Unlimited Statute-of-Limitations Waivers in Guam Promissory Notes Are Unenforceable Absent Statutory Authorization

I. Introduction

In Goodwind Development Corporation v. West Bay Corporation and 21st Century Corporation, 2025 Guam 14, the Supreme Court of Guam affirmed the dismissal of (1) Goodwind’s collection action on two demand promissory notes issued in 2011 and (2) the borrowers’ counterclaims sounding largely in fraud and related theories. The case arose from a contemplated investment in a San Francisco parking garage structured through entities affiliated with long-time Goodwind insiders. After more than eleven years, Goodwind demanded payment on two non-interest-bearing demand notes—$750,000 (West Bay) and $120,000 (21st Century)—and sued when payment was not made.

The primary issues were: (a) whether the trial court improperly relied on extrinsic matters on a GRCP 12(b)(6) motion and therefore should have converted the motion to summary judgment under GRCP 12(c); (b) whether a contractual waiver of the statute of limitations in a promissory note (“to the extent allowable by law”) permits suit long after the limitations period; and (c) whether defendants’ fraud-based counterclaims were pleaded with the particularity required by GRCP 9(b), including whether parol evidence could support various counterclaims.

II. Summary of the Opinion

The court affirmed across the board. As to Goodwind’s complaint, it held: (1) any reference to extraneous material in the trial court’s order was harmless because dismissal was justified from the face of the complaint and attached notes; (2) the four-year statute of limitations for actions on written instruments (7 GCA § 11303(a)) applied, and under 13 GCA § 3122(1)(b) a demand note without a maturity date accrues on its date/issuance; (3) the notes’ statute-of-limitations waivers were unenforceable under Guam law absent a legislatively “prescribed by law” exception (7 GCA § 11101); and (4) leave to amend was properly denied as futile.

As to defendants’ cross-appeal, the court held: (1) the fraud and fraud-related counterclaims were properly dismissed for lack of particularity under GRCP 9(b); (2) the trial court erred in concluding the parol evidence rule barred negligent misrepresentation because the rule is a contract doctrine not applicable to tort claims, but dismissal was still affirmed because negligent misrepresentation was not pleaded with sufficient particularity; (3) breach of contract and breach of the covenant of good faith and fair dealing were properly dismissed because parol evidence could not be used to add extra-contractual “promises” to integrated notes; (4) the unjust enrichment claim was not properly dismissed as time-barred at the pleading stage, but dismissal was affirmed because the unjust enrichment theory was derivative of the dismissed fraud theories; and (5) denial of leave to amend counterclaims was not an abuse of discretion because amendment would be futile.

III. Analysis

A. The New Rule/Precedent Established

The opinion’s central doctrinal contribution is its firm statutory holding on limitations waivers: for actions on demand promissory notes in Guam, parties cannot contract around the statutorily prescribed limitations periods unless a “different limitation is prescribed by law” within the meaning of 7 GCA § 11101. A broad contractual waiver of “any statute of limitations” (even with the qualifier “to the extent allowable by law”) is unenforceable where Guam has enacted no statute authorizing such waiver or extension for written instruments.

The court also clarified (in the cross-appeal context) an important boundary rule: the parol evidence rule is a contract doctrine and does not, as a categorical matter, bar the tort claim of negligent misrepresentation—though plaintiffs must still satisfy GRCP 9(b)’s heightened pleading standards where the claim is fraud-adjacent in substance.

B. Precedents Cited (and How They Shaped the Decision)

1. Pleading and motion-to-dismiss framework

Cruz v. Cruz, 2023 Guam 20 (quoting Portis Int'l, LLC v. Marquardt, 2018 Guam 22) anchored finality/jurisdiction and reaffirmed the strict standards governing GRCP 12(b)(6) review, including accepting well-pleaded facts as true.
Newby v. Gov't of Guam, 2010 Guam 4 supplied the scope-of-materials rule: courts may consider the complaint, attachments, incorporated documents, and materials heavily relied upon.
Core Tech Int'l Corp. v. Hanil Eng'g & Constr. Co., 2010 Guam 13 framed GRCP 12(c)’s conversion requirement when matters outside the pleadings are considered.
Federal persuasive authorities—Federated Mut. Ins. Co. v. Coyle Mech. Supply Inc., Bates v. Green Farms Condo. Ass'n, and Hawk Tech. Sys., LLC v. Castle Retail, LLC—were used to apply a harmless-error approach: even if extraneous material is referenced, reversal is unnecessary where dismissal stands independently on the pleadings.

2. Statute of limitations and accrual on demand notes

The court applied the statutes directly: 7 GCA § 11303(a) (four years for written instruments) and 13 GCA § 3122(1)(b) (demand note accrues on date/issue if no maturity date).
Gayle v. Hemlani, 2000 Guam 25 was cited for de novo review of limitations issues and elsewhere for discovery-rule principles in the unjust enrichment discussion.

3. Departure from Appellate Division precedent on limitations waivers

Guam Economic Development Authority v. Mailloux was the key prior decision invoked by Goodwind to support enforceability of a limitations waiver. The Supreme Court declined to follow it, emphasizing that Appellate Division cases are not binding on the Supreme Court (citing People v. Quenga, 1997 Guam 6 and People v. Palomo, 1998 Guam 12) and applying the “well reasoned / well established” approach described in Limtiaco v. Guam Fire Dep't, 2007 Guam 10.
The court’s critique of Mailloux was methodological and statutory: it failed to analyze the controlling “special cases” text (then GCCP § 312, now 7 GCA § 11101) and relied instead on general contract principles and out-of-jurisdiction cases (N&D Fashions Inc. v. DHJ Indus., Inc.; Squires v. Woodbury) that did not directly address the statutory limitation framework.
People v. San Nicolas, 2001 Guam 4 supported affirmance despite trial-court error as to the binding force of Mailloux (harmless error / affirm on any ground supported by the record).

4. Public policy and contractual freedom

The court balanced freedom-of-contract arguments against statutory/public-policy limits using 20 GCA § 15105 (laws for public reason cannot be contravened by private agreement), and the court’s public policy power described in Sorensen Television Sys., Inc. v. Superior Court (Lina'la Sin Casino), 2006 Guam 21.
It grounded the public-policy importance of limitation periods in Custodio v. Boonprakong, 1999 Guam 5 and Guam Hous. & Urban Renewal Auth. v. Dongbu Ins. Co., 2001 Guam 24, and reinforced the broader national trend by citing Umpqua Bank v. Gunzel (collecting the majority rule that unlimited waivers are void as against public policy).
Goodwind’s contract-intent authorities—Wasson v. Berg, 2007 Guam 16 (plain meaning contract interpretation) and Duenas v. George & Matilda Kallingal, P.C., 2012 Guam 4 (enforce clear contract language even if harsh)—were distinguished because they did not involve contract terms that collide with a statutory “without exception” limitations command (7 GCA § 11101).

5. Fraud pleading particularity

Ukau v. Wang, 2016 Guam 26 and Taitano v. Calvo Fin. Corp. (Taitano I), 2008 Guam 12 supplied the “who, what, when, where, and how” test and the rationale for heightened pleading: fair notice and protection against conclusory accusations.
The court used United States ex rel. Lee v. SmithKline Beecham, Inc. (cited in Taitano I, 2008 Guam 12) to explain why insiders cannot plead corporate fraud generically: where the pleader is a long-time insider (here, officers/agents for decades), the identities and roles of actors should be knowable and must be alleged.
Story-Bernardo v. Gov't of Guam, 2023 Guam 27 (quoting Papasan v. Allain) reinforced that courts need not accept legal conclusions disguised as facts.

6. Parol evidence rule and integrated instruments

The parol evidence rule was rooted in 6 GCA § 2511, supplemented by 18 GCA § 86107 and Leong v. Deng, 2002 Guam 2 (integration supersedes prior negotiations).
Integration principles drew on Craftworld Interiors, Inc. v. King Enters., Inc., 2000 Guam 17 and persuasive authorities like Founding Members of Newport Beach Country Club v. Newport Beach Country Club, Inc. and Restatement (Second) of Contracts § 209.
The court’s treatment of exceptions relied on Torres v. Torres, 2005 Guam 22 and California authority Riverisland Cold Storage, Inc. v. Fresno-Madera Prod. Credit Ass'n to distinguish between using extrinsic evidence to vary terms versus to attack validity.
For covenant analysis, the court relied on Quijano v. Atkins-Kroll, Inc., 2008 Guam 14 (citing Waller v. Truck Ins. Exch., Inc.) to reiterate that the implied covenant cannot add substantive duties beyond the contract’s express terms.

7. Unjust enrichment as derivative of failed tort theories

The court used In re Guardianships of Moylan, 2011 Guam 16 (quoting Rawlings v. Rawlings) to state the elements of unjust enrichment.
It then adopted a “derivative claim” approach—relying on federal circuit authorities such as Ass'n Benefit Servs., Inc. v. Caremark RX, Inc. and Cleary v. Philip Morris, Inc.—to hold that when unjust enrichment is premised on the same alleged fraudulent misconduct, dismissal of the fraud-based theories dooms the unjust enrichment claim.

C. Legal Reasoning

1. No conversion to summary judgment: harmless reference to extraneous matters

The court began with a procedural restraint principle: a GRCP 12(b)(6) decision should rest on the complaint and attachments. Although the trial court’s order contained some facts lifted from defendants’ counterclaims, the Supreme Court treated this as harmless because the dispositive facts—issuance of demand notes in May 2011, suit filed January 2023, and the waiver language—appeared within the four corners of the complaint and exhibits. On that basis, conversion under GRCP 12(c) was unnecessary.

2. Enforceability of statute-of-limitations waiver: statutory command controls

The opinion is statutory in character. The court read 7 GCA § 11101 (“Civil actions, without exception…unless…a different limitation is prescribed by law”) as foreclosing private agreements that effectively abolish limitations periods in the absence of a legislatively created exception. The contractual phrase “to the extent allowable by law” was given its plain meaning under Wasson v. Berg, 2007 Guam 16: it incorporates Guam’s statutory ceiling rather than creating permission to waive beyond it.

The court further emphasized accrual rules for demand notes: under 13 GCA § 3122(1)(b), a demand note without a maturity date accrues upon issuance. Thus, the four-year period in 7 GCA § 11303(a) expired in 2015, long before Goodwind’s 2023 suit.

Mailloux could not supply the “prescribed by law” exception because (a) it was not binding on the Supreme Court, and (b) it was unpersuasive: it did not engage 7 GCA § 11101’s predecessor and did not cite on-point authority analyzing whether a private waiver can override a statutory “without exception” limitation scheme. Public policy (stale-claim avoidance) reinforced the statutory reading.

3. Fraud-based counterclaims: insiders must plead the “who” with specificity

On the cross-appeal, the court applied GRCP 9(b) rigorously, focusing on notice and accountability. Because defendants (through their principals) were long-time officers/agents of Goodwind, the court found it inadequate to allege generic “Goodwind promised” or “Goodwind misrepresented” theories without naming the human actors and their roles. The decision uses Taitano I, 2008 Guam 12 and the insider rationale from SmithKline Beecham to draw a practical pleading boundary: corporate-fraud allegations cannot remain amorphous when the pleader is positioned to know (or readily ascertain) the relevant individuals and communications.

4. Parol evidence: contract vs. tort, and integrated notes

The court held both notes were integrated agreements for parol-evidence purposes and, as to contract-based counterclaims, refused to allow alleged side promises (no repayment; expense/loan sharing) to vary or add to the written terms. It also held the validity/fraud exceptions do not resurrect breach-of-contract and implied-covenant claims because those claims presuppose a valid, enforceable contract and seek to enforce extra-contractual terms—precisely what the rule forbids.

At the same time, the court clarified that negligent misrepresentation is a tort and the parol evidence rule, as a contract doctrine, does not categorically bar it—yet dismissal still followed because defendants failed to plead the claim with sufficient GRCP 9(b)-level specificity in these circumstances.

5. Unjust enrichment: not time-barred at pleading stage, but derivative and therefore doomed

The court corrected the trial court’s limitations analysis (a factual dispute existed as to when defendants should have suspected wrongdoing). Still, it affirmed dismissal by treating the unjust enrichment claim as derivative of the rejected fraud narrative: because the alleged “injustice” was the same alleged misrepresentation-based bargain, the collapse of the fraud-based pleading left no independent inequitable retention theory.

D. Impact

Debt collection and note drafting in Guam: Lenders cannot rely on broad limitations waivers in promissory notes to preserve claims indefinitely. For demand instruments without maturity dates, the clock runs from issuance, not from demand, making recordkeeping and timely enforcement critical.
Legislative primacy over limitations policy: By tying enforceability to 7 GCA § 11101’s “prescribed by law” language, the court signals that any regime resembling California’s waiver statute (noted in the opinion) must come from the Legislature, not private drafting.
Pleading discipline in insider disputes: Where parties are corporate insiders with access to information, the court is likely to demand identification of specific actors and communications in fraud-based pleadings rather than permitting generalized allegations against the entity.
Contract-tort boundary: The clarification that parol evidence does not categorically bar negligent misrepresentation (even though dismissal may still occur under GRCP 9(b)) will shape how litigants plead around written agreements—while simultaneously warning that conclusory pleadings will not survive.
Restitution claims cannot “backdoor” failed fraud: The derivative-treatment of unjust enrichment discourages litigants from repackaging inadequately pleaded fraud as restitution when the alleged inequity is the same alleged misrepresentation.

IV. Complex Concepts Simplified

Demand promissory note (no maturity date): A note payable when the lender demands payment. Under Guam’s UCC provision (13 GCA § 3122(1)(b)), if there is no stated maturity date, the limitations period begins when the note is issued—not when demand is later made.
Statute of limitations “waiver”: A contract clause where a party agrees not to assert the time-bar defense. This decision holds such broad waivers are unenforceable for written instruments in Guam unless a statute authorizes a different period (7 GCA § 11101).
GRCP 12(b)(6) vs. summary judgment conversion (GRCP 12(c)): A 12(b)(6) motion tests whether the pleadings state a claim. If a court actually relies on evidence outside the pleadings, it generally must convert to summary judgment. Here, any outside references were deemed harmless because the legal conclusion followed from the complaint and attached notes alone.
Parol evidence rule and “integration”: If a written agreement is treated as the complete expression of the parties’ deal, prior or contemporaneous oral side promises generally cannot be used to add to or contradict the writing. The notes were treated as integrated agreements.
GRCP 9(b) heightened pleading for fraud: Fraud-based claims must be pleaded with details—who said what, when, where, and how. General accusations (especially by insiders) are not enough.
Unjust enrichment as “derivative”: If the alleged “unjustness” depends on the same supposed wrongdoing as a dismissed fraud claim, the unjust enrichment claim can fall with it because there is no remaining “improper conduct” making retention inequitable.

V. Conclusion

Goodwind, 2025 Guam 14, is a statute-forward decision that meaningfully tightens Guam’s law on limitations waivers in written instruments: absent legislative authorization, parties cannot privately contract around the “without exception” limitations framework of 7 GCA § 11101. Procedurally, it reinforces harmless-error analysis for stray extraneous references on dismissal orders. Substantively, it demands precision in fraud pleadings—especially from corporate insiders—and prevents unjust enrichment from operating as a fallback for inadequately pleaded fraud narratives. The combined effect is to promote timely enforcement of written debts, disciplined pleading, and fidelity to statutory limitations policy.