Judge orders release of M/V Luta

The federal court directed Japanese investor Takahisa Yamamoto and three others to pay by tomorrow, Tuesday, their shares in custodial fees now amounting to $189,323 for cargo vessel M/V Luta.

After the amount is paid to the custodian, National Maritime Services Inc., M/V Luta would be released back to its owner, Luta Mermaid LLC and the Mendiolas.

U.S. District Court for the NMI designated judge Frances Tydingco-Gatewood issued the oral order on Friday.

Abelita T. Mendiola is president of Luta Mermaid; Luta Mermaid’s members are Deron T. Mendiola and Fidel S. Mendiola III.

Tydingco-Gatewood gave the order after hearing the issue whether M/V Luta’s arrest was unreasonable since Yamamoto is a joint venturer in the vessel.

Tydingco-Gatewood’s tentative ruling favors Luta Mermaid LLC and the Mendiolas, who filed a motion to declare Yamamoto’s maritime lien on the vessel invalid. The judge said she will issue a written decision today, Monday.

Tydingco-Gatewood ordered Yamamoto to pay by Tuesday the ship’s custodian, National Maritime Services Inc., $130,406 as his share in the custodial fees.

Failure to pay the fee by Tuesday may result in contempt proceedings against Yamamoto.

Saipan Tribune tried yesterday to get comment from Yamamoto’s counsel, George Hasselback, about the judge’s tentative ruling, but he had yet to reply as of press time.

Tydingco-Gatewood also ordered the three groups of intervenors to pay their shares of custodial fees. The ship’s captain and crew were ordered to pay $8,628; Long Consulting, $14,095; and Norton Lilly, $6,192.

Yamamoto filed initial custodial fees in the amount of $30,000. The intervenors have not filed their share of fees yet.

Tydingco-Gatewood is hoping that the relationship between Yamamoto and the Mendiolas is not totally broken down and there would be reconciliation.

Attorney William M. Fitzgerald, counsel for Luta Mermaid LLC and the Mendiolas, said reconciliation would be possible.

When asked for comments after the hearing, Fitzgerald said he does not want to say anything because the judge only made a tentative oral ruling.

Fitzgerald said Tydingo-Gatewood stated that her decision favors his client, Luta Mermaid LLC and the Mendiolas as to their motion to declare the maritime lien invalid.

“So I don’t want to say anything more than that because she could change her mind,” Fitzgerald said, adding that they are really happy, but that the ruling won’t be final until the judge comes out with a written decision.

Luta Mermaid LLC and the Mendiolas, through Fitzgerald, asserted that Yamamoto was never entitled to a maritime lien on M/V Luta as he is a joint venturer with the Mendiolas.

Fitzgerald asked the court to invalidate the lien and vacate its order for the sale of M/V Luta.

The captain and crewmembers are demanding payment of $183,648 in unpaid wages, while Long Consulting is claiming $300,000 in unpaid services. Norton Lilly is claiming $131,801 in unpaid services.

The fourth claimant, Rota Terminal & Transfer Co. Inc., withdrew its motion to intervene after settling with the Mendiolas. The company claims that M/V Luta owes it $165,766 in services, costs, fees, and interest.

The fifth claimant, the Commonwealth Ports Authority, filed a complaint to collect $20,463 in alleged unpaid services. CPA also later withdrew its motion after resolving its claim with the Mendiolas.

Yamamoto is suing Lt. Gov. Victor Hocog and the owner/operators of M/V Luta for allegedly refusing to pay back the $3.4 million that he put up for the vessel.

After Yamamoto filed the lawsuit last Oct. 25, the National Maritime Services was appointed as custodian of the vessel.

Last Jan. 9, Tydingco-Gatewood ordered the sale of M/V Luta for a minimum of $550,000 on Feb. 8, 2017. Tydingco-Gatewood approved the sale, citing its expensive upkeep and the delay in securing its release. The judge, however, recently stayed the sale for 60 days.

Luta Mermaid and the Mendiolas have filed in court counterclaims for fraud and other claims against Yamamoto.

Fitzgerald said the joint venture proposal by Yamamoto was a 50/50 split of the profits and losses of the company, Luta Mermaid, with Abelina Mendiola and her children holding legal title to 100 percent of the shares of the company, and Yamamoto holding the beneficial ownership of the 50 percent of the shares.

Fitzgerald said the arrest of M/V Luta then prompted the crewmembers, Norton Lilly, and Long Consulting to file their own complaint.

Fitzgerald have disclosed that the owners of M/V Luta have reached a settlement agreement that requires them to pay over $600,000 to the three group of intervenors—the captain and six crewmembers, Long Consulting, and Norton Lilly.