The government of Guam, and its Department of Land Management and Guam Waterworks Authority suffered a major blow in court in a lawsuit the government brought in the waning days of the Eddie Calvo administration.
In December 2018, GovGuam filed a lawsuit against Core Tech International, suing for a change in the certificate of title of ownership of the land under the Northern District Wastewater Treatment Plant (NDWWTP) from Core Tech (see note at bottom of story) to GovGuam. Judge Elyze Iriarte on Monday, issued a ruling stating Core Tech legally purchased the property and that Core Tech owns the property. The ruling follows a November 2021 ruling, where the judge questioned whether GWA or GovGuam have any interest or right to operate the plant on the property at all.
GWA joined the case in March 2019. Shortly after, the water agency demolished a fence belonging to Core Tech, which straddled the edge of an adjoining lot also owned by Core Tech. That encroachment led Core Tech to counterclaim in the case, suing GWA for nearly $200 million in damages. This would mark the first time Core Tech had ever demanded payment from the government for the government’s use of the property Core Tech legally purchased several years prior.
Kandit began investigating and reporting on the case in 2021, digging up the documents evidencing the several transfers of the property since 1980 to the sell of the property to Core Tech. GWA has insisted throughout the case that the property was illegitimately conveyed to Core Tech, despite Core Tech’s payment for the property, and the successive conveyance documents properly filed at the Guam Department of Land Management proving the ownership.
“Incorporating its Decision and Order issued on November 30, 2021, the Court generally determines that any interest in lots at issue here conveyed by the Government of Guam to GWA reverted according to the language of the conveyance document,” Ms. Iriarte wrote in her August 14, 2023 Decision and Order. “Moreover, Gov. Guam also conveyed the same property to third parties, and title to the property eventually ended up in the hands of Core Tech upon Core Tech’s reliance on Certificates of Title issued to Core Tech’s predecessor. Core Tech was entitled to rely upon those Certificates of Title, and therefore its title is protected under Guam’s Land Title Registration law. Finally, the Court determines that the law of the case doctrine does not preclude the findings made here.”
This statement is part of a 38-page decision and order on two pre-trial motions – one motion to dismiss and motion for summary judgment by Core Tech, and one second motion for summary judgment by GWA – unto which Ms. Iriarte ruled Monday, setting the stage for a trial that could cost GWA $200 million in damages.
Core Tech requested summary judgment against GWA, alleging GWA failed to bring its request to quiet title timely, in other words, within the relevant statute of limitations. Core Tech, according to the recent decision and order, relied upon a statement the court made in its November 2021 decision and order “taken out of context,” regarding whether there was a dispute on GWA’s possession of the NDWTTP property since GWA’s creation in 1997.
Ms. Iriarte analyzed and reconstructed the possession issue, determining that it is an undisputed fact GWA has possessed the property – operating the NDWTTP there since 1997 – and Core Tech has not. Therefore, “the statute of limitations has not begun to run on a quiet title action. She denied Core Tech’s part of its motion for summary judgment.
On the question of ‘Who owns the land under the Northern District Wastewater Treatment Plant?,’ Ms. Iriarte took apart GovGuam’s 1997 Grant Deed of the property to GWA and honed in on a requirement in that Grant Deed for GWA to draw up and submit a survey map within five years of the conveyance. That was not done. The judge, after a lengthy legal analysis, ruled that GWA’s failure to record the maps timely led to an automatic reversion of the property to the government of Guam.
That reversion set the stage for GovGuam’s conveyance of that property to the Chamorro Land Trust Commission, then later to the Guam Ancestral Lands Commission upon the creation of the GALC. Following that conveyance, GALC then quitclaimed the property to the estate of Jose Martinez Torres. The estate later sold the property to the owner of Younex. The owner of Younex then transferred the property to Younex. A series of mortgages then led to an auction of the property; one which Core Tech won in 2015.
The judge, again after reviewing and analyzing each of these conveyances against GWA’s arguments against Core Tech’s claim of ownership, ruled that the relevant quitclaimed deeds were valid, and do not interrupt the chain of title transfer to Core Tech.
Finally, the judge denied GWA’s contention that its possession of the NDWTTP property through its operation of the plant has the legal ability to uproot an officially-issued and recorded certificate of title. And, while Core Tech’s name is not on the current certificate of title, the government’s Land Registration law protects Core Tech as the owner of the property because Core Tech properly purchased the property from the title holder: Younex.
The court’s determination of Core Tech’s legal protection as owner of the property is a pivotal moment in the case, as the litigation advances. At stake is the possibility Core Tech will be awarded full damages and attorneys fees of about $200 million, unless the government settles with Core Tech prior to any trial and award.
The court has set a status hearing for September 18.
It is unclear whether a) the government of Guam has discussed this latest blow to the public interest with the military, to which the operation of the NDWTTP is critical, especially considering the investment of Government of Japan funds for its upgrade for the military buildup; and b) whether GWA has informed its creditors, especially its bondholders, of the change of status of the property ownership of its most valuable asset.
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Footnote: Younex is actually named on the certificate of title. Younex subsequently forfeited the property through a legal transaction to Core Tech, one which is recorded at the Guam Department of Land Management.
