Default judgment vs IPI OK’d

The U.S. District Court for the NMI has granted a default judgment in favor of Kan Pacific Saipan Ltd. in its breach of contract suit against Imperial Pacific International (CNMI) LLC.

Magistrate Judge Heather Kennedy entered last Monday a default judgment in favor of Kan Pacific for IPI’s failure to respond to the complaint.

“Kan Pacific filed the instant action against IPI asserting breach of contract. IPI was served a copy of the summons and complaint on Sept. 8, 2023. Pursuant to Federal Rule of Civil Procedure, IPI’s response to the complaint was due on Sept. 29, 2023. On Sept. 30, Kan Pacific filed a motion for entry of default requesting [that the] clerk of court enter default against IPI. It appears from the record that IPI has failed to appear, plead, or otherwise defend [itself]. The default of IPI is hereby entered,” states the court order.

According to court documents, Kan Pacific filed the breach of contract suit against IPI last month over the casino investor’s continuous failure to make payments toward its contractual obligation with Kan Pacific.

The complaint stated that IPI still has an ongoing obligation to Kan Pacific pursuant to an agreement they had back in May 2016.

Although the court issued a judgment in Kan Pacific’s first suit against IPI for its failure to make its June 2020, June 2021, and June 2022 payments amounting to over $400,000, IPI has again defaulted on its June 2023 payment.

In addition, IPI has yet to satisfy the court’s judgment in Kan Pacific’s initial breach of contract suit.

Pursuant to the agreement between Kan Pacific and IPI, the latter is contractually obligated to pay Kan Pacific $5,000,000, which was to be satisfied by making 25 annual payments in the amount of $200,000 on June 1 of each calendar year, commencing on June 1, 2017.

IPI made the first three annual payments that were due in June 2017, June 2018, and June 2019.

However, IPI failed and refused to pay the amount that that was due on June 1,2020, even after Kan Pacific sent IPI the 10-day notice of default.

Kan Pacific finally filed a civil action against IPI based upon IPI’s failure to make the payments due on June 1. 2020, June 1, 2021, and June I, 2022.

The court issued a judgment in favor of Kan Pacific in December 2022 in the amount of $697,801.30 plus post-judgment interest under the federal rate of 4.76% per annum.

However, to date, the judgment remains unpaid.

Kan Pacific has also recently applied for a writ of execution against IPI’s properties to satisfy the unpaid judgment, but IPI has since opposed the request.

IPI alleges that senior lien holders, like USA Fanter and Joshua Gray, should be given priority.