The Department of Public Lands is suing David Trung Quoc Phan’s auto shop company for allegedly occupying public lands in Lower Base without DPL’s authorization from 2012 until Aug. 28, 2017.
DPL, through assistant attorney general Matthew J. Pugh, is suing United Brothers Inc., which owns TBK Auto Cares, for trespassing and unjust enrichment.
DPL asked the Superior Court to hold United Brothers liable to pay unspecified damages, interest on unpaid rent, and court costs.
DPL requested the court to issue an injunction requiring United Brothers and all others occupying the premises to vacate the premises and removed all personal property.
Phan refused to comment when asked about the lawsuit.
Saipan Tribune learned that Phan had already closed TBK Auto Cares last year after he and several others were indicted in federal court.
Phan was among three convicted by a federal jury last October for their participation in a scheme to bring Bangladeshi men to Saipan on promises of jobs and green cards in exchange for cash.
Phan was slapped with an eight-month prison sentence. He has appealed to the U.S. Court of Appeals for the Ninth Circuit. He also requested the U.S. District Court for the NMI to allow his continued release pending the outcome of his appeal.
According to Pugh in the complaint, DPL’s predecessor, Marianas Public Lands Corp., entered into a 25-year lease in 1980, for a public land (lot 2) in Lower Base with Frank F. Ferreira Jr. and Diane C. Ferreira, who own Products of Saipan.
In 1984, the Ferrerias’ lease was assigned to Pacific Development Contractors Ltd. (PDC).
In 1995, Nanyo Shoji II Inc. purchased PDC’s lease at a public auction held to satisfy a judgment entered against PDC.
After acquiring the lease, Pugh said, Sanyo Shoji II Inc. subleased lot 2 to TBK in 2009.
Nanyo Shoji II Inc.’s lease of lot 2, including holdover, ended in 2012.
Pugh said Nanyo Shoji II Inc. had no interest in the land after 2012.
Pugh said TBK continued to occupy the land without DPL’s authorization.
On June 11, 2012, TBK allegedly purchased Saipan Machine Shop, the company that held the public land lease to another piece of land (Lot 1) in Lower Base.
Saipan Machine Shop attempted to transfer its interest in Lot 1. Pugh said no transfer or assignment occurred because DPL did not approve of or consent to Saipan Machine Shop’s attempt to transfer its interest in Lot 1 to TBK.
On July 31, 2012, DPL terminated its lease agreement with Saipan Machine Shop. TBK allegedly continued to occupy Lot 1 after DPL terminated the lease.
In February 2016, shortly after DPL learned of TBK’s occupancy of the premises without authorization or payment to DPL, DPL requested payment of rent dating back to 2012.
In May 2016, DPL still allegedly had not received any payments from TBK.
DPL wrote a letter to TBK requesting payment for past occupancy of the premises and informing TBK of its lease and temporary occupancy agreement requirements.
In October 2016, DPL’s staff appraiser completed appraisals for Lot 1 and Lot 2. DPL’s appraiser determined that the fair market value of Lot 1 as of Aug. 1, 2012 was $96,195, and that the fair market value of Lot 2 as of July 1, 2012 was $125,800.
In December 2016, DPL met with TBK to discuss its lease requirements and to request that TBK pay for its past occupancy of the premises.
On Jan. 19, 2017, TBK wrote to DPL and requested that it be allowed to lease the premises for 1 percent of appraised value.
TBK also allegedly requested that DPL waive interest owed on past due amounts.
TBK hired its own independent appraiser to prepare an appraisal report for the two lots. The appraiser hired by TBK concluded that the fair market value of lot 1 was $108,000, and the fair market value of lot 2 was $118,000 as of the date of the appraisal.
On May 3, 2017, Pugh said, DPL still had not received a complete lease proposal from TBK for the premises, so DPL wrote a letter to TBK asking it to submit the remaining items and pay past due amounts.
DPL warned TBK that if it did not complete the requirements, DPL would require TBK to vacate the properties and would file a lawsuit against TBK.
On May 10, 2017, TBK wrote back to DPL requesting lease terms that did not comply with DPL lease requirements.
On June 9, 2017, Pugh said, DPL responded to TBK and rejected its request for reduced rental rates and waiver of accrued interest. DPL still had not received a complete lease application by that date.
DPL provided TBK with 30 days to vacate the premises.
Pugh said TBK did not remove all possessions from the premises within 30 days.
On Aug. 28, 2017, following multiple warnings to TBK, DPL secured the premises by using a chain and lock to block access.
DPL informed TBK that it could retrieve any possessions on the property by contacting DPL and setting a time for removal of items.
Pugh said TBK has abandoned a number of junk vehicles and other possessions on the premises.
Pugh said TBK occupied the premises without DPL’s authorization or permission from 2012 until Aug. 28, 2017.
The government lawyer said TBK ran a business on the premises during this time and placed junk vehicles and other possessions on the premises without DPL’s authorization, permission, or consent.
TBK allegedly caused an ongoing trespass by leaving behind junk vehicles and other possessions on the premises after Aug. 28, 2017, despite many requests from DPL that TBK remove these items.
This ongoing trespass, Pugh said, reduced the value of the premises and prevents DPL from making beneficial use of the premises.
Even after DPL blocked access to the premises, TBK allegedly continued to store junk vehicles and other possessions on the premises.