Anaks Appeal Dismissed

On Friday, March 20, the NMI Supreme Court dismissed the appeal in a dispute over the property on which the Anaks Oceanview Hill Condominiums now stand.

A company known as Anaks Investors, LLC had negotiated with a local family trust, and had obtained an agreement giving Anaks Investors the right to purchase the fee simple property underlying the condominiums. The lease between the family trust and the home owners association (HOA) at Anaks, however, contains a provision which gave the HOA the right of first refusal should the trust ever decide to sell the property. The trust notified the HOA that Anaks Investors wished to purchase the land, and the HOA decided it would exercise its right to buy the property itself.

At that point, Anaks Investors sued the trust and the HOA seeking to prevent the trust from selling the land to the HOA. Importantly, this was the only relief that Anaks Investors requested in its lawsuit.

The legal theory behind Anaks Investors’s case was that the right of first refusal contained in the lease to the HOA violated Article XII of the NMI Constitution. This important provision of CNMI law provides that only persons of Northern Marianas Descent (NMDs) can acquire long term interests in real property. Anaks Investors’s position was that the right of first refusal was a “long term interest,” and that the HOA did not meet the definition of “NMD” making the right of first refusal unconstitutional.

Unfortunately for Anaks Investors, its lawsuit had been filed many years after the HOA had obtained the right of first refusal. For this reason, the Superior Court dismissed the lawsuit because Anaks Investors had not filed within the applicable statute of limitations.

Anaks Investors appealed, but in the meantime the property was sold to a separate company legally able to hold fee simple under the Constitution. Then, after a bit more litigating, the HOA moved the Supreme Court to dismiss the appeal based on a principle known as “mootness doctrine.”

Mootness doctrine is a legal concept based on the idea that US courts only deal with concrete “cases and controversies,” not abstract or academic ideas. This means that when a court makes a ruling, the ruling must resolve a particular question with effect in the real world.

In the Anaks case, because Anaks Investors had only asked the Court to stop the sale of the property, there was no longer any way for the Court to effect something in the real world after the property was already sold. The question of whether the right of first refusal became academic, and US Courts do not answer academic questions.