$4.41-M land compensation deal probed

The Attorney General’s Office will look into the propriety of the $4.41-million land compensation settlement between the Marianas Public Lands Authority and the Rita Kaipat estate in connection with the government-taking of private land that now forms part of Middle Road.

The MPLA, however, vowed to proceed with the disbursement of funds, disclosing that it is in the final stages of the compensation process.

The AGO requested the MPLA Friday for copies of documents pertaining to settlement offers and board minutes in relation to the Kaipat estate’s claim.

In a media statement, the MPLA said that it would comply with the AGO’s request pursuant to the Open Government Act.

“The MPLA will fully comply with this request; however fund disbursement to the Kaipat heirs will proceed according to the land compensation settlement agreement,” MPLA spokesman Ed Arriola said.

The MPLA disclosed that the Kaipat estate agreed to a $4.41-million compensation in a meeting with its board and Gov. Juan N. Babauta last April 6. The MPLA officially approved the settlement in a special board meeting last Monday.

Assistant attorney general James Livingstone, who now heads the AGO’s civil division, said his office would look into the propriety of the settlement.

“The AGO is interested in making sure that the laws of the Commonwealth are properly enforced,” Livingstone said. “MPLA has obligations on how to calculate land payments and we have an interest in MPLA following those.”

He said the Finance secretary is expected to review the calculations that were done in arriving at the settlement figure, before the latter approves the disbursement of funds from the government’s land compensation fund. The AGO will also provide advice to the secretary on the legal aspects of the settlement transaction.

The $4.41-million settlement is about 43 times greater than the authority’s original offer of over $102,000. However, the amount slightly slid by $350,000 than the amount the MPLA and the estate had agreed to earlier this year.

The land compensation pertains to the government’s expropriation of land registered in the name of Rita Kaipat, which measures approximately 6,000-sqm and now forms part of the Chalan Pale Arnold or Middle Road. The estate has received no compensation from the government.

According to Timothy Bellas, lawyer for Kaipat estate administrator Luis K. Pelisamen, it was MPLA’s predecessor, the Marianas Public Lands Corp., which appraised the land’s valuation. He said the MPLA reviewed MPLC’s appraisal report before reaching a settlement with the Kaipat estate.

The MPLC conducted its appraisal based on 1992 land valuation. Consequently, the MPLA initially offered 4,761,955.38—the appraised value—to settle the estate’s claim.

Bellas justified the use of the 1992 valuation, saying that the governor’s certification of the property for public use came out in March 1992. Although it appears that the government actually took the land for public use long before the governor issued the certification, Bellas said that a new public law defines the time of land taking based on when the governor certifies the property for public use.

Negotiations between the estate and the MPLA began after the court authorized Pelisamen to enter into negotiations in January 2004. The administrator rejected the MPLA’s initial offer of $102,242.19, until the authority made a new settlement offer in the amount of $4.76 million.

The estate then sought the Superior Court’s ratification of the proposed $4.76-million settlement, but associate judge Juan T. Lizama refused to approve it, noting the controversy that has plagued other land compensation claims, particularly that of the Malite estate.

“The court has concluded that settlement agreements between an estate and its debtors should generally be private contracts and do not need the approval of the court and indeed do not warrant it,” the judge had said. “That said, there has been as yet no challenge to the propriety of the settlement. So, if the relevant parties believe the matter settled, then the court suggests that the funds described be transferred to the estate for disposition in the ordinary course.”