OAG: Ana Castro was MPLA director when lease to govt building was provided to her husband
The Department of Public Lands has amended its lawsuit to include former Marianas Public Lands Authority board member Ana D. Castro as a co-defendant of her husband whom DPL is suing for alleged violations of the lease to run the post office branch on Capital Hill. Among the alleged violations are failure to operate a snack bar on the premises and untimely payment of rent, among other.
DPL, through the Office of the Attorney General, said that Ana Castro, who is not a party to the lease agreement with DPL, was a member of the MPLA board of directors when the lease was provided to her husband, Jesus M. Castro, to operate a U.S. Postal Service branch on Capital Hill.
Public Law 15-02 abolished MPLA and created DPL in its stead.
DPL is suing Ana and Jesus Castro before the Superior Court for ejectment, trespass, and unjust enrichment.
As of press time, Saipan Tribune was still trying to contact the Castros for comments.
DPL’s original lawsuit, which was filed by then-assistant attorney general Christopher M. Timmons in 2016, named only Jesus Castro as defendant. DPL’s amended complaint, which was recently filed by assistant attorneys general Leslie A. Healer and John Lowrey, named the Castro couple as defendants.
In the amended lawsuit, DPL asked the court to issue a judgment in favor of DPL and to order the Castro couple to immediately vacate and surrender possession of the premises to DPL.
DPL also asked the court to order Jesus Castro pay rent and other monies owed, plus interest allowed under DPL regulations for leases in default. The department also wants Castro to pay for damages for unjust enrichment for continuing to occupy the premises after the lease expired in 2006.
According to Healer and Lowrey in the amended complaint, MPLA leased the government building and space to Jesus Castro on May 13, 2003, so he could operate the U.S. Postal Service Capital Hill branch, or CHRB, and a mini snack shop. Healer and Lowrey said that CHRB, a private business, has occupied the premises until now.
The government lawyers said the lease called for payment of $100 per year for the first three years, and 10% of Jesus Castro’s contracted consideration under its USPS contract. The lease was represented to equal a minimum rent of $3,000 per annum for the first floor of the premises. The lease also called for payment of rent equal to 3% of gross receipts derived from operation of a snack bar on the second floor of the premises during the first six years of the lease. After the sixth year, the lease required Jesus Castro pay an amount equal to 8% of appraised value of the premises.
Yet Jesus Castro never operated a snack bar on the premises, DPL said.
On Nov. 27, 1998, Ana Castro entered into a contract with the U.S. Postal Service to operate the CHRB.
Healer and Lowrey said the Castros have paid a total of $462 for rent to DPL to use of the premises since the beginning of the lease in 2003, yet DPL has never gave Ana Castro any right to use or occupy the premises.
On Nov. 22, 2006 and March 7, 2007, Jesus Castro was given a written notice of violation of the lease for failing to operate a snack shop; failing to submit copies of his USPS contract, Business Gross Revenue Tax returns, and audited financial statements; failing to submit plans and permits for repairs, renovation and construction; failing to maintain the premises; and failing to provide insurance.
On Sept. 19, 2007, Jesus Castro was given notice of default for failing to cure the violations and for failing to pay rent on time. On Feb. 7, 2008, Jesus Castro was given a written final notice for failing to cure the violations and failing to make timely rent payments. Again, on Oct. 14, 2008, Jesus Castro was given another written notice of violation for continuously failing to make payments on the account.
On Nov. 28, 2008, Ana Castro wrote DPL to ask it to amend the lease and to add her name to the lease, Healer and Lowrey said. About a month later, on Dec. 29, 2008, DPL denied the request and gave additional written notice of violations due to unpaid arrears.
On June 21, 2010, Jesus Castro was given a final notice of default, which stated that “failure to comply with [the final notice] will result in immediate termination of the lease and DPL will close lessee’s operation of a postal service on Capital Hill….” Five days later, Jesus Castro was given written notice of termination based upon those notices.
On Aug. 3, 2010, Ana Castro allegedly wrote DPL to ask for a meeting to discuss a new lease.
On Nov. 10, 2010, DPL gave the defendants more time to submit a request for a new lease and to pay the unpaid arrears.
On Feb. 15, 2011, Jesus Castro was given written notice to vacate within 15 days and to pay the outstanding arrearages. This was repeated on Nov. 28, 2011, this time giving him a written notice to vacate within 30 days and to pay the outstanding arrearages. And for a third time, he was again given another written notice to vacate within 15 days and to pay the outstanding amounts.
Healer and Lowrey said that, on Jan. 16, 2013, Jesus Castro wrote DPL releasing the snack shop portion of the lease and requesting the lease be renewed in his wife’s name.
On June 1, 2016, Jesus Castro was given written notice to vacate and to pay the outstanding arrearages.
On June 1, 2016, Ana Castro asked for a meeting. Fourteen days later, she met with DPL and DPL’s legal counsel to discuss the terminated lease, request for a new lease for no rent, and arrearages. Healer and lowrey said that no agreement was made.
On Oct. 2, 2019, Ana Castro was served with a written notice that ordered her to vacate the premises within seven days. To date, the lawyers said, Ana Castro continues to occupy the premises and to operate the CHRB on the premises. To date, they said, Ana Castro has paid nothing for her use and occupation of the premises. To date, the lawyers said, Jesus Castro has only paid $462 in rent under the lease.
They said the 2003 lease between Jesus Castro and MPLA has expired and has been terminated due to his breach of the lease agreement.
Healer and Lowrey said the Castros have no legal basis to occupy the premises and continue to occupy the premises unlawfully.
“Because defendants have no legal basis to occupy the premises, DPL is entitled to have both defendants ejected from the property,” the lawyers said. They said defendants must be ordered to vacate the premises and to pay appropriate damages for their unlawful trespass. Defendants have allegedly used the premises without authorization for more than 14 years.
On June 1, 2016, DPL allegedly served Jesus Castro a three-day notice to pay the sum of $58,780, but he refused to pay.