Associate Judge David A. Wiseman said MRC can also appropriate portions of DLNR’s budget and obtain a finding of contempt from the court.
Asked for comment, Press Secretary Charles P. Reyes Jr. said, “I believe Gov. [Benigno R.] Fitial, when he was speaker of the 14th Legislature, supported a legislative appropriation to settle this matter, but the House minority was adamantly against it, and now the liability has substantially increased with interest, costing the CNMI government millions more than it would have cost had Fitial not been blocked in his past attempts to resolve the matter much earlier.”
The plaintiff, represented by attorney Michael Dotts, appeared for a hearing on Dec. 18, 2008. Assistant Attorney General David Lochabay appeared on behalf of DLNR.
The court issued two prior orders on May 10, 2005 and on May 21, 2008, but the court said DLNR failed to comply with both orders in all respects.
The defendant has made no payments on the stipulated judgment and has not made any offer to make payments.
The court ordered that the $20,000 paid to the plaintiff on May 10, 2005 “shall be paid to the plaintiff’s counsel on or before April 1, 2009 with an accumulated interest rate of 9 percent from May 10, 2005 to the date of payment.”
DLNR is also ordered to pay all income biweekly received from its operations at the Outer Cove Marina on Saipan, including boat slip rental fees to cover plaintiff’s costs on executing this judgment.
Further, DLNR must report to the court by April 30, 2009 on what efforts it has made to get appropriation of funds by the Legislature to pay the judgment. The department has to report what it has collected out of its operations.
The court stated that the plaintiff, as well as all CNMI corporations in which the plaintiff is the sole shareholder, is authorized to use the plaintiff’s portion of the judgment, which is $5,646,679 plus 9 percent interest, as a dollar-for-dollar offset against the CNMI gross revenue tax imposed under the Commonwealth Code.
On Aug. 24, 1995, DLNR and MRC entered into an agreement under the Marine Revitalization Corporation Submerged Lands Lease Act of 1995.
Part of the agreement included the construction of the new Outer Cove by MRC.
DLNR agreed that all commercial boats would be required to use the new marina and the usage fees would belong to MRC.
MRC fulfilled its part of the agreement but DLNR did not.
On Dec. 3, 2004, a binding arbitration found DLNR to have breached the lease agreement and owed MRC over $5 million.
On Jan. 20, 2005, DLNR stipulated to a judgment which confirmed it owed MRC $5,919,849.99 but DLNR has made no effort to comply with the judgment or the subsequent orders of the court.
On May 10, 2005, the court issued an order in aid of judgment where it was found DLNR did not make any written request to the legislators to appropriate funds to pay for the judgment.
A final settlement conference took place on Feb. 11, 2009 where the plaintiff presented seven proposals on how the defendant may satisfy the judgment but DLNR rejected all the proposals on Feb. 22.
In April last year, the plaintiff again filed a second motion in aid of judgment but DLNR failed to appear for the hearing set for May 6, 2008.
The court issued a second order reiterating the contents of the first order, giving DLNR 30 days to file any objections.
DLNR did not file any, and completely disregarded the second order of the court.
DLNR submitted a motion to quash or modify the order in aid of judgment only recently but the court denied it. DLNR argued that it is executive branch agency and cannot sue or be sued in its own name.
DLNR stated that the judgment can only be paid by the Legislature and no appropriation has been made and there is nothing the department can do about it.
But the court noted that DLNR has agreed to pay MRC a large sum of money which MRC is owed.
Wiseman stated that “the reputation of the commonwealth cannot afford the long term consequences of a government which accepts the benefits of a contract and refuses to fulfill their obligations, and ignores judgments which they have stipulated to.”
