The Supreme Court of the Commonwealth of the Northern Mariana Islands ruled in favor of Bernard S. Guerrero in a dispute over a lease agreement with the Marianas Public Land Corporation (MPLC). This decision, made on October 4, 1991, affects Guerrero's sanitation business and clarifies the application of contract law regarding temporary impracticability.

The case began when MPLC filed a lawsuit against Guerrero, claiming he had breached their lease agreement. The court's ruling is significant because it addresses the interpretation of a moratorium on utility hook-ups that Guerrero faced, which he argued made it impossible for him to fulfill his lease obligations.

Background

Guerrero, who operates Saipan Sanitation Service, entered into a 25-year lease with MPLC on October 23, 1987. The lease allowed him to use 4,000 square meters of public land for his business operations, including sanitation services, automobile repair, and welding. As part of the lease, Guerrero was required to obtain necessary permits and insurance within three months of signing.

Shortly after the lease was signed, Guerrero learned from the Commonwealth Utilities Corporation (CUC) that there was a moratorium on water and power hook-ups for commercial establishments. This moratorium was described as indefinite, and neither Guerrero nor MPLC was aware of it when the lease was executed. Guerrero decided to delay construction on the leased land, believing the moratorium would be lifted soon, yet he continued to pay rent.

In June 1988, MPLC notified Guerrero that he was in default for not submitting construction plans and for allegedly abandoning the premises. Guerrero contended that he had not abandoned the property and was still paying rent while waiting for the moratorium to end. MPLC denied his request for an extension of time to comply with the lease terms and subsequently filed a lawsuit seeking termination of the lease.

The Ruling

The Supreme Court, led by Justice Villa Gomez, reviewed the case and the trial court's decision to grant MPLC a partial summary judgment. The trial court had concluded that the CUC moratorium was not temporary and thus did not apply to the legal principle of impracticability under Section 269 of the Restatement (Second) of Contracts.

The court ruled, "The moratorium was for a temporary period and during that period Guerrero's duty to construct the building was suspended as a matter of law." The court reversed the trial court's decision and remanded the case, stating that Guerrero's lease had not been terminated.

Justice Villa Gomez emphasized that the term