BANK of Saipan’s temporary receiver Randall T. Fennell has moved to disqualify Associate Justice Alexandro C. Castro from presiding over the receivership proceedings.
Fennell, through attorney Cindy Adams, said Castro has a history of close personal contact and friendship with attorney David Lujan and former Speaker Joe Lifoifoi.
Adams said this relationship, along with Castro’s involvement with Lujan, the JLH Trust, the Hillblom Memorial Fund and the CNMI Judicial Law Library has led both to an appearance of impartiality on the part of the justice and actual bias and prejudice in favor of Lujan and the bank’s board of directors.
Adams said Castro should recuse himself or appoint a special court in order to consider the motion for his disqualification.
Bank of Saipan, Inc., meanwhile, filed a petition for mandamus in the high court for Fennell’s removal as temporary receiver.
Fennell said Lujan and Lifoifoi, who are or were directors of the bank, are personal friends of Castro.
Adams said the JLH Trust, a major shareholder of the bank, and other directors of the bank may face civil liability for the bank’s collapse or for the wrongful removal of funds from the bank.
The JLH Trust, Adams said, is the major donor and is expected to donate further to the Hillblom Fund, of which the associate justice is one of the founders.
“This has unilaterally reflected in Justice Castro’s handling of the matter before him so far. He has unilaterally issued an order of the Supreme Court without giving all interested parties an opportunity to be heard,” Adams said.
In 1999, Adams said, Lujan as counsel for Junior Larry Hillbroom, announced to then Judge Castro and others present in the Hillblom probate that the boy’s guardian had approved using $750,000 of his money to fund a CNMI charitable foundation which would benefit, among other things, the CNMI Judicial Law Library.
Adams said Castro indicated he would be happy to be a participant in the Hillblom Fund, and from the bench actively solicited donations to the Hillblom Fund from the other heir claimants.
Adams said Castro and his then special research assistant, Dianne Bergeron, worked closely with Lujan on organizing and funding the Hillblom Fund.
“As a co-founder of the fund, Judge Castro used his position on the bench to secure further donations for the Hillblom Fund and compensate those who had participated in establishing the fund,” Adams said.
She said that on Dec. 21, 1999, Castro ordered over $250,000 transferred from Hillbroom’s account to the Hillblom Fund.
In April 2000, Adams said, Castro awarded several “bonuses” from Hillblom’s estate money to different participants in the estate, including $50,000 to Bergeron and $150,000 to the attorney of Hillblom’s special administrator, Diego Mendiola.
Mendiola’s attorney, Jeffrey Wallsworth, donated his “bonus” to the Hillblom Foundation.
After the donation, the Wallsworth firm and Mendiola began to participate with Castro and Lujan in the formation and funding of the Hillblom Fund.
During that time, Adams said, Lujan and others who had contributed to the Hillblom Fund were allowed any substantial ex parte, or private, contacts with Castro.
Adams said Fennell, acting on behalf of his client, refused to donate to the Hillblom Fund.
“This failure to contribute to the fund noticeably upset then Judge Castro and created bias against Mr. Fennell in that proceeding,” Adams said.
