THE Saipan Mayor’s Office can be sued independently from the CNMI government, attorneys Robert T. Tenorio and Oliver M. Manglona said.
Tenorio and Manglona represent Construction & Material Supply Inc., which sued Saipan Mayor Ramon RB Camacho in his official capacity, and the Saipan Mayor’s Office for nonpayment of quarry products provided by CMS to the mayor’s office.
CMS also opposes and has asked the Superior Court to deny the Saipan mayor’s motion to dismiss.
According to CMS, the court has subject matter jurisdiction over the dispute regardless of whether or not Saipan is a chartered municipality. CMS said the Saipan municipality has the legal capacity to enter into a contract independently, and cannot bind the central government to its liabilities. In addition, the municipality is a third-party beneficiary only as to the benefits actually consented to by the Department of Public Lands — free raw quarry materials of up to 100 cubic yards in 2023.
CMS said defendants received processed quarry materials in excess of 100 cubic yards in 2023, which was beyond and not part of DPL’s consent agreement, and should be liable for breach of contract.
Moreover, CMS said its claims for equitable relief — unjust enrichment and quantum meruit — should not be dismissed because defendants failed to discuss why these claims are not sufficiently pleaded for.
“The Saipan municipality cannot bind the Commonwealth government to its liabilities resulting from the performance of its constitutional duties,” the CMS lawyers reiterated.
“The mayor has a constitutional responsibility to submit items for inclusion in its proposed annual budget to the Legislature pertaining to services or programs it intends to provide for its municipality…. Thus, even though the Saipan municipality’s budget may be tied in with the Commonwealth Treasury, the mayor of Saipan is the expenditure authority for the funds that are allocated for the Saipan municipality,” the CMS lawyers added.
They stated that the temporary occupancy agreement requires that any government agency that would like to avail itself of public benefits to receive free quarry materials must first obtain approval from DPL.
“The consent obtained by defendants eventually conferred an intended third-party beneficiary status to defendants, but did limit the public benefit defendants could receive from CMS, which is 100 cubic yards of free, raw, unprocessed quarry materials per annum…. Anything that defendants received in excess of this benefit should legally bind defendants to the obligations owed to CMS, especially since DPL had warned defendants that it could be liable to CMS if it were to accept services and goods beyond what it consented to,” CMS added.
According to the lawsuit, from Feb. 1 to Sept. 11, 2023, the mayor’s office obtained 7.5 cubic yards of “aggregates-3/8” material and 1,310 cubic yards of “base course” at the CMS Kannat Tabla quarry.
CMS said when it was providing quarry materials to the mayor’s office, it likewise provided monthly invoices, which indicated that “the customer agrees to pay the invoice to CMS, with each overdue invoice charged at 1.5% per month.” The invoices also stated that the customer is responsible for attorney and collection fees in case of default.
CMS said despite the invoices, the mayor’s office has “failed to pay and continues to fail or refuses to pay CMS….”
CMS stated that the mayor’s office obtained 1,310 cubic yards of base course at $30.50 per cubic yard.
Mayor Camacho, represented by attorney Michael Evangelista has asked the Superior Court to dismiss the lawsuit, which seeks a total of $36,126.25 in unpaid quarry fees.
CMS should sue the CNMI government or the Department of Public Lands secretary instead, Evangelista said.
“The court lacks subject matter jurisdiction over this dispute. Even if the court finds that it has subject matter jurisdiction, plaintiff’s complaint fails to state a claim on which relief can be granted against defendants,” Evangelista added.
Evangelista said “the crux” of the dispute between CMS and the mayor’s office is the public benefit provision of the quarry operating permit or Section 11 of the temporary occupancy agreement.
He said CMS’s 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.”
Evangelista said it is “clear from the language of Section 11 of the [agreement] 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.
He added that the complaint was not presented to the attorney general first as required by law, and that “there is no valid and binding contract between plaintiff and defendants.”
Associate Judge Joseph N. Camacho, who is presiding over the case, scheduled a motion hearing for Jan. 30, at 2:30 p.m. in courtroom 220A.
