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Trial scheduled in case of Pago Pago Village Council, Inc. loan default

reporters@samoanews.com

Associate Justice Lyle L Richmond, who was accompanied on the bench by Associate Judge Mamea Sala Jr has scheduled for trial the lawsuit by the ANZ Amerika Samoa Bank against Pago Pago Village Council, Inc, (PPVC) over default of a loan made in 2006 for the redevelopment of the Pago Pago Community Center — which was later destroyed in the 2009 tsunami disaster.

The defendants include six village leaders — Tuaolo Manaia Fruean, Mauga T. Asuega, Fuaautoa Taufaasau, Vaivao Etelagi, Asuega F. Lauvai and the estate of Mageo Malu, who passed away in January this year —and who guaranteed the $558,674 loan.

During the hearing yesterday, the plaintiff’s lawyer David Vargas asked the court for a trial date. Vargas told the court that this is a straight forward case and the bank is ready for trial.

The defendants’ lawyer Mark Ude asserted there has been several issues that needed to be sorted out before trial, and that he was waiting for a response from the bank’s initial lawyer Jennifer Joneson, but up to now there has been no response.

However, Associate Justice Richmond noted these issues can be resolved during trial, and scheduled trial for September 20, 2012 with a pretrial conference date of August 23, 2012.

According to the complaint, it was on February 1, 2006 that PPVC authorized representatives signed the promissory note for the loan and in the note, PPVC promised and agreed to pay the bank the principal sum of $558,674 as well as the interest.

The authorized representatives are the six village leaders identified as defendants in the case. According to the promissory note, PPVC will pay the loan on demand and if none is made, PPVC will pay the loan in monthly installment payments starting Mar. 1, 2006 until Feb. 1, 2016, on which date the entire balance of principal and unpaid interest shall be due and payable.

Around Dec. 21, 2007, the authorized representatives of PPVC signed a loan revision agreement. At that time, PPVC failed to pay its payment obligations under the note and when due, the complaint alleges.

Under the revised agreement, there would be 84 monthly payments of $6,300 commencing Jan. 1, 2008 to be paid until Dec. 1, 2014, followed by one payment of $210,878 the following month. The revised agreement was signed by only five village leaders and these individuals acted in their capacity as duly authorized representatives of PPVC.

However, the bank alleges that PPVC failed to make payments in accordance with terms of the original and revised agreements. As of Mar. 22, 2011, the bank declared that PPVC had defaulted on its payment obligations.

It also says that PPVC presently owes the bank unpaid principal in the amount of $399,350 and accrued interest, late fees, costs and attorney fees that are in excess of $11,000.

Additionally, the amount that PPVC owes the bank for accrued interest, costs and attorney fees will increase during the pendency of this case.

At the time the six leaders signed the guarantee, they wanted the PPVC to succeed in its endeavors including the PPVC’s plan to improve the premises known as the Pago Pago Community Center, the complaint alleges.

Despite signing the guarantee agreement, the bank alleges the leaders have failed to pay PPVC’s indebtedness to the bank, which is asking the court to rule against PPVC and the six leaders, for the principal, interest, late fees, costs and attorney fees due under the loan agreement in an amount to be established at a hearing. The bank is also asking the court for any other and further relief as is equitable and just.



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