Settlement Fund seeks suspension of proceedings

The NMI Settlement Fund is asking the Superior Court to temporarily stay or suspend the proceedings in its lawsuit against the Commonwealth Utilities Corp. and the CNMI government over the $4.4 million that CUC allegedly owes the Retirement Fund.

The NMI Settlement Fund, through counsel Nicole M. Torres-Ripple, said a three-month stay is warranted because the questions raised in CUC’s and CNMI government’s motion to dismiss the lawsuit require an interpretation of the settlement agreement in the Betty Johnson class action in federal court.

In 2013, the U.S. District Court for the NMI gave final approval to the global settlement agreement in Johnson’s class action against the CNMI government and the NMI Retirement Fund.

With the final approval, all Retirement Fund assets were transferred to the Settlement Fund, administered by a court-appointed trustee.

In the Settlement Fund’s emergency motion for temporary stay, Torres-Ripple said the District Court has continuing and exclusive jurisdiction over the interpretation and enforcement of the settlement agreement in Johnson’s lawsuit.

Torres-Ripple said a stay is necessary to give the Settlement Fund enough time to request the District Court’s determination on issues raised by CUC and the CNMI government relating to the interpretation and enforcement of the settlement agreement.

Last Saturday, the NMI Settlement Fund trustee, through Torres-Ripple, asked the District Court to issue an order enforcing the Johnson settlement agreement and finding that the claims asserted in the Superior Court case were not resolved by that settlement deal.

The NMI Settlement Fund filed the two motions in the Superior Court and in the District Court after CUC and the CNMI government in their motion to dismiss the Settlement Fund’s lawsuit, argued for the first time that the Johnson settlement agreement resolved CUC’s liabilities in the Superior Court lawsuit.

Torres-Ripple said the crux of the CUC’s and CNMI government’s arguments in favor of the dismissal of the Settlement Fund’s claims is that no actual controversy exists because the settlement agreement disposed of all government liabilities, including CUC’s liabilities, for unpaid employer contributions.

The lawyer said a stay will help the Superior Court in proceeding with the lawsuit instead of prematurely holding a hearing and requiring briefing on issues that depend on the determination of the main issue in the motion to dismiss—whether the settlement agreement in Johnson’s class action resolved the claims against CUC.

In CUC’s motion to dismiss the lawsuit, CUC counsel Jose Mafnas Jr. asserted that the CNMI government absorbed all liabilities owed the NMI Settlement Fund as of Aug. 6, 2013, through the settlement agreement in Johnson’s class action.

Mafnas said the settlement agreement was approved in September 2013, close to two-and-half years after CUC and the CNMI executed a memorandum of understanding on March 11, 2011.

Mafnas said there cannot be a breach of contract because CUC continues to pay its employer contributions to the Settlement Fund at the scheduled rates and terms as intended by the settlement agreement.

In the CNMI government’s motion to join CUC’s request to dismiss the lawsuit, assistant attorney general Hessel Yntema said that, based upon the Settlement Fund’s lawsuit, it is apparent that the Settlement Fund seeks to double collect from the CNMI after having been party to a universal settlement in Johnson’s class action that was terminated over half a decade ago.