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High Court denies ASG request to stay Laufou judgement

fili@samoanews.com

The Trial Division of the High Court on Monday this week denied the American Samoa Government’s request to stay the enforcement of a $6 million judgement against ASG in the fire that destroyed the old Laufou Shopping Center while the matter is on appeal.

The 8-page decision is signed by Associate Justice Lyle L. Richmond and Associate Judge Mamea Sala Jr.

ASG motion to stay enforcement as well as to disqualify local attorney Roy J.D. Hall Jr., as the new attorney for Progressive was heard before the trial division on Sept. 14.

STAY OF JUDGEMENT

ASG had argued that there is substantial likelihood that it will prevail on appeal, but the judges says the government has not argued anything new. The judges say that ASG merely repeats the arguments that were heard and rejected by the court in past motions.

“This court sees no reason why arguments previously heard and rejected would enjoy any likelihood of success at the appellate level,” the judges said.

As to ASG’s assertion that there has been recent development in sovereign immunity law, which cited three local cases, the judges say they are “without merit.”

“ASG merely appears to be citing recent cases concerning sovereign immunity and the GTLA (Government Tort Liability Act) without any regard to whether they actually constitute a real development in sovereign immunity law in American Samoa,” the decision states.

ASG also asserts that the balancing of equities favor a stay of execution. It argues that Progressive will not be harmed by a stay of the judgement because they will continue to accrue post-judgement interest.

ASG contents that it will be irreparably harmed if stay is denied because the $6 million judgement represents about 8.8% of the local revenue generated over the past three budget years. Additionally, denying the stay would severely harm ASG’s finances.

“We find, as we did in our May 12, 2008 order, that neither party will be irreparably harmed by either possible outcome of the case on appeal,” the judges point out. “The award, while substantial, is merely monetary.”

Progressive will continue to receive post-judgement interest if the payment process is delayed, according to the decision, which also acknowledged ASG’s statement that the $6 million payment is a significant part of ASG’s operating budget.

“However, ASG has a history of failing to timely pay judgments against it. Beginning the process now allows ASG plenty of time to generate funds for payment to Progressive,” the judges said and noted that the governor in September submitted to the Fono legislation a bill to appropriate funds for payment of the judgement.

(Samoa News should point out that the bill was automatically defeated when no action was taken on it before the Fono ended its final session. Funding sources cited in the bill were hikes in excise tax and business license fees).

“Moreover, if the judgement is not stayed and ASG wins on appeal, ASG will have appropriated funds for payment that will no longer be required for that purpose. This is an inconvenience for ASG but does not constitute irreparable harm,” the judges said.

ASG had also argued that denying the stay will adversely affect public interest. ASG says that sending this money off island to pay the judgement while the appeal is pending would be disastrous to ASG’s programs that depend on these local revenues for funding.

However, the judges said a “stay of judgment will harm the public because post judgement interest will continue to accrue. The $6 million judgement is a significant principal amount and interest is currently accruing rapidly, adding more to the already sizable amount that ASG must pay.”

Accordingly, the judges said, “we find that ASG is not entitled to a stay of judgement pending appeal” and the “low likelihood of success on appeal combined with harm to the public does not justify a stay.”

PROGRESSIVE ATTORNEY

ASG also argued that Hall must be removed as attorney for Progressive because he previously represented a former defendant in this matter— the American Samoa Power Authority. ASG claims this violates the duty attorneys owe to their former clients.

However, the judges said Hall had obtained “informed written consent” from ASPA to represent Progressive and therefore denied the ASG motion.

BACKGROUND

Following a trial in July 2007, the Trial Division awarded plaintiff Progressive Insurance Company (insurer of the old Laufou) $6.60 million against ASG. In May the following year, the Trial Court denied ASG’s motion for a stay of judgement pending appeal.

However, the Appellate Division in January 2010 reversed and remanded the matter back to the lower court on jurisdictional grounds. In the December 2011 Order on Remand, the trial court found in favor of Progressive in the revised amount of $6 million.

In August this year, the trial court denied ASG’s motion pertaining to the December 2011 Order on Remand to alter or amend the judgement or a new trial. Then, ASG on Aug. 27 this year, moved to stay enforcement of the $6 million judgement while it again appealed the matter.



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