Transfer of interest in lot where Anaks is located is restrained

Superior Court Presiding Judge Robert C. Naraja has restrained the Manuel S. and Luise P. Villagomez family trust from transferring any interest in a lot where the Anaks Ocean View Hill Saipan condominium is situated.

Naraja, however, ordered Anaks Investors LLC post $50,000 to be used to pay costs and damages should it later be determined that the Anaks Ocean View Hill Saipan Homeowner’s Association and/or the Manuel S. and Luise P. Villagomez family trust were wrongfully enjoined.

The judge said Anaks Investors LLC must submit the $50,000 to the clerk of court on or before yesterday, Wednesday.

Naraja issued the order in granting Anaks Investors LLC’s application for a preliminary injunction in connection with its Article 12 lawsuit against the homeowner’s association and the trust.

Naraja determined that all factors used to analyze whether a preliminary injunction should be issued weigh in favor of Anaks Investors LLC.

The judge said the status quo should be preserved so that the judicial process can play out and the rights of all the parties can be determined.

Naraja said he appreciates the burden being placed on the homeowner’s association and trust and recognizes that should it later be found that they were wrongfully enjoined, they would likely be entitled to costs and damages.

Yet Naraja is not convinced that Anaks Investors LLC should have to post the full purchase price as security, since the point of ordering security is only to secure payment of costs and damages.

Naraja said it seems unlikely that in the event that Anaks Investors LLC was found to have wrongfully enjoined the homeowner’s association and/or trust that the damages would be measured at such a high amount.

Naraja said that $50,000 is appropriate.

In its lawsuit, Anaks Investors LLC, through counsel Daniel Guidotti, asked the court to declare the lease where Anaks Ocean View Hill is located to be void because it violates Article 12.

Article 12 of the CNMI Constitution restricts land ownership in the CNMI to “persons of Northern Marianas descent.”

On Dec. 9, 2015, Anaks Investors LLC offered to buy the trust’s interest in the lot where the Anaks Ocean View Hill is located for $1,973,200.

Anaks Ocean View Hill is a condominium-style residential development that consists of 131 residential units plus common areas.

Guidotti asked the court to enjoin the homeowner’s association and the trust from consummating any transaction, premised on the lease’s section 26 right of first refusal.

The homeowner’s association operates the Anaks Ocean View Hill. The trust owns the reversionary interest in the lot.

Naraja heard last Dec. 22 Anaks Investors LLC’s motion to convert the temporary restraining order that the court earlier issued into a preliminary injunction. He later placed the matter under advisement.

At the hearing, Guidotti argued for Anaks Investors LLC. Attorneys Jennifer Dockter and Mark Scoggins represented the homeowner’s association. Attorney Michael Evangelista argued as counsel for the trust.

Guidotti argued that a preliminary injunction is necessary because the homeowner’s association and trust could complete a transaction for the lot at any moment.

Guidotti pointed out that once a transfer takes place it will be very difficult, if not impossible, to unwind any such transaction.

Guidotti contended that a preliminary injunction is warranted because the status quo needs to be preserved so that all the parties’ rights can be justly determined.

Dockter and Evangelista asserted that there are various procedural and standing defects that should bar Anaks Investor LLC’s claims.

In granting the motion, Naraja said the homeowner’s association and trust’s threshold challenge that Anaks Investors LLC did not properly apply for a preliminary injunction does not persuade the court to rule on the substance of Anaks Investors LLC’s application.

Naraja said it appears that Anaks Investors LLC’s likelihood of success as to invalidating the homeowner’s association’s ability to control a reversionary interest appears high.

At this stage, Naraja said, he is not definitely ruling and/or fully analyzing the claims, but is merely looking at the face of the parties’ submissions and seeing if it seems likely that Anaks Investors LLC would be successful.

The judge noted that examining the face of the parties’ submissions it appears that the homeowner’s association is a non-Northern Marianas descent whose lease contains a provision that would allow it to impermissibly acquire a long-term interest in the lot.