Guam Top Builders, Inc. and Ejong Construction Co., Ltd., Plaintiffs-Appellees/Cross-Appellants, v. Tanota Partners, Hafa Adai Properties, AES Construction, Inc., and John Does I-V, Defendants-appellants/Cross-Appellees

IN THE SUPREME COURT OF GUAM GUAM TOP BUILDERS, INC. and EJONG CONSTRUCTION CO., LTD., Plaintiffs-Appellees/Cross-Appellants, TANOTA PARTNERS, HAFA ADA1 PROPERTIES, AES CONSTRUCTION, INC., and JOHN DOES I-V, Defendants-Appellants/Cross-Appellees. OPINION Cite as: 2011 Guam 30 Supreme Court Case No.: CVA09-013 Superior Court Case Nos.: CV0558-99 and CV2469-98 Appeal from the Superior Court of Guam Argued and submitted on June 3,2010 Hagitfia, Guam ORIGINAL Guam Top Builders, Inc. v. TatlofaPartners, 201 1 Guam 30, Opinion Page 2 of 50 Appearing for Plaintiffs-Appellees1 Cross-Appellants: Thomas M. Tarpley, Esq. 414 W. Soledad Ave., Ste. 904 Hagitiia, GU 96910 Appearing for Defendants-Appellants1 Cross-Appellees Tanota Partners and Hafa Adai Properties: David Mair, Esq. (Argued and Briefed) Mair, Mair, Spade & Thompson, L.L.C. 238 Archbishop F.C. Flores St. DNA Bldg., Ste. 801 Hagitiia, GU 96910 Calvo Fisher & Jacob LLP 259 Martyr St., Ste. 100 Hagitiia, GU 96910 Guam Top Builders, Inc. v. Tanota Partners, 201 1 Guam 30, Opinion Page 3 of 50 BEFORE: ROBERT J. TORRES, Chief Justice; F. PHILIP CARBULLIDO, Associate Justice; and KATHERINE A. MARAMAN, Associate ~ustice.' TORRES, C.J.: [I] Defendants-Appellants/Cross-AppelleesTanota Partners and Hafa Adai Properties appeal the Judgment and Decree of Foreclosure of Mechanic's Liens. Plaintiffs-Appellees/CrossAppellants Guam Top Builders, Inc. and Ejong Construction Co., Ltd. also filed a cross-appeal of the same judgment and decree. For the reasons discussed below we affirm in part and reverse in part the Judgment. I. FACTUAL AND PROCEDURAL BACKGROUNDAsk ⌕

[2]Many of the facts relevant to this appeal are contained in our earlier opinion, Guam Top Builders, Inc. v. Tanota Partners, 2006 Guam 3, as a result we will set forth only those facts necessary to explain our decision. This case involves mechanic's lien claims arising out of the construction of the Outrigger Hotel ("Hotel") in Tumon, Guam, owned by DefendantsAppellants/Cross-AppelleesTanota Partners and Hafa Adai Properties (collectively, "Tanota"). Plaintiff-Appellee/Cross-Appellant,supplier Ejong Construction Co., Ltd. ("Ejong"), did not execute a written contract with Tanota or any of its agents but nevertheless indisputably supplied steel and other materials for the Hotel's construction, filed with the Department of Land Management a mechanic's lien for record on the Hotel for the steel and materials supplied. Id. ¶ 1. Subsequently, Ejong filed a complaint in the Superior Court to enforce payment of its claim and to foreclose on the amended lien in the amount of $1,728,284.67. I On January 18, 201 1, Justice F. Philip Carbullido was sworn in as Chief Justice of the Supreme Court of Guam. The signatures in this Opinion reflect the titles of the justices at the time this matter was considered and determined. Guam Top Builders, Inc. v. Tanota Partners, 201 1 Guam 30, Opinion Page 4 of 50Ask ⌕⧉ cite

[3]Tanota moved for summary judgment on the basis that Ejong was paid in full for the materials supplied to the Hotel project, that the lien amount was not a claim for materials provided but included a claim for money paid to John K. Sherman ("Sherman"), President of AES Construction, Inc. ("AES"), and that the claims of lien were ineffective for lack of verification. The trial court granted summary judgment, and Ejong appealed.Ask ⌕⧉ cite

[4]On appeal, we held that because a genuine issue of material fact remained over the existence and terms of an agreement regarding the price of materials Ejong supplied, summary judgment invalidating the amount of Ejong's lien to the extent it exceeded $5,000.00 was improper. Id. ¶ 23. On remand, the case proceeded to a jury trial. At the pre-trial conference the parties disputed the issues that would proceed to trial. Transcripts ("Tr.") at 3-5 (Pre-Trial Conf., Jan. 12, 2007). Tanota asserted that Plaintiffs-Appellees/Cross-AppellantsGuam Top Builders, Inc. ("GTB") and Ejong made no demand for a jury trial, and as a result were not entitled to have their claims tried by the jury. Id. at 5. The trial judge requested the parties brief the issues and continued the hearing. At the continued hearing, the trial court decided it would determine all issues relating to the validity of the mechanic's liens, and that all other triable issues would be sent to the jury. Tr. at 10-13, 25-26 (Status Conf., Jan. 17, 2007). At trial, the parties filed proposed jury instructions for the court's consideration. Tanota requested the trial court instruct the jury on its affirmative defenses. Specifically, Tanota proposed the following: (1) an instruction on the validity of a mechanic's lien when made with intent to defraud; (2) an instruction defining fraud; (3) an unclean hands instruction; (4) an instruction for payment of materials and labor provided; (5) an agency instruction; and (6) instructions on the mechanic's lien statutory requirements. Appellants' Excerpts of Record ("ER), vol. 1, tab 34 at 2-4, 5-6, 89 (Am. Proposed hstr., Feb. 13,2007). The trial court denied Tanota's requested instructions. Guam Top Builders, Inc. v. Tanota Partners, 201 1 Guam 30, Opinion Page 5 of 50Ask ⌕⧉ cite

[5]Following a 16-dayjury trial, the jury returned a special verdict in favor of Ejong for the sum of $1,491,658.17. Record on Appeal ("RAW),tab 248 at 2 (Special Verdict, Feb. 16, 2007). In the special verdict form, the jury found there was an agreement with Ejong regarding the price of the materials supplied. Id. The jury also determined that GTB did not fulfill its obligations under the Memorandum of Understanding ("MOU) between AES and GTB, and after deducting the costs incurred by AES to complete the project, the jury awarded GTB $180,000.00. Id. at 3. The trial court requested that the parties file post-trial memoranda on how the case should next proceed. Tr. at 44 (Jury Trial, Feb. 16, 2007). The trial court subsequently issued a Decision and Order concluding that it would proceed with determining the issues concerning the statutory requirements of the mechanic's liens. RA, tab 253 at 13 (Dec. & Order, June 12, 2007). The court also found that "the jury's finding that an agreement existed for the purchase price of steel was inconsistent with its determination as to the amount owing under such agreement because the jury's award of $1,491,658.17 to Plaintiff Ejong more closely reflect[ed] the market value of materials . . . , and not $928,620.00, the amount Ejong claimed as the balance under the agreement." Id. at 9-10. As a result of the inconsistent verdict, the court held that Ejong was owed $928,620.00. Id. at 11.Ask ⌕⧉ cite

[6]The trial court proceeded to determine the issues related to the validity of the mechanic's liens. GTB and Ejong filed post-trial motions for summary judgment which the court granted in part. RA, tab 258 (Pls.' Post-Trial Mots. Summ. J., Aug. 3, 2007); RA, tab 272 (Dec. & Order, Sept. 8,2008). Thereafter, Tanota filed a motion for reconsideration and also renewed its motion for a judgment as a matter of law or in the alternative for a new trial. RA, tab 293 (Defs.' Mem., Nov. 10, 2008). The motions were denied. In its Decision and Order denying the motions, the court reconsidered its earlier decision of the inconsistent verdict and agreed with GTB and Guam Top Builders, Inc. v. Tanota Partners, 20 1 1 Guam 30, Opinion Page 6 of 50 Ejong's explanation of the jury's verdict, that is, that the jury decided to add to the actual cost of materials a 10% markup to account for overhead and profit. RA, tab 304 at 12 (Dec. & Order, Mar. 19, 2009). On May 1, 2009, judgment was entered for Ejong in the amount of $1,491,658.17 and for GTB in the amount of $180,000.00, which included an award of prejudgment and post-judgment interest. RA, tab 309 at 2 (Judgment & Decree of Foreclosure, May 1, 2009). Tanota timely appealed. RA, tab 314 (Not. of Appeal, May 19, 2009). Ejong and GTB filed a cross-appeal. RA tab 330 (Not. of Cross Appeals, June 11,2009). 11. JURISDICTIONAsk ⌕⧉ cite

[7]This court has jurisdiction over this appeal and cross-appeal from a final judgment. 48 U.S.C.A. § 1424-1(a)(2) (Westlaw through Pub. L. 112-44 (2011)); 7 GCA $ 3 3107(b), 3108(a) (2005). 111. STANDARD OF REVIEW [a] We review a jury's verdict to determine whether it is supported by substantial evidence or is against the clear weight of the evidence. Park v. Mobil Oil Guam, Inc., 2004 Guam 20 9 11 (citing O'Mara v. Hechanova, 2001 Guam 13 ¶ 6). "Substantial evidence is such relevant evidence which reasonable minds might accept as adequate to support a conclusion even if it is possible to draw two inconsistent conclusions from the evidence." Id. (quoting O'Mara, 2001 Guam 13 16). A ruling on a motion for judgment notwithstanding the verdict is reviewed de novo. Id. (citing Leon Guerrero v. DLB Constr. Co., 1999 Guam 9 111). A denial of a motion for a new trial is reviewed for an abuse of discretion. Fenwick v. Watabe Guam, Inc., 2009 Guam 1 ¶ 6 (citing B.M. Co. v. Avery, 2002 Guam 19 ¶ 10). "When reviewing the denial of a motion for a new trial, the inquiry is whether the verdict is either supported by substantial Guam Top Builders, Inc. v. Tanota Partners, 201 1 Guam 30, Opinion Page 7 of 50 evidence or 'whether the jury's decision is against the clear weight of the evidence."' Id. (quoting Avery, 2002 Guam 19 ¶ 10).Ask ⌕⧉ cite

[9]A trial court's refusal to give a requested instruction is reviewed for an abuse of discretion. Id. (citing Avery, 2002 Guam 19 7 10). While we generally review the trial court's formulation of jury instructions for abuse of discretion, we review jury instructions de novo when they are challenged as a misstatement of the law. See People v. Songeni, 2010 Guam 20 ¶ 9 & n.1 (citations omitted); Voohries-Larson v. Cessna Aircraft Co., ⟂241 F.3d 707Persuasive authoritynon-Guam — not binding under the reception rule, 713 (9th Cir. 2001) (citations omitted). Since the trial judge is in the best position to determine if a jury's answers are inconsistent, we review the decision for abuse of discretion. See Kerman v. City of New York, ⟂261 F.3d 229Persuasive authoritynon-Guam — not binding under the reception rule,244 (2d Cir. 2001). [lo] Although a trial court's award of interest generally is reviewed for an abuse of discretion, Guam United Warehouse Corp. v. DeWitt Transp. Sews. of Guam, Inc., 2003 Guam 20 ¶ 22, whether prejudgment interest for an implied contract to pay the reasonable value of services or materials provided is permitted under §20 GCA 3Guam Code Annotatedstatute — binding 2110 is a question of law warranting de novo review. Tanaguchi-Ruth + Assocs. v. MDI Guam Corp., 2005 Guam 7 ¶ 81. Finally, we review the denial of a motion for summary judgment de novo. Quichocho v. Macy's Dep't Stores, Inc., 2008 Guam 9 ¶ 13 (citing Villanueva ex rel. United States v. Commercial Sanitation Sys., Inc., 2005 Guam 8 ¶ 9). IV. ANALYSIS [I].] In this opinion, we first examine the issues raised in Tanota's appeal and then address GTB and Ejong' s cross-appeal issues. A. Tanota's Appeal 1. Trial Court's Refusal to Provide Proposed Instructions Guam Top Builders, Inc. v. Tanota Partners, 201 1 Guam 30, Opinion Page 8 of 50 a. Standard of ReviewAsk ⌕⧉ cite

[12]The parties dispute the applicable standard of review for the trial court's failure to instruct the jury with Tanota's proposed instructions. Tanota asserts the standard of review "depends on the nature of the claimed error." Appellants' Br. at 11 (Feb. 9, 2010) (quoting Navellier v. Sletten, ⟂262 F.3d 923Persuasive authoritynon-Guam — not binding under the reception rule, 944 (9th Cir. 2001)). Specifically, Tanota contends that the abuse of discretion standard applies generally to claims of instructional error; however, where the claim of error is based on a misstatement of the law or failure to instruct on a party's theory of a case, the standard of review is de novo. Id. Relying on B.M. Co. v. Avery, 2002 Guam 19, GTB and Ejong claim that a denial of a proposed instruction is reviewed for an abuse of discretion. Appellees' Br. at 10 (Mar. 12, 2010).Ask ⌕⧉ cite

[13]In Avery we stated that the denial of a proposed jury instruction is reviewed for an abuse of discretion. 2002 Guam 19 ¶ 10. We said that a refusal to give an instruction on a cognizable issue for which there was supporting evidence may be an abuse of discretion, and "a trial court's decision to reject a requested instruction will be upheld even where the court could have given an instruction that was of more assistance to the jury, if the instruction actually given accurately and sufficiently instructed the jury of the law to be applied." Id. (J¶ 34, 36 (citations omitted). ''[If] the instructions advise the jury as to the law it should apply, the court has the discretion to decline to give other instructions even though they may properly state the law to be applied." Id. ¶ 34 (citation and internal quotation marks omitted). Thus, Avery provides that the trial court's denial of a jury instruction will be upheld so long as the instructions actually given adequately apprise the jury as to the law it is to apply.Ask ⌕⧉ cite

[14]Most federal courts apply the de novo standard where the alleged error is based on a misstatement of the law. Voohries-Larson, 241 F.3d at 713 (citing Mockler v. Multnomah Cnty., Guam Top Builders, Inc. v. Tanota Partners, 201 1 Guam 30, Opinion Page 9 of 50 ⟂140 F.3d 808Persuasive authoritynon-Guam — not binding under the reception rule, 812 (9th Cir. 1998)). Alleged errors based on the formulation of the instruction and particular language used are also reviewed for an abuse of discretion. Id. (quoting Gilbrook v. City of Westminster, ⟂177 F.3d 839Persuasive authoritynon-Guam — not binding under the reception rule, 860 (9th Cir. 1999)); Mendez v. Cnty. of San Bernardino, ⟂540 F.3d 1109Persuasive authoritynon-Guam — not binding under the reception rule, 1118 (9th Cir. 2008). [IS] Tanota argues the trial court erred in failing to instruct the jury with its proffered instructions related to its affirmative defenses. Specifically, Tanota proposed the following instructions: (I) the mechanic's lien amount was overstated and made with intent to defraud; (2) definition of fraud; (3) an unclean hands instruction; (4) materials and labor instruction; (5) an instruction on agency; and (6) instructions on the mechanic's lien statutory requirements.. ER, vol. 1, tab 34 at 2-4, 5-6, 8-9 (Am. Proposed Jury Inst.). We examine each alleged jury instruction error below. b. Fraud InstructionsAsk ⌕⧉ cite

[16]Tanota proposed the following instruction2: Mechanic's Liens - Invalidation of Lien Because of Fraud Under Guam law, an overstatement in the amount of a mechanic's lien made with the intent to defraud shall invalidate the lien. If you find that Ejong overstated the amount of its mechanic's lien with the intent to defraud, you must find that Ejong's lien is invalidated. - -- Tanota also proposed an instruction on the definition of fraud which read: The elements of fraud include: 1. a misrepresentation; 2. knowledge of falsity (or scienter); 3. intent to defraud to induce reliance; 4. justifiable reliance; 5. resulting damages. RA, tab 245 at 29 (Am. Proposed Jury Inst.). Guam Top Builders, Inc. v. Tanota Partners, 201 1 Guam 30, Opinion Page 10 of 50 If you find that Guam Top Builders overstated the amount of its mechanic's lien with the intent to defraud, you must find that Guam Top Builder's lien is invalidated. Source: 7 G.C.A. 3 33401; Henley v. Pacific Fruit Cooling & Vaporizing Co., ⟂127 P. 800Persuasive authoritynon-Guam — not binding under the reception rule (Cal. Ct. App. 1912). RA, tab 245 at 21 (Am. Proposed Jury Inst.).Ask ⌕⧉ cite

[17]In its Answer, Tanota pleaded as affirmative defenses: 6. Both Plaintiffs GTB and Ejong have willfully and intentionally filed claims of lien in excess of the amounts permitted by their respective contracts and by 8. The lien claims of both Plaintiffts] GTB and Ejong are false and fraudulent. RA, tab 71 at 5 (Answer, Feb. 9,2001).Ask ⌕⧉ cite

[18]Although a trial court has broad discretion in formulating jury instructions, "a party is entitled to have the jury instructed on its theories if the proposed instructions are correct statements of the law and supported by the evidence." Arkwright Mut. Ins. Co. v. Gwinner Oil, Inc., ⟂125 F.3d 1176Persuasive authoritynon-Guam — not binding under the reception rule, 1180 (8th Cir. 1997) (citing Hoselton v. Metz Baking Co., ⟂48 F.3d 1056Persuasive authoritynon-Guam — not binding under the reception rule, 1063 (8th Cir. 1995)); see also People v. Jones, 2006 Guam 13 1' [ 35. Conversely, a party is not entitled to an instruction if the issue is not properly before the court. See Goldsmith v. Bagby Elevator Co., ⟂513 F.3d 1261Persuasive authoritynon-Guam — not binding under the reception rule, 1287 (1lth Cir. 2008). A party is entitled to an instruction when the instruction accurately states the law and is supported by the evidence. GTB and Ejong contend that Defense # 6 alleges fraud that is a statutory defense under §7 GCA 5Guam Code Annotatedstatute — binding 3340 1 to a mechanic's lien foreclosure action, but that as the case developed, factually there was little support for this defense. Appellees' Br. at 11. In particular, Tanota failed to rebut their Trial Exhibit 86, demonstrating their actual costs, and consequently, there was no showing that the lien amounts claimed by Tanota were made with any "intent to defraud." Id. Guam Top Builders. Inc. v. Tanota Partners, 201 1 Guam 30, Opinion Page 11 of 50Ask ⌕⧉ cite

[19]In Avery, this court determined that the trial court erred in rejecting a proposed instruction, where the proposed instruction "adequately encapsulate[d] the law" relating to the crux of a parties' claim, "recited a legally cognizable theory of recovery," and the principle set forth in the proposed instruction was not "substantially covered by any other given instruction," and consequently, the failure to instruct was prejudicial. 2002 Guam 19 35-36 (relying on cases from disparate jurisdictions).Ask ⌕⧉ cite

[20]Tanota suggests we evaluate instructional error by applying three factors articulated in Goldsmith, wherein the Eleventh Circuit held that "[a] refusal to give a requested instruction is erroneous only if '(1) the requested instruction correctly stated the law, (2) the instruction dealt with an issue properly before the jury, and (3) the failure to give the instruction resulted in prejudicial harm to the requesting party."' 513 F.3rd at 1287 (quoting Roberts & Schaefer Co. v. Hardaway Co., ⟂152 F.3d 1283Persuasive authoritynon-Guam — not binding under the reception rule, 1295 (11th Cir. 1998)); see also Appellants' Br. at 11 (citations omitted).Ask ⌕⧉ cite

[21]We adopt the test in Goldsmith and examine first, the second factor that the fraud instructions dealt with an issue properly before the jury. The parties dispute whether the trial court bifurcated the trial, separating the factual issues from the primarily legal issues related to the liens' validity.Ask ⌕⧉ cite

[22]GTB and Ejong contend that the trial court indicated at the continued pre-trial status hearing that the court was considering bifurcating the trial, whereby the jury would determine the factual issues of whether there was a contract, with whom, and whether there was money owed and how much, but the trial judge would determine the issues regarding the mechanic's lien enforcement. Appellees' Br. at 2 (citing Tr. at 9-10 (Status Hrg., Jan. 17, 2007)). GTB and Ejong submit the bifurcation was confirmed the following day. Id. (citing Tr. at 12-14 (Status Guam Top Builders, Inc. v. Tnnota Partners, 201 1 Guam 30, Opinion Page 12 of 50 Conf., Jan. 18, 2007)). Tanota, on the other hand, contends that the trial was not bifurcated and that the trial court determined that all issues would proceed to the jury. Appellants' Reply & Resp. Br. at 9-10 (Apr. 12,2010).Ask ⌕⧉ cite

[23]Discussion on the scope of the jury trial initially ensued at the pre-trial conference. Tr. at 3-5 (Pre-trial Conf., Jan. 12, 2007). The trial court informed the parties to file memoranda on their positions, and the matter was continued. Id. at 5. At the continued hearing, after oral argument from the parties, the trial court stated that the jury would decide the factual issues related to the lien claims if the case was to proceed to trial. Tr. at 25 (Status Hrg.). The court informed the parties it would issue a decision the following day. Id. at 25-26. The next day, the trial court declined to find that GTB and Ejong had a right to a jury trial on the equitable claim, here the validity of the mechanic's liens, when the claim was infused with legal issues. Tr. at 1214 (Status Conf.); RA, tab 253 at 5-6 (Dec. & Order). The court decided to proceed to a jury trial on all triable issues in the matter, on the grounds that Tanota made a jury demand and did not specify issues it wished to be tried before a jury, and in failing to specify the issues, the demand made was only a demand for all triable issues pursuant to Rule 3 8 ( ~o)f~the Guam Rules of Civil Procedure . Tr. at 12-14 (Status Conf.).Ask ⌕⧉ cite

[24]The trial was clearly bifurcated and legal issues relating to the validity and perfection of the mechanic's liens were reserved by the trial court. The issue of the invalidation of the mechanic's liens including the lien perfection,5 were not properly before the jury, and therefore it was not proper for the trial court to instruct the jury on Tanota's proposed instructions on the 4 Rule 38(c) states that "[iln the demand a party may specify the issues which the party wishes so tried; otherwise the party shall be deemed to have demanded trial by jury for all the issues so triable." Guam R. Civ. P. ("GRCP) 38(c). Tanota also claimed it was error for the trial court to refuse to instruct the jury on its proposed instructions on whether GTB and Ejong perfected the liens under Guam's mechanic's lien laws. Because we find that the trial was bifurcated, the trial court did not abuse its discretion in rejecting Tanota's proposed instructions on this issue. Guam Top Builders, Inc. v. Tanora Partners, 201 1 Guam 30, Opinion Page 13 of 50 invalidation of the lien due to fraud, or whether the liens were perfected, as well as the other requested fraud instructions. Tanota's proposed fraud instructions were not based on the fraud argued at trial. Rather, at trial Tanota argued that GTB, Ejong and AES intended to defraud the bank by increasing the dummy invoices, which is not the same type of fraud as that in the proposed instruction. The "intent to defraud" in the proposed instruction and the cited statute relates to an overstatement in the amount of a mechanic's lien, not to the overstatement of amounts invoiced to a bank. Here, there were two lien claims in the amounts of $928,000.00 and $1.7 million. GTB and Ejong did not file liens in excess of the amounts permitted by their respective contracts or by law. Moreover, Tanota was not a party to the dummy invoices created between GTB & Ejong and AES, and the fact that Tanota was harmed because of the dummy invoices was not an affirmative defense pled by Tanota. Therefore, we find no abuse of discretion by the trial court in refusing to instruct the jury on Tanota's proffered fraud instructions. Because the issues were not properly before the jury, we need not reach the other Goldsmith factors for evaluating instructional error outlined above. c. Unclean Hands InstructionAsk ⌕⧉ cite

[25]Tanota next argues that the trial court erred in rejecting its proposed instruction based on the "unclean hands" doctrine. Tanota submits that it properly raised the affirmative defense in its answer and was therefore entitled to an instruction on this issue. GTB and Ejong claim that Tanota's defense of unclean hands involved bank fraud and therefore was not properly pleaded with particularity as required under Rule 9(b) of the Guam Rules of Civil Procedure. In considering the alleged error, the trial court stated that Tanota failed to explain how the "proposed instruction would have altered the outcome" of the case. RA, tab 304 at 14 (Dec. & Guam Top Builders, Inc. v. Tanota Partners, 201 1 Guam 30, Opinion Page 14 of 50 Order, Mar. 19, 2009). Further, after reviewing the evidence, the court found that even if the proposed instruction was given, the jury's verdict would not have changed. Id. Tanota's proposed instruction read: Unclean Hands If you find that Guam Top Builders intended to defraud Tanota Partners and/or HSBC, the law requires that the doctrine of unclean hands be applied and that you leave the parties as you found them. If you find that [Ejong Construction, Inc.] intended to defraud Tanota Partners and/or HSBC, the law requires that the doctrine of unclean hands be applied and that you leave the parties as you found them. RA, tab 245 at 28 (Am. Proposed Jury Inst.).Ask ⌕⧉ cite

[26]The doctrine of unclean hands is an affirmative defense invoked by defendants to prevent a plaintiff from obtaining relief. Giraldo v. Cal. Dep't of Corr. & Rehab., 85 Cal. Rptr. 3d 371, 393 (Ct. App. 2008) (citing Kendall-Jackson Winery, Ltd. v. Super. Ct., 90 Cal. Rptr. 2d 743, 746 (Ct. App. 1999)). "Traditionally, the doctrine of unclean hands is invoked when one seeking relief in equity has violated conscience, good faith or other equitable principles in his prior conduct." Fibreboard Paper Prods. Corp. v. E. Bay Union of Machinists, Local 1304, 39 Cal. Rptr. 64, 96 (Dist. Ct. App. 1964) (citations omitted). "Any unconscientious conduct in the transaction may give rise to the defense." Burton v. Sosinsky, 250 Cal. Rptr. 33, 41 (Ct. App. 1988) (citations omitted). Whether the defense of unclean hands should bar a remedy otherwise available depends upon an analysis of "the analogous case law, the nature of the misconduct, and the relationship of the misconduct to the claimed injuries." Blain v. Doctor's Co., 272 Cal. Rptr. 250,256 (Ct. App. 1990).Ask ⌕⧉ cite

[27]Tanota argued at trial that GTB and Ejong engaged in a scheme to defraud Hong Kong Shanghai Bank Corporation ("HSBC") and Tanota. "A party has the right to have [its] theory of Guam Top Builders, Inc. v. Tanota Partners, 201 1 Guam 30, Opinion Page 15 of 50 the case presented to the jury by instructions, if there is evidence to support it." Alley v. Praschak Mach. Co., 366 So. 2d 661 (Miss. 1979) (citations omitted). As discussed above, the affirmative defense of fraud pleaded by Tanota was based on the alleged overstatement of GTB and Ejong's lien claims with the intent to defraud, and not on the alleged bank fraud. There was no evidence presented at trial which showed that the dummy invoices to HSBC were somehow related to the inflation of the lien claims. Again, the fraud claims pleaded by Tanota as affirmative defenses were that the lien claims were contractually and unlawfully excessive as well as false and fraudulent. RA, tab 71 at 5 (Answer). Tanota has failed to show how the dummy invoices relate to the increase in the lien claims. The unclean hands instruction did not deal with an issue properly before the jury and therefore we find that the trial court did not abuse its discretion in refusing to instruct the jury with this instruction. d. Instruction on Mechanic's Liens -- Materials and Labor only6Ask ⌕⧉ cite

[28]Tanota also argues error in the trial court's refusal to instruct the jury that loans are not recoverable under a mechanic's lien. The proposed instruction read: Mechanic's Liens - Materials and Labor Only A mechanic's lien may be filed for the value of labor and materials only. If you find that Ejong was paid in full for the materials it provided to the Outrigger project, and thereafter made a loan or transferred money to John Sherman or AES Construction, Inc., you must find that Ejong is not entitled to a mechanic's lien for the amount loaned or transferred. RA, tab 245 at 20 (Am. Proposed Jury Inst.).Ask ⌕⧉ cite

[29]GTB and Ejong assert it was not error to refuse this instruction because the issue of whether GTB and Ejong were entitled to a mechanic's lien was not before the jury. GTB and Tanota objected at trial to the trial court's refusal to instruct the jury as proposed, but this claimed error was not raised in its renewed motion for a judgment as a matter of law or alternatively for a new trial. Guam Top Builders, Inc. v. Tanota Partners, 201 1 Guam 30, Opinion Page 16 of 50 Ejong also submit that Tanota abandoned the loan defense and failed to submit a proposed instruction with acceptable wording. Appellees' Br. at 14. Finally, GTB and Ejong submit no evidence was presented at trial of a loan to Sherman. At trial, Jae Park, President of GTB, testified that it was understood the $923,000.00 was John Sherman's money and that the theory of the loan to Sherman was a theory suggested by prior counsel. Tr. at 3 1-32 (Jury Trial, Jan. 25, 2007). John Sherman denied the existence of a loan. Tr. at 38-39 (Jury Trial, Feb, 9, 2007). Jong Kwan Lee, President of Ejong Construction, testified and also denied it was a loan. On cross-examination, Lee stated: Q. You testified yesterday that you recalled in 1998 and 1999 that you originally said Ejong had loaned Nine Hundred and Twenty-three Thousand Dollars ($923,000) to John Sherman; correct? IA. Yes. Q. Okay. And you said you did it because your lawyer told you to call it a loan? IA. Yes. Q. Okay. So, are you telling me, then, that when you said in 1999 that you loaned money to John Sherman, that that was a lie? IA. I . . . I would not con-- I would not call it - I will not see it as a lie. In . . . in truth, because I don't know American law . . . . . . as I stated yesterday, with Ejong's provisions of the steel and not getting paid, after consultation with an American attorney, it was stated that in order to resolve the issue, it would be less complicated to deal with it as . . . or treat it as a loan; and, as such, the claim was stated as a loan. Q. Okay. Tr. at 11, 16 (Jury Trial, Feb. 2, 2007). Guam Top Builders, Inc. v. Tanota Partners, 201 1 Guam 30, Opinion Page 17 of 50Ask ⌕⧉ cite

[30]Neither party presented any evidence of a loan agreement. The testimony of the witnesses at trial did not establish that Ejong made a loan to Sherman; instead, as the trial court concluded, the testimony about a loan was a legal theory devised by Ejong's former c ~ u n s e l . ~ Tanota urged that the instruction was proper because there was evidence of a loan and the instruction was necessary in order to allow the jury to determine whether Ejong was paid for the materials supplied. As we have previously held, a trial court's denial of a jury instruction will be upheld so long as the instructions actually given adequately apprise the jury as to the law it is to apply. See Avery, 2002 Guam 19 ¶¶ 34, 36. Here, the proposed instruction would have allowed the jury to determine whether to invalidate the lien if it found there was evidence of a loan. GTB and Ejong abandoned the loan theory, and Tanota also abandoned the loan theory when it moved for a directed verdict. Tanota maintained at trial that GTB and Ejong were fully paid for the labor and materials it supplied for the project, and the jury was instructed on this defense. Tr. at 14 (Jury Trial, Feb. 16, 2007). The trial court instructed the jury on a loan definition8 and also provided the following instructions: In this case you are presented evidence that Letters of Credit were issued and drawn down. If after reviewing the Letters of Credit you find that the Letters of Credit were intended by the parties to the Letter of Credit to service [sic] payment for the steel, you may find that Ejong received the money and that the money was to be applied toward the payment of steel. You have received evidence that Plaintiff, Guam Top Builders and Ejong, each recorded liens against the Outrigger Hotel. Under Guam [llaw any person or corporation who furnishes labors [sic] or materials used in the construction of any building on Guam is entitled to record a lien against the property to secure 7 Although not an issue on appeal, after trial, the trial court granted a directed verdict in Sherman's favor on the claim of unjust enrichment filed by Ejong and found that only "contradictory evidence was presented on [Ejong's] claim of debt" and the witnesses' testimony revealed that Ejong did not loan Sherman any money. RA, tab 253 at 12-13 (Dec. &Order). The instruction read: "A loan of money is a contract by which one delivers a sum of money to another and the latter agrees to return at a future time a sum equivalent to that which he borrowed." Tr. at 31 (Jury Trial, Feb. 16, 2007). Guam Top Builders, Inc. v. Tariota Partners, 201 1 Guam 30, Opinion Page 18 of 50 payment for such labor and materials. These liens are called mechanic's liens. Such liens shall not exceed in the amount the reasonable value of the labor done or materials furnished or both or for which the lien is claimed, nor the price agreed upon between the claimant and the person by whom he was employed. Tr. at 29-31 (Jury Trial, Feb. 16,2007) (emphases added).Ask ⌕⧉ cite

[31]The jury had to determine whether any sums were owed to GTB and Ejong, not whether they were entitled to a lien. By providing these instructions, the jury was properly apprised of what a loan was and that under Guam's lien laws, GTB and Ejong's lien claims were limited to payment for materials and labor supplied. The jury was also instructed that if it determined the Letters of Credit served as payment, the jury should find that Ejong received the money and that the money was to be applied to the payment of the steel. It was therefore proper for the trial court not to instruct the jury on Tanota's proposed instruction for materials and labor provided because the instruction did not deal with an issue properly before the jury. e. Instruction on Whether Tanota or its Agent was a Party to an Agreement to Allocate Funds to ShermanAsk ⌕⧉ cite

[32]Tanota also argues it was entitled to a jury instruction on whether Tanota was a party to an agreement authorizing Ejong's allocation of funds to Sherman. Tanota contends that it was error for the trial court to refuse its requested jury instructions on the principles of agency and consent under Guam's mechanic's lien laws. Appellants' Br. at 14-15. Tanota submits that without the requested instructions, "the jury had no way of knowing that there are such limitations on the scope of an owner's responsibilities under the mechanics' lien law." Appellants' Br. at 14. In response, GTB and Ejong point out that while Tanota argues instructional error, Tanota did not identify the requested instructions or indicate when the instructions were requested. Appellees' Br. at 17-18. In reply, Tanota confirmed its argument was not based on any specific requested jury instruction but instead that it was entitled to Guam Top Builders, Inc. v. Tanota Partners, 2011 Guam 30, Opinion Page 19 of 50 judgment as a matter of law because GTB and Ejong failed to prove "agency" as an element of its lien claims. Appellants' Reply & Resp. Br. at 2-3. The record is devoid of any proposed instructions by Tanota on the agency principle or any indication that Tanota objected with respect to any of the instructions on agency approved by the court.Ask ⌕⧉ cite

[33]Tanota's argument of instructional error on the agency theory is intertwined with the argument that GTB and Ejong failed to produce evidence that the lien claims were within the scope of Tanota's agency consent. Specifically, Tanota argues, Ejong had the burden of establishing that the funds were allocated pursuant to an agreement by the parties. Appellants' Reply & Resp. Br. at 2. Tanota contends that Ejong did not present competent evidence to make the required showing, and the trial court failed to instruct the jury that such failure would bar GTB and Ejong's recovery. Id. Tanota submits it is irrelevant that it did not request a jury instruction on whether Tanota was a party to an agreement relating to the diversion of funds because Ejong failed to meet its burden of presenting evidence that the allocated funds received were a result of an agreement among the parties. Id. The jury was instructed as follows: A claim of lien should not be offset by money that is allocated to another party if it can be shown that such allocation was done by the owner's or an agent of the owner's request. Under Guam lien law, every contractor, sub-contractor, designer, builder, or other person having chartered the construction in whole or in part of any building, is the agent of the owner. Tr. at 51 (Jury Trial, Feb. 16,2007). The prior Rule 51 of the Guam Rules of Civil Procedure, which was in effect at the time of the trial, states: Rule 51. Instructions to Jury: Objections. At the close of the evidence or at such earlier time during the trial as the court reasonably directs, any party may file written requests that the court instruct the jury on the law as set forth in the requests. The court shall inform counsel of its proposed action upon the requests prior to their arguments to the jury. The court, at its election, may instruct the jury before or after argument, or both. No party may assign as error the giving or the failure to give an instruction unless heAsk ⌕⧉ cite