Long-Term Credit Bank of Japan v Superior Court [2003] GUSC 9; 2003 Guam 10 (16 May 2003)

IN THE SUPREME COURT OF GUAM

THE LONG-TERM CREDIT BANK OF JAPAN,
Petitioner

v.

SUPERIOR COURT OF GUAM,
Respondent
___________________________

IWAO NOMOTO; INTERNATIONAL TRADING NETWORK, LTD.;
ITN CORPORATION; EDUARDO A. CALVO; E.C. DEVELOPMENT;
ALBERT WONG; CAPITAL INVESTMENT GROUP LTD.;
LUXTON SERVICES, LTD; SUNBRIGHT MARSHALL ISLANDS;
SUNBRIGHT PALAU; EIE AMERICAN CO., LTD.; HENSHAW GROUP
LIMITED; EIE DEVELOPMENT (HONG KONG) LTD.; EIE GUAM
CORPORATION; and JOHN DOES 1-20 INCLUSIVE,
Real Parties in Interest.

OPINION

Filed: May 16, 2003

Cite as: 2003 Guam 10

Supreme Court Case No.: WRP03-002
Superior Court Case No.: CV1365-99

Original Proceeding in the Supreme Court of Guam
Argued and submitted on April 8, 2003
Hagåtña, Guam

Appearing for Petitioner Long-Term Credit Bank of Japan: G. Patrick Civille, Esq. Teker Civille Torres & Tang, PLLC Ste. 200, 330 Hernan Cortez Ave. Hagåtña, Guam 96910	Appearing for the Respondent Superior Court of Guam: Samuel J. Taylor, Esq. Staff Attorney Superior Court of Guam Guam Judicial Center 120 West O=Brien Dr. Hagåtña, Guam 96910
Appearing for the Real Party in Interest EIE Guam: Rodney Jacob, Esq., Arthur Clark, Esq. Calvo & Clark, LLP Ste. 202, First Savings & Loan Bldg. 655 S. Marine Dr. Tamuning, Guam 96911	Appearing for the Real Party in Interest Capital Investment and Albert Wong: Cesar Cabot, Esq. Law Offices of Cesar C. Cabot, P.C. 2nd Flr., Bank Pacific Bldg. 825 S. Marine Dr. Tamuning, Guam 96911
Iwao Nomoto, International Trading Network, Ltd., and ITN Corp.: William Fitzgerald, Esq. c/o Paul A. Lawlor, Esq. Law Office of Paul A. Lawlor Ste. 903, PNB 238 Archbishop Felixberto Flores St. Hagåtña, Guam 96910	EC Dev. and Eduardo A. Calvo: Thomas M. Tarpley, Jr., Esq. Law Office of Thomas M. Tarpley Ste. 201, American Life Bldg. 137 Murray Blvd. Hagåtña, Guam 96910

BEFORE: FRANCES M. TYDINGCO-GATEWOOD, Chief Justice (Acting)[1]; JOHN A. MANGLONA, Justice Pro Tempore[2]; RICHARD H. BENSON, Justice Pro Tempore.

PER CURIAM:

[1] The Petitioner The Long-Term Credit Bank of Japan (ABank@) requests that this court issue a peremptory writ of prohibition, commanding the Respondent Superior Court of Guam to cease and desist from scheduling any matters in The Long-Term Credit Bank of Japan, Ltd. v. Iwao Nomoto, et al., Superior Court Case No. CV1365-99, before the Presiding Judge of the Superior Court, Alberto C. Lamorena, III. The Bank ultimately seeks review of the lower court=s decision denying the Bank=s request to recuse the Presiding Judge from presiding over that matter. This court issued an Alternative Writ of Prohibition granting the requested relief, and ordered the Respondent to appear and show cause as to why a peremptory writ should not be issued in this case. We also allowed the Real Parties in Interest to brief the matter. Upon due notice and hearing, and upon consideration of the papers, the court finds that a peremptory writ of prohibition should be issued to permanently restrain the Respondent from scheduling any matters in the above-mentioned proceeding before the Presiding Judge. Accordingly, the Petition is hereby granted and the reasons are set forth herein.

I.

[2] This case arises out of a motion presented by the Bank to disqualify Presiding Judge Alberto C. Lamorena, III (sometimes AJudge Lamorena@ or APresiding Judge@) from presiding over the case The Long-Term Credit Bank of Japan, Ltd. v. Iwao Nomoto, et al., Superior Court Case No. CV1365-99. The relevant facts as set forth in the Petition are as follows: The underlying action (ANomoto Action@) was filed by the Bank against the Defendants (separately referred to as AEIE Guam@ and ANomoto defendants@) to collect money which the Bank alleges was illegally transferred by EIE Guam to the Nomoto defendants.

[3] The Nomoto Action involves a longstanding dispute between the parties over money for the construction of the Hyatt Hotel Guam (AHotel@). In the early 1990=s, EIE Guam was involved in the construction of the Hotel and, as a result, was entitled to profits from the Hotel under a profit distribution plan (AOwner=s Profit Distribution@). In 1994, as security for a construction loan from the Bank, EIE Guam executed a Security Agreement assigning its rights in the Owner=s Profit Distribution to the Bank. The Bank alleges that EIE Guam has refused to pay the Bank any portion of the Owner=s Profit Distribution since mid-1995, and has transferred funds from the Distribution to the Nomoto defendants.

[4] On August 2, 1995, EIE Guam filed a lawsuit in the Superior Court captioned EIE Guam Corp. v. The Long-Term Credit Bank of Japan, et al., Case No., CV1190-95 (hereinafter AFirst Action@). The First Action was filed by EIE Guam to avoid payment of millions of dollars to the Bank and other banks involved in the construction of the Hotel. The Bank filed a counterclaim seeking to enforce the loans, guaranties and security agreements at issue in the suit, including its security interest in the Owner=s Profit Distribution.[2]

[5] The First Action was assigned to retired Chief Justice (then Superior Court Judge) Benjamin J. F. Cruz. The Presiding Judge thereafter took the case from Judge Cruz and assigned it to himself. On April 2, 1996, Judge Lamorena sua sponte filed a Memorandum titled ADisqualification to Sit on CV1190-95,@ recusing himself from the case under Title 7 GCA ''6105 and 6108. In the Memorandum, he stated:

In reviewing the memorandum and affidavits, I realized [sic] that I have received information regarding some facts of this case.

Civille Decl., Exhibit 5 (March 20, 2003).

[6] The First Action was thereafter assigned back to Judge Cruz, who entered summary judgment in favor of EIE Guam against the Bank in 1996. The decision was reversed by this court in 1998, and petitions for a writ of certiorari were thereafter denied by the Ninth Circuit in 1999 and the United States Supreme Court in 2000. The case was remanded to the Superior Court, and due to Judge Cruz=s appointment to the Guam Supreme Court, the case was assigned to Judge Joaquin V.E. Manibusan, Jr.

[7] While the First Action was on appeal in 1999, the Bank allegedly discovered evidence that money from the Owner=s Profit Distribution which EIE Guam assigned to the Bank was wrongfully converted, paid, and loaned to the Nomoto defendants. In order to preserve its causes of action, the Bank filed the instant underlying action, (the Nomoto Action), in the Superior Court. The Nomoto Action was initially assigned to Judge Manibusan but was stayed upon motion of the Nomoto defendants until resolution of the appeals in the First Action.

[8] After the conclusion of the appeals in 2000 and remand to the Superior Court, the First Action was removed to the District Court. Thereafter, the stay was lifted in the Nomoto Action and EIE Guam and the Nomoto defendants filed their Answers to the Bank=