Counterclaim vs Yamamoto

The owners of cargo ship M/V Luta have filed counterclaims for fraud and other claims against Japanese investor Takahisa Yamamoto.

M/V Luta, Luta Mermaid LLC, Luta Mermaid president Abelina T. Mendiola, and Luta Mermaid members Deron T. Mendiola and Fidel S. Mendiola III also filed counterclaims against Yamamoto for invalid arrest of the ship and for breach of fiduciary duty.

They asked the U.S. District Court for the NMI to hold Yamamoto liable to pay them damages for his alleged fraudulent actions in securing a maritime lien and the arrest of M/V Luta, and lost profits and cost of paying off the vessel’s former captain and crew members, Norton Lilly, and Long Consulting.

They asked the court to order the immediate release of the ship and to declare the lien invalid.

Legal counsel William M. Fitzgerald stated in the counterclaims that Yamamoto met and became friends with Fidel Mendiola Jr. and his wife Abelina Mendiola through several visits to Rota.

During this time, Yamamoto allegedly became interested in acquiring the Sunset Villia, which was in a state of disrepair and in need of substantial renovations.

Having learned from Fidel Jr. about the difficulties of getting materials and equipment to Rota because of the lack of shipping services, Yamamoto allegedly suggested that he would start a shipping company, which would augment his ongoing efforts to acquire Freedom Air, an airline serving Rota.

Fitzgerald said that Yamamoto then suggested that they would start a shipping business, which would be a joint venture between Yamamoto and Fidel Jr.’s family.

It was allegedly agreed that Yamamoto would be financing the business and the Mendiolas would provide time and services in the management, operation and logistics of the venture, which was to be done through Luta Mermaid LLC.

The joint venture proposal was to be a 50/50 split of the profits and losses of Luta Mermaid, with Abelina Mendiola and her children holding legal title to 100 percent of the shares of the company, and Yamamoto holding the beneficial ownership of the 50 percent of the shares.

Fitzgerald said after the renovations and a long and costly transit from Louisiana to Rota, the vessel began operations.

The lawyer said up to the date of the ship’s arrest last Oct. 25, Luta Mermaid was struggling financially to pay the cost of operations, but was still able to continue operations with prospects for future business looking bright.

He said M/V Luta’s crewmembers had agreed to a delay in the payment of their wages and both Long Consulting and Norton Lilly were willing to wait for payment for services provided by them.

Without any notice to any of the defendants, Fitzgerald said, Yamamoto sued them and arrested the vessel, falsely claiming that he was a provider of necessaries to the ship, hiding the fact that he was a 50 percent joint venturer.

He said the arrest of M/V Luta prompted and required the crewmembers, Norton Lilly, and Long Consulting to file their own complaints.

The lawyer said Yamamoto then contracted with a private firm to be the custodian of the vessel.

Fitzgerald said Luta Mermaid recognizes the legitimacy of the claims by crewmembers, Long Consulting and Norton Lilly and already has a plan.

Fitzgerald earlier disclosed that the owners of M/V Luta have reached a settlement that requires them to pay over $600,000 to three group of intervenors—the ship’s captain and six crewmembers, Long Consulting, and Norton Lilly.

In defendants’ counterclaims, Fitzgerald alleged that as a direct and proximate result of Yamamoto’s false statements, a maritime lien was issued and the vessel was arrested.

Fitzgerald asserted that Yamamoto’s fraudulent claims were made in violation of the fiduciary duties of trust and loyalty owed to his joint venture partners and were in violation of the implied covenant of good faith and fair dealing.

In defendants’ answer to Yamamoto’s lawsuit, Fitzgerald asked the court to dismiss the case in its entirety and declare invalid the arrest of M/V Luta and order the vessel’s release.