Imperial Pacific International (CNMI) LLC asked the federal court yesterday to dismiss the lawsuit filed by a former general contractor of its hotel-casino project in Garapan, saying the contractor failed to exhaust its contractual prerequisites prior to filing this case
Citing previous court rulings, IPI counsel Phillip J. Tydingco said if a contract contains conditions that a party must comply with prior to filing suit in court, then a complaint that fails to allege compliance with those contractual prerequisites should be dismissed.
Tydingco said Article 20 of the construction contract between IPI and Pacific Rim Land Development LLC is an agreement between the parties that sets the conditions that must be met before any party goes to court.
Tydingco said Article 15 of that contract provides that the contract’s dispute resolution “shall survive completion of work, expiration or termination of this agreement.”
Thus, the lawyer said, the dispute resolution provisions of the construction contract survives the mutual termination agreement between IPI and Pacific Rim.
“This survival indicates that the parties intended that compliance with the dispute resolution procedures are a prerequisite to a party filing suit,” he said.
Tydingco said Commonwealth courts enforce and require compliance with contractual alternative dispute resolution procedures.
Noticeably, he said, Pacific Rim does not plead or allege that it has complied with the contracts dispute resolution procedure prior to filing the lawsuit.
“IPI is entitled to judgment on the pleadings and dismissal of the complaint as it is predicated on the construction contract,” the lawyer said.
Tydingco also asserted that Pacific Rim’s complaint fails to demonstrate the existence of diversity jurisdiction as the allegations concerning Pacific Rim’s members, IPI’s members, and the unnamed defendants in this case are insufficient.
Tydingco said a party seeking diversity jurisdiction must clearly allege the essential facts showing the existence of diversity.
Pacific Rim alleges that all of its members are domiciled in the Commonwealth, yet this insufficiently pleads diversity, Tydingco said, in as much as Pacific Rim does not indicate the nature of its members.
In other words, Tydingco said, Pacific Rim does not allege if its members are individuals, corporations, LLCs or some other entity.
Alleging only that they are domiciled in the CNMI is not enough, he said, as it does not satisfy the U.S. citizenship requirement.
The lawyer pointed out that, if Pacific Rim’s members are corporations, then the citizenship of each corporation member is its place of incorporation and its principal place of business.
He said the complaint is defective as it does not allege the place of incorporation and principal place of business of Pacific Rim’s corporate members.
Tydingco said with respect to IPI, the complaint alleges that “upon information and belief” none of IPI’s members are domiciled in the CNMI.
Tydingco said that pleading a defendant’s citizenship “upon information and belief” is not enough in a diversity case, unless it is alleged that such information is not readily available, which he said the complaint does not.
Moreover, he said, the domicile allegation is insufficient if an IPI member is a corporation.
Pacific Rim filed the lawsuit against IPI last month to collect approximately $10 million in damages.
Pacific Rim is suing IPI and five unnamed alleged co-conspirators for breach of contract (construction and promissory note), and unjust enrichment.
Pacific Rim and IPI executed a contract for construction of the Imperial Pacific Resort last Feb 13, 2018 and executed a notice of mutual termination on Sept. 21, 2018.