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Last updateWed, 18 Sep 2019 12am







    Tuesday, September 17, 2019-6:33:55P.M.






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Settlement Fund: NMI in breach of settlement agreement

DISAVOWING the agreement it made and refusing to recognize the Settlement Fund’s right to proceed on these claims against the CNMI is a clear breach of the settlement agreement and is tantamount to bad faith, attorney Nicole M. Torres-Ripple told the federal court.

She represents the Settlement Fund in seeking the court’s help in enforcing the final judgment approving a class action settlement to collect unpaid employer contributions from the Commonwealth Utilities Corp.

In response to the Office of the Attorney General’s position that “the claims against CUC were in violation of the explicit language” of the settlement agreement, Torres-Ripple asked the federal court to deny the CNMI government motion, and grant the Settlement Fund’s cross-motion to enforce the settlement agreement.

Torres-Ripple sought the intervention of the federal court after CUC filed a motion to dismiss on May 8, 2019 in the CNMI Superior Court, “arguing for the first time that the Settlement Agreement resolved CUC’s liabilities.”

The then-NMI Retirement Fund filed a lawsuit against CUC on May 5, 2011 to collect unpaid employer contributions. The lawsuit alleged violations of the CNMI Constitution, breach of contract, and void assignment of debt, and sought judgment in the amount of $3,175,225 plus $740,462 in penalties, and $527,716 in economic damages as of April 29, 2011.

In Dec. 2011, the Retirement Fund moved for partial summary judgment. CUC filed its opposition and cross-motion for partial summary judgment on Feb. 20, 2012.

On May 10, 2012, the CNMI government intervened and opposed the Retirement Fund’s motion for partial summary judgment.

On May 17, 2012, the lawsuit was moved to District Court for the NMI following the Retirement Fund’s petition for bankruptcy.

On August 15, 2012 the bankruptcy petition was dismissed and the case was remanded to Superior Court.

On Aug. 15, 2017, the Retirement Fund, CUC, the CNMI government and the Settlement Fund stipulated to the substitution of the Settlement Fund as the plaintiff in the Superior Court lawsuit based on the Retirement Fund’s assignment and transfer to the Settlement Fund of all rights, title, and interest in and to the litigation pursuant to the settlement agreement.

The Superior Court approved the stipulation on Aug. 16, 2017.

Following a hearing on March 28, 2018 on the motion for partial summary judgment originally filed by the Retirement Fund, the Superior Court denied it and ordered that “the pleadings be amended to include the updated information, arguments, and complaints in this case.”

On April 10, 2019, the Settlement Fund filed its first amended verified complaint on Superior Court and added the CNMI government as defendant.

The Settlement Fund on June 6, 2019 filed a temporary stay of proceedings in Superior Court pending review of the settlement agreement by the district court.

Torres-Ripple said the settlement agreement carved out the Retirement Fund claims from general release.

She said a section of the agreement states in part: “Any claims of the CNMI Fund against CUC existing as of the date of final approval are not released and are assets of the CNMI Fund under this agreement.”

She said the settlement agreement is clear: “the parties agreed not to release the Retirement Fund claims that existed as of Sept 30, 2013.”

Torres-Ripple said the CNMI government is a party to the settlement agreement, “and having agreed that the Retirement Fund claims would not be released and would instead be assigned and transferred to the Settlement Fund, it cannot take the untenable position that the Settlement Fund cannot pursue these claims against the CNMI.”

In 2009, retiree Betty Johnson sued the CNMI government for its failure to pay the amounts that it was required by law to pay to the Retirement Fund since 2005.

Johnson said the Fund would run out of money by June 2014 and would no longer be able to pay retirement benefits.

In Sept. 2013, the parties agreed to settle the lawsuit and the U.S. court approved a $779 million consent judgment in case the CNMI government does not meet its obligations to the Settlement Fund.

The Settlement Fund was created by the federal court as part of the settlement between the CNMI government and the retiree.