Club 88 Mariana sues Kan Pacific, DPL, BSI

The owner of e-gaming facility Club 88 Mariana is suing the owner of Mariana Resort & Spa and Best Sunshine International, Ltd. for allegedly not informing the company of Best Sunshine’s negotiation to purchase the resort.

Saipan Entertainment LLC, owner of Club 88 Marianas, is suing Kan Pacific Saipan Ltd., which owns Mariana Resort & Spa; and Imperial Pacific International (CNMI) LLC, which is doing business as Best Sunshine International.

Kan Pacific and then-Department of Public Lands Secretary Pedro A. Tenorio were the two defendants in the original complaint.

Saipan Entertainment later amended the complaint that named Imperial Pacific as co-defendant with Kan Pacific, while Tenorio was replaced by acting DPL secretary Marianne C. Teregeyo as co-defendant.

In the amended complaint, Saipan Entertainment is suing Kan Pacific for breach of contract, unjust enrichment, and fraudulent nondisclosure.

Saipan Entertainment is suing DPL secretary and DPL in order to enjoin the CNMI government from consenting to any assignment of the resort lease or the resort property until the controversy surrounding the validity of the resort lease is resolved.

Saipan Entertainment is suing Imperial Pacific International for intentional interference with contract.

On Tuesday, Superior Court Associate Judge Teresa Kim-Tenorio placed under advisement Kan Pacific’s motion to compel and Saipan Entertainment’s motion for a protective order.

In Kan Pacific’s motion to compel, attorney Joseph J. Iacopino asked the court to compel Saipan Entertainment’s sole member, Victoria Scott, and her designees, to produce the requested documents and submit to the taking of depositions.

Deposition refers to the taking testimony of a witness outside of court.

In Saipan Entertainment’s motion for a protective order, attorney Daniel T. Guidotti requested the court to protect the company and Scott from being forced to respond to deposition topics that are not specified with reasonable particularity.

Attorney Viola Alepuyo appeared as counsel for Imperial Pacific. Attorney Christopher C. Timmons appeared as counsel for DPL.

Kan Pacific also filed a motion to dismiss the lawsuit. Iacopino asserted that Saipan Entertainment has failed to establish any breach of its purported sublease or any actual damages and is actually conducting its business uninterrupted at this time.

Iacopino said Saipan Entertainment has admitted in its complaint that Kan Pacific and Imperial Pacific have not consummated any agreement.

Iacopino said clearly, Saipan Entertainment is asking the court to get involved in “a matter that is premature, not ripe, hypothetical, and speculative.”

In Saipan Entertainment’s lawsuit, Guidotti asked the court to issue an order enjoining Kan Pacific and its agents from transferring the resort lease and the resort lease to Imperial Pacific or any other third party unless and until the prospective transferee agrees to assume all of the contractual provisions of the sublease.

Guidotti requested the court to enjoin the DPL and its secretary from approving any transfer of any part of the resort lease from Kan Pacific to Imperial Pacific or any other third party unless or until the prospective transferee agrees to assume all of the contractual provisions of the sublease.

Guidotti said if the court determines that the sublease is valid, Saipan Entertainment should be awarded money sufficient to compensate for the company’s damages.

According to Guidotti in the complaint, on Dec. 15, 1977, Kan Pacific leased 146 hectares of public land from the CNMI government (resort lease) to develop the Mariana Resort & Spa.

Guidotti said the resort lease was to end in April 2003, but in March 2003, the Marianas Public Lands Authority, entered into an extension of the resort lease.

The lease was extended for 15 years. It terminates in April 2018.

Guidotti said that on Dec. 18, 2013, Kan Pacific and Saipan Entertainment entered into a commercial sublease agreement.

Under the agreement, Kan Pacific agreed to lease a commercial space at Mariana Resort to Saipan Entertainment for its Club 88 Mariana facility.

Club 88 Mariana began its business operations on Nov. 20, 2015.

Guidotti said Saipan Entertainment invested more than $1 million in the Club 88 Mariana facility.

Guidotti said sometime in October 2015, stories began appearing in Saipan Tribune and Marianas Variety, indicating that Imperial Pacific or Best Sunshine was interested in purchasing Kan Pacific’s remaining interest in the resort property.

The lawyer said by mid-November, new stories appeared in the two newspapers, indicating that Imperial Pacific and Kan Pacific had entered into negotiations regarding Kan Pacific’s remaining 2.5 years under the resort lease.

Guidotti said that, during the second week of December, news stories appeared, indicating that Imperial Pacific and Kan Pacific “signed” an agreement obligating Kan Pacific to assign its remaining interest in the resort property Pacific Imperial Pacific.

Guidotti said during this time period, Kan Pacific did not inform Saipan Entertainment of its ongoing negotiations with Imperial Pacific.

Guidotti said the DPL secretary has not consented to the agreement between Kan Pacific and Imperial Pacific regarding the transfer of the resort property.

He said Kan Pacific and Imperial Pacific are continuing to seek the DPL secretary’s consent to this transaction.

Guidotti said several documents in DPL’s possession indicate that Kan Pacific willfully sabotaged Saipan Entertainment’s rights under the sublease in order to make the sale of the resort property more attractive to Imperial Pacific.

Guidotti said prior to entering into the sublease with Saipan Entertainment, Kan Pacific was aware that section 13 of the Dec. 16, 1977 lease includes a restriction requiring it to obtain DPL’s consent prior to subleasing any part of the resort property to Saipan Entertainment.

Guidotti said prior to entering into the sublease with Saipan Entertainment, Kan Pacific did not disclose the Dec. 16, 1977 lease or the subleasing restriction to Saipan Entertainment.

Guidotti said Imperial Pacific and 10 unknown persons offered to Kan Pacific $3.5 million plus other consideration, conditioned in part on Kan Pacific entering into one or more written agreements with Imperial Pacific and others that obligate Kan Pacific to deliver the premises to Imperial Pacific free of any claims by Saipan Entertainment.

Guidotti said Kan Pacific has entered into one or more written or oral agreements with Imperial Pacific whereby Kan Pacific has agreed to transfer the resort property and the resort lease to Imperial Pacific.

As of press time, Best Sunshine had yet to reply to Saipan Tribune’s request for comments.