Court issues default judgment vs IPI in law firm’s suit

The U.S. District Court for NMI has issued a default judgment in favor of law firm Banes Horey Berman & Miller, which is suing Imperial Pacific International (CNMI) LLC for breach of contract.

U.S. District Court for the NMI Chief Judge Ramona V. Manglona has ordered IPI to pay the law firm $113,333.30 plus 9% per annum in prejudgment interest beginning on Jan. 6, 2021.

Manglona said that IPI has to date failed to respond to the law firm’s motion for entry of default. IPI’s response was due last Jan. 25, 2021, if it wanted to contest that it was in default or to contest the balance owed.

“Given IPI’s failure to file any opposition contesting the law firm’s motion, the court grants the motion for entry of default,” she said.

In her order, the judge noted that the law firm earlier asked the court to stay proceedings in the case for six months pending execution of the parties’ settlement agreement. The judge granted the stay.

On Jan. 7, 2021, the law firm had the stay lifted and asked for a default judgment against IPI for its failure to pay the second installment pursuant to the parties’ settlement agreement.

According to the settlement agreement, IPI was to pay a total of $100,000 in consideration of the law firm’s releasing and waiving IPI from further claims arising out of the nonpayment of legal fees and costs as alleged in the complaint.

IPI was supposed to pay those amounts in six installment of $16,666.66 except for the first installment amount being $16,666.70 that was due by Dec. 7, 2020.

IPI’s failure to pay or deliver the full amount of any installment on or before its due date would constitute a default on the agreement and would entitle the law firm to entry of default judgment in the higher amount of $130,000, minus the sum of prior installments that were fully paid on time.

A day after IPI failed to make the second payment on the due date, the law firm asked the court to lift the stay and enter a default judgment against IPI.

Manglona lifted the stay on Jan. 8, and ordered the law firm to serve both its motion and the court order on IPI.

The law firm then filed proof that IPI accounting director Frances Mafnas was personally served on Jan. 11, 2021.

According to court documents, back in Sept. 10, 2020, the law firm sued IPI for breach of implied contract, and unjust enrichment. IPI owed the law firm at least $120,000 for legal services.