Rahmani v Park [2011] GUSC 7; 2011 Guam 07 (15 April 2011)

IN THE SUPREME COURT OF GUAM

KIA RAHMANI,
Plaintiff-Appellee,

v.

JAE SEUNG PARK and HEE SOOK PARK,
Defendants-Appellants.

OPINION

Filed: April 15, 2011

Cite as: 2011 Guam 7

Supreme Court Case No.: CVA09-008
Superior Court Case No.: CV1985-03

Appeal from the Superior Court of Guam
Argued and submitted on March 10, 2010
Hagåtña, Guam

Appearing for Defendants-Appellants: Robert P. Kutz, Esq. Law Office of Robert P. Kutz 130 Maleyuc Cir. Yona, GU 96915

Appearing for Plaintiff-Appellee: Jehan'Ad G. Martinez, Esq. Blair Sterling Johnson Martinez & Leon Guerrero, P.C. Ste. 1008 DNA Bldg. 238 Archbishop F.C. Flores St. Hagåtña, GU 96910

BEFORE: ROBERT J. TORRES, Chief Justice; F. PHILIP CARBULLIDO, Associate Justice; KATHERINE A. MARAMAN, Associate Justice.[1]

TORRES, C.J.:

[1] Defendants-Appellants Jae Seung Park and Hee Sook Park (collectively, "the Parks") appeal from a final judgment entered in favor of Plaintiff-Appellee Kia Rahmani on his claim of negligence against the Parks in the amount of $31,671.00, and in favor of the Parks on their breach of contract claim against Rahmani in the amount of $47,361.13.

[2] For the reasons set forth below, we reverse in part the judgment of the trial court, vacate the trial court's damage awards to both parties, and remand for findings consistent with this opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

[3] Defendants-Appellants Jae Seung Park and Hee Sook Park are the owners of the Oka Plaza building located in Tamuning. On September 1, 2000, Plaintiff-Appellee Dr. Kia Rahmani entered into an agreement with the Parks to lease commercial office space in Oka Plaza to be used as Dr. Rahmani's medical clinic. The parties executed a written lease agreement on November 13, 2000, wherein Dr. Rahmani agreed to lease the premises for a period of five years commencing January 1, 2001, and ending January 1, 2006.

[4] Pursuant to the lease agreement, Dr. Rahmani was responsible for the payment of rent, common area fees, utilities, and any late payment fees subject to compound interest. The amount of rent due was to increase at certain intervals over the five-year lease period, starting at $3,581.99 per month and gradually increasing to $4,884.53 by the end of the lease term. Dr. Rahmani was also responsible for securing at his expense both property damage liability insurance and a policy of fire insurance with standard form extended coverage endorsements including typhoon coverage. Because his clinic was located on the second floor, Dr. Rahmani declined to purchase typhoon or flood insurance for his property.

[5] Under the terms of the lease agreement, the Parks were responsible for the maintenance of the common areas and the maintenance of the back-up power generator. They were also responsible for any major repairs to Oka Plaza's infrastructure, including the plumbing system.

[6] According to Dr. Rahmani, a variety of problems existed with the condition and maintenance of Oka Plaza. These problems included inadequate cleaning of the common areas, leaking windows, periodically failing elevator service, and periodically failing back-up generator service. Dr. Rahmani gave written notice about these problems to the Parks on October 30, 2001.

[7] On or about February 12, 2002, Dr. Rahmani abated the amount of his monthly rental payments on the basis of the aforementioned alleged conditions of Oka Plaza. He continued to abate his rental payments until he vacated the premises on or about August 31, 2003.

[8] In 2002, prior to Dr. Rahmani's vacating of the premises, Dr. Rahmani's property was damaged during Typhoons Chata'an and Pongsona. Dr. Rahmani suffered extensive water damage to the leased premises and the equipment therein. In the aftermath of each typhoon, Oka Plaza experienced intermittent power failures resulting from the failure of the Plaza's back-up generator. Each typhoon and subsequent power interruption caused damages to Dr. Rahmani's clinic and the equipment therein.

[9] According to Dr. Rahmani, his clinic and equipment were damaged in two separate incidents during the cleanup from Typhoon Chata'an in August 2002. On August 25, 2002, Oka Plaza lost power when the generator failed due to what Dr. Rahmani believed to be reversed polarity. Two days later, Dr. Rahmani's clinic flooded ("the flood") when a common area bathroom spigot was left open and water was restored to Oka Plaza, which had been without water since the typhoon.

[10] On or about August 31, 2003, Dr. Rahmani vacated Oka Plaza before the expiration of his five-year lease term. On March 31, 2004, the Parks agreed to lease the abandoned premises to an existing tenant, Dr. Lizama, who had been leasing space on the first floor of Oka Plaza. The Parks agreed to rent the second floor space to Dr. Lizama for $4,000.00 per month, which was the amount Dr. Lizama had been paying for the smaller first floor space he previously occupied.

[11] The first floor space remained vacant until October 1, 2004, when a portion of the space was leased out to a Dr. Mitchell for $1,650.00 per month. Neither Dr. Mitchell nor Dr. Lizama paid any common area fees for the first floor space between the time of Dr. Lizama's transfer to the second floor space in March 2004 and the end of Dr. Rahmani's lease term on January 1, 2006.

[12] Subsequently, Dr. Rahmani filed a complaint in the Superior Court against the Parks for negligence, seeking damages in the amount of $210,000.00. Along with the damage claims, Dr. Rahmani sought recovery of his $9,769.06 security deposit and discharge from the lease agreement on a theory of constructive eviction.

[13] The Parks filed a counterclaim against Dr. Rahmani on the basis of Dr. Rahmani's failure to pay contractually-agreed rental and common area fees, together with late fees and interest, both before Dr. Rahmani abandoned the premises in August 2003 and thereafter. Both parties sought to recover attorney fees and costs pursuant to the lease agreement.

[14]