Default judgment vs Dynasty

U.S. District Court for the NMI designated Judge Frances M. Tydingco-Gatewood adopted Monday a magistrate judge’s recommendation to enter a default judgment against the management of the defunct Tinian Dynasty Hotel and Casino in connection with the lawsuit filed against them by former foreign workers or CW-1 employees.

Tydingco-Gatewood granted the workers’ motion to strike the answers of Tinian Dynasty’s owners and management—Hong Kong Entertainment (Overseas) Investment Ltd. and Mega Stars Overseas Ltd.

Tydingco-Gatewood pointed out that, in this case, there were no objections that were filed by any party to Magistrate Judge Heather L. Kennedy’s recommendation.

In her recommendation, Kennedy stated it is established that “a corporation may appear in the federal courts only through licensed counsel.”

In this case, Kennedy said, the court informed Tinian Dynasty on several occasions after the withdrawal of their lawyers in 2016 and 2018 that they may face sanctions, including stricken answers and a default judgment, if they fail to obtain a new lawyer.

“Yet no counsel has appeared to represent [Tinian Dynasty] since Jan. 16, 2018, when defendants’ second counsel was permitted to withdraw from the case,” Kennedy said.

Therefore, she said, the court may strike HKE’s and Mega Stars’ answers and enter default based on their failure to defend and failure to comply with the court’s orders to obtain a lawyer.

Kennedy noted that the former workers’ motion for default judgment does assert an amount for damages or include any evidence necessary for the court to determine the amount of damages for the entry of a final judgment.

Samuel Mok is counsel for Eric F. Dona and six other co-plaintiffs. There are 15 named plaintiffs in this case.

In their lawsuit, Dona and co-plaintiffs alleged that the owners and management of Tinian Dynasty lied to them about their immigration status.

Mok alleged that the owners and management of Tinian Dynasty lied to the workers that they were legally authorized to work despite the denial of their CW-1 petitions.

In this dispute, Kennedy said, the plaintiffs filed a complaint with claims of fraudulent concealment, negligent misrepresentation, constructive fraud, and wrongful termination, and seeks punitive damages.

On April 27, 2018, the workers asked the court to strike the defendants’ answers to the complaint and enter default judgment against HKE and Mega Stars in an amount of damages to be determined at a hearing.

Last February, Chun Wai Chan, a corporate representative of both defendants, disclosed that the total outstanding liabilities of the owner of Tinian Dynasty has now climbed to over $250 million, excluding the $75 million in civil penalty assessed by the U.S. Department of the Treasury Financial Crimes Enforcement Network.

Chan revealed that HKE’s outstanding liabilities keeps increasing due to late payment penalties and interest.

Chan said Tinian Dynasty’s casino operation stopped in August 2015, and when the hotel operation halted in March 2016 and no income has been generated since then.