Ex-congressman, wife found liable to pay unpaid loan

The Superior Court yesterday found former Rep. Ignacio DLG. Demapan and his wife Frieda R. Demapan jointly liable to pay the Commonwealth Development Authority $277,848 in an unpaid loan.

Associate Judge Ramona V. Manglona also determined that the Demapan couple should pay CDA pre-judgment and post-judgment interest at 9 percent per annum, penalty, late charges, attorneys’ fees, and court costs.

Manglona said CDA has 10 days to submit to the court and the Demapans its calculation of interest, attorney’s fees and costs.

CDA’s mortgage interest in the Demapans’ two properties in San Vicente and Marpi will be sold at a public auction. The mortgaged properties will be seized and sold by CDA, said the judge, adding that the proceeds of any sale will be applied for payment.

Manglona said CDA may seek a deficiency judgment against the Demapans for any deficiency that may remain after applying all the proceeds of all sales.

“Based on the foregoing facts of this case, this court concludes that there is no genuine issue as to any material fact that CDA and the Demapans had a legally enforceable agreement, and that the Demapans are in default of those agreements for their failure to make the requisite payments,” said the judge in granting CDA’s motion for summary judgment.

In the same order, Manglona ruled that CDA must still obtain a separate judgment against co-defendant Pacific Amusement Inc.

PAI is included in the lawsuit because it has a claim through a real estate lease that is subordinate in right to that of CDA. In June 2004, an entry of default was entered against PAI. CDA has not yet moved for a default judgment against the company.

Court records show that in 2004 CDA sued the Demapans and PAI to seek a monetary judgment holding the Demapans jointly liable for three loans and a bank guaranty it made to them, including several consolidation and revision agreements.

CDA claims the outstanding principal sum of these three revised and consolidated debts and guaranty total $277,848.89 as of the filing date.

CDA further claimed it is entitled to this principal amount, which matured on July 16, 2002, plus attorney’s fees and costs.

CDA wants to foreclose the two properties mortgaged by the Demapans in securing the three loans and bank guaranty under the consolidated and revised loan and mortgage agreements.

CDA, through the Law Offices of Vicente T. Salas, has moved for summary judgment on its monetary claims and foreclosure action on the mortgages.

In her 10-page order, Manglona cited that in their opposition memorandum to CDA’s motion, the Demapans do not dispute the fact that CDA revised the consolidated loan on Aug. 18, 2000, creating a new principal amount of $277,848.89 with revised monthly payments.

Accordingly, Manglona said, CDA is entitled to summary judgment on its claim for monetary judgment for the principal amount of $277,848.89 plus pre-judgment interest, costs, and attorney’s fees.

The judge said that, in deciding whether to grant CDA’s foreclosure request, the first issue to address is whether the plaintiff complied with the CNMI’s Real Estate Mortgage Law.

Manglona said that after the Demapans admitted to the $277,848.89 principal amount that remain unpaid, and after admitting that they mortgaged their interest in the property in San Vicente, they did not produce any evidence to refute CDA’s evidence proving the existence and validity of the mortgages.

The Demapans, she said, failed to present any admissible evidence that would show that there is a genuine issue for trial about these verified mortgages.

“[This] court concludes that CDA has met its burden of establishing its entitlement to summary judgment to foreclose on the verified mortgages as to [the] lot in San Vicente and lot situated in Marpi, under the CNMI’s Real Estate Mortgage Law,” the judge said.

CDA, she added, complied with the applicable Rules and Regulations on loans and mortgages.