Probable cause found for mechanic’s lien against IPI

U.S. District Court for the NMI Chief Judge Ramona V. Manglona ruled Friday that a former contractor of Imperial Pacific International (CNMI) LLC has satisfied its burden of establishing probable cause to attach a mechanic’s lien to IPI’s interests on its casino/resort project in Garapan.

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 improve the property.

Manglona made the ruling during the continuation of the hearing on U.S.A. Fanter Corp.’s application for mechanic’s lien Friday. The hearing was done through telephoe and video conference due to the court’s temporary closure because of the COVID-19 outbreak.

Manglona set the bench trial for June 24, 2020.

IPI, through counsel Joseph Horey, called to the stand its witness, Tsai Tsunglun, who is an engineer. Colin Thompson argued as counsel for U.S.A. Fanter.

The first hearing on the application for mechanic’s lien was held last March 5 and continued Friday.

At the March 5 hearing, Thompson presented two witnesses, Antonio Muña and Guo Cao Qian. Muña is general consultant of U.S.A. Fanter. Qian owns the company.

U.S.A. Fanter is suing IPI for breach of construction contract and unjust enrichment for allegedly refusing to pay $2,089,345 over landscaping improvements for IPI’s hotel-casino project.

U.S.A. Fanter asked the court to hold IPI liable to pay $2.08 million in contract damages. The company also sought payment for interest and attorney’s fees. The plaintiff asked the court to attach a mechanic’s lien to IPI’s interests in the real property on the project.

IPI, through Horey, asked the court to dismiss the complaint or, in the alternative, suspend the proceedings pending mediation. Horey argued that U.S.A. Fanter has not complied with the mandatory mediation clause.

Thompson stated in the complaint that, despite repeated demands by U.S.A. Fanter for IPI to pay all amounts due and owing for work performed, IPI has failed to do so. Thompson said that last Dec. 29, 2019, U.S.A. Fanter demanded to mediate their claims, but IPI refused.

Another former IPI contractor, Pacific Rim Land Development LLC, also filed an application for a mechanic’s lien on IPI’s hotel-casino project and on the land that it sits on.

Pacific Rim, through Thompson, is suing IPI and five unnamed alleged co-conspirators for breach of contract (construction and promissory note), and unjust enrichment.

Thompson said the unpaid amount that is owed Pacific Rim is $5.65 million, but it wants to collect from IPI approximately $10 million in damages that would be proven at trial.

The court then consolidated Pacific Rim’s lawsuit and its application for a mechanic’s lien. The case is pending in court.