IPI files counterclaim against Pacific Rim

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IMPERIAL Pacific International has accused its former contractor, Pacific Rim Land Development LLC, of providing false information in its lawsuit.

Represented by attorney Cong Nie, IPI is asking the District Court for the NMI to dismiss Pacific Rim’s second amended complaint for its “failure to negotiate in good faith and mediate prior to filing [its] lawsuit, which is a condition precedent to bringing suit as agreed to in the contract.”

Nie on Wednesday also filed counterclaims against Pacific Rim, alleging promissory fraud, fraud in the inducement as to the promissory note, violation of the Consumer Protection Act, and breach of contract.

Demanding a jury trial, IPI also asked the federal court to cancel IPI’s contract with Pacific Rim and the promissory note, and to hold Pacific Rim liable to pay damages in an amount to be proven at trial.

In a recent order, Chief Judge Ramona V. Manglona granted the summary judgement motion of Pacific Rim against IPI as it pertains to the breach of promissory note claim.

Judge Manglona also denied IPI’s motion to dismiss the lawsuit of Pacific Rim and stated that she has reconsidered the submission of a certified question with respect to the mechanic’s lien issue and instead will issue an order on Pacific Rim’s lien application.

Attorney Colin Thompson, who represents Pacific Rim, said the total due on the promissory note for interest and principal is $6,840,944 as of April 16, 2020.

Pacific Rim sued IPI for refusing to pay for services in the amount of $5.65 million for the substantially completed or completion of the agreed-upon construction work for IPI’s casino-resort project on Sept. 30, 2018.

Pacific Rim also filed an application for a mechanic’s lien on IPI’s hotel-casino project and on the land that it sits on. An online legal dictionary states that a mechanic’s lien “empowers and enables contractors, suppliers, and others that work in the construction industry to get paid the money they’ve earned on their projects and jobs.”

In its counterclaims against Pacific Rim, IPI stated that it did not discover the “fraudulent intent” prior to April 16, 2018, adding that its promissory fraud claim is timely.

IPI accused Pacific Rim of knowingly misrepresenting the trade categories of its employees in its monthly invoices and deliberately omitting to disclose when submitting its monthly invoices that its workforce did not perform work in a manner as efficient or competent as those of ordinary skill, competency, and standing in the corresponding trades.

IPI also alleged that Pacific Rim engaged in unfair and deceptive acts in its business operations.

According to IPI, the enactment of the Northern Mariana Islands Economic Expansion Act in August 2017 imposed a ban on CNMI businesses using CW-1 visa category to hire new construction workers.

This federal law made it extremely difficult for large-scale construction projects in the CNMI, IPI stated.

At that time, IPI said it was under a deadline to complete the hotel-casino project as provided in its casino agreement with the CNMI government. “IPI needed a general contractor who could finish the project timely and completely.”

Pacific Rim proposed to IPI that it could and would act as the general contractor of the project, IPI said. On Feb. 13, 2018, Pacific Rim and IPI executed a written contract for the construction of the project.

In the contract, IPI said “Pacific Rim promised to perform the scope of work defined in the contract, including implementing a construction plan to substantially complete all construction on or before May 31, 2019, and supervising other contractors and subcontractors working on that project, as the general contractor.”

IPI said Pacific Rim also promised to assign qualified and or licensed personnel.

After executing the contract Pacific Rim started to recruit workers for the project. However, IPI said, Pacific Rim recruited workers “with reckless disregard whether they were able to conduct construction work.”

As an example, IPI said, Pacific Rim “hired a person in Saipan with the initials P.P. to work on the project. P.P., prior to being hired by Pacific Rim, was working as a kitchen helper whose duties mainly involved cleaning dishes and cooking utensils and had been in that job position for four years. Pacific Rim had him work first as a security guard, and then as a carpenter and a mason on the project. P.P during his employment received no training for carpentry or masonry work and was among the first batch of employees that Pacific Rim terminated when the construction contract agreement was terminated,” IPI added.

IPI said Pacific Rim also hired E.M. who was previously a delivery man. “Pacific Rim had E.M. do carpentry work involving installing glass reinforced concrete [or GRC] panels on the exterior of the hotel building,” IPI said.

During the time period when Pacific Rim performed worked under the contract, IPI said “more than 200 GRC panels were installed at a much slower pace than what it would have been had Pacific Rim hired construction workers and supervisory staff that possessed ordinary skill, competency and standing in the trades involved.”

IPI said a “substantial number of GRC panels installed during the term of the contract were installed incorrectly and had defects, such as improper welding, and the defects had to be corrected.”

After the contract was terminated, the incorrectly installed GRC panels had to be removed and re-installed, IPI added.

It noted that at least in the invoices for April, May and June 2018, Pacific Rim “listed multiple persons working as equipment mechanics, even though it employed during that period at most one qualified equipment mechanic with the initials M.V.”

IPI said prior to the filing of the lawsuit it made payments in aggregate over $30 million to Pacific Rim. “Even putting aside the damages caused by Pacific Rim to IPI, the payments that have been made by IPI to Pacific Rim prior to the filing of this lawsuit were more than enough to cover the fair value of the services and materials furnished by Pacific Rim, and more than enough to provide a significant profit margin to Pacific Rim,” IPI said.

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