DPL sues USPS operator for failing to operate snack bar

The Department of Public Lands is suing the operator of the U.S. Postal Service Capitol Hill Branch Post Office for allegedly failing to operate a snack bar on the premises, for untimely payment of rents, plus other violations of their lease agreement.

DPL, through counsel assistant attorney general Christopher M. Timmons, asked the Superior Court to issue a judgment holding defendant Jesus M. Castro liable to pay DPL $58,780.22.

DPL asked the court to order Castro to immediately vacate and surrender possession of the premises to DPL.

DPL demanded payment for fees and costs to which it is entitled pursuant to the Holdover Tenancy Act and the lease.

According to Timmons in the complaint filed on Friday, on May 13, 2003, the Marianas Public Lands Authority leased Government Building 1301 to Castro for purposes of operating the U.S. Postal Service Capitol Hill Rural Branch Post Office as a USPS contractor.

Timmons said the lease called for payment of $100 per year for the first three years, and 10 percent of Castro’s contracted consideration under its USPS contract which was represented to equal minimum rent of $2,500 per annum for the first floor of the premises.

Timmons said the lease also called for payment of rent equal to 3 percent of gross receipts derived from operation of a snack bar on the second floor of the premises during the first six years of the lease, and thereafter, an amount equal to 8 percent of appraised value of the premises.

Timmons said Castro never operated a snack bar on the premises.

He said that on Nov. 22, 2006 Castro was given a written notice of violation of the lease for failing to operate a snack shop on the premises; failing to submit copies of its USPS contract, BGRT returns, and audited financial statements; failing to submit plans and permits for repairs, renovation and construction; failing to maintain the premises; and failing to provide insurance.

On Sept. 19, 2007, Castro was given notice of default for failure to cure the violations and for failure to make timely payment of rents.

On June 21, 2010, Castro was given a final notice of default stating that “failure to comply with this final notice will result in immediate termination of the lease and DPL will close lessee’s operation of a postal service on Capitol Hill…”

On Feb. 15, 2011, Castro was given written notice to vacate within 15 days and to pay back rent.

To date, Timmons said, Castro had only paid $356.98 in rent under the lease.

Castro occupied premises under the lease from May 13, 2003 until its termination on Aug. 10, 2010.

On June 1, 2016, DPL personnel served Castro a three-day notice to pay the sum of $58,780.22.

Timmons said that, on June 1, 2016, Castro, through his wife, acknowledged receipt of the June 1 notice to vacate and requested additional time to respond.

At the June 15, 2016 meeting, Timmons said Castro refused to pay the sum of $58,780.22, which represents all rent and holdover fees due under the lease together with interest at 12 per annum, compounded monthly.

Timmons said Castro has not vacated the premises despite DPL’s demand to do so.

Ferdie De La Torre | Reporter
Ferdie Ponce de la Torre is a veteran journalist who has covered all news beats in the CNMI. Born in Lilo-an, Cebu City in the Philippines, De la Torre graduated from the University of Santo Tomas with a bachelor’s degree in journalism. He is a recipient of many commendations and awards, including the CNMI Judiciary’s prestigious Justice Award for his over 10 years of reporting on the judiciary’s proceedings and decisions. Contact him at ferdie_delatorre@saipantribune.com

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