(CNMI Judiciary) — On Feb. 18, 2021, the local Supreme Court issued its opinion in PRC v. Globuil Resort, affirming the trial court’s judgment terminating Globuil Resort’s lease.

In 1988, Jose Manalo leased a Fina Sisu property to Chung Doo Young for 55 years. Hotel Riviera partially sits on the property. Manalo later sold the property and assigned all his interests as lessor to PRC LLC. After several assignments, Globuil Resort now holds all interests as lessee, including Hotel Riviera Saipan, Inc.’s interests.

In July 2012, PRC sued Globuil Resort for failure to pay rent, nonpayment of taxes, and failure to maintain the property, among others. The trial court found in PRC’s favor, holding Globuil Resort breached the contract because rent was never fully paid and the premises were left in an unsanitary and unsafe condition.

Globuil Resort appealed the court’s judgment terminating the lease and ordering it to pay PRC $335,618.37, claiming forfeiture was not warranted because circumstances justified equitable relief.

Globuil Resort further argued that PRC — as a limited liability company — is not qualified to own real property in the CNMI and therefore had no right under Article XII to terminate the lease. Globuil Resort first raised the Article XII issue in its motion to dismiss at the trial court. The trial court denied the motion, holding any Article XII issue was premature and would be addressed at trial. At trial, Globuil stipulated to PRC’s ownership in fee simple and at no point did it raise the Article XII issue again. During oral argument, Globuil Resort again conceded to PRC’s fee simple ownership.

The CNMI Supreme Court affirmed the judgment, finding that the trial court properly terminated the lease. All Article XII claims were found waived because of Globuil Resort’s failure to argue the issue during trial or oral arguments.

The high court’s full opinion is available at  https://cnmilaw.org/pdf/supreme/2021-MP-05.pdf

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