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Published On: Sun, May 2nd, 2021

Cupecoy has to pay for unlawfully terminating management contract

PHILIPSBURG — The Porto Cupecoy Owners Association has to pay $353,100 to Invest Assured Management and Consulting because it terminated the management contract with Invest unlawfully. The Court in First Instance declared its decision executable with immediate effect.

Invest and its director William Charles Olliver managed Porto Cupecoy since 2009 and the owners association still renewed the contract for five years in 2018. But the relationship between the two parties soured at breakneck speed in January 2020 when Olliver balked at the suggestion to let an unnamed casino handle the association’s payroll.

Attorney Roy Moes is the chairman of the owners association. He is also employed by casino-owner Francesco Corallo.

Olliver wrote on January 20, 2020, to the board of the association that he was “not comfortable with the idea of the payroll for the owners association going through a casino. “It might have the appearance of money laundering since the staff members are not employees of the casino.”

Olliver asked Moes when he was going to receive cash. “He said that this was not going to happen any time soon,” Olliver wrote in his email. “Why not? I am willing to accept the physical risk; I do it all the time.”

Olliver pointed out that he was behind with payments to GEBE and the insurance company. “Depositing cash directly to the bank will have to be done daily in increments of less than $10,000 but I can do it. Until you can find a way to write us a check I don’t see any alternative. We need the funds or everything will collapse like a house of cards.”

Olliver’s cry for help was not appreciated. Eleven days after he sent his email, Moes wrote to Invest: “On behalf of the board of the Cupecoy Owners Association I herewith serve you with notice of termination of the Condominium Association Management Agreement. The termination will have immediate effect.”

The termination notice did not give any reason for the board’s decision.

Invest asked the court to order the association to pay $470,800 – the amount the company would have received for the remainder of its contract. In reconvention, the association asked the court to order Invest to pay close to $129,000.

The court established that termination of the contract was only possible in case of a “material breach.” But the owners association should have motivated its decision to terminate the contract, detailing these breaches and giving Invest thirty days to repair any shortcomings. “There is no option to terminate the contract for an urgent reason,” the court ruling states.

The association told the court that it had informed Invest verbally about the reasons for the termination, but Invest denied this and the court established that “there is not a single indication that this has actually been done.”

“With Invest the court is of the opinion that it cannot be excluded that Olliver’s email of January 24, 2020, in which he addressed the risk of money laundering, is the real reason for the termination.”

The court awarded damages to Invest, but mitigated the demanded amount by 25 percent. The owners association attempted to prevent that the court would declare its decision immediately executable, but the court saw no reason to go along.

“The interest of Invest in immediate execution is significant. Otherwise, the company would have to wait 1.5 to 2 years for a ruling on appeal, while it is clear that Invest suffered serious damages due to the unlawful termination.”

The court furthermore noted that the owners association could take measures to prevent Invest from going after its assets during a lengthy appeal procedure. “In this context, the court considers it relevant that the employees of the association are not paid by her but apparently by way of a casino. That triggers questions about the association’s liquidity position.”

The court denied the association’s demand in reconvention for the payment of $129,000.



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