Judge Joseph N. Camacho
SAYING that the Department of Public Land secretary has authority to accept the request for proposal of an investor based on DPL regulations, Superior Court Associate Judge Joseph N. Camacho has denied the department’s motion to dismiss Mariana Eland Corporation’s lawsuit over the cancelation of the Mariana Resort property lease proposal.
Eland, owner and operator of Kensington Hotel Saipan, Coral Ocean Point, and Pacific Islands Club, sued DPL and then-DPL Secretary Sixto Igisomar in his official capacity, for the cancelation of the Mariana Resort property lease proposal last year.
Represented by attorney Charity Hodson, Eland wants the court to issue a temporary restraining order and a preliminary injunction pursuant to Rule 65(a) of the NMI Rules of Civil Procedure, preventing DPL and/or its secretary from reissuing RFP20-RED004 until such time that the court has ruled on Eland’s complaint.
Eland’s lawsuit seeks a declaratory judgment declaring DPL’s rescission of the notice of award dated March 22, 2021, as well as DPL’s April 29, 2021, letter with the draft lease attached and the cancelation of RFP20-RED004, as improper and should be reversed.
The lawsuit likewise asked the court to issue judgment against the then-DPL secretary for breach of his fiduciary duty; and an injunction to prevent defendants from reissuing the RFP.
In his 20-page order issued on December 19, Judge Camacho noted that the opinion of the Attorney General’s Office is not binding to the judiciary.
The AG’s office is limited to giving legal advice, and the DPL secretary has authority to accept the RFP as per DPL’s rules, Judge Camacho said.
“Because DPL’s decision to rescind the award to Eland was not required by DPL’s regulations, DPL’s motion to dismiss on these grounds is unpersuasive,” the judge added.
As for DPL’s argument that Eland seeking an injunction to prevent the defendants from reissuing the RFP improperly interferes with DPL’s duties and obligations as a government agency, Judge Camacho said, “This argument is largely based on factual issues and thus is not suited to be addressed at the motion to dismiss stage.”
According to Eland’s lawsuit, on Feb. 20, 2020, DPL solicited proposals for the purpose of leasing and commercial development of public land located in Marpi, through RFP20-RED004.
Eland submitted a proposal in response to the RFP on October 12, 2020.
On Feb. 17, 2021, the then-DPL secretary and its legal counsel met with Eland to discuss the amount of the total investment in Eland’s proposal, because DPL wanted to confirm the total amount of the investment offered by Eland.
The then-DPL secretary and DPL’s legal counsel requested Eland to present a best and final offer.
On Feb. 19, 2021, Eland issued its best and final offer to DPL.
Eland said its total investment was $220 million, of which $213.2 million was directly related to development investment and $6.8 million was strictly related to public benefits:
• $2.5 million for the infrastructure development of DPL’s homestead program;
• $1.05 million for the repair and upgrade of the existing Marpi swimming pool;
• $400,000 to develop a baseball field in Tanapag village; and
• $2.85 million for a Lifelong Education Center to facilitate learning about Micronesian traditions and culture.
On March 22, 2021, DPL issued a notice of award to Eland.
On April 29, 2021, DPL issued a letter to Eland with a draft lease attached.
On June 18, 2021, the then-DPL secretary issued another letter to Eland, advising that he was rescinding the award and canceling the RFP, which would be reissued.
“The DPL secretary stated that the reason for the rescission and cancellation was because, after DPL submitted the draft lease to the Office of the Attorney General for review for legal sufficiency, and the Office of the Attorney General rejected it, Eland’s proposal should not have been considered because it was allegedly not compliant with the minimum rental rates set by regulation.”
Eland said it requested DPL to reconsider its decision to rescind the award based on the DPL secretary’s discretion to exercise his fiduciary duty in negotiating basic rent under Section 145-70-110(e) of the DPL Temporary Occupancy Rules and Regulations.
According to Eland’s attorney, the then-DPL secretary breached his fiduciary duty in rejecting a proposal that was in the best interest of the Commonwealth.
CNMI taxpayers have been injured by the breach of fiduciary duty because of the loss of a $220 million investment in the CNMI, the lawsuit added.
