Pacific Rim objects to submission of certified questions to NMI Supreme Court

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PACIFIC Rim International, which has sued Imperial Pacific International for breach of contract, is opposed to the submission of certified questions to the CNMI Supreme Court as proposed by District Court for the NMI Chief Judge Ramona V. Manglona.

The questions pertain to Pacific Rim’s mechanic lien’s application against IPI.

Judge Manglona said certification is appropriate because the timeliness of a mechanic’s lien application has important public policy ramifications.

These are Judge Manglona’s proposed questions:

- “Whether date of completion in 4 CMC § 5803(c) refers to the date of completion of the entire project or the date of completion of contracted work by a particular contractor.”

- “Whether the notice of mutual termination in this case constitutes a valid notice of completion under 4 CMC § 5803(c) where the parties agreed that the contractor began its work and completed portions of the project and owner agrees that contractor’s obligations to perform work under the construction contract are complete.”

Pacific Rim, through attorney Colin Thompson, wants the federal court to take notice of its objection to the certification of questions while offering two additional questions of its own.

The judge earlier directed the parties to submit their proposals and/or comments to the federal court regarding the proposed certified questions.

Thompson proposed the following questions:

- “Whether a notice of completion is valid if it is not filed with the Superior Court pursuant to 4 CMC § 5804.”

- “Whether a notice of completion is ineffective for any purpose if delivery of the notice was made prior to substantial completion of the improvement, delivery of the materials, or the improvement has been actually abandoned under 4 CMC § 5803(c).”

IPI, through attorney David Banes, suggested another way to formulate the certified questions.

Under the CNMI mechanic’s lien statute, he said, an application for a lien and accompanying notice of lien is required to be filed “not later than 60 days after the date of completing of the improvement against which it is filed.”

This date, Banes said, is then statutorily defined with reference to the date when “the contracted work on the improvement has been completed,” the date of “substantial completion of the improvement,” and the date of “actual completion...of the improvement.”

Banes said “in case where the lien applicant’s contracted work on a construction project was completed before the time the entire project was completed, does the term ‘completing’ (or ‘completion’) of ‘the improvement,’ in 4 CMC § 5803(c), refer to the completion of the entire project, or only to the completion of the applicant’s contracted work on the project?”

Banes said Pacific Rim and IPI executed a construction contract under which Pacific Rim was to perform work on IPI’s project.

“They later executed a notice of mutual termination…in which they agreed that Pacific Rim’s obligations to perform work under the construction contract were complete,” he added.

“Did this notice of mutual termination constitute a ‘notice of completion’ under 4 CMC § 5803(c), effective to commence the running of the 60-day filing period for an application for a lien by Pacific Rim?”

He said the CNMI mechanic’s lien statute provides that “[a]ny licensed construction contractor or construction material supplier claiming a lien shall apply therefore to the Superior Court.”

Absent a mechanic’s lien application submitted to the Superior Court in this case, Banes said, does probable cause exist to permit the lien to attach to the property?

Banes earlier said that the mechanic’s lien against IPI could possibly shut down the casino.

Pacific Rim has sued IPI for breach of contract and breach of promissory note.

Pacific Rim alleged that IPI has refused to pay for services in the amount of $5.65 million for the agreed-upon construction work for IPI’s casino-resort project.

Pacific Rim also filed an application for a mechanic’s lien on the IPI hotel-casino project and on the land where it sits.

A mechanic’s lien refers to a security interest in the title to property for the benefit of those who have supplied labor or materials that improved the property.

In response to the lawsuit, IPI said Pacific Rim intentionally overstated the costs it incurred in the construction of the hotel-casino project in Garapan.

Moreover, IPI said Pacific Rim fraudulently obtained from the casino investor a promissory note, which is therefore unenforceable.

November 2020 pssnewsletter

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