The parties in the class action filed by retiree Betty Johnson have been directed to comment on the issue whether or not the court should appoint a federal equity receiver at this point.
On Friday, U.S. District Court designated judge Frances M. Tydingco-Gatewood directed Johnson to submit her brief by Sept. 27, 2012, and gave other parties until Oct. 11, 2012, to file oppositions.
Reply shall be submitted by Oct. 18, 2012, and a hearing on the matter will be held on Oct. 30, 2012.
A federal equity receiver is usually referred to as an “arm of the court.” Like the court, the receiver is a neutral fiduciary who holds a property subject to receivership. The ultimate disposition of the property is determined through the parties' litigation.
Tydingco-Gatewood issued the order after Johnson asked the court to appoint a federal equity receiver to manage the NMI Retirement Fund. Johnson also asked the court to certify her lawsuit as a class action.
Johnson wants the court to order the Fund and the CNMI government to collect Superior Court associate judge Kenneth L. Govendo's judgment, pay or bring current all CNMI obligations to the Fund, and distribute retirement benefits.
Johnson named as defendants in her class action Gov. Benigno R. Fitial, Fund trustees Adelina C. Roberto and Nacrina Barcinas, former Fund administrator Richard S. Villagomez, Finance Secretary Larissa Larson, the CNMI government, Finance, the Fund, and the Fund board of trustees.
Johnson is suing them for breach of contract, violation of the U.S. and CNMI constitutions, violation of due process, deprivation of rights, breach of fiduciary duty, and unjust enrichment.
Attorneys Margery S. Bronster, Bruce L. Jorgensen, and Stephen C. Woodruff are counsels for Johnson.
On Friday, Tydingco-Gatewood appointed Guam tax lawyer Joseph C. Razzano as trustee ad litem for the Fund.
Assistant attorney general Reena J. Patel, counsel for Fitial and the CNMI government, said the order appointing the trustee ad litem should not limit Fitial and the Senate's statutory obligation to appoint trustees.
Patel proposed to add to the court's order language stating that “Nothing in this order shall prevent the lawful appointment of trustees” and that “at such time the board of trustees has a quorum under Commonwealth Code.the trustee shall be relieved of his/her duties.”
After hearing Patel's proposal, Tydingco-Gatewood asked: “Is the governor now interested to appoint trustees?”
Patel replied that the appointment of trustees is an ongoing interest.
The judge appointed the trustee ad litem for the Fund and its board so it could participate in the litigation of Johnson's class action.
It was also Johnson who asked for the appointment of a trustee ad litem because the Fund board lacks a quorum and is therefore incapacitated.
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