Contractor’s request for receivership is denied

The U.S. District Court for the NMI has denied a contractor’s request for a receivership against an apartment investor because it failed to serve the investor with the motion for a receivership.

Last week, U.S. District Court for the NMI Chief Judge Ramona V. Manglona, denied without prejudice Peace & Order Trading Corp.’s motion to appoint a receiver for apartment investor Fairyland Investment, LLC to help Peace & Order satisfy the $767,697.50 judgment.

The court denied Peace & Order’s motion without prejudice so that it could refile a new motion that properly follows the procedures of the court’s local rule.

Manglona pointed out that Peace & Order moved for an appointment of a receiver, but never served Fairyland with its motion as required by Local Rule 63.1.

The court noted that, while the plaintiff cited Federal Rules of Civil Procedure to warrant a receivership, Peace & Order’s request relied on state law for the appointment of a receiver.

In line with federal rules, Manglona said, the district court has a local rule pertaining to receiverships, Local Rule 63.1. This rule requires the service of a motion to appoint a receiver to be served on all parties and compels the defendant to list the defendant’s creditors and their addresses within seven days after being served.

According to court documents, back on April 13, 2021, the court issued a default judgment against Fairyland in the principal amount of $767,697.50 plus attorney’s fees and costs, including applicable federal interest rate for post-judgment interest.

On July 24, Peace & Order, through lawyer Colin Thompson, asked the court for an order appointing a receiver to administer, collect, or sell any real or personal property in which Fairyland Investment, LLC has an interest, specifically two lots on Navy Hill.

Thompson also asked for an order directing Fairyland to turn over to the receiver title to its assets in an amount sufficient to satisfy the judgment.

Peace & Order sued Fairyland Investment, LLC, for breach of construction contract and unjust enrichment.
Peace & Order was a contractor hired by Fairyland to remodel and build an apartment building on Navy Hill, Saipan. The lawsuit stated that Peace & Order stopped work on the project because Fairyland refused to pay the amount owed for work completed.