Cite as Stephen v. Chuuk,11 FSM Intrm. 36 ( Chk. S. Ct. Tr. 2002)

[11 FSM Intrm. 36]

CSSC CA NO. 242-94

Decided: June 26, 2002

APPEARANCES:

HEADNOTES

Civil Procedure – Motions

The court may decide motions based on the written filings. Stephen v. Chuuk, 11 FSM Intrm. 36, 39 (Chk. S. Ct. Tr. 2002).

Judgments

An order that does not adjudicate all claims and the rights and liabilities of all parties is not a judgment or an order from which a judgment could be derived. Nor is such an order a partial final judgment when it does not have an express determination that there is no just reason for delay and an express direction for entry of judgment, both of which are required for the entry of a partial final judgment. Stephen v. Chuuk, 11 FSM Intrm. 36, 40 (Chk. S. Ct. Tr. 2002).

Civil Procedure; Judgments

An order that did not adjudicate any of the claims against the defendants or adjudicate any of the defendants' defenses and did not dispose of or dismiss either the case or the complaint, but only disposed of and dismissed the plaintiffs' and both sets of intervenors' claims against each other was therefore not a judgment because all it did was to combine both sets of intervenors and the plaintiffs together as joint plaintiffs against the two defendants. Stephen v. Chuuk, 11 FSM Intrm. 36, 40-41 (Chk. S. Ct. Tr. 2002).

Property – Tidelands

Prior to the effective date of the Chuuk Constitution, all tidelands were owned by the government. When the Chuuk Constitution became effective, traditional tideland rights were restored over only those areas that were still tidelands on that date (Oct. 1, 1989). Stephen v. Chuuk, 11 FSM Intrm. 36, 41 (Chk. S. Ct. Tr. 2002).

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Property – Certificate of Title

Certificates of title are by statute, prima facie evidence of ownership stated therein as against the world. Because of this, a court is required to attach a presumption of correctness to them when considering challenges to their validity or authenticity. Stephen v. Chuuk, 11 FSM Intrm. 36, 41 (Chk. S. Ct. Tr. 2002).

Transition of Authority

Title 67 of the Trust Territory Code remains Chuuk state law pursuant to the Chuuk Constitution's Transition Clause and because it has never been amended or repealed. Stephen v. Chuuk, 11 FSM Intrm. 36, 41 n.1 (Chk. S. Ct. Tr. 2002).

Settlement

When the defendants did not sign the settlement agreement between the other parties, they are not bound by it or by the court's confirmation of it because the defendants were not parties to the settlement agreement. A settlement agreement will not bind those not a party to it. Stephen v. Chuuk, 11 FSM Intrm. 36, 42 (Chk. S. Ct. Tr. 2002).

Property – Tideland

The tideland that is subject to traditional claims of ownership does not include deep water. Stephen v. Chuuk, 11 FSM Intrm. 36, 42 n.2 (Chk. S. Ct. Tr. 2002).

Civil Procedure – Motions; Judgments – Relief from Judgment

When there is no judgment in the case but only an interlocutory order confirming a settlement agreement between fewer than all the parties to the action, a motion for relief from judgment will properly be characterized, not as one for relief from judgment under Rule 60(b), but as one to reconsider an interlocutory order. A party cannot seek relief from a judgment that does not exist. Stephen v. Chuuk, 11 FSM Intrm. 36, 43 (Chk. S. Ct. Tr. 2002).

Settlement

When an order confirming a settlement agreement did not adjudicate the rights and liabilities of all parties, but only of the tideland claimants against each other, it may be revised because in the absence of a properly entered partial final judgment, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not terminate the action as to any of the claims or parties, and is subject to revision at any time before the entry of judgment. Stephen v. Chuuk, 11 FSM Intrm. 36, 43 (Chk. S. Ct. Tr. 2002).

Settlement

The grant or denial of a motion to set aside a settlement agreement lies within the sound discretion of the court and will not be disturbed on appeal except for a clear abuse of discretion. Stephen v. Chuuk, 11 FSM Intrm. 36, 43 (Chk. S. Ct. Tr. 2002).

Settlement

As a contract, a valid settlement agreement requires offer and acceptance, consideration, and parties who have the capacity and authority to settle. Stephen v. Chuuk, 11 FSM Intrm. 36, 43 (Chk. S. Ct. Tr. 2002).

Settlement

In order for a settlement to be fully binding, a person signing a settlement agreement must have the capacity and the authority to do so. Stephen v. Chuuk, 11 FSM Intrm. 36, 43 (Chk. S. Ct. Tr. 2002).

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Settlement

When affidavits show that the one person who purportedly signed the settlement on the affiants' behalf did not have the authority to do so and there is no admissible evidence to the contrary, only the unsupported assertion of counsel that the signer said she had the authority to sign for her older sisters, and when there is no basis to conclude that they ratified the settlement or that they should now be estopped from claiming that they are not bound by it, the movants have shown good cause that the settlement agreement must be held invalid. Stephen v. Chuuk, 11 FSM Intrm. 36, 43 (Chk. S. Ct. Tr. 2002).

Settlement

Even if there was no authority to bind a party to a compromise, he may nevertheless be bound on the basis of ratification or estoppel if he retains benefits derived from the compromise. Stephen v. Chuuk, 11 FSM Intrm. 36, 43-44 (Chk. S. Ct. Tr. 2002).

Custom and Tradition – Chuuk

Under Chuukese custom and tradition the oldest sister may have the authority in family and lineage matters to sign for younger family members, but the youngest sister does not have the authority, under custom and tradition, to sign for the older ones. Stephen v. Chuuk, 11 FSM Intrm. 36, 44 (Chk. S. Ct. Tr. 2002).

Settlement

The usual effect of the invalidation of a settlement is to restore the parties to where they were before the defective settlement or compromise was made, or at least to prevent the defective settlement from being enforced. Stephen v. Chuuk, 11 FSM Intrm. 36, 44 (Chk. S. Ct. Tr. 2002).

COURT'S OPINION

WANIS R. SIMINA, Associate Justice:

There are two matters before the court. The first consists of two motions by Intervenors #2, one filed on February 22, 2001 and the other on June 5, 2001. Relying on a settlement reached between both sets of intervenors and the plaintiffs and that was adopted as an order of this court, these two motions ask the court to order the Land Commission to issue certificates of title jointly to those parties for various lots of land allegedly filled in from a tideland called Newachei. The second matter is the plaintiffs' motion, filed November 13, 2001, which asks the court to set aside that settlement agreement and the court's order adopting it, or at least the plaintiffs' part of it.

A hearing on these matters was scheduled several times, each time continued due to the inability of one or more counsel to attend. By order of May 16, 2002, the court announced its intention to decide the motions based on the written filings, Chk. Civ. R. 78; see also Chk. R. 43(e), and gave any movants until May 31, 2002 to supplement their motions if they deemed it necessary, and gave the parties opposing any motion until June 14, 2002 to "file additional points and authorities and affidavits in opposition to the pending motions" as they deemed necessary. The order further stated that the three pending motions would be deemed submitted and ready for decision without further argument or evidence after 4:00 p.m., June 14, 2002.

I. Background

The plaintiffs filed their complaint on December 15, 1994, alleging that, in rebuilding and

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extending the Weno dock, starting in October, 1994, the defendants, the State of Chuuk and Penta Ocean Company, encroached on and filled in certain portions of their tideland Newachei and dredged sand and materials from other parts of the tideland, destroying the marine habitat and depriving them of the use of their tideland. They asked the court to declare that the defendants were encroaching and trespassing on their tideland, to enjoin the defendants from any further activity on the tideland, to order the defendants to restore the tideland to its previous state, and to award them damages.

On May 23, 1995, Samurai Meika and Anif Robert (now known as Intervenors #2), and on July 3, 1995, Simiko Bossy, Saiwai Ukoruru, and Sinako Meika, and their heirs (now known as Intervenors #1) each moved to intervene. Both groups claimed they were the true owners of the tideland in question because they had inherited it from their ancestors. Both motions to intervene were granted on April 26, 1996.

Intervenors #1 presented the court with a settlement between themselves, Intervenors #2, and the Plaintiffs that ownership to the tideland would vest in all three parties, that those three parties would share any benefits (including monetary) equally, that the three parties would cooperate in any decisions concerning the tideland, and that they agreed that the case would be dismissed with prejudice to all three parties as "pertain[ed] to the area under settlement in this case." On October 13, 1998, the court issued an order confirming and adopting the settlement agreement and ordered that it should "become a part of this order and decree of this Court."

II. Motions for Certificates of Title

A. The Motions

Intervenors #2 filed a motion on February 22, 2001 and another on June 5, 2001, that asked the court to order the Land Commission to issue certificates of title jointly to the plaintiffs and both sets of intervenors for various lots of land that had been filled in from the tideland Newachei. Intervenors #2 characterize the intervenors' and plaintiffs' status as that of judgment creditors and their motions as ones seeking orders in accordance with the judgment.

The state filed its opposition on August 29, 2001, and moved that the intervenors' motions be stricken. The state noted that the second motion was for the Mobil Oil plant area that was nowhere near the reconstructed dock area that was the subject of the complaint in this case and that the state had a certificate of title to that land and had certificates of title to most of the lots that the motions covered. Furthermore, the state contended that since neither defendant was a party to the settlement agreement, they were not bound by it or by the order confirming it.

B. Analysis

To start, no judgment has been entered in this case. The court's October 13, 1998 order is not a judgment. It is not an order "adjudicating all claims and the rights and liabilities of all parties" from which a judgment could be derived. See Chk. Civ. R. 54(b). Nor was the October 13, 1998 confirmation order a partial final judgment. The order did not have an "express determination that there [wa]s no just reason for delay" and an "express direction for entry of judgment," both of which are required for the entry of a partial final judgment. Id. (There was also no separate document setting forth a judgment as required by Rule 58.)

In essence, all that the October 13, 1998 confirmation order did was to combine both sets of intervenors and the plaintiffs together as joint plaintiffs against the two defendants. It did not adjudicate any of the claims against the defendants or adjudicate any of the defendants' defenses. It

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did not dispose of or dismiss either the case or the complaint. It only disposed of and dismissed the plaintiffs' and both sets of intervenors' claims against each other. There is therefore no judgment in this case, and Intervenors #2 cannot move for an order in accordance with a judgment that does not exist.

Additionally, this case concerns the defendants' alleged interference with the other parties' tidelands. Prior to the effective date of the Chuuk Constitution, all tidelands were owned by the government. Cheni v. Ngusun, 6 FSM Intrm. 544, 548, 1 CSR 35, 39 (Chk. S. Ct. App. 1994); see also 67 TTC 2. On the date the Chuuk Constitution became effective, traditional tideland rights were restored over only those areas that were still tidelands on that date (October 1, 1989). Cheni, 6 FSM Intrm. at 548, 1 CSR at 39; Sellem v. Maras, 7 FSM Intrm. 1, 7 (Chk. S. Ct. Tr. 1995) (traditional rights in tidelands do not include tidelands that became dry land before the Constitution's effective date through filling or other activity that raised land above mean high tide mark), aff'd, 9 FSM Intrm. 36 (Chk. S. Ct. App. 1999); Nena v. Walter, 6 FSM Intrm. 233, 236 (Chk. S. Ct. Tr. 1993) (reversion of tidelands under article IV, section 4 does not apply to any tidelands previously filled or reclaimed). Any tideland that had been filled in before October 1, 1989 remained government property. Nimeisa v. Department of Public Works, 6 FSM Intrm. 205, 212 (Chk. S. Ct. Tr. 1993) (government retains ownership of land it filled in before traditional rights in tidelands were returned to traditional owners).

The court is aware of the one reported Trust Territory case that ruled that the Trust Territory government had failed to prove its ownership of tidelands. Ungeni v. Trust Territory, 8 TTR 366 (App. 1983). The court is also aware that this decision was later specifically overruled by the court that decided it, Simiron v. Trust Territory, 8 TTR 615, 621 (App. 1988), and that Ungeni was contrary to all earlier cases on the point, id. at 620 n.1; see also Damarlane v. United States, 7 FSM Intrm. 56, 65-67 (Pon. S. Ct. App. 1995). It was article IV, section 4 of the Chuuk Constitution that restored tideland ownership to Chuukese people when it became effective October 1, 1989. See Moses v. Phillip, 10 FSM Intrm. 540, 544-45 (Chk. S. Ct. App. 2002); Cheni, 6 FSM Intrm. at 548, 1 CSR at 39.

All of the lots for which Intervenors #2 seek certificates of title were filled in long before the Constitution's effective date. As such, tideland owners do not have a claim to them. Furthermore, they were not areas over which this suit was brought, which was tideland that the defendants allegedly started damaging, filling, or encroaching upon in October, 1994.

In fact, the government was issued certificates of title to most, if not all, of these lots well before the Constitution's effective date. Certificates of title are by statute, 67 TTC 117,¹ prima facie evidence of ownership stated therein as against the world. Luzama v. Ponape Enterprises Co., 7 FSM Intrm. 40, 50-51 (App. 1995). Because certificates of title are prima facie evidence of ownership against the world, a court is required to attach a presumption of correctness to them when considering challenges to their validity or authenticity. See, e.g., Sigrah v. Kosrae State Land Comm'n, 9 FSM Intrm. 89, 93 (Kos. S. Ct. Tr. 1999). In this case, Intervenors #2 do not even challenge the validity of the government's certificates of title. They merely ask (based on a court-approved agreement only between themselves, the plaintiffs, and the other intervenors) that the court order the Land Commission to issue them new certificates of title for the same land that the government already has certificates of title. There is no legal or factual basis for such an order.

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Finally, the state is correct that the defendants are not bound by the settlement agreement between the other parties or by the court's confirmation of it. The defendants were not parties to the settlement agreement. A settlement agreement will not bind those not a party to it. Cf. Bank of Hawaii v. Helgenberger, 9 FSM Intrm. 260, 262 (Pon. 1999) (court will not enforce a settlement agreement against a party who has not signed it); Gambles v. Perdue, 572 P.2d 1241, 1243 (Mont. 1977) (obligation of contracts is limited to contracting parties).

The settlement agreement between those claiming ownership of the tideland Newachei cannot and does not bind the defendants and there is no judgment in this case. As tideland owners, the intervenors and the plaintiffs have no valid claim to any land filled in before the Chuuk Constitution's effective date. Their claims are limited to any part of the original tideland Newachei that remained tideland² on October 1, 1989, and that is either still tideland or that was filled in after that date, specifically, in this case's context, to any of the Newachei tideland that the defendants damaged or filled in after the Weno dock reconstruction and extension project began in October, 1994. The intervenors' motions are thus without merit and have utterly no basis in law or fact and must be denied with prejudice.

III. Motion to Set Aside the Settlement Agreement

A. Nature of Relief Asked For

On October 26, 2001, plaintiff Nasiko Stephen³ served, and on November 13, 2001, she filed, through her new attorney, her Motion to Set Aside Settlement Agreement and Order of October 13, 1998, Confirming Settlement Agreement. It asks that the settlement agreement, and the order confirming it, be set aside because neither she nor her sister, Nariko Souken, signed it, because what purport to be their signatures on the agreement are forgeries, because they never agreed to the settlement's terms, and because the third signatory for the plaintiffs on the agreement is now dead. The motion was supported by Nasiko Stephen's and Nariko Souken's affidavits, which also stated that they had not received any benefit from the agreement and that they had been unaware until sometime in September, 2001 that their previous counselor had withdrawn from the case. The motion contends that the settlement is void since they never signed or agreed to it, and that it and the order confirming it, should be set aside on the basis of fraud. The motion cites Rule 60(b) as the source of the court's power to do so. That rule which permits relief from a final judgment or order under certain conditions including fraud.

On November 6, 2001, Intervenors #1 filed their opposition to this motion. On June 14, 2002, they filed a supplement to the opposition. Intervenors #1 contend that the signatures were not forged because the now deceased youngest sister, Yosko Hedgar, had informed them that she had been asked and authorized by her older sister, Nasiko, to sign for her and Nariko. The opposition also asked that the motion be denied because, under Rule 60, relief from a judgment on the ground of fraud must be

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sought within a reasonable time, not to exceed one year, and that more than one year has passed since the order confirming the settlement. It asserts that the agreement was valid when executed and should remain undisturbed. No supporting affidavits were attached to the opposition or to the supplemental filing.

Stephen characterizes her motion to set aside the settlement agreement and the confirmation order as one for relief from judgment. This characterization is incorrect. As discussed above, there is no judgment in this case. There is only an interlocutory order confirming a settlement agreement between fewer than all the parties to the action. A party cannot seek relief from a judgment that does not exist. The motion is therefore properly characterized, not as one for relief from judgment under Rule 60(b), but as one to reconsider an interlocutory order. The remedy the motion seeks is to vacate the October 13, 1998 interlocutory order confirming the settlement agreement and to set aside the agreement itself. As such, Stephen, in order to prevail, does not have to comply with Rule 60(b)'s requirements as to time limits and grounds, but must only show good cause why the confirmation order should be subject to revision. In the absence of a properly entered partial final judgment,

any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment . . . .

Chk. Civ. R. 54(b). Because the order confirming the settlement agreement did not adjudicate the rights and liabilities of all parties, but only of the tideland claimants against each other, it is thus "subject to revision at any time before the entry of judgment." The grant or denial of a motion to set aside a settlement agreement lies within the sound discretion of the court and will not be disturbed on appeal except for a clear abuse of discretion. In re Estate of Cohen, 464 P.2d 620, 623 (Ariz. 1970).

B. Validity of Settlement Agreement

It is undisputed that neither Nasiko Stephen nor Nariko Souken signed the settlement agreement, although signatures appear there in their names. There is no indication on the document that some other person is signing their names for them or has the authority to do so. There is no recitation on the document that Yosko Hedgar has been given the authority to, and is, signing for Nasiko Stephen or Nariko Souken. Nor is there an attached power of attorney authorizing her to sign for them.

As a contract, a valid settlement agreement requires offer and acceptance, consideration, and parties who have the capacity and authority to settle. Brockman v. Sweetwater County School Dist. No. 1, 826 F. Supp. 1328, 1331 (D. Wyo. 1993). In order for a settlement to be fully binding, a person signing a settlement agreement must have the capacity and the authority to do so. 15A Am. Jur. 2d Compromise and Settlement § 11 (1976). Nasiko Stephen's and Nariko Souken's affidavits show that the one person who purportedly signed the settlement on their behalf did not have the authority to do so. There is no admissible evidence to the contrary. To oppose Nasiko Stephen's and Nariko Souken's sworn statements, Intervenors #1 offer only the unsupported assertion of counsel that Yosko Hedgar said she had the authority to sign for her older sisters. Even if this is true, Yosko Hedgar's saying that she had the authority does not mean that she actually did have the authority to sign for anyone other than herself. Counsel's unsupported assertion that Yosko Hedgar had the authority to sign for her sisters because she said she did, cannot overcome Nasiko Stephen's and Nariko Souken's statements under oath, that Yosko Hedgar did not have the authority to sign the settlement agreement and that they did not know about the agreement.

Nor have Nasiko Stephen or Nariko Souken ratified the settlement agreement. "Even if there was

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no authority to bind a party to a compromise . . . he may nevertheless be bound on the basis of ratification or estoppel if he retains benefits derived from the compromise." 15A Am. Jur. 2d Compromise and Settlement § 12 (1976). Both Nasiko Stephen's and Nariko Souken's affidavits state that they have not received any benefit from the settlement agreement. There is therefore no basis to conclude that they ratified the settlement or that they should now be estopped from claiming that they are not bound by it.

One final note, the parties to the settlement should have had some concern that Yosko Hedgar might not have the authority to sign the agreement. While under Chuukese custom and tradition the oldest sister may have the authority in family and lineage matters to sign for younger family members, the youngest does not have the authority, under custom and tradition, to sign for the older ones. So when Yosko Hedgar said she had the authority to sign for her older sisters, that should have caused a reasonable Chuukese to be cautious and want to ascertain whether that was actually the case, either by asking for a notarized power of attorney or at least by personally asking the older sisters if that was so. That was not done, and there is no admissible evidence that Yosko Hedgar had the authority that Intervenors #1 now say that she said she had.

The plaintiffs have shown good cause to grant their motion. Accordingly, the settlement agreement must be held invalid. The usual effect of the invalidation of a settlement is to restore the parties to where they were before the defective settlement or compromise was made, or at least to prevent the defective settlement from being enforced. 15A Am. Jur. 2d Compromise and Settlement §§ 40, 41 (1976). The plaintiffs are therefore not bound by the settlement agreement. The settlement agreement is hereby set aside and the October 13, 1998 order confirming the settlement agreement is vacated.

IV. Conclusion

No judgment has ever been entered in this case. Intervenors #2's motions filed on February 22, 2001 and June 5, 2001, which ask the court to order the Land Commission to issue certificates of title jointly to the plaintiffs and both sets of intervenors for various lots of land allegedly filled in from the tideland called Newachei, are denied with prejudice. Nasiko Stephen's motion is granted. The settlement agreement is invalid and set aside, and the order confirming the settlement agreement is vacated.

The following schedule is therefore set: All discovery shall be requested by September 30, 2002. All discovery shall be completed by October 21, 2002. All pretrial motions shall be filed by November 18, 2002. A hearing on the pretrial motions is set for December 16, 2002, at 9:30 a.m. If no motions are filed by the deadline, the court will then set a date either for a final pretrial status conference or for trial.

¹ Title 67 of the Trust Territory Code remains Chuuk state law pursuant to the Chuuk Constitution's Transition Clause and because it has never been amended or repealed. See, e.g., In re Lot No. 014-A-21, 9 FSM Intrm. 484, 490 (Chk. S. Ct. Tr. 1999).

² The "tideland" that is subject to traditional claims of ownership does not include deep water. Sellem v. Maras, 7 FSM Intrm. 1, 4-5 & n.9 (Chk. S. Ct. Tr. 1995) (tidelands traditionally are those lands from the dry land to the deep water at the edge of the reef, and must be shallow enough for Chuukese women to engage in traditional methods of fishing; a deep water passage too deep for Chuukese women to engage in their traditional fishing methods is not a tideland), aff'd, 9 FSM Intrm. 36 (Chk. S. Ct. App. 1999).

³ The complaint and most papers filed later spell her surname as Stifen, but this motion, and her notarized signature on the affidavit, spell her surname as Stephen. That spelling is therefore used throughout this order.