Settlement negotiations continue in M/V Luta case

A settlement between the CNMI government and the owners of Luta Mermaid LLC regarding the $400,000 in public land funds they were loaned for operational purposes is still under negotiations.

A settlement conference was held last week at the Superior Court between the CNMI government and Luta Mermaid LLC and its owners but no agreement was reached and negotiations are still ongoing, according to Superior Court Associate Judge Kenneth Govendo.

The CNMI government is suing the owners of cargo ship M/V Luta for allegedly refusing to return the $400,000 in public funds that was loaned to them for the vessel’s operations.

The government, through the Office of the Attorney General, is suing Luta Mermaid and its shareholders Abelina T. Mendiola, Deron T. Mendiola, Fidel S. Mendiola III, and Fidel Mendiola Jr. for unjust enrichment, conversion, and other claims.

Former lieutenant governor Victor Hocog and Finance Secretary Larrisa Larson were not among those named defendants in the government’s lawsuit.

According to Saipan Tribune archives, the government initially asked the Superior Court, through the lawsuit, to come up with a judgment of $400,000 in favor of the government.

According to the government’s complaint, the Rota Legislative Delegation adopted Rota Legislative Delegation Resolution 19-3 on March 20, 2015, to authorize the Finance secretary to “pay for fuel, lubrication, and costs necessary for the maiden voyage of M/V Luta from Louisiana to Rota and to provide for the personnel and operational costs of the Office of the Mayor of Rota.”

Hocog, who was Senate president at that time, participated in drafting and the adoption of that resolution.

Resolution 19-3 expressed the will of the Rota delegation that the Finance secretary be authorized to loan $400,000 to the ship’s owners, with the amount to be repaid within one year.

On March 27, 2015, two days after being notified by the Rota Legislative Delegation that Resolution 19-3 had been adopted, Larson remitted $400,000 from the general fund to the defendants’ bank account.

Because of this transfer, the defendants allegedly received public funds without legal authorization. The defendants have not entered into any contract of any kind with any government agency for the repayment of the $400,000.

On Jan. 17, 2017, Larson asked the defendants to repay the $400,000.