RB Camacho
SAYING that the Office of the Mayor of Saipan and the Municipality of Saipan are the intended third-party beneficiaries of the public benefit provision, Superior Court Associate Judge Joseph N. Camacho granted Saipan Mayor Ramon “RB” Camacho’s motion to dismiss the civil complaint of Construction & Material Supply Inc.
CMS sued the mayor’s office over $36,126.25 in unpaid invoices for quarry products provided by CMS to the mayor’s office.
In a 17-page order on Wednesday, Judge Camacho said the municipalities of Tinian and Rota are chartered, while the Mayor’s Office of Saipan is an unchartered municipality, which means it cannot sue or be sued except through certain situations.
“One of those situations is when MOS complies with procurement rules and regulations such as vendors or employment contracts,” he said. “This case is not one of those situations,” the judge added.
“The only valid contract is the Temporary Occupation Agreement between the Department of Public Land and CMS, and MOS is only an intended beneficiary of the TOA,” Judge Camacho said.
He noted that the “DPL letter [dated July 11, 2023] did not go through the procurement process/regulations, so it is not a valid contract for purposes of suing MOS.”
CMS filed the civil complaint on October 18, 2023, saying that “CMS and Mayor RB, through the Municipality of Saipan, entered into a valid, enforceable contract” for quarry materials.
CMS said MOS breached that contract when MOS refused to pay for the quarry materials and services performed by delivery of the materials to the project sites.
CMS claimed at least $36,126.25 in damages as of Sept. 11, 2023.
CMS is seeking payment for the services performed and provided to MOS.
CMS said it supplied and delivered 100 cubic yards of coral or raw materials above the approved limit set by DPL, and MOS was aware of the excess.
According to its lawsuit, CMS conferred a substantial benefit to MOS and is entitled to compensation.
Mayor Camacho, represented by attorney Michael Evangelista, stated that “the crux” of the dispute between CMS and the Saipan municipality is the public benefit provision of the quarry operating permit: Section 11 of the Temporary Occupancy Agreement.
The public benefit provision reads as follows:
“With the prior written consent of DPL, CNMI government agencies shall be exempted from paying any charges for quarry materials extracted from the quarry site operated by Permittee under a valid permit. Permittee shall be exempted from paying royalty fees for the amount of quarry materials supplied to the government. However, it shall be the responsibility of the Permittee to keep detailed records of any and all quarry materials provided to the government. This detailed record shall be submitted as a separate report from the royalty report required to be submitted by the Permittee, but must be submitted on the same due date as required by the Permittee.”
According to Evangelista, “Section 11 clearly makes the Mayor of Saipan, together with the Saipan Municipality and the people of Saipan, intended third-party beneficiaries of the temporary occupancy agreement which, likewise, indisputably constitutes a contract between plaintiff and DPL.”
As such, the lawyer said, the rights of the mayor and the municipality cannot be diminished by the agreement between DPL and plaintiff, much less by DPL unilaterally.
He said CMS’ complaint relies on a letter issued by the secretary of the Department of Public Lands “purporting to condition and limit Mayor RB’s access to quarry materials under the public benefit provision.”
But Evangelista said the “public benefit provision itself reserves no such authority in the DPL secretary. The Office of the Mayor of Saipan and the Municipality of Saipan are intended third-party beneficiaries of the public benefit provision. The public benefit provision is part of the consideration for the Commonwealth’s grant of quarry privileges to plaintiff, as the permit, or Temporary Occupancy Agreement, is a contract between Plaintiff and DPL.”
He said it is “clear from the language of Section 11 of the TOA that the only consideration plaintiff is entitled to receive for the public benefit provision is exemption from paying the quarry royalty that would otherwise be due on the quarry materials supplied to a governmental agency such as the Office of the Mayor of Saipan.”
Accordingly, “the DPL secretary had no authority to alter the terms of the contract and diminish the amount of public benefit reserved to Mayor RB and other government agencies except as authorized by Commonwealth law,” Evangelista said.
Under its temporary occupancy agreement with the Department of Public Lands, CMS is obligated to provide 100 cubic yards of base course to government agencies for “public benefit.” In the case of the Mayor’s Office of Saipan, the quarry materials are used to repair roads.
Judge Camacho found that CMS failed to state a claim for breach of contract because there was no valid contract complying with the procurement regulations between the parties for the material and services listed in the Department of Public Land’s July 11, 2023, letter.
“There is no contract between Plaintiff CMS and Defendants. The only valid contract is the Temporary Occupancy Agreement between Plaintiff CMS and DPL, with Defendants as the intended beneficiary,” the judge said.
“The TOA allows CNMI government agencies such as MOS to receive quarry materials without incurring any charges when there is prior written consent from DPL…. Defendants did receive DPL’s consent. Defendants as an intended beneficiary complied with the terms of the TOA, and because the TOA is a valid contract, Plaintiff’s Quantum Meruit/Unjust Enrichment claims fail,” the judge added.
