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Sunday, April 20, 2014

High Court affirms dismissal of case vs contractor

The CNMI Supreme Court, in a unanimous decision issued yesterday, affirmed the Superior Court’s dismissal of Century Insurance Co.’s lawsuit against Pedro R. Guerrero.

In 1993 Guerrero Brothers Inc. entered into a contract with the Public School System to build Tinian High School. Guerrero Brothers turned to Century Insurance to secure the construction bonds necessary for it to start the project. The construction bonds provided that if Guerrero Brothers failed to complete the project, Century Insurance would step in and pay another company to complete the job. Additionally, Century Insurance and Pedro Guerrero entered into an “Agreement to Lease” where Pedro Guerrero agreed that if Guerrero Brothers failed to complete the project he would lease certain land to Century Insurance for 55 years.

In 1998 PSS terminated Guerrero Brother’s contract, and Century Insurance hired another construction company to finish the project.

In 2006, Century Insurance filed suit in the Superior Court seeking to enforce the “Agreement to Lease.” Pedro Guerrero, through his attorney, responded to the lawsuit by alleging that Century Insurance had waited too long to enforce the agreement, and as a result, the six-year statute of limitations had passed.

Statutes of limitations are enacted by the Legislature and determine how long a party has to file a lawsuit. The statutes are strictly applied meaning that if a party does not file his or her lawsuit within the specified time period they completely lose the right to have their case heard by the court.

Both parties stipulated that Century Insurance was entitled to enforce the agreement starting in 1998. Pedro Guerrero asserted that the Superior Court correctly applied the general catch-all six-year statute of limitations. Century Insurance argued that the 20 statute of limitations applicable to actions for the recovery of land or an interest therein governed their lawsuit.

The Supreme Court held that an action to enforce an agreement to lease does not constitute an action seeking the recovery of land or an interest therein. The high court found that the 20-year statute of limitations was never applied to actions seeking to enforce an agreement to lease. Since the suit was filed in 2006, eight years after Century Insurance’s right to file the suit arose, the Supreme Court affirmed the Superior Court’s order dismissing the action. The full opinion is Century Insurance Company, Limited v. Pedro R. Guerrero, et-al., 2009 MP 16 and can be found at http://www.justice.gov.mp/. (PR)

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