He said the employees’ salaries are on hold because the IPI payroll account was frozen.
Dotts noted that other jurisdictions have more comprehensive exemptions than the CNMI.
“For example, in many jurisdictions, the payroll account of a business is exempt so that the employees of a defendant will still get paid for the work they have done,” he said.
Dotts added that the CNMI does not have an exemption for payroll accounts.
On April 27, 2020, District Court for the NMI Chief Judge Ramona V. Manglona entered a judgment in favor of Pacific Rim, which had sued IPI for breach of contract and breach of promissory note.
On May 28, 2020, the court entered an amended civil judgment in favor of Pacific Rim in the amount of $6.8 million including the principal amount and attorney’s fees and costs.
IPI workers who staged protest actions early this week also circulated a petition stating that Judge Manglona, “should not have granted the writ of execution until the case was completely heard and the appeal procedures completed.”
According to Dotts, “The CNMI’s list of exemptions came from the Trust Territory Code and was adopted for the CNMI in 1984. It is out of date.”
He said a writ is a court order directed to the U.S. Marshal, and not the defendant. The writ orders the U.S. Marshal to go to the banks and collect any money in the accounts of the defendant up to the amount of the judgment. The U.S. Marshal then reports back to the court on what was collected, and the court can release that money to the plaintiff to pay the judgment, Dotts said.
“If there is not enough money in the bank accounts of the defendant to pay the judgment, a writ can be issued to the U.S. Marshall to take possession of personal property, like cars and boats. These personal properties are then generally sold at auction by the court and the money from the sale goes to pay the judgment.”
But not all property can be taken by the U.S. Marshal, Dotts said.
He said the federal court will follow local law as to what property is “exempt” from the writ.
“In the CNMI, personal and household goods are exempt. For example, the U.S. Marshal cannot take a person’s clothes or their bed or their cooking utensils. Tools needed for work and work animals are also exempt. So, the U.S. Marshal cannot take the woodworking tools of a carpenter. Land in the CNMI is also exempt, except that where justice is required the court can order land sold,” Dotts said.
If the writ that the court issued does not raise enough money to pay the judgment, the court will hold a hearing on a “motion for an order in aid of judgment,” he added.
Pacific Rim, through attorney Colin Thompson, earlier asked the federal court for a hearing and order in aid of judgment.
Thompson requested the court to examine the ability of IPI to pay or to determine the fastest practical manner in which IPI can pay the unpaid balance of the judgment, and to establish a payment schedule.
The unpaid balance of the judgment is $6,909,333.43 including interest, Thompson added.
At that hearing, Dotts said, IPI can be asked questions about what it owns, and the plaintiff can ask that certain assets be ordered sold to pay the judgment. The court can also put the defendant on a payment plan.
