The owners and operators of Luta Mermaid LLC, which owns the seized cargo ship M/V Luta, have opposed Japanese investor Takahisa Yamamoto’s bid to have the ship sold.
Speaking through their lawyer, William M. Fitzgerald, Luta Mermaid LLC, M/V Luta, company president Abelina T. Mendiola, Deron T. Mendiola, and Fidel S. Mendiola III, said the U.S. District Court for the NMI should deny Yamamoto’s bid to have the vessel sold because Yamamoto may not have a maritime lien on the vessel. That means the court does not have jurisdiction to order the sale of the ship, they said.
Fitzgerald said that if Abelina Mendiola’s affidavit is contested, then the court must hold an evidentiary hearing because there will be a question of fact and the court cannot resolve this as a matter of law if there are disputed issues of fact.
Fitzgerald said the most significant issue for the court to decide is whether Yamamoto is a joint venture owner of M/V Luta, or is he a stranger to the vessel who simply provided money for the purchase of the ship and its necessities.
“By stranger to the vessel is meant an independent vendor who supplied something that the vessel needed,” the lawyer said.
Fitzgerald said the court, at this stage, only has Yamamoto’s complaint and Abelina Mendiola’s affidavit, which cannot be contradicted since it is supported by Yamamoto’s own words by which he describes himself as a joint owner of M/V Luta in a 50/50 relationship with the Mendiolas.
Fitzgerald said substantial case law establishes that a joint venture in the ownership of a vessel cannot obtain a maritime lien.
The district court, he said, has the power to invalidate the arrest of the vessel even in the face of a claim for delay, expense, and decay if Yamamoto secured the lien improperly.
Fitzgerald pointed out that the most unbelievable part about Yamamoto’s claim is the absence of any documentary evidence.
“It is truly incredible that Yamamoto, apparently a wealthy licensed tax accountant in Japan, ‘loaned’ a large amount of money to eight defendants, consisting of individuals and a limited liability company without a single document,” the lawyer pointed out.
Fitzgerald said Yamamoto takes the position that he operated as a banker who simply loaned money in exchange for a promise to be repaid.
“But what bank loans money without specifying an interest rate or time for repayment?” Fitzgerald asked.
It is seldom, he said, that one sees a complaint for breach of contract to loan money without a copy of the contract attached as an exhibit, but that there is none in this case.
One glaring question, Fitzgerald said, is why Yamamoto claims that Lt. Gov. Victor Hocog promised to ensure that Yamamoto’s “investment was returned with profit” instead of Yamamoto’s loan would be repaid with interest if, in fact, the financing of the vessel was a loan.
Fitzgerald said the answer is found in Abelina Mendiola’s affidavit, supported by documents showing that Yamamoto’s funding for the vessel was not a loan, but a joint venture investment in the shipping business to be conducted with the Mendiola family of Rota.
Yamamoto is suing Hocog and the owners/operators of Luta Mermaid LLC for allegedly refusing to pay back the $3.4 million that he put up for the vessel.
After Yamamoto filed the lawsuit last Oct. 25, the U.S. Marshal Service seized the ship.
Yamamoto, through counsel George Lloyd Hasselback, recently asked the court to order the sale of M/V Luta to avoid its deterioration and excessive cost of keeping the vessel while his lawsuit is pending in court.
Abelina Mendiola, 53, said it was Yamamoto’s idea to go into shipping business for Rota, which was developed out of his interest in the acquisition of Sunset Villa on Rota, owned by her sons.
Abelina Mendiola said under Yamamoto’s idea he finances the businesses and the Mendiolas will provide time and services in management, operation, and logistics. She said they agreed that this was a 50-50 joint venture, ultimately using Luta Mermaid LLC as their vehicle.