Ex-gov. Guerrero and wife found liable to pay $122K

The Superior Court has found former governor Lorenzo I. Guerrero and his wife Matilde V. Guerrero liable to pay the Commonwealth Development Authority for their $122,129.42 loan and interest.

Associate Judge Juan T. Lizama ruled that whether the Guerreros are in default is a legal conclusion based on the facts regarding their failure to pay and any mitigating circumstances.

“Because the material facts are undisputed, there is no jury question regarding default,” said Lizama in his order issued Thursday granting CDA’s motion for summary judgment.

The judge pointed out that based on CDA’s evidence presented in court, which the Guerreros have failed to adequately refute, “summary judgment is appropriate.”

The court grants summary judgment if the pleadings, depositions, answers to interrogatories and admissions on file show that there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law.

Court records show that CDA extended a direct loan to the Guerreros in the consolidated and revised principal amount of $122,129.42 with interest payable at a rate of 9 percent per annum.

The loan was initiated on Oct. 31, 1985 in the principal amount of $160,000. The two loans were consolidated for a new principal of $230,720.01 in November 1986.

As part of the consolidation agreement, CDA released the earlier mortgages and substituted a 20,000 square meter property in As Lito.

In February 1995, at the specific requests of defendants Guerreros, CDA revised and extended the consolidated loan. This resulted in a new principal amount of $100,601.26 with new monthly payments and a new maturity date.

The parties again revised and extended this loan in 1997, 1998, and 2001. The principal amount of $122,129.42 arises from the fourth revision.

The Guerreros have not denied executing any of the loan documents, except for one referring to a fee simple mortgage.

On Feb. 17, 2004, CDA served defendants with notices of default. In addition to the As Lito property, the default notice referred to two other properties.

In granting CDA’s motion, Lizama noted that because the latter two properties had already been released under the 1995 revision, CDA no longer had a right to foreclose on the two lots.

There is no dispute that CDA’s inclusion of these two tracts in the notice was an error, Lizama said.

In spite of this error, the judge said, the default notice provided the principal due, $122,129.42, and referred to each of the mortgages, agreements and revisions by their file numbers.

“There is no dispute regarding the amount of the principal quoted,” he said.

The notice, Lizama said, indicated that defendants would be in default if they failed to pay the amount due within 30 days.

After 30 days had passed and defendants had not paid the amount due, CDA filed its lawsuit.

“The defendants have each admitted that the notes, guaranties, loan agreements, security agreements, revision agreements and mortgages were duly executed by one or both of them,” Lizama said.

However, he said, the defendants denied they are in default and argued that the Jan. 12, 2004 notice of default was defective, since it listed properties that had already been released as collateral when the As Lito property was included as collateral.

The Guerreros, through counsel Victorino Torres, stated that whether the notice was defective is an issue of fact that precludes summary judgment.

Lizama disagreed.

“There is no factual dispute regarding the substance of the loan agreements or the information contained in the notice,” he said.

“CDA admits that the two other tracts were improperly included in the notice. Whether this error precludes default is a legal question rather than a factual question,” he said.

Lizama said he finds that CDA’s error does not preclude a finding of default.

He cited that a plain reading of the loan agreement belies defendants’ interpretation.

Further, the judge said, the defendants’ non-payment constitutes default under the promissory note, which states, “If an installment payment is not paid within 15 days after its due date, all amounts remaining due may be accelerated and made immediately due and payable at the option of the promisee.”