Court: CPA breached sections of AUA

The Superior Court recently determined that the Commonwealth Ports Authority did, in fact, breach sections of its Airline Use Agreement with Star Marianas Air, Inc.

Superior Court Associate Judge Joseph Camacho has recently issued an order granting partial summary judgment in favor of SMA in its legal dispute with CPA over the breach of contract claims brought before the Superior Court by both parties.

Specifically, partial summary judgment was granted after the court found that CPA breached sections 7.05 and 7.08 of the AUA, which pertains to annual usage rate adjustments and CPA’s failure to provide SMA a copy of every CPA proposed annual budget since the AUA was executed up until it was terminated.

However, the court could not fully grant summary judgment because it found that damages could not be determined without further discovery as the court also found CPA’s counterclaims to be true—that SMA also breached the AUA for non-payments.

“The court has determined that CPA breached section 7.05 for annual adjustments and section 7.08 concerning the proposed budget. In regard to CPA’s counterclaim, SMA did not dispute the non-payment; however, the court found that SMA had indeed breached section 7.13. A summary judgment is granted when there are no genuine disputes as to material facts and the movant is entitled as a matter of law. Adding to that, questions of fact are not decided in a summary judgment. The court has found breaches by CPA and a breach by SMA, but the specific monetary extent of these breaches has yet to be established or substantiated,” said Camacho.

Because the amount in damages could not be determined, both parties have agreed that specific monetary damages should be proven at trial.

“SMA asserts that this lack of clarity stems from their limited access to relevant figures. Both parties agree any damages would be proven at trial,” said the order.

According to Camacho’s order, CPA has failed to adjust the fees and charges each year as required by Section 7.05, in breach of the AUA.

In addition, Camacho stated in his order that CPA has failed to provide an annual proposed budget each year, as required by Section 7.08, in breach of the AUA.

In its counterclaim, CPA says that SMA failed to pay CPA for the use its terminals, breaching section 7.13 by not continuing payments.

SMA is suing CPA and five unnamed co-defendants for breach of contract, violation of anti-head tax, and for unreasonable user fees.

In a previous court order, the court found that Star Marianas has not met its burden of proving claims that CPA breached sections of their AUA, warranting a summary judgment.

“SMA has not met its burden to entitle it to summary judgment because plaintiff has not demonstrated absence of genuine issues and entitlement to summary judgment as a matter of law. Therefore, SMA’s motion for partial summary judgment is denied,” said Camacho.

SMA and CPA entered into an AUA in April 2009. Twenty years later, on Dec. 14, 2020, SMA sued CPA, claiming the agency committed six breaches of the AUA.

However, after reviewing SMA and CPA’s arguments and facts, Camacho said in his order that there are material facts in dispute and SMA did not support its factual claims to show CPA breached sections 7.01, 7.02, 7.05, 7.06, 7.07, and 7.10.