Bank of Guam v. Del Priore (Guam 2007)

Bank of Guam v. Del Priore (2007)

Citation: 2007 Guam 7 (Supreme Court Case No. CVA05-007; Superior Court Case No. CV1022-98) · Court: Supreme Court of Guam (Carbullido, C.J.; Tydingco-Gatewood and Torres, JJ.; opinion by Torres, J.) · Decided: filed August 28, 2007

Facts

On remand from bank-of-guam-v-del-priore-2001, Bank of Guam (BOG) amended its complaint to a claim for damages for the deficiency left after its 1998 public sale of the vessel Sunflower, which secured a Preferred Ship Mortgage. The Superior Court granted BOG summary judgment for the deficiency, fees and interest. Del Priore appealed, arguing among other things that the federal Ship Mortgage Act gave the federal courts exclusive jurisdiction (opinion ¶¶ 1–4, 11).

Holding

1. Jurisdiction. Federal district courts have exclusive jurisdiction over a civil action in rem to enforce a preferred mortgage lien (46 U.S.C. § 31325(b)(1), (c)), but that exclusivity does not extend to an action for a deficiency (§ 31325(b)(2)); a mortgagee may also use nonjudicial remedies, so the Superior Court had jurisdiction over BOG’s deficiency claim (¶¶ 13–16).
2. Notice. Satisfying 13 GCA § 9504(3) is a condition precedent to a deficiency, and under 13 GCA § 9501(3)(b) the parties may by agreement set the standards for measuring the § 9504(3) duties if the standards are “not manifestly unreasonable” (§ 9501(3)). The Preferred Ship Mortgage required specific notice before a public sale; BOG did not show it met the mortgage’s own notice terms, so summary judgment was improper. The judgment, fees and interest were reversed and vacated (¶¶ 23–36).

Reasoning

The court read § 31325(c) as limiting exclusive federal jurisdiction to in rem enforcement under subsection (b)(1) and relied on Eleventh Circuit authority that the Ship Mortgage Act does not displace state self-help remedies (¶¶ 13–17). On notice, it held that the Superior Court misread the 2001 remand: proving § 9504(3) notice is necessary but not sufficient, and where the security agreement itself prescribes how notice is given, that contractual standard governs (¶¶ 21–27).

Practical impact

• Buyer / operator: a preferred-mortgaged vessel on Guam may be sold by the mortgagee’s self-help public sale under Division 9 rather than by a U.S. Marshal’s admiralty sale. Under 13 GCA § 9504(4) the buyer at such a sale takes the debtor’s rights free of the security interest under which the sale is made and subordinate liens; the opinion does not address what happens to maritime liens, which a marshal’s in rem sale would clear (see admiralty-arrest-and-marshals-sale) — needs_verification for a nonjudicial sale.
• Split of authority: the court noted contrary decisions (Bank of America Nat’l Trust & Savings Ass’n v. Fogle, 637 F. Supp. 305 (N.D. Cal. 1985); Nate Leasing Co. v. Wiggins, 789 P.2d 89 (Wash. 1990)) holding the Ship Mortgage Act remedies exclusive, and declined to follow them (¶ 15 n.4).
• Owner / debtor: the notice terms written into the mortgage are enforceable against the lender; a sale that departs from them can defeat the deficiency.

Good-law status

needs_verification. The full official opinion was independently retrieved and its holding verified on 2026-10-17. The limited party/statute searches in this pass do not establish complete subsequent appellate treatment.

Applies in →

guam · maritime-liens-and-preferred-ship-mortgages · ucc-article-9-dispositions · vessels

Legal information, not legal advice. Summarized from the opinion PDF published by the Judiciary of Guam, independently retrieved in full 2026-10-17 and re-retrieved and re-read 2026-10-18 (retained in schema/verification/guam-evidence-2026-10-18/cases/).