This case arose in February 2006 after Public Law 15-2 dissolved the Marianas Public Lands Authority and replaced it with the Department of Public Lands.
Deleon Guerrero, now the executive director of the Commonwealth Ports Authority, had originally signed a contract with MPLA in Oct. 2004.
The contract stated that Deleon Guerrero would serve as the commissioner of the MPLA for four years with a base salary of $80,000.
The contract also included terms that provided that if Deleon Guerrero was ever dismissed “without cause,” he was to receive either 12 months’ pay or a lump sum for the remaining duration of the contract, whichever period was longer.
Once the MPLA board of directors understood that the MPLA was going to be dissolved, they acted to terminate Deleon Guerrero “without cause” so that he would be eligible to receive a lump sum payment under the terms of the contract.
The trial court found that portions of Deleon Guerrero’s contract violated CNMI law.
Specifically, the trial court determined that the four-year term of the contract and the lump sum term violated CNMI law because Deleon Guerrero’s position at the MPLA was statutorily defined as “at will,” and the provisions of Deleon Guerrero’s contract made him a “for cause” employee. The trial court also found that that MPLA board did not comply with the Open Government Act when it attempted to terminate Deleon Guerrero without cause.
Deleon Guerrero argued that the Superior Court erred in concluding that: (i) the MPLA statute gave the MPLA board authority to enter into any employment contract it wished, and therefore, his employment did not exceed statutory authority (ii) his termination was proper under the Open Government Act, and his actual date of termination was Feb. 22, 2006; and (iii) even if his termination under the Open Government Act was improper, the fact that the governor appointed an acting secretary for DPL on Feb. 22 terminated his duties to MPLA as a matter of law.
The Supreme Court upheld the trial court’s decision and found that: (i) the MPLA had broad authority to enter into employment contracts, but lacked the authority to contract around specific statutory provisions defining the position of commissioner as “at-will”; (ii) the MPLA failed to comply with provisions of the Open Government Act thus invalidating the MPLA board’s attempt to terminate Deleon Guerrero without cause; (iii) the cutoff date for liability between Deleon Guerrero and DPL was Feb. 22, 2006 because both the trial court and Deleon Guerrero agreed that that was the appropriate date.
The Supreme Court reversed the trial court on one minor point. The trial court’s opinion explicitly stated that Deleon Guerrero abandoned his position as the MPLA commissioner. Because of the unique circumstances surrounding Deleon Guerrero’s termination, the Supreme Court held that it would be unfair to uphold the trial court’s finding of abandonment.
The Supreme Court’s full opinion in Guerrero v. Department of Public Lands, 2011 MP 3, can be found at http://www.justice.gov.mp/.
