Archbishop of Guam v GFG Corporation [1997] GUSC 12; 1997 Guam 12 (17 October 1997)

IN THE SUPREME COURT OF GUAM

ARCHBISHOP OF GUAM,
ANTHONY SABLAN APURON,
OFM, CAP D.D.,
Appellee,

vs.

G.F.G. CORPORATION,
Appellant.

Supreme Court Case No. CVA96-016
Superior Court Case No. CV1083-96
Filed: October 17, 1997

Cite as: 1997 Guam 12

Appeal from the Superior Court of Guam
Submitted on 12 August 1997
Agana, Guam

Counsel for Appellant
STEVEN A. ZAMSKY
Zamsky Law Firm
Suite 501, Bank of Guam Building
111 Chalan Santo Papa
Agana, Guam 96910

Counsel for the Appellee
JOHN C. DIERKING
Attorney at Law
140 Route 8
Agana, Guam 96910

_______________

OPINION

BEFORE: PETER C. SIGUENZA, Chief Justice, JANET HEALY WEEKS, and JOSE LEON GUERRERO, Associate Justices.

WEEKS, J.:

This is an appeal from a judgment in an unlawful detainer action restoring possession of certain real property to Appellee Archbishop of Guam and awarding the Archbishop rental payments due for a period of one year. The tenant, Appellant G.F.G. Corporation, contends that the Archbishop=s notice of default failed to comply with Guam=s unlawful detainer statute, 21 G.C.A. ' 21103. We agree with Appellant and reverse the judgment of the Superior Court.

BACKGROUND

[1] Appellee Archbishop of Guam (AArchbishop@) leased property to Appellant G.F.G. Corporation (AG.F.G.@) for a period of 99 years. The rent was set at $15,000 per month increasing 10% after the first five years and every five years thereafter. G.F.G.=s failure to pay rent led to a series of three unlawful detainer actions, the instant action being the most recent.

[2] The first unlawful detainer action (AUnlawful Detainer I@) was filed on 7 September 1994 and was based on a notice of default that Appellee sent to G.F.G. on 16 February 1994 demanding performance under the lease or surrender of the property. Following a trial, the Superior Court entered judgment awarding possession of the property to the Archbishop as well as unpaid rent up to the date of judgment. The Appellate Division of the District Court of Guam reversed the judgment because the Archbishop did not have a business license and did not substantially comply with the business licensing statute. Archbishop of Guam v. G.F.G. Corp., No. CR-95-00007A 1995 WL 604383, at *3 (D.Guam App. Div. Oct. 2, 1995). The opinion from the Appellate Division included the following statement in a footnote: AWe do not reach whether post-October 1994 circumstances support further proceedings against G.F.G. and this decision is not intended to prejudice future pursuit of any appropriate claims.@ Id.

[3] The second unlawful detainer action (AUnlawful Detainer II@) was filed on 8 April 1996 and was based on a notice of default sent to G.F.G. on 2 February 1996. The notice demanded rental payments covering a period of sixteen months, from October 1994 to January 1996, and also demanded interest and attorneys= fees. On the same day Unlawful Detainer II was filed, Appellee sent another notice of default to G.F.G. demanding, in addition to attorneys= fees and interest, rent again covering a period of sixteen months, this time from January 1995 to April 1996. This third default notice was entitled Alternate Written Notice of Default to Lessee and included the following language:

This notice is an AAlternate Notice@ given on the contingency that the Superior Court of Guam may rule that the AWritten Notice of Default to Lessee@ given by the Lessor to the Lessee on January 31, 1996 is defective by reason of inclusion therein of rental accruing from October 6, 1994 through December 31, 1994. This alternative notice shall not be deemed as an admission that rental for the months of October, November and December, 1994 is res-judicata, nor shall it be deemed as a waiver of claim for the said rental.

[4] G.F.G. did not appear in court to defend the action in Unlawful Detainer II. The Superior Court issued a default judgment which led to a 6 May 1996 judgment restoring possession to the Archbishop and awarding rent from October 1994 to April 1996. G.F.G. appealed the judgment in Unlawful Detainer II to the Appellate Division which resulted in another reversal. Archbishop of Guam v. G.F.G. Corp., No. CIV 96-00048A 1997 WL 208978, at *1(D.Guam App. Div. Apr. 21, 1997). The Appellate Division held that Appellee=s notice of default was invalid because it demanded more than one year=s rent and was therefore not in compliance with 21 G.C.A. ' 21103, Guam=s unlawful detainer statute. Id.

[5] On 18 July 1996, prior to the Appellate Division=s reversal in Unlawful Detainer II, Appellee filed a third unlawful detainer action (AUnlawful Detainer III@) in the Superior Court. This third action, the subject of the instant appeal, was based on the 8 April 1996 Alternative Notice of Default described above. The complaint in Unlawful Detainer III included the following clause: AThis action is brought on the contingency that defendant prevails in its appeal from the Judgment in Civil Case No. CV0464-96, Superior Court of Guam [Unlawful Detainer II], such appeal now pending in the District Court under D.C.C.V. 96-00048A.@

[6] G.F.G. filed a summary judgment motion on 13 August 1996 challenging the 8 April 1996 Alternative Notice of Default primarily on the basis that the notice demanded rent for a period in excess of one year. The Superior Court denied the summary judgment motion and on 4 October 1996 filed findings of fact and conclusions of law awarding Appellee twelve months of rent as well as interest and attorneys= fees. A separate judgment to this effect was filed on 30 January 1997. This appeal followed.

DISCUSSION

[7] Appellant G.F.G. presents three argument on appeal. First, G.F.G. argues that the Alternative Notice of Default which formed the basis of this unlawful detainer action was not in compliance with Guam=s unlawful detainer statute because it demanded rent in excess of 12 months. Second, G.F.G. argues that the judgment in this case,