HERMAN B. Cabrera told jurors on Wednesday that he was contracted by David Hood of Bright Star LL and Coldwell Solar International Inc. to design a boutique hotel on top of an existing apartment building in Garapan.
Cabrera, the principal of Herman B. Cabera & Associates architectural firm, said he was also contracted to do the permitting and construction management after a contractor had been selected.
He said the delay in the building permit was due to Hood not approving any of the sealed bids or selecting any of the contractors who submitted a bid.
Asked whether he applied for a building permit with the Department of Public Works on behalf of Bright Star, Cabrera said, “No.”
Cabrera was scheduled to be cross-examined by attorneys Robert O’ Connor and Stephen Nutting at 2 p.m. Wednesday afternoon after a court recess.
DPW Secretary Ray N. Yumul also testified regarding the application process for a building permit. Yumul said there was no new application received for a building permit by his office regarding a proposed boutique hotel.
Earlier, a CNMI Zoning board employee, Walter Zachrias, testified that their office issued a zoning permit for the construction of a boutique hotel in an existing building in Garapan.
Superior Court Presiding Judge Roberto C. Naraja is presiding over the jury trial, which started on Tuesday.
A breach of lease agreement complaint was filed by Magic International Corporation, owned and operated by Hideaki Sawada, against Hood and Bright Star.
Magic International, through attorney Colin Thompson, sued Bright Star and requested that the court issue a judgment for rent in the amount of $142,500, representing rent due for the period from Feb. 1, 2017, to Aug. 30, 2018, plus interest.
Moreover, the plaintiff, represented by attorney Janet King, is seeking an award of $18,000 for late charges due to the defendant’s failure to pay all unpaid rent within 10 days, in addition to regular rent and a security deposit in the amount of $20,000.
In addition, the plaintiff is asking for damages and for attorney’s fees, litigation costs and other fees.
The complaint
According to the complaint, on Dec. 17, 2016, Magic International Corporation entered into a written lease agreement with Brite Star LLC with a term of 30 years commencing on Feb. 1, 2017, and terminating on Jan. 31, 2047.
“Article IV of the Lease required Lessee to pay monthly rent of $7,500…payable in advance on the first day of each month commencing on February 1, 2017, for the first three years of the Lease. After this three-year period, it was agreed that the monthly rent would increase to $10,000…payable in advance on the first day of each month,” the lawsuit stated.
“Article IV of the Lease required Lessee to pay a late charge of $1,000 if the monthly rent was not paid within ten days of its due date. Article V of the Lease required Lessee to pay a $60,000…security deposit to Lessor upon execution of the Lease,” the lawsuit added.
Counterclaim
Bright Star and Hood have denied the allegations in the complaint of Magic International and filed a counterclaim against Sawada.
Bright Star is denying that “any other obligations arising under the lease were accomplished by plaintiff, as the lease never took effect, and defendants never took possession of the property because conditions subsequent went unmet, and no obligation related to the lease such as the right to quiet enjoyment in Bright Star’s construction and operation of the hotel ever arose.”
Bright Star said it was Sawada who wanted Cabrera to assist him in obtaining the necessary permits for construction.
Sawada stated that “he and Cabrera would work together and would be able to expeditiously obtain all necessary permits, and conduct the architectural design, and management of the construction process, after a contractor had been selected,” Bright Star stated.
Hood, when agreeing to sign the lease agreement, placed a handwritten final clause on the agreement, which stated: “Lease is subject to a successful permit & construction bid. Bright Star LLC can cancel the lease anytime until these items are complete and approved by Bright Star LLC.”
Bright Star said it paid a “$40,000 security deposit…to Sawada to show its good faith and commitment to moving forward with the project.”
Bright Star said it also paid “approximately $23,050 in fees to Cabrera, as further evidence of its commitment and good faith.”
“Magic International makes its claim despite the clear contingent nature of the ground lease, and the fact that permits and an acceptable construction bid was never received and despite the fact that Bright Star never took possession of the property, never occupied any portion of the property, never was given a key to the property, and never asserted any rights to the property, or held itself out as a lessee,” Bright Star stated in its counterclaim.
Bright Star is seeking the court to dismiss Magic International’s complaint, arguing that the lease agreement did not create any binding obligations on Bright Star or Hood due to the “plaintiff’s failure to perform and meet the conditions…necessary to bring the contract to fruition.”
Bright Star is also seeking the return of the $40,000 security deposit, along with an award for attorney’s fees and costs.
