Cite as Kelly v. Lee,11 FSM Intrm. 116 ( Chk. 2002)

[11 FSM Intrm. 116]

CIVIL ACTION NO. 2002-1003

Decided: August 28, 2002

APPEARANCES:

HEADNOTES

Civil Procedure – Motions

Failure to file a timely opposition is deemed a consent to the granting of the motion, but proper grounds to grant the motion must still exist before a court can grant it. Kelly v. Lee, 11 FSM Intrm. 116, 117 (Chk. 2002).

Jurisdiction – Diversity

Diversity jurisdiction does not exist when all the parties are foreign citizens, even though they may be citizens of different foreign nations. In such cases, the FSM Supreme Court's subject matter jurisdiction must be based on some other ground. Kelly v. Lee, 11 FSM Intrm. 116, 117 (Chk. 2002).

Admiralty; Jurisdiction – Diversity

A motion to dismiss for lack of diversity jurisdiction will be denied when the plaintiff's complaint does not plead diversity jurisdiction (found in section 6(b) of article XI of the Constitution), but clearly pleads that the court's jurisdiction under section 6(a), and when a fair reading of the plaintiff's claim is that it is based on the defendant's alleged breach of a maritime contract) the plaintiff's employment contract as a ship's captain. This, coupled with the complaint's allegation that the court has jurisdiction based on section 6(a), which provides for FSM Supreme Court exclusive jurisdiction over certain cases including admiralty and maritime cases, indicates that the plaintiff did not base his jurisdictional plea on the parties' citizenship, but upon the case's alleged maritime nature. Kelly v. Lee, 11 FSM Intrm. 116, 117 (Chk. 2002).

[11 FSM Intrm. 117]

Contracts – Damages

Generally, punitive damages are not a contract remedy, because only compensatory damages are usually allowed for breach of contract. Kelly v. Lee, 11 FSM Intrm. 116, 117 (Chk. 2002).

COURT'S OPINION

ANDON L. AMARAICH, Chief Justice:

On August 1, 2002, the defendant, Dong Hun Lee, filed and served his motion to dismiss this case on the ground that the court lacks subject matter jurisdiction because all parties are foreign citizens and therefore there is no diversity jurisdiction. No opposition has been filed.

Failure to file a timely opposition is deemed a consent to the granting of the motion, FSM Civ. R. 6(d), but proper grounds to grant the motion must still exist before a court can grant it. Senda v. Mid-Pacific Constr. Co., 6 FSM Intrm. 440, 442 (App. 1994). The court also notes that its service of its scheduling order was returned undelivered when sent to the plaintiff, Kevin Kelly, General Delivery, Chuuk, but that service was not returned when sent to General Delivery, Yap. The Yap address will be used for future service.

The defendant's motion correctly notes that both parties to this action are citizens of different foreign nations, and that this court does not have diversity jurisdiction when all parties are foreign citizens. The FSM Supreme Court has diversity jurisdiction only in disputes between a state and a citizen of another state, between citizens of different states, and between a state or a citizen thereof, and a foreign state, citizen, or subject. FSM Const. art. XI, § 6(b). Diversity jurisdiction thus does not exist when all the parties are foreign citizens, even though they may be citizens of different foreign nations. In such cases, the court's subject matter jurisdiction must be based on some other ground. Trance v. Penta Ocean Constr. Co., 7 FSM Intrm. 147, 148 (Chk. 1995); International Trading Co. v. Hitec Corp., 4 FSM Intrm. 1, 2 (Truk 1989).

The plaintiff's Complaint, however, does not plead diversity jurisdiction, which is found in section 6(b) of article XI of the Constitution. It clearly pleads that the court has jurisdiction under section 6(a). Complaint, para. 4. A fair reading of the complaint indicates that the plaintiff's claim is based on the defendant's alleged breach of a maritime contract – the plaintiff's employment contract as a ship's captain. This, coupled with the complaint's allegation that the court has jurisdiction based on section 6(a), which provides for FSM Supreme Court exclusive jurisdiction over certain cases including admiralty and maritime cases, indicates that the plaintiff did not base his jurisdictional plea on the parties' citizenship, but upon the case's alleged maritime nature.

Diversity jurisdiction not being the basis on which the court's subject matter jurisdiction is pled in this case, the defendant's motion to dismiss is denied.

Besides damages for the breach of the alleged maritime contract, Kelly's complaint asks for $2,700 in punitive damages. Generally, punitive damages are not a contract remedy, because only compensatory damages are usually allowed for breach of contract. Amayo v. MJ Co., 10 FSM Intrm. 244, 249 (Pon. 2001). Under the court's April 2, 2002 scheduling order, all pretrial motions are to be filed by September 24, 2002. Therefore the parties shall include in any motions filed by that date, their views on whether punitive damages may be recovered in this maritime contract case.