$3M suit filed vs Tottotville contractors

The Northern Marianas Housing Corp. has filed a $3-million lawsuit against the contractors of Tottotville, a subdivision of 45 homes in Koblerville.

NMHC sued SSFM International Inc., Telesource CNMI Inc., and their insurers, Telebond Insurance Corp. and an unidentified insurance firm, for breach of contract, breach of express warranty, and violations of Consumer Protection Act and Building Safety Code.

NMHC, through counsel F. Matthew Smith, asked the Superior Court to order the defendants to pay in excess of $3 million to be used for the correction, replacement, repair of deficiencies and the proper completion of the subdivision.

The housing agency asked for damages for all out-of-pocket expenses incurred by NMHC for the replacement of toilets and cabinets and the retention of experts.

NMHC requested the court to order the defendants to indemnify and reimburse the agency for all liabilities and damages. The plaintiff also asked for punitive damages.

NMHC sued the defendants for alleged defects in the construction of Tottotville homes.

NMHC had proposed in the latter part of the ’90s the idea of constructing a housing subdivision that would contain 45 single-family residential homes and supporting infrastructure in Koblerville.

In August 1998, NMHC entered into a written construction management services agreement with SSFM in which the latter agreed to provide technical and professional construction management services for the subdivision.

In May 1999, SSFM informed NMHC that it wished to increase its presence at the subdivision to a minimum of five hours a day to ensure that it had sufficient time to monitor construction progress on a daily basis as well as provide on-site assistance to the contractor.

In 2000, plaintiff and SSFM entered into two other written contracts.

As consideration for such agreements, promises, contracted services and assistance, NMHC paid SSFM $474,860, Smith said.

The lawyer said that in August 1999, NMHC entered into a written contract with Telesource under which Telesource agreed to furnish all materials, labor, equipment, tools and services necessary for the completion of the subdivision.

As consideration, MMPC paid Telsource $6,324,234, Smith said.

Smith said that during the early spring of 2002, SSFM and Telesource notified NMHC that the subdivision was complete and that all contracted work and services were performed in accordance with the contract, documents, and was free from defective materials.

But Smith said his client began hearing complaints and receiving demands from homeowners about the subdivision.

During the summer of 2005, NMHC hired EFC Engineering and Architects Corp. as an independent expert to investigate the complaints and demands of the homeowners.

Smith said that on July 26, 2005, NMHC found out about the failures and breaches of SSFM and Telesource when it received the investigative engineering report from EFC.

He said EFC concluded that Telesource did not execute the subdivision in accordance with its contractual commitments and noted specific problems with manpower, subcontracts, materials, and quality control.

He said EFC also concluded that SSFM was responsible for such failures as well as likely being liable for specific design problems and the distinct lack of quality control.

Smith said that in December 2005, NMHC attempted to negotiate, mediate and resolve these issues, to no avail.