Supreme Court Affirms Allocation of Damages from Tottotville Construction

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Saipan, CNMI – The Supreme Court issued an opinion clarifying when a party’s liability is considered “extinguished” and reaffirming the right of a co-defendant to seek contribution after paying more than its share of the joint obligation

The dispute arises from defects in the Tottotville housing project, where Telesource CNMI, Inc. (“Telesource) and SSFM International, Inc. (“SSFM”), were found jointly liable through arbitration for approximately $5.4 million in damages owed to homeowners. The two contractors paid the damage award, with SSFM covering almost $3.6 million under a settlement agreement with the homeowners. In subsequent litigation between the contractors, the trial court determined that Telesource was responsible for approximately $4.3 million of the total liability. Telesource appealed this determination on three grounds. It argued that SSFM could not seek contribution because its settlement did not extinguish Telesource’s liability to the homeowners, that the trial court failed to adequately explain its factual findings, and that the calculation of interest on the award was incorrect. The Supreme Court rejected Telesource’s arguments on contribution and factual findings, but agreed that the interest had been improperly calculated.

On the contribution issue, the Supreme Court held that the law requires only that Telesource’s liability to the homeowners be extinguished. It found that Telesource was no longer open to further liability once the arbitration award was issued. Because Telesource was no longer exposed to further liability for the housing defects, SSFM was entitled to recover from Telesource the excess payment it made to the homeowners.

Regarding the adequacy of the findings of facts, the Supreme Court concluded that the trial court decision sufficiently explained the basis for allocating fault between the contractors, meeting the requirements under the NMI Rules of Civil Procedure.

The trial court’s determination on interest was reversed because it improperly found Telesource accrued interest from the date SSFM paid the homeowners under the settlement agreement. The Supreme Court clarified that interest begins to accrue only after liability is established by judgment. In this case, that did not occur until the trial court determined each party’s respective share of the arbitration award. Interest could not accrue before that determination.

The full opinion is available on the Law Revision Commission website:

https://cnmilaw.org/pdf/supreme/2026-MP-04.pdf

2026-PR-020

FOR IMMEDIATE RELEASE

June 11, 2026

This press release has been prepared by court staff for the convenience of the public. For further information, contact the Supreme Court at Supreme.Court@NMIJudiciary.gov