Bank of Guam v Flores [2004] GUSC 24; 2004 Guam 25 (29 December 2004)

IN THE SUPREME COURT OF GUAM

BANK OF GUAM,
Plaintiff-Appellee

vs.

DAVID D. FLORES and WILLIAM B.S.M. FLORES,
Defendants-Appellants

Supreme Court Case No. CVA03-017
Superior Court Case No. CV1162-02

OPINION

Filed: December 29, 2004

Cite as: 2004 Guam 25

Appeal from the Superior Court of Guam
Argued and submitted on July 16, 2004
Hagåtña, Guam

Appearing for the Plaintiff-Appellee: Joaquin C. Arriola, Esq. Mark E. Cowan, Esq. Arriola, Cowan & Arriola 259 Martyr St., Ste. 201 C&A Bldg. Hagåtña, Guam 96932

Appearing for the Defendants-Appellants: Arthur B. Clark, Esq. Jennifer Ann Calvo, Esq. Calvo and Clark, LLP, Attorneys at Law 655 S. Marine Dr., Ste. 202 Tamuning, Guam 96911

BEFORE: FRANCES M. TYDINGCO-GATEWOOD, Chief Justice (Acting)[1]; ROBERT J. TORRES, Associate Justice; PETER C. SIGUENZA, JR., Justice Pro Tempore.

TORRES, J.:

[1] Plaintiff-Appellee the Bank of Guam foreclosed a mortgage granted by Defendants-Appellants David and William Flores (AFloreses@) to secure a promissory note. The Bank of Guam later filed a lawsuit against the Floreses to recover the deficiency remaining due on the promissory note following the foreclosure. The Floreses counterclaimed, arguing that the Bank of Guam breached an agreement to postpone foreclosure of the mortgage and seeking specific performance regarding the Bank of Guam=s release of a separate mortgage. The trial court granted the Bank of Guam=s motion for summary judgment on all claims. The Floreses appeal the trial court=s judgment. We affirm in part, reverse in part, and remand this matter for further proceedings consistent with this opinion.

I.

[2] In December 1999, the Floreses borrowed $3,915,000.00 from the Bank of Guam pursuant to a Promissory Note (ANote@) secured by a mortgage on properties in Hagåtña and Mangilao, Guam (AMortgage@). The Note and Mortgage were accompanied by a Loan Agreement (ALoan@). The Loan proceeds were to be used in part to acquire and renovate the D=Flores Capitol Building, formerly known as Pedro=s Plaza, in Hagåtña, Guam.

[3] The Bank of Guam sent a notice to the Floreses on December 11, 2000 that the Floreses were in default under the Note for failure to make their required payments. The notice also informed the Floreses that if the default was not cured within thirty days, the full amount due on the Note of $4,128,125.43 would be accelerated and be immediately due and payable. The Floreses did not cure the default and the Bank of Guam recorded its Notice of Default and of Acceleration of Indebtedness with the Department of Land Management. The Bank of Guam then recorded its Notice of Sale under Power of Sale in Mortgage with the Department of Land Management, scheduling the foreclosure sale for March 27, 2001.

[4] David Flores subsequently wrote to the Bank of Guam regarding the default and ongoing renovations underway at the Hagåtña property and requested that the foreclosure proceedings be briefly delayed to give him a chance Ato secure the additional financing necessary to complete the project and bring his loan current.@ Appellee=s Supplemental Excerpts of Record (ASER@), tab 2 (Cowan=s Decl., Ex. L-1 (Ltr. from Att=y Stephanie Flores to Att=y Cowan of 02/16/01)). The Bank of Guam granted the request for a postponement of the foreclosure sale, with no concessions required from the Floreses, and rescheduled the foreclosure sale for April 26, 2001. On April 25, 2001 the Bank of Guam and David Flores executed an Agreement for Extension (A