Supreme Court slams door on GWA and GovGuam in Ukudu land scam case

The Guam Supreme Court in a unanimous decision Friday, denied yet another attempt by Guam Waterworks Authority and the Department of Land Management to take a private owner’s land without just compensation. GWA and DLM desperately tried to escape the numerous decisions against them previously written by Superior Court Judge Elyze M. Iriarte in a case GovGuam embroiled taxpayers in that may result in hundreds of millions in damages to Core Tech International.

The case, which now awaits trial before Ms. Iriarte, began in the final days of the Calvo administration, when then-director of land management Michael Borja sued CTI to seize title from the company on Lot 10184-7 Ukudu. That’s the property, where GWA operates the Northern District Wastewater Treatment Plant. GWA joined the case months later. The clincher: CTI, the owner of the property according to legally-filed land documents at DLM, did nothing to provoke the lawsuit, and actually continues to be assessed and pay property taxes on it.

From 2015, when CTI bought the land, to December 2018, the company quietly allowed GWA to operate the plant, undisturbed. There was no bill for rent, no skirmish about the operation of a sewage treatment plant near barracks and other land owners nearby, and certainly no lawsuit to get GWA to pay the landowner. And then, something strange happened: Mr. Borja sued CTI, embroiling the island’s taxpayers and GWA’s ratepayers in a now-four-year standoff that three decisions in the case point to the possibility of major damages being owed to CTI.

The first decision was an admonishment of the Office of the Attorney General, where Ms. Iriarte ordered the government, and thus the taxpayers, to pay attorneys fees to CTI. The second was the November 30, 2021 decision and order that, among other issues, declared CTI’s ownership interest in the property and questioned whether GWA had any right to occupy the property at all. And the third, which happened Friday, occurred in the Guam Supreme Court.

In this latest effort to again try to avoid the inevitable, the two agencies had filed a petition for Interlocutory appeal with the Guam Supreme Court claiming they have been irreparably harmed and that they disagreed with Judge Iriarte’s decision to also deny their motion for summary judgement.

“This court DENIES Plaintiff-Appelants, Government of Guam, Joseph M. Borja, in his capacity as Director of Land Management, and Guam Waterworks Authorities Petition for Permission to file Interlocutory Appeal,” wrote the justices. Included in their decision the justices also wrote that land owner Core Tech International (“CTI”) has every right to pursue damages in the trial court and that the Supreme Court had no evidence before it to intervene.

It has now been more than a year that Kandit has closely followed this case which is proving to be one of, if not the biggest, land scams and controversies in our island’s history. The story has involved serious consequences to our people by GWA’s and Land Management’s decision to initiate this lawsuit in the first place. And we continue to believe that this case involves an innocent land owner that has not only taken up its own fight, but the fight of hundreds of land owners whose lands have been taken by their own government.

We reached out to Core Tech attorney Peter Sgro, Jr. for a reaction to the Friday decision. Sgro replied:

Peter Sgro, Jr., Esq.

“This is yet another decision in this case that supports the position our community should have faith in our judicial system. We are of course very pleased with the decision and also the fact it was a unanimous decision by the justices. This decision sends a very strong message to both GWA and the Department of Land Management that it’s time they be held accountable for years of mistakes. They do not have very many options left and it’s clear they have no evidence to support their allegations. This lawsuit they filed is now over four years old and not once have they produced any evidence to show my client does not own its land. This has and continues to be a waste of ratepayer’s money,” Mr. Sgro said.

Severe fallout

Kandit has previously reported about questionable activities related to GWA disclosing required information to its bond holders. We have also raised questions and concerns about whether GWA has met the legal requirements associated with disclosures to its bond holders. We discussed some of our findings with attorney Sgro and asked him what he felt about the impact of this decision to GWA bond holders.

“As for the issue related to the bonds, GWA has and continues to have a very high fiduciary obligation to its bond holders to disclose any risks to their investments. Not only should they have provided the Trustee of the bonds all pleadings and orders in this case, this must provide the Trustee this Supreme Court decision. There is no excuse for non- disclosure especially since the Trustee of the bonds is right here on Guam. I feel it’s just a matter of time before those responsible for drafting these disclosures are called to answer some serious questions,” stated Mr. Sgro.

Miguel Bordallo

In one of our previous stories, we raised the issue of how GWA could apply for a federal grant to improve the NDWWTP when it had no site control. We reached out numerous times for comments to GWA General Manager Miguel Bordallo about this, as well as issues related to the bonds but he would not reply. So we asked Mr. Sgro if he could comment about GWA’ federal grant application.

“As for their federal grant application, that too is at significant risk. When a local government agency applies for federal grant funds to improve land, that agency must prove in its application it has site control of the land it desires to develop. It is no different from borrowing money from a bank to build a home. You must provide the bank with evidence you own the land where you want to build the home. GWA does not own the land nor can it prove it has site control over the land. And this Supreme Court decision reaffirms these facts,” Sgro added.

Where Is Michael Borja? What Is The AG Going To Do?

Michael Borja

Although there have been serious allegations made about GWA and the current director of land management – Joseph Borja – now finds his name on the case, it was Calvo’s Michael Borja who started the controversy. Michael Borja, who is no longer a government employee, still has his name on the caption of the case even in this Guam Supreme Court decision. Questions of consequence remain: Why did he do it? Who ordered him to do it? And did he engage in any alleged collusion with GWA or anyone else in what has become a four year waste of our people’s time and money.

When the dust settles, can Michael Borja be held to account for a decision he made in his official capacity, and what is the attorney general going to do now? The AG’s office still represents Land Management but is it obligated to still represent a former agency director? After four years of litigation, and a court record of 0-3, it is beguiling how many unanswered questions there are, and why the government of Guam refuses to extricate itself from the mess it started.

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