Asia Pacific Hotel Guam v Dongbu Insurance Co Ltd [2015] GUSC 3 (3 February 2015)

IN THE SUPREME COURT OF GUAM

ASIA PACIFIC HOTEL GUAM, INC.,
Plaintiff-Appellant/Cross-Appellee,

v.

DONGBU INSURANCE CO., LTD,
Defendant-Appellee/Cross-Appellant.

GUAM ADVANCE ENTERPRISES, INC.,
Plaintiff-Appellee/Cross-Appellee,

v.

ASIA PACIFIC HOTEL GUAM, INC.,
Defendant-Appellant/Cross-Appellee.

Supreme Court Case No.: CVA14-005
Superior Court Case Nos.: CV0194-06 and CV0303-06

OPINION

Filed: February 3, 2015

Cite as: 2015 Guam 3

Appeal from the Superior Court of Guam
Argued and submitted on August 5, 2014
Hagåtña, Guam

Appearing for Plaintiff-Appellant/ Cross-Appellee: William R. Mann, Esq. Berman O’Connor & Mann Bank of Guam Bldg., Ste. 503 111 Chalan Santo Papa Hagåtña, GU 96910

Appearing for Defendant-Appellee/ Cross-Appellant: Thomas C. Sterling, Esq. Blair, Sterling, Johnson & Martinez, P.C. 238 Archbishop Flores St., Ste. 1008 Hagåtña, GU 96910

BEFORE: ROBERT J. TORRES, Chief Justice; F. PHILIP CARBULLIDO, Associate Justice; ALEXANDRO C. CASTRO, Justice Pro Tempore.

TORRES, C.J.:

[1] This appeal presents a dispute over an arbitration award. We previously remanded this case for the arbitration panel to render a sufficiently final award after we found its conditional award in 2007 insufficient to satisfy 7 GCA § 42A701(b)(4)[1]. Asia Pac. Hotel Guam, Inc. v. Dongbu Ins. Co., Ltd. (“Asia Pacific I”), 2011 Guam 18 ¶¶ 21-22. Following remand, the arbitration panel issued a final award in 2013, and Plaintiff-Appellant/Cross-Appellee Asia Pacific Hotel Guam, Inc. (“Asia Pacific”) again seeks vacatur of that award. The trial court denied Asia Pacific’s motion to vacate and granted Defendant-Appellee/Cross-Appellant Dongbu Insurance Co., Ltd.’s (“Dongbu”) motion for summary judgment confirming the arbitration award. For the reasons set forth below, including the requisite deference to arbitrators and arbitration panels, we affirm the trial court’s denial of Asia Pacific’s motion to vacate the arbitration award. Due to remaining disputes of material fact, however, we reverse the trial court’s grant of summary judgment and remand. Finally, on Dongbu’s cross-appeal, we affirm the trial court’s award of prejudgment interest from the date of the final, post-remand 2013 award, rather than from the conditional non-final 2007 award.

I. FACTUAL AND PROCEDURAL BACKGROUND

[2] This case is before us for the second time. In 2011, we issued our first opinion, Asia Pacific I, 2011 Guam 18. The initial facts relevant to this appeal are amply recorded in paragraphs two through four of that opinion. To recap, Asia Pacific owns the Fiesta Resort in Tumon and signed a contract with Harmon Corporation in 2004 to renovate the hotel. Dongbu issued a Performance and Payment Bond, with Harmon as contractor and Asia Pacific as obligee. Harmon defaulted on the contract, and Dongbu began working to complete the renovations pursuant to the Performance Bond. Disputes arose between Asia Pacific and Dongbu regarding Dongbu’s work, and Asia Pacific brought suit in the trial court. The parties agreed to arbitrate this portion of their dispute, and the arbitration panel issued an award in 2007. The trial court granted Dongbu’s motion to confirm and denied Asia Pacific’s motion to vacate, and Asia Pacific appealed to this court.

[3] In Asia Pacific I, we held that the Guam International Arbitration Chapter (“GIAC”) applied to the arbitration, that the arbitration panel’s “conditional award” was insufficiently final to satisfy 7 GCA § 42701(b)(4), Asia Pacific I, 2011 Guam 18 ¶ 23, and that the non-final portion of the award could not be severed from the remainder of the arbitration panel’s award. Though Asia Pacific had argued that the issue should be remanded to the Superior Court for trial, we remanded the case to the arbitration panel “to render a final and definite award, which may then be reviewed by the trial court in accordance with the agreement of the parties.” Id. ¶ 30.

[4] We also addressed the same issue of prejudgment interest raised in this appeal and held that “the trial court erred in ordering pre-judgment interest back to the date of the partial award,” because the arbitration panel never issued a “truly ‘final’ award.” Id. ¶ 34.

[5] On remand, the arbitration panel calculated the total off-set for defective work as $798,604.00. It then calculated the “[n]et amount owed by Asia Pacific on the Project” as $4,477,241.00.[2] Record on Appeal (“RA”), tab 115, Ex. C at 2 (Thomas C. Sterling Aff., Mar. 13, 2013).

[6] Dongbu filed a motion to confirm the award in the Superior Court and for summary judgment on the remaining issues which involve Dongbu’s entitlement to be subrogated to the entire amount of the award, prejudgment interest and for foreclosure of the mechanic’s liens securing the amount owed. Asia Pacific filed a motion to vacate the arbitration award. Asia Pacific essentially advanced the same arguments that it had raised previously seeking to vacate the 2007 award—namely, that the award resulted from a manifest disregard of the law, violated public policy, and did not draw its essence from the parties’ contract and bond. Since this court found the 2007 award to be impermissibly indefinite or non-final under the standards of 7 GCA § 42A701(b)(4), we had not previously addressed Asia Pacific’s further non-statutory arguments concerning vacation of the award.

[7]