‘Kaipat breached duty as estate administrator’

Former CNMI Supreme Court clerk of court Crispin Kaipat was found to have breached his fiduciary duty to an estate and to the court for misappropriating $36,000 in assets of an estate where he served as an administrator.

Superior Court Associate Judge Juan T. Lizama ordered Kaipat to pay $36,000 to the estate of Maria Piere Malus plus interest at 6 percent per annum covering the period from Dec. 22, 2004 to July 19, 2006.

Lizama held Kaipat liable to pay attorney’s fees and costs incurred by the administrator or the estate in having to file the motions for his removal or substitution and accounting of the estate.

“The reason for awarding fees is so that any heir or party with knowledge of malfeasance by a fiduciary would act immediately and to prevent further injury to any estate,” the judge pointed out.

With respect to the contempt issue, Lizama deferred ruling on the motion until Nov. 7, 2006 at 1:30pm.

On Nov. 7, the judge said, he hopes that Kaipat has made full or substantial amends to satisfy the misappropriated amount; attorney’s fees and costs; and interest accrued.

Lizama directed the former High Court clerk of court to appear at the Nov. 7 hearing.

Lizama issued the ruling after Malus estate’s substitute administrator Juan Kaipat moved to find Crispin Kaipat in contempt of court.

Juan Kaipat, through counsel Robert T. Torres, also asked the court to declare that Crispin Kaipat breached his fiduciary duty to the estate and to the court as an administrator through the misappropriation of rental income owned by the estate.

Lizama had previously directed Crispin Kaipat to file an income/expense declaration and to start making payments.

The former administrator has reported that he is no longer employed; that he has submitted papers to the NMI Retirement Fund to start receiving his retirement pension; and claims to be actively looking for a job.

Crispin Kaipat has made no payments and has offered to pay $50 every 15 days.

The estate’s administrator Jeffrey Kaipat, through counsel, has asked for more information in order to recoup funds or assets from Crispin Kaipat.

In response to the request, Lizama ordered Crispin Kaipat to provide a notarized and detailed income and expense declaration with supporting papers.

He directed the former administrator to provide documentation from Retirement Fund’s benefits manager relating to his application for his retirement pension such as the determination of eligibility for retirement benefits; the amount of pension; and any approval letter.

The judge also required Crispin Kaipat to provide a listing of all real and personal property that he owns and provide that information to attorney Torres.

Court records show that in July 2006, Lizama removed Crispin Kaipat as administrator of the Malus estate after he was found misusing the estate’s funds.

A day after Lizama’s order, acting Chief Justice Alexandro C. Castro informed the courts and lawyers that on that day Kaipat tendered his resignation effective immediately as the high tribunal’s clerk of court.

Court papers indicate that Magdalena and Juan Kaipat, heirs of the Malus estate, filed motions seeking for an immediate accounting of the estate’s lease income proceeds, partial distribution of estate funds, and removal of the administrator.

In July 2002, Crispin Kaipat substituted for Joaquin Sablan as administrator for the estate.

As administrator, Crispin Kaipat renegotiated a lease of the estate’s property in Garapan to Yu-Jung Kim and Ji-Young Kim. Pursuant to the new lease, the estate was to receive $16,000 in September 2002 and $20,000 in December 2002.

Crispin Kaipat, however, never filed an accounting of the lease income proceeds nor has he communicated with any of the other heirs.

Magdalena and Juan Kaipat, through Torres, brought the motions after learning that the lease income proceeds were not in the estate’s trust account.

At the hearing, Crispin Kaipat informed the court that he had taken the money for his own personal use and that he had exhausted the funds in 2004.

Attorney Reynaldo Yana, then counsel of Crispin Kaipat, stated that he was previously unaware of the existence of the lease and his client’s misuse of estate funds.