Another default judgment sought vs IPI

Imperial Pacific International (CNMI) LLC is faced with another possible default judgment of over $200,000 following a recent application for default judgment filed by USA Fanter Corp. Ltd., with the U.S. District Court for the NMI.

USA Fanter, though its attorney, Colin Thompson, recently applied for default judgment against IPI in the amount of $226,127.05 in the contractor’s civil lawsuit alleging breach of contract.

U.S. District Court for the NMI chief judge Ramona V. Manglona issued a notice last Wednesday stating that she would hear the motion next week, Nov. 29, at 9am.

“The District Court for the Northern Mariana Islands will hear U.S.A. Fanter Corporation, Ltd.’s application for Default Judgment pursuant to Fed. R. Civ. P. 55(b)(2),” her notice stated.

According to a declaration in support of a default judgment signed by USA Fanter financial consultant Antonio Muña, USA Fanter is applying for a default judgment against IPI for its failure to acquire counsel or defend itself in this matter leading to the first entry of default on Nov. 15.

“Plaintiff now files this application to the court to enter default judgment against the defendant in the corresponding amount of $226,127.05. On Nov 15, 2022, the court ordered the clerk to strike IPI’s answer and enter default against the defendant IPI. This application follows the order striking defendant’s IPI’s answer and directing entry of default pursuant to Rule 37,” the declaration states.

According to the lawsuit, USA Fanter states that IPI failed to pay a construction staging lease agreement and construction contract that involved quarry products and heavy equipment rentals.

Without factoring interest or late fees, IPI owes USA Fanter $61,600 for unpaid property rent, $87,772.55 for the unpaid change order work, $15,462 for unpaid quarry materials, and $61,292.50 for unpaid heavy equipment rentals—for a total of $226,127.05, according to Thompson.

The lawsuit further states that on or about Dec. 15, 2015, IPI leased the property owned by USA Fanter by the execution of a staging lease agreement, with the term commencing on Feb. 22, 2016, and ending on Dec. 31, 2018, with no right to extend the term of the lease. Pursuant to the lease, IPI agreed to pay plaintiff rent on or before the 25th day of each month.

Thompson said IPI did make some payments to USA Fanter on a month-to-month basis for its occupancy of the property.

However, when IPI transitioned into a holdover occupancy of the property after the lease agreement ended, the monthly payments were reduced to only $5,600 per month. Thompson said the last payment IPI made to plaintiff for its holdover occupancy of the portion of the property was for July 2019.

The lawyer said USA Fanter served IPI with invoices for the amounts outstanding for the occupancy and use of the property but IPI has not responded to these invoices or demands for payment.

Meanwhile, Thompson said USA Fanter and IPI also executed a written construction contract for construction of off-site improvements that was beyond the scope of their previous construction contract.

On Nov. 20, 2018, plaintiff submitted to IPI a change order proposal detailing the cost breakdown for the additional work, which totaled $87,772.55. On March 28, 2019, IPI sent USA Fanter a letter agreeing to the change order and agreeing to pay plaintiff $87,772.55 upon completion of the change order work. On July of 2019, USA Fanter completed all of the work pursuant to the change order but IPI allegedly refused to make the $87,772.55 payment.

As for the complaint regarding the nonpayment of quarry products and heavy equipment rental, Thompson said IPI ordered that USA Fanter procure and deliver quarry products to the defendant on different occasions and that they’d pay for the products. IPI allegedly failed to pay these orders and rentals that totaled $61,292.50.