DBAS files 12th 1602 civil suit
The Development Bank of American Samoa (DBAS) has filed their latest civil suit with the High Court against one of its customers who failed to comply with conditions of the section 1602 housing program contract. To date there are a total of 12 civil cases, including the new one against Eddie and Bernadette Fruean.
According to the court documents, in December 2010 the Frueans were awarded an $85,000 section 1602 grant.
The documents further say the defendants failed to comply with the US Department of Treasury rules, pursuant to federal law and policies allowed under construction of 1602 projects in American Samoa to be completed and placed in service no later than December 31, 2012. DBAS is seeking to recapture the full amount, which will then be forwarded to the US Treasury.
Court filings say that on November 26, 2013 DBAS served a notice of dispute and demand for repayments and the Frueans did not respond or resolve the dispute.
On April 15, 2014 DBAS conducted an inspection of the project and the inspection revealed that the project was incomplete. Another inspection was conducted in May 2014 showing the project remained incomplete and as of June 10, 2014 DBAS had not received for the units a Certificate of Occupancy issued by the Department of Public Works.
DBAS is asking for the High Court find that each defendant is in breach of his or her agreement. It is also seeking judgment against the defendants and in favor of DBAS for the full amount of the section 1602 grant award plus judgment and post judgment interest and any other amount in accordance with the US Treasury guidelines to be determined at trial.
DBAS is also asking the court for a judicial order to foreclose on the mortgage or security. It also seeks that amounts paid by defendants to DBAS as a result of the monetary judgment, or proceeds from a judicial or non-judicial foreclosure sale, except attorney fees and costs, shall be forwarded to the US Treasury.
In a letter dated November 26, 2013 sent to the Frueans, the DBAS pointed out that they are non-complaint because of one or more of the following reasons:
• construction of the entire 1602 affordable housing project is not complete or there is no certificate of occupancy for all of the 1602 units;
• at least 40% of the 1602 units are not being leased to qualified low-income tenants;
• incomplete repairs of physical defects or building code violations; and
• the owners are occupying one of the units and are not low-income tenants.
According to the letter DBAS warned the Frueans that they will pursue any and all of its legal and equitable remedies against them.
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