Moylan v. Moylan (In re Moylan), (2018)

2018 Guam 8

IN THE MATTER OF THE GUARDIANSHIP OF YUK LAN MOYLAN, Ward.

RICHARD E. MOYLAN, Appellant, v. KURT MOYLAN, LEIALOHA MOYLAN ALSTON,and FRANCIS LESTER MOYLAN, JR., Appellees.

Supreme Court Case No.: CVA16-016

SUPREME COURT OF GUAM

Argued and submitted: August 4, 2017

July 26, 2018

Superior Court Case No.: SP0106-07

(consolidated with SP0104-07, SP0105-07, SP0107-07, SP0110-07, & SP0111-07)

OPINION

Appeal from the Superior Court of Guam

Argued and submitted on August 4, 2017

Hagåtña, Guam

Appearing for Appellant:

Gary Wayne Francis Gumataotao, Esq.

155 San Ramon St., Ste. 301

Hagåtña, Guam 96910

Douglas B. Moylan, Esq.

Law Offices of Douglas B. Moylan

138 W. Seaton Blvd., Ste. 201

Hagåtña, Guam 96910

Appearing for Appellees:

Jacqueline Taitano Terlaje, Esq.

Law Office of Jacqueline Taitano Terlaje, P.C.

284 W. Chalan Santo Papa

Hagåtña, Guam 96910 BEFORE: F. PHILIP CARBULLIDO, Presiding Justice; ROBERT J. TORRES, Associate Justice; JOHN A. MANGLONA, Justice Pro Tempore.

CARBULLIDO, J.:

[1] Appellant Richard E. Moylan ("Richard") appeals from a Decision and Order of the Superior Court that denied his request for attorney's fees. For the reasons set forth below, we reverse in part and vacate in part, with instructions.

I. FACTUAL AND PROCEDURAL BACKGROUND

[2] This case arises out of the same highly-contested guardianship case we previously addressed in In re Guardianships of Francis Lester Moylan & Yuk Lan Moylan, 2011 Guam 16 (hereinafter, "Moylan I"), and, more recently, in In re Guardianship of Yuk Lan Moylan, 2017 Guam 28 (hereinafter, "Moylan II"). As noted in the court's prior opinions in this case, Mrs. Yuk Lan Moylan ("Mrs. Moylan") and Mr. Francis Lester Moylan ("Mr. Moylan")¹ (collectively, the "Wards") were successful businesspeople who amassed a large set of assets. In 2007, each was diagnosed with varying stages of Alzheimer's disease, which limited their ability to care for themselves and their assets. Mr. and Mrs. Moylan had four children, including Richard and Appellees Kurt Moylan ("Kurt"), Leialoha Moylan Alston ("Princess"), and Francis Lester Moylan, Jr. ("JR") (Kurt, Princess, and JR collectively, the "Majority Siblings").

[3] Faced with competing petitions to be appointed guardian of the Wards, the trial court appointed Princess "general guardian" over the person of Mr. Moylan and "limited guardian" over the person of Mrs. Moylan. Kurt was appointed "general guardian" of the estate of Mr. Moylan and "limited guardian" of the estate of Mrs. Moylan. We affirmed these appointments on appeal in Moylan I.

[4] During the course of this guardianship litigation, Richard alleged that his siblings orchestrated a scheme to put more than $1.5 million worth of Time Certificates of Deposit ("TCDs") that belonged to the Wards into the names of Princess and JR. Following the eleven-day evidentiary hearing, the court ordered that "[a]ll sums originally transferred into the names of Princess and JR shall be transferred as soon as is practicable back to the names of the Wards." Record on Appeal ("RA"), tab 285C at 22 (Finds. Fact & Concl. of L., Nov. 10, 2008). The trial court, however, did not require reimbursement of interest on the TCDs from Princess and JR to the Wards. Subsequently, the court issued another order requiring "Guardian Kurt S. Moylan . . . to remove the names of [Princess] and [JR] from any and all" of the TCDs, which had been placed into a joint account over which Princess and JR continued to maintain co-ownership following the court's November 2008 decision. RA, tab 328C (Order, Apr. 24, 2009).

[5] Among other issues, Richard appealed that portion of the trial court's findings that Princess and JR were not required to reimburse the Wards for interest on the TCDs while they were in Princess's and JR's names. We found this issue moot. See Moylan I, 2011 Guam 16 ¶ 45. Nevertheless, we noted that in resolving this issue below, the trial court "did not base this conclusion on any prior bad act on the behalf of any of the Majority Siblings" and "found no ill will or deceitful motives on the part of" any of the Majority Siblings. Id. ¶ 20 (citations and internal quotation marks omitted). Thus, we observed that "the imposition of a constructive trust by the trial court was not based on any finding of prior bad acts and was not necessarily inconsistent with the appointment of Kurt and Princess as guardians." Id.

[6] Separately, the Majority Siblings cross-appealed from the trial court's order imposing a constructive trust on the TCD transfers. We affirmed this order, finding that Princess and JR would be unjustly enriched were a constructive trust not imposed. We further stated that "[t]he act of restoring the property to the rightful owner, as was done in this case, both restored the property back to the Wards and prevented any future unjust enrichment." Id. ¶ 70 n.12.

[7] Richard filed a motion for attorney's fees, which asserted that his role in the litigation helped to protect estate assets properly belonging to the Wards. Princess and Kurt, as court-appointed guardians of the Wards, opposed this motion.

[8] The trial court denied Richard's motion in its entirety. In doing so, the trial court reasoned that Guam's guardianship statutes permit only the guardian to apply for attorney's fees. The court also found that Richard's actions did not rise "to the level of 'protection' needed to invoke the equitable circumstances exception" because there was "no evidence of bad faith or egregiousness by the guardians to warrant protection." RA, tab 495C at 5 (Dec. & Order, July 26, 2016). Therefore, no equitable circumstances existed to warrant the grant of attorney's fees. Richard filed a timely appeal of this final order.

II. JURISDICTION

[9] This court has jurisdiction over appeals from final orders entered by the Superior Court of Guam. 7 GCA § 3107(b) (2005); 48 U.S.C.A. § 1424-1(a)(2) (Westlaw through Pub. L. 115-196 (2018)).

III. STANDARD OF REVIEW

[10] "[A] determination of the legal basis for an award of attorney fees [is reviewed] de novo as a question of law." Fleming v. Quigley, 2003 Guam 4 ¶ 14 (alteration in original) (quoting Sessions Payroll Mgmt., Inc. v. Noble Constr. Co., 101 Cal. Rptr. 2d 127, 131 (Ct. App. 2000)). This includes any inquiry into whether the lower court properly applied or departed from the American Rule for the award of attorney's fees. See id.

IV. ANALYSIS

[11] "The award of attorney's fees in United States jurisdictions is governed by what is commonly referred to as the 'American Rule.' Under the American Rule, parties bear their own litigation expenses, including attorney's fees." Fleming, 2003 Guam 4 ¶ 7 (citing Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 247 (1975)). "[T]he American Rule applies in Guam," Fleming, 2003 Guam 4 ¶ 35, and is codified at 7 GCA § 26601(f), id. ¶ 12 (citation omitted). Even in jurisdictions adhering to the American Rule, however, fee-shifting is allowed in certain limited instances, including where: "(1) authorized by statute, (2) authorized by contract, or (3) allowed in judicially-established equitable circumstances." Fleming, 2003 Guam 4 ¶ 7 (citation omitted). "[D]epartures from the American rule are narrowly drawn exceptions." In re Guardianship & Protective Placement of Evelyn O., 571 N.W.2d 700, 702 (Wis. Ct. App. 1997) (citation omitted). Thus, "[a] statute allowing attorney fees is in derogation of the common law and must be strictly construed." Belton v. State, 529 S.E.2d 4, 5 (S.C. 2000) (citation omitted); see also Sule v. Guam Bd. of Dental Exam'rs, 2008 Guam 20 ¶ 53 (finding that "absent specific statutory or contractual language to the contrary, the term 'costs' does not include attorney's fees").

[12] On appeal, Richard argues that the trial court erred in refusing to award attorney's fees because applicable guardianship statutes and equitable considerations justify the award of fees. See Appellant's Br. at 11-25 (Oct. 19, 2016). In opposition, the Majority Siblings argue that under Guam's guardianship statutes only guardians are permitted to seek recovery of attorney's fees and no equitable exception applies because the court found that the Majority Siblings did not act in bad faith. See Appellees' Br. at 10-17 (May 26, 2017). We hold that while no statute provides for the recovery of attorney's fees in this case, Richard should nevertheless be entitled to recover his attorney's fees under the "substantial benefit" doctrine.

A. Guam's Guardianship Statutes Do Not Permit Richard to Recover Attorney's Fees

[13] Richard first argues on appeal that he is entitled to recover his attorney's fees under Guam's guardianship statutes, including 15 GCA §§ 4101-4104. See Appellant's Br. at 11-18. The Majority Siblings assert in opposition that only a guardian may recover from a ward's estate under Guam law. See, e.g., Appellees' Br. at 15. Determining whether statutory authority permits deviation from the American Rule is a question of law, properly resolved by reference to "the statute's plain meaning and the legislature's intent." Macris v. Swavely, 2008 Guam 18 ¶ 17 (citation omitted); see also Sule, 2008 Guam 20 ¶ 53 (interpreting the term "costs" to exclude attorney's fees); Cruz v. Cruz, 2005 Guam 3 ¶¶ 17-23 (interpreting term "pending" to encompass appellate attorney's fees).

[14] Pursuant to 15 GCA § 4102, "[e]very guardian must pay the ward's just debts out of the ward's personal estate and the income of his real estate, if sufficient . . . ." 15 GCA § 4102 (2005). Richard asserts that because his efforts resulted in the return of more than $1.5 million in TCDs to the Wards, his costs in doing so are a "just debt" of the Wards' estate. Nothing in the text of this specific provision, elsewhere in the text of Guam's guardianship statutes, or in the legislative history indicates what debts are considered "just" or what debts properly belong to the estate.

[15] We have been able to find only one case that addressed a similar argument to...