Ex-Supreme Court employee is found in civil contempt

Superior Court Associate Judge Juan T. Lizama has held former CNMI Supreme Court clerk of court Crispin Kaipat in civil contempt for the misappropriation of $36,000 in assets of an estate where he had served as administrator.

In his order issued Monday, Lizama found Crispin Kaipat liable to pay the estate of Maria Piere Malus $36,000, plus 6 percent interest prior to the order of contempt, 9 percent post-order interest, attorney’s fees and costs.

Lizama directed Crispin Kaipat to appear in court on Feb. 20, 2007, at 1:30pm to set up a regular payment schedule.

The judge’s order serves to set the date of the commencement of post-order judgment and clarify the nature of Crispin Kaipat’s contempt and the mechanism by which he will reimburse the Malus estate.

Last month, Lizama issued an order finding Crispin Kaipat of having breached his fiduciary duty to the Malus estate and to the court for misappropriating $36,000 in estate assets.

Lizama ordered Crispin Kaipat to pay the amount to the estate of Maria Piere Malus plus interest at 6 percent per annum from Dec. 22, 2004 to July 19, 2006.

He held the former administrator liable to pay attorney’s fees and costs incurred by the new administrator or the estate in having to file the motions for his removal or substitution and accounting of the estate.

Court records show that Jeffrey Kaipat, new administrator of the Malus estate, moved for an order of contempt against Crispin Kaipat following the latter’s admission of misappropriating $36,000 in estate funds. The administrator sought reimbursement of the misappropriated amount, attorney’s fees, and interest.

Oral arguments were held Nov. 21, 2006, with Robert Torres representing the administrator, and Richard Pierce representing Crispin Kaipat.

In his Monday order, Lizama agreed that Crispin Kaipat has acted in contempt, and is liable to the estate for the current administrator’s attorney’s fees and costs, the principal, and the requested pre-order and post-order interest.

He said the Commonwealth Code and Rules of Civil Procedure do not expressly provide for orders of civil contempt in the event that an officer of the court breaches his or her fiduciary duties.

Lizama said the court’s power to find contempt in such cases stems from its inherent power to perform its functions without interference.

“A court should utilize its inherent powers to find civil contempt when it encounters conduct which defies classification pursuant to either Rule 11 or its criminal contempt authority, and yet still threatens the court’s ability to function properly,” he explained.

“While the purpose of criminal contempt sanctions is to vindicate authority and punish past acts of disobedience, that of civil contempt is to coerce compliance with underlying order and to compensate complainant for loss sustained by contemnor’s disobedience,” Lizama pointed out.

He noted that the purpose of the current administrator’s motion for contempt should be to compensate the estate for the loss sustained due to the former administrator’s disobedience.

An extended jail sentence would only hinder the estate’s ability to recover the lost funds, the judge said, adding that a finding of civil contempt, rather than criminal contempt, is appropriate.

Crispin Kaipat is unemployed and has been ordered to seek employment. At this time, his only income is his retirement pension from the CNMI Supreme Court.

Lizama said the court does not have the power to attach such income. However, he said, the court can and shall order Crispin Kaipat to make a good faith effort to reimburse the estate by any means available to him.

This includes voluntary payments from his retirement income, Lizama said. At the hearing, Crispin Kaipat agreed to pay the estate $100 per month while he is unemployed.

The judge directed Crispin Kaipat to submit a report of his income and employment status on a quarterly basis. After finding a job, his monthly payments will be increased, the judge said.

At the hearing, Torres suggested that the integrity of the probate process would be undermined if the administrator were allowed to misappropriate funds and simply have the amount come out of his share.

“The Court agrees, and for this reason holds Crispin Kaipat liable for attorney’s fees and costs, as well as interest above and beyond what the estate would have earned otherwise,” Lizama said.