IN THE SUPERIOR COURT OF GUAM

TRI-MANI, LLC) CASE CV0949-15; CV1182-15
)
Plaintiff,)
)
vs) FINDINGS OF FACT AND
) CONCLUSIONS OF LAW
) (Unlawful Detainer)
DR. JOEL JOSEPH,)
)
Defendant.)
)
)
_____________________________________ )

INTRODUCTION

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[1]

    By a preponderance of evidence, the Court makes the following findings of fact:

  1. 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. [2] (Verified Compl. 7, Oct. 9, 2015.)

  2. Plaintiff is a registered domestic limited liability corporation authorized to conduct business in Guam at the Premises for commercial space rental.

  3. 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.

  4. 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. [3] (Def.'s Trial Ex. A & B; see also Verified Compl. Ex. A, Oct. 9, 2015.)

  5. Lease Agreement I was signed contemporaneously with Lease Agreement II on or around May 10, 2005.

  6. 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.)

  7. 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.

  8. 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.)

  9. 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.)

  10. 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.)

  11. 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.)

  12. 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.

  13. 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").

  14. 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 receptionist. (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.)

  15. 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.

  16. 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.)

  17. 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. [4] See Tri-Mani, LLC v. Dr. Joel Joseph, Civil Case No. 1139-15, Judgment of Dismissal (Jan. 19, 2016).

  18. 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.

  19. 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.)

  20. 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.)

  21. 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. (Id.)

  22. Defendant continues to remain in possession of the Premises despite Plaintiffs multiple notices concerning unpaid rent.

  23. 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.)

  24. 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.

  25. 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

  1. 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.

  2. 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.

  3. 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).

  4. 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.

  5. 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.

  6. 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.

  7. 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.

  8. 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.

  9. 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.

  10. 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)

  11. 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). [5] 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.

  12. 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.

  13. 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. [6]

  14. 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). Furthermore, a 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. 70121.

  15. 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).

  16. In light of the aforementioned principles, the Court finds that Plaintiff is unable to collect rent for any period when Plaintiff ["Defendant" in original -ed] did not have any business license whatsoever. [7] 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.

  17. 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 original -ed] 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

  18. 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.

  19. 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." [8] S.P. Growers Assn. v. Rodriguez, 552 P. 2d 721, 723 (Cal. 1976).

  20. 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).

  21. 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.").

  22. 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.

  23. 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.

  24. 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 1184.

  25. 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.

  26. 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.

  27. 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 detainer action.

  28. 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. [9]

  29. 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.)

  30. 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.

  31. The failure of Plaintiff to repair the roof is also in contravention of the Lease Agreement. [10]

  32. Given Plaintiffs breach of the implied warranty of habitability, Defendant may rightfully assert this beach as an affirmative defense for these unlawful detainer actions.

  33. 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.

  34. 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

  35. 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. [11]

  36. 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.)

  37. 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

  38. 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.)

  39. 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.

  40. Even if the Plaintiff was not in default, the Lease Agreement requires that the option be exercised by written notice to the Lessor. (Id.)

  41. The Court finds that there is insufficient evidence [12] to establish that Defendant gave formal written notice to Plaintiff, or his predecessors - the Gombars, exercising the option to renew in the Lease Agreement.

  42. 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.

  43. 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

  44. 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.

  45. 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).

  46. 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 Gombars.

  47. 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.

  48. 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 of hardship.

    VII. Attorney's Fees and Costs

  49. 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.

  50. 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.

  51. 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.)

  52. 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".

  53. 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 main issue." [13] Rahmani v. Park, 2011 Guam 7 61.

  54. 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 pay.

  55. 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.

CONCLUSION

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


[1]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.

[2]The Premises is also described as Lot No. 2117-REM-R3NEW-l. (Sachdev Aff 2, Oct. 23, 2015.)

[3]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.

[4]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.

[5]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.

[6]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.)

[7]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.)

[8]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.

[9]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 disputes.

[10]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.

[11]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 ... ").

[12]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.

[13]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.