unlawful detainer action is a summary proceeding designed to
facilitate owners in obtaining possession of their real property, counterclaims, crosscomplaints, and affirmative defenses are inadmissible."
S.P. Growers Assn. v. Rodriguez, 552 P. 2d 721, 723 (Cal. 1976).
- The purpose of this prohibition barring counterclaims, cross-complaints, and affirmative
defenses in unlawful detainer actions is to "prevent tenants who have violated the
covenants of their leases from frustrating the ordinary and summary remedy provided by
statute for the restitution of the premises." Union Oil Co. v. Chandler, 84 Cal. Rptr. 756,
760 (Ct. App. 1970).
- There are some exceptions to the general rule disallowing affirmative defenses in
unlawful detainer actions, namely, breach of the implied warranty of habitability. See
Lau v. Bautista, 598 P.2d 161, 165 (Haw. 1979) ("where a landlord brings an action for
summary possession based on a tenant's failure to pay rent, the tenant may assert the
landlord's breach of an implied warranty of habitability as an affirmative defense.");
Green v. Superior Court, 517 P.2d 1168 (Cal. 1974) (finding that a tenant may properly
raise the defense of the breach of the warranty of habitability in an unlawful detainer
action); Foisy v. Wyman, 515 P2d 160, 164 (Wash. 1973) (holding "that in all contracts
for the renting of premises, oral or written, there is an implied warranty of habitability
and breach of this warranty constitutes a defense in an unlawful detainer action.").
- Asserting the implied warranty of habitability as a defense in unlawful detainer actions
exists because "[t]he tenant's obligation to pay rent and the landlord's duty to maintain
the premises in habitable condition are mutually dependent." Lau, 598 P.2d at 165.
- The implied warranty of habitability basically requires a landlord to maintain property,
used for the purpose of human habitation, in a habitable condition during the term of the
lease. Green, 517 P.2d at 1175.
- Should a landlord violate the implied warranty of habitability, a tenant may withhold
rent until there has been a judicial determination as to the fair rental value of the
premises as they were during occupancy by tenant in the uninhabitable condition. Id. at
- Although our Supreme Court has not explicitly recognized the implied warranty of
habitability, Guam law hints to this concept, and imposes a statutory duty on landlords to
make dwellings habitable. Pursuant to 18 G.C.A. § 51101, a "lessor of a building
intended for the occupation of human beings must, in the absence of an agreement to the
contrary, put it into a condition for such occupation, and repair all subsequent
dilapidations thereof, which render it untenantable". Should a landlord violate this
statutory duty imposed by 18 G.C.A. § 51101, a tenant may, after notice and failure by
the landlord to make the repairs, make the necessary repairs and deduct those costs from
the rent owed or vacate the premises. 18 G.C.A. § 51102.
- Guam's statutory duty on landlords to make dwellings habitable is identical to California
Civil Code §§ 1941, 1942. In interpreting these provisions with respect to the implied
warranty of habitability, the California Supreme Court determined that such statutes
were "not intended as the exclusive remedy for tenants in this field and does not
preclude the recognition of a common law implied warranty of habitability in residential
leases." Green, 517 P.2d at 1178.
- Based on the foregoing, the Court finds there to be an implied warranty of habitability in
residential leases, and that such warranty may be used as a defense in an unlawful
- In applying the aforementioned principles, the Court determines that Plaintiffs failure to
repair the roof despite Defendant's repeated requests constitutes a breach of the implied
warranty of habitability for the residential portion of the Premises.
- According to evidence received by the Court, Defendant has provided ample and
adequate notice to Plaintiff and the Gombars of the problems associated with water leaks
arising from the bad condition of the roof. The water leaks from the roof have caused
constant puddling in stairways, hallways, and rooms; severe water damage to interior and
exterior walls, ceilings and floors; and damage to electrical lines and outlets. (Def.' s
Trial Ex. C & D.)
- The bad condition of the roof and the ensuing water leaks have begun to affect the
structural integrity of the Premises and are a health and safety hazard.
- The failure of Plaintiff to repair the roof is also in contravention of the Lease
- Given Plaintiffs breach of the implied warranty of habitability, Defendant may
rightfully assert this beach as an affirmative defense for these unlawful detainer actions.
- The Court, however, finds this defense is not a complete defense because the implied
warranty of habitability only applies to the residential portion of the Premises. See
Kachian v. Aronson, 475 N.Y.S. 2d 214, 218-219 (1984) (recognizing that when
premises are used for both commercial and residential purposes, a court may pro-rate
rent based on the landlord's breach of the warranty of habitability) See also Four Seas
Inv. Corp. v. Int'l Hotel Tenants Ass'n, 81 Cal. App. 3d 604, 613 (1978). Therefore, this
defense does not absolve Defendant's duty to pay rent for the portion of the Premises
that are used for commercial operations, namely, the Wise Owl Veterinarian Clinic.
Thus, Plaintiff is still in unlawful detainer relative to Tri-Mani I for defaulting on the
payment of rent.
- In summary, Plaintiff may only collect rent from September 23, 2015 and onwards. The
rental payments, however, for the residential portion of the Premises will be abated due
to violations of the implied warranty of habitability. The total amount determined for
rent on both the business and residential portion (with abatement) will be determined
upon the parties' submission of information regarding the square footage for the
business and residential portions of the Premises.
IV. UCC Concerns Regarding Check Payments Made
- Plaintiff has brought up concerns regarding the check payments for rent that have been
received thus far but have yet been cashed or deposited due to concerns that cashing the
checks would constitute an accord and satisfaction under the UCC. The Court looks to
the Lease Agreement to clarify this issue.
- The Court notes that the Lease Agreement contains an accord and satisfaction provision
which states as follows: "No payment by Lessee or receipt by Lessor of a lesser amount
than the monthly rent herein stipulated and required to be paid shall be deemed to be
other than on account of rents due, no[r] shall any endorsement or statement on any
check or any letter accompanying any check or payment of rent be deemed an accord
and satisfaction, and Lessor may accept such check or payment without prejudice to
Lessor's right to recover the balance of such rent or pursue any remedy provided in this
Lease or by law." (Verified Compl. Ex. A, at 11 ¶ 27, Oct. 9, 2015.)
- Given this provision, Plaintiffs deposit or cashing of the checks would not have
constituted an accord and satisfaction exonerating the Defendant from paying the full
rental amount due under the Lease Agreement.
V. Current Status of the Defendant
- As stated previously, the Lease Agreement contains a provision granting Defendant with
an option to extend the term of the Lease Agreement for an additional five (5) years,
provided that written notice is given to the lessor - i.e. the Gombars or their successors
in interest - prior to expiration of the lease term and provided that lessee - i.e.,
Defendant - is not in default of any term of the lease. (Verified Compl. Ex. A, at 1 ¶ 1,
17 ¶ 33, Oct. 9, 2015.)
- Having found that that the Defendant was in default in Tri-Mani I for not paying rent
pursuant to the Lease Agreement, Defendant could not exercise his option to renew.
- Even if the Plaintiff was not in default, the Lease Agreement requires that the option be
exercised by written notice to the Lessor. (Id.)
- The Court finds that there is insufficient evidence
to establish that Defendant gave formal written notice to Plaintiff, or his predecessors -
the Gombars, exercising the option to renew in the Lease Agreement.
- Further, Guam law provides that "[i]f a lessee of real property remains in possession
thereof after the expiration of the hiring, and the lessor accepts rent from him, the parties
are presumed to have renewed the hiring on the same terms and for the same time, not
exceeding one month when the rent is payable monthly, not in any case one year." 18 G.C.A. § 51105.
- Accordingly, Defendant's status as of January 1, 2016 is a holdover tenant, on a month
to month to basis.
VI. Defendant's Request for Repossession
- Having determined above that Defendant was in unlawful detainer with respect to Tri-Mani I,
there is still the matter of Defendant's request for repossession of the Premises.
- Equitable principles generally apply to forfeiture requests in actions for unlawful
detainer. See Scheweiger v. Superior Court, 3 Cal.3d 507, 514 (Cal. 1970) (finding that
equitable principles apply where forfeiture is sought in an unlawful detainer action and
that a court must examine the equities involved before awarding forfeiture).
- In applying such principles, the Court recognizes that Plaintiff has not received a full
rental payment from Defendant since becoming successors in interest of the Premises in
2015. For Defendant to continue staying in the Premises would be unfair to Plaintiff,
particularly as Defendant has refused to pay the full rent as required by the Lease
Agreement and has refused to vacate the Premises. Further, there is no evidence that
either Plaintiff acted maliciously in refusing to make the repairs that were requested or
that Defendant acted maliciously with respect to the Premises' deteriorating conditions.
The crux of the dispute and the souring relationship between the parties arise out of a
disagreement concerning interpretation of the Lease Agreement and the relative
responsibility of the parties in performing their respective obligations. Further, the
problems associated with the Premises and interpretation of the obligations of the parties
in the Lease Agreement existed long before Plaintiff purchased the Premises from the
- The Court notes that Defendant, rather than enduring the uninhabitable conditions, could
have vacated the premises in accordance with 18 G.C.A. § 51102 after Plaintiff
purportedly failed to live up to their obligation to maintain the premises in accordance
with the Lease Agreement and after Defendant's repeated requests to fix the problems
surrounding the roof and sewage system. Instead, Defendant has chosen to remain on the
Premises for the full duration of the Lease Agreement, even insisting that he exercised
his option to renew for an additional five years after December 2015. Further, Defendant
has had ample time to secure alternative commercial and residential arrangements since
the roof leaks were first reported in 2014 and since the problems relative to the
Premises' lack of a sewage system persisted.
- Based on the foregoing, the Court finds that forfeiture of the Lease Agreement and that
repossession of the premises by Plaintiff is the most practical solution given the strained
nature of the relationship between the parties and the amount of time that has passed
since the complaints for unlawful detainer were first lodged. The Court recognizes
Defendant's rights, pursuant to 21 G.C.A. § 21119, for relief against forfeiture in cases
VII. Attorney's Fees and Costs
- Having found that Defendant is in unlawful detainer in Tri-Mani I, but not in Tri-Mani
III, the Court will now address the issue of attorney's fees for those respective cases.
- In determining whether to award attorney's fees to a party, courts in United States
jurisdictions, including Guam, apply what is commonly referred to as the "American
Rule." Fleming v. Quigley, 2003 Guam 4 ¶ 35 ("the American Rule applies in Guam").
"Under the American Rule, parties bear their own litigation expenses, including
attorney's fees." Id. at ¶ 7. There are several exceptions to the American Rule which
include matters "where attorney's fees are: (1) authorized by statute, (2) authorized by
contract, or (3) allowed in judicially-established circumstances." Id.
- Here, there exists a provision relative to attorney's fees in the Lease Agreement. The
provision states as follows: "[i]n any action, arbitration, or other proceeding involving a
dispute between Lessor and Lessee arising out of this Lease, the prevailing party will be
entitled to reasonable attomey['s] fee[s], expert witness fees, and costs." (Verified
Comp. Ex. A, at 17 ¶ 26, Oct. 9, 2015.)
- Accordingly, the Court finds that attorney's fees to a "prevailing party" are authorized
by virtue of the Lease Agreement signed between Plaintiff and Defendant. The Court,
however, still must determine whether Defendant qualifies as a "prevailing party".
- The Supreme Court of Guam has determined that "the prevailing party to a suit, for the
purpose of determining who is entitled to attorney[']s fees, is the one who successfully
prosecutes the action or successfully defends against it, prevailing on the merits of the
Rahmani v. Park, 2011 Guam 7 ¶ 61.
- As Defendant was found to be in unlawful detainer of the Premises in Tri-Mani I
(CV949-15), the Court finds that Plaintiff is the prevailing party. Accordingly, Plaintiff
is entitled to attorney's fees and court costs for that matter which Defendant is ordered to
- As Defendant was not found to be in unlawful detainer of the Premises in Tri-Mani III
(CV1182-15), the Court finds that Defendant is the prevailing party. Accordingly,
Defendant is entitled to attorney's fees and court costs for that matter which Plaintiff is
ordered to pay.
Based on the above findings of fact and conclusions of law, the Court finds the
Defendant in unlawful detainer in Tri-Mani I (CV0949-15), but not in Tri-Mani III (CV1182-15).
Pursuant to 21 G.C.A. § 21115, the Court orders Defendant to vacate the Premises within
thirty (30) days and the Court terminates the Lease Agreement. The Court further orders the
parties to submit within ten (10) working days a brief which details the square footage of the
Premises which are being used for commercial and residential purposes in order to aid the Court
in determining the amount of rent due for unlawful detainer. After a review by this Court of
such documents, Defendant will be ordered to pay Plaintiff a sum, at an amount to be
determined, for reasonable rent due under the lease from September 23, 2015 through December
31, 2015, and for each month thereafter that Defendant has remained in possession of the
property. The Court further orders Plaintiff to submit a brief and proposed order within ten
working (10) days in support of attorney's fees and costs incurred in Tri-Mani I (CV0949-15).
Finally, the Court orders Defendant to submit a brief and proposed order within ten (10)
working days in support of attorney's fees and costs incurred in Tri-Mani III (CV1182-15).
A status hearing will be held on August 29, 2016 at 2 p.m. to ensure that the documents requested
by this Court have been submitted.
IT SO ORDERED, on this day of August 4, 2016.
[signature] Hon. Alberto C. Lamorena III
HONORABLE ALBERTO C. LAMORENA III
Presiding Judge, Superior Court of Guam
Placement of a clause under a particular section herein is not controlling;
a finding of fact may state legal conclusions and a conclusion oflaw may include statements of fact.
The Premises is also described as Lot No. 2117-REM-R3NEW-l.
(Sachdev Aff ¶ 2, Oct. 23, 2015.)
The Court notes discrepancies between the lease agreements admitted during the
evidentiary hearing on April 8, 2016 - Def.'s Exhibit A and B - and the agreements which are identified
as Exhibit A and attached to the Verified Complaints in CV0949-15 and CV1182-15.
The discrepancies, however, are inconsequential to the Court's disposition of these cases as
this Court's findings rests on the undisputed portions of the agreements.
For purposes of consistency, this Court adopts the lease agreements attached to the Verified Complaint
in CV0949-15 as the controlling Lease Agreement in these Findings of Fact and Conclusions of Law.
The determination that service was not proper in
CV1139-15 under 21 G.C.A. §§ 21103(b), 21105 and that dismissal without
prejudice was appropriate was made by Judge Vernon G. Perez before the
matter was reassigned to this Court.
There is no reason for this Court to doubt the sufficiency of the funds behind the attempted check payments
that were made the day after the notice in Tri-Mani III was served on Defendant. Had those checks been
received and deposited accordingly, Defendant would have essentially complied with the notice's
requirements therefore precluding any action for unlawful detainer relative to that specific month.
This Court previously determined that Defendant did not have a valid business license to lease the Premises.
(Dec. and Order 3:10-12, Oct. 28, 2015.)
Plaintiff has largely conceded this point stating that "[i]t may be that this Honorable Court may determine
that Plaintiff is not entitled to collect rent for any period before Plaintiff obtained the business license on
September 23, 2015 ... Plaintiff is clearly entitled to collect rent from the date of the license ... " (Opp'n to Def.
M. Re: Business License 6:2-8, Oct. 23, 2015.)
Although nothing in Guam's unlawful detainer statute prohibits the raising of counterclaims and affirmative
defenses, the Court finds instructive California's treatment of this issue given that Guam's statute was derived
from California's former unlawful detainer statute.
The Court will not make a determination as the adequateness of the Premises' sewage facilities or septic
tank system. Although such problems have some bearing with respect to the implied warranty of habitability,
the bulk of the evidence on this issue points to a dispute on liability over the (1) costs and maintenance of the
septic tank system and (2) the cost of connecting the Premises to the sewer system, which are contractual
The Lease Agreement states that "Lessee will be responsible for all repairs required during the term of the
lease, except the following which will be maintained by the lessor: roof, exterior walls, structural
foundations ..." (Verified Compl. Ex. A, at 16 ¶ 8, Oct. 9, 2015.) The Court reads use of the word "will" in
the aforementioned section of the Lease Agreement as a mandatory duty.
A contractual party's obligation in a contract is usually determined by the contract itself as long as the
contract is clear, unambiguous, valid, and in writing. See, e.g., 6 G.C.A. §2511 (If a contract is in writing, no
extrinsic evidence of the contract terms should be considered except for where there is a mistake, ambiguity
or imperfection in the writing); 18 G.C.A. § 87104 ("The language of a contract is to govern its interpretation,
if the language is clear and explicit, and does not involve an absurdity"); 18 G.C.A. 87105 ("When a writing
is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible ... ").
Apart from Defendant's testimony, the only other evidence before this Court to suggest that Defendant
exercised his option to renew is a letter dated February 1, 2015 from Plaintiff to the prior owners of the
Premises stating that "I have already given you our intent to use the option of staying here the next S years.
Hopefully, we will be out of here in 2-3 years as we are coming close to closing on some property (fingers
crossed)." (Def.'s Ex. D-10.) There is no evidence that the letter itself, or the previous expression of intent to
renew that is referenced in the letter, was ever received by the Gombars or by Defendant at some time after
they purchased the Premises in 2015.
It is worth noting that some jurisdictions award attorney's fees and costs to a prevailing party in matters
when there has been no adjudication on the merits, such as in cases where dismissal was based on procedural
grounds. See Arias v. Kardoulias, 207 Cal. App. 4th 1429, 144 Cal. Rptr. 3d 599, 604 (2012) (listing cases
where courts have awarded attorney's fees to a prevailing party upon a dismissal based on procedural
grounds); Oahu Publications, Inc. v. Abercrombie, 134 Haw. 16, 24 (2014) (stating that there is "no
requirement that the judgement in favor of the prevailing party be a ruling on the merits"). In other
jurisdictions, however, it is necessary for there to be an adjudication on the merits in order to be entitled
attorney's fees as a prevailing party. See HNA Properties v. Moore, 848 N.W. 2d 238, 242 ("a prevailing
party must be more than successful to some degree, and instead must prevail on the merits in the underlying
action") (internal citation marks omitted); Thanks But No Tank v. Dept. of Environmental Protection, 2013
ME 114 (the determination of a successful party for allocating attorney's fees and costs is to be based on
success upon the merits). Our Supreme Court has adopted the latter rule that a prevailing party, for purposes
of awarding attorney's fees and costs, is one who is successful on the merits. Rahmani, 2011 Guam 7 ¶ 61.