The Commonwealth Healthcare Corp. has accused the Commonwealth Utilities Corp. of illegally prosecuting CHCC by using public funds to finance its lawsuit against the corporation.
Assistant attorney general David Lochabay, counsel for CHCC, asserted that CUC’s use of appropriated public funds to pursue the lawsuit is in direct contravention of CNMI law.
“Neither has CUC obtained the approval of the governor to prosecute this action, also in direct contravention of CNMI law. The suit should be dismissed,” he said.
Lochabay raised again the legality of CUC’s lawsuit in CHCC’s response to CUC’s motion asking the Superior Court to hold CHCC in contempt for ignoring a $1.3-million baill for utility services for three months. CUC counsel James Sirok alleged that the non-payment caused CHCC’s total overdue balance to balloon to $14.7 million.
In CHCC’s response, Lochabay said CHCC officials never willfully violated the court’s order as they were, and are, simply in a situation where there are not enough funds to pay all of the bills.
Lochabay said CHCC did not pay the utility bills for October, November, and December in 2014 and in January 2015 because the past due vendor accounts were to the point where they could not be delayed any longer.
The lawyer said the vendor accounts that were paid in those four months were all for reasonable and necessary expenses for the safe operation of the hospital and the Public Health Division.
Lochabay asked the court to suspend further proceedings in this case to allow briefing on the matter of CUC’s lack of capacity and the legality of the lawsuit.
At the May 9, 2014, hearing, Superior Court Associate Judge David A. Wiseman ordered CHCC to remain current with its monthly billings beginning June 1, 2014, or risk contempt, including consideration by the court to allow the disconnection of non-essential CHCC utility services.
CUC sued CHCC in December 2013 to collect utility services in the amount of $9.7 million, together with pre-judgment interest.