‘Save for 1, all CUC board directors violated law and disregarded statutory duties’

The Commonwealth Utilities Corp. board directors, who are being sued by former CUC public information officer Brad Ruszala and former CUC chief financial officer Matthew Yaquinto, violated their fiduciary duties to the CNMI people by violating Commonwealth law and disregarding their statutory duties, according to attorney George Lloyd Hasselback.

Hasselback, counsel for Ruszala and Yaquinto, said the duties owed by a fiduciary are some of the highest recognized by the CNMI laws.

The lawyer said because all government officials owe a fiduciary duty to the people of the CNMI, and the defendants CUC board directors are government officials who manage the CUC, the defendants owe a fiduciary duty to the people of the Commonwealth.

The CUC board, Hasselback said, should at least not break the law when they take official action.

Hasselback discussed CUC board directors fiduciary duties, among other issues, in Ruszala’s and Yaquinto’s opposition to CUC board’s motion to dismiss their lawsuit.

Ruszala and Yaquinto sued all CUC board members, except David Sablan Jr., for allegedly holding closed-door meetings under the guise of “executive sessions” and using their positions to obtain private financial gain for themselves and their relatives.

Ruszala and Yaquinto sued CUC board chair Adelina C. Roberto and board members Eric C. San Nicolas, Joseph T. Torres, Ignacio L. Perez, and Albert A. Taitano for violations of the Open Government Act, Government Ethics Code, and U.S. District for the NMI stipulated order.

Ruszala and Yaquinto asked the Superior Court to declare that defendants are in violation of their fiduciary duties to the people of the CNMI for their continued failure to comply with the OGA requirements.

The plaintiffs requested the court to declare that all ordinances, resolutions, rules, regulations, directives created by the CUC board in violation of OGA, be declared null and void.

The defendants, through counsel James Sirok, moved the court to dismiss the lawsuit.

According to Sirok, the lawsuit is nothing more than a veiled attempt to obtain a “stepping stone” for a request to Gov. Ralph DLG. Torres to remove all board members except David J. Sablan Jr.

Sirok said the complaint is nothing more than a thinly veiled attempt to persuade the court to enter an order declaring that each of the individually named defendants have violated their fiduciary duties as members of the CUC board of directors to the people of the CNMI.

“They have failed to name as a defendant one board member who has been outspoken and critical of CUC, Mr. Sablan,” said Sirok in CUC board members’ motion to dismiss.

In Ruszala’s and Yaquinto’s opposition to the motion filed on Friday, Hasselback asked the court

to deny in its entirety CUC board members’ motion to dismiss, and immediately order each board member to file their respective answer to their complaint.

Hasselback, asserted that the arguments raised in CUC board’s motion to dismiss are not supported by any relevant legal authority, are raised at an improper time and/or lack of any reasonable factual or legal basis.

Hasselback said the defendants are sued in their capacities as members of the CUC board.

Hasselback said each of cause of action states that the defendants acted “as members of the CUC board…”

Put simply, the lawyer said, the complaint simply cannot be construed as being directed toward the defendants solely in their personal capacities.

Hasselback said the entire crux of this lawsuit is that Ruszala and Yaquinto claim that the defendants have violated their fiduciary duties to the people of the CNMI by breaking the law and failing to take reasonable steps to comply with a stipulated order that could impose significant penalties upon the CUC if its terms are not met.

Hasselbacks said every time that the CUC board takes any official action that official action implicates their fiduciary duty to the public.

The defendants, he said, may not compel the plaintiffs to pursue an action against government officials who did not violate the law.

Hasselback said his clients have alleged sufficient facts to support a taxpayer suit for the expenditure of funds for a non-public purpose.

The plaintiffs, he said, may pursue a taxpayer action against the defendants without alleging the expenditure of public funds for a non-public purpose.

Hasselback said the motion should be confined to the facts as alleged in the complaint.