Cite as Aggregate Sys., Inc. v. FSM Dev. Bank,11 FSM Intrm. 514 (Chk. 2003)

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CIVIL ACTION NO. 1994-1002
CIVIL ACTION NO. 1994-1008

Hearing: February 27-28, 2003
Decided: May 8, 2003

APPEARANCES:

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HEADNOTES

Judgments

If money on deposit with the court is eventually paid out in partial satisfaction of a judgment, the statutory interest, at least on the sum paid into court, stops accruing on the date the money was paid into court and the only interest the judgment creditor would be entitled to on that money would be the amount it earned while on deposit with the court. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 517 (Chk. 2003).

Judgments

As a general rule, interest on a judgment ceases to accrue when money is paid into a court of competent jurisdiction pursuant to the court's order. If a part of the principal is paid, then the statutory interest stops on that part. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 517 (Chk. 2003).

Judgments

If money currently deposited with the court ultimately goes toward satisfaction of a judgment, then the statutory interest on whatever part of it that was attributable to the principal when paid into court will have ceased accruing on the date it was paid into court. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 517 (Chk. 2003).

Judgments

Partial payments on a judgment are first to be applied to the accrued interest and then to reduction of the principal. The subsequent statutory interest is computed only on the remaining principal. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 517 n.1 (Chk. 2003).

Judgments

The statutory interest on judgments is simple interest and cannot be compounded. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 517 (Chk. 2003).

Judgments

The deposited money's ultimate recipient is entitled to the interest the money earned while deposited with the court. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 517 (Chk. 2003).

Civil Procedure – Intervention

There are rare cases when it may be proper to allow intervention even after judgment has been entered. Courts are reluctant to allow intervention after entry of judgment and require a strong showing by the applicant. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 518 (Chk. 2003).

Civil Procedure

Although the court must first look to FSM sources of law rather than begin with a review of cases decided by other courts, when the court has not previously construed an FSM Civil Rule which is identical or similar to a U.S. counterpart, it may look to U.S. sources for guidance in interpreting the rule. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 518 n.2 (Chk. 2003).

Civil Procedure – Intervention

The rule is that intervention may be allowed after a final judgment or decree if it is necessary to preserve some right which cannot otherwise be protected, but such intervention will not be permitted unless a strong showing is made. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 518 (Chk. 2003).

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Civil Procedure – Intervention

Both intervention of right and permissive intervention must be upon timely application, but a permissive intervention motion under Rule 24(b) filed after all rights to appeal have expired is never timely. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 518 (Chk. 2003).

Civil Procedure – Intervention

In addition to timeliness, an intervenor must make a three part showing to qualify for intervention as a matter of right under Rule 24(a): an interest, an impairment of that interest, and the inadequacy of representation by existing parties. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 518 (Chk. 2003).

Civil Procedure – Intervention

Generally, absent extraordinary and unusual circumstances, intervention by a party who did not participate in the litigation giving rise to the judgment should not be permitted. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 518 (Chk. 2003).

Civil Procedure – Intervention

An attempt to intervene after final judgment is ordinarily looked upon with a jaundiced eye. The rationale underlying this general principle is the assumption that allowing intervention after judgment will either prejudice the rights of the existing parties to the litigation or substantially interfere with the court's orderly processes. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 518 (Chk. 2003).

Civil Procedure – Intervention

Intervention after judgment has been entered carries with it inherent procedural disruption, and a high risk of prejudice to the original parties by undercutting litigation strategies planned without reference to the intervenor. It is well in such cases to deny intervention to an applicant who does not act promptly to protect his interest in the case, once he learns of it. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 518 (Chk. 2003).

Civil Procedure – Intervention

When a would-be intervenor has no interest in the litigation's subject matter, but only claims an interest in the funds that were generated to pay the judgment, he has other remedies to recover the funds already paid. To allow him to intervene would substantially interfere with the court's orderly process by inserting new causes of action in to post-judgment consolidated cases, which include parties with no interest in any of his claims, and who would be prejudiced by having their collection efforts unnecessarily involved with a landowning dispute. This would create procedural disruption. The would-be intervenor's remedy is to assert whatever causes of action and claims, he deems appropriate, against such defendant(s), as he is advised, in a new action. His application to intervene must therefore be denied. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 519 (Chk. 2003).

Civil Procedure – Intervention

It seems proper to permit an applicant's intervention for the limited purpose of protecting whatever interest he and his lineage may have in the undistributed funds on deposit with the court. As long as the funds remain on deposit, the present parties are not prejudiced. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 519 (Chk. 2003).

Civil Procedure – Intervention

An applicant's motion to intervene will be denied with the exception of his and his lineage's claim to funds on deposit with the court. Intervention will be permitted for the limiting purpose of protecting his and his lineage's claim to those funds if he files and serves a pleading asserting only his claim to

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the funds deposited with the court. Aggregate Sys., Inc. v. FSM Dev. Bank, 11 FSM Intrm. 514, 519 (Chk. 2003).

COURT'S OPINION

RICHARD H. BENSON, Specially Assigned Justice:

This comes before the court on an Application to Intervene as a Party in Civil Action No. 94-1008; Claim for Funds Held by the Court per Order of the Court, filed by Mino Rudolph on March 4, 2002; and the Answer Brief to Motion to Intervene, filed by the FSM Development Bank on June 5, 2002. The motion was heard on February 27-28, 2003. The bank and the Louis Family Inc. responded to the motion.

Mino Rudolph, representing his lineage of Sorlap in Wichap, seeks to intervene in these consolidated cases to claim money that, pursuant to a court judgment and orders in aid thereof, has been paid to the FSM Development Bank in partial satisfaction of its March 31, 1995 judgment against the Louis Family, Inc. and to claim money currently held by the court that would also go toward satisfaction of that judgment. Rudolph asserts that these funds were all derived from rock quarried on land that is his lineage's. In support of this contention he produces a Chuuk State Land Commission Determination of Ownership (issued September 4, 2001) for Lot 64440 known as Nekein (part) on which he asserts that the quarrying took place. Fichiuo Lewis appealed that determination to the Chuuk State Supreme Court trial division (CSSC CA No. 213-2001) on October 17, 2001.

The Louis Family does not oppose Rudolph's intervention as a claimant and Rudolph's proposal that the money on deposit with the court remain deposited with the court while the land determination appeal is pending. But it expressed its concern that in the meantime the interest on the judgment against it will keep accruing. This concern is misplaced. This is because if the money on deposit with the court is eventually paid over to the bank in partial satisfaction of the judgment, the statutory interest, at least on the sum paid into court, would stop accruing on the date the money was paid into court and the only interest the bank would be entitled to on that money would be the amount it earned while on deposit with the court. Senda v. Creditors of Mid-Pacific Constr., 7 FSM Intrm. 664, 670-71 (App. 1996). "'[A]s a general rule interest ceases to accrue when money is paid into a court of competent jurisdiction pursuant to the court's order' . . . . If a part of the principal is paid, then the statutory interest stops on that part." Id. at 670 (citations omitted). Thus, if the money currently on deposit with the court ultimately goes toward satisfaction of the judgment against the Louis Family, then the statutory interest on whatever part of it that was attributable to the principal when paid into court will have ceased accruing on the date it was paid into court.¹ Of course, no interest will accrue on the part deposited that was attributable to the statutory interest because the statutory interest on judgments is simple interest and cannot be compounded. Id. at 670. The deposited money's ultimate recipient is entitled to the interest the money earned while on deposit. Id. at 671.

The bank opposes the intervention on the grounds that it is not timely; that Rudolph has no substantial interest in this litigation's subject matter; that he has other remedies to protect his interests; and that he has failed to comply with Civil Procedure Rule 24(c).

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There are rare cases where it may be proper to allow intervention even after judgment has been entered. Moses v. Oyang Corp., 10 FSM Intrm. 273, 276 (Chk. 2001). Courts are reluctant to allow intervention after judgment has been entered and require a strong showing by the applicant. 7C Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1916, at 444 (2d ed. 1986).² "The rule for intervention after entry of judgment is . . . '[i]ntervention may be allowed after a final judgment or decree if it is necessary to preserve some right which cannot otherwise be protected, but such intervention will not be permitted unless a strong showing is made.’" United States v. Blue Chip Stamp Co., 272 F. Supp. 432, 435 (C.D. Cal. 1967); see also Moten v. Bricklayers, Masons & Plasterers Int'l Union, 543 F.2d 224, 234 (D.C. Cir. 1976) (intervention of right denied because no right involved that could not otherwise be protected, but if situation changed could move to intervene again); United States v. Wilhelm Reich Found., 17 F.R.D. 96, 102 (D. Me. 1954) (applicants must make a strong showing in order to intervene after entry of final judgment).

Rudolph contends that his motion is timely because he did not know until Transco started mining rock there for Penta Ocean's airport project that others claimed that land and that he promptly protested to Transco and Penta Ocean and when they rebuffed him, he proceeded to pursue his claim through Land Commission, and only once Land Commission had ruled in his favor did he try to intervene.

Both intervention of right and permissive intervention must be upon timely application. Tom v. Pohnpei Utilities Corp., 9 FSM Intrm. 82, 88 (App. 1999). A permissive intervention motion under Rule 24(b) filed after all rights to appeal have expired is never timely. Burney v. City of Pawtucket, 728 F.2d 547, 549 (1st Cir. 1984). But Rudolph seeks to intervene of right under Rule 24(a). In addition to timeliness, an intervenor must make a three part showing to qualify for intervention as a matter of right under Rule 24(a): an interest, an impairment of that interest, and the inadequacy of representation by existing parties. Moses v. Oyang Corp., 10 FSM Intrm. 210, 212 (Chk. 2001).

Generally, "absent extraordinary and unusual circumstances, intervention by a party who did not participate in the litigation giving rise to the judgment . . . should not be permitted." National Labor Relations Bd. v. Shurtenda Steaks, Inc., 424 F.2d 192, 194 (10th Cir. 1970). "[A]n attempt to intervene after final judgment is ordinarily looked upon with a jaundiced eye." McDonald v. E.J. Lavino Co., 430 F.2d 1065, 1072 (5th Cir. 1970). The rationale underlying this general principle "is the assumption that allowing intervention after judgment will either (1) prejudice the rights of the existing parties to the litigation or (2) substantially interfere with the orderly processes of the court." Id.; see also United States v. United States Steel Corp., 548 F.2d 1232, 1235 (5th Cir. 1977).

Intervention after judgment has been entered carries with it inherent procedural disruption, and a high risk of prejudice to the original parties by undercutting litigation strategies planned without reference to the intervenor. It is well in such cases to deny intervention to an applicant who does not act promptly to protect his interest in the case, once he learns of it.

Usery v. Brandel, 87 F.R.D. 670, 674-75 (W.D. Mich. 1980).

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Rudolph appears to have no interest in the subject matter of the litigation, the loan between the bank and the Louis Family. He only claims an interest in the funds that the receivership has generated to pay that debt. Rudolph has other remedies to recover the funds already paid to the bank. To allow Rudolph to intervene would substantially interfere with the court's orderly process by inserting new causes of action in to these consolidated cases, which include parties with no interest in any of Rudolph's claims, and who would be prejudiced by having their post–judgment collection efforts unnecessarily involved with a landowning dispute. This would substantially interfere with the court's orderly processes and create procedural disruption. Rudolph's remedy is to assert whatever causes of action and claims, he deems appropriate, against such defendant(s), as he is advised, in a new action. Rudolph's application to intervene must therefore be denied.

That, however, does not end the analysis. The court has on deposit approximately $18,000 (with more expected to be deposited shortly), which was earmarked for payment to the bank as partial satisfaction of its judgment against the Louis Family, and to which Rudolph also lays claim.

In McDonald, an insurance company tried to intervene after judgment to protect its subrogation rights to some funds paid into court, but intervention was denied by the trial court. McDonald, 430 F.2d at 1067-69. The appellate court reversed, and permitted intervention for the limited purpose of protecting the applicant's subrogation interest in a fund not yet distributed. Id. at 1074. Additionally, in Federal Trade Comm'n v. American Legal Distrib., Inc., 890 F.2d 363, 365-66 (11th Cir. 1989), the court denied intervention as to matters already resolved, but allowed intervention as to future sale of the defendant's frozen assets so that the intervenors could make a claim for those assets that it would not otherwise be able to make.

That is analogous to the situation in the present case – the court is in possession of funds not yet distributed and to which Rudolph claims a right. It therefore seems proper to permit Rudolph to intervene for the limited purpose of protecting whatever interest his lineage may have in the undistributed funds on deposit with the court. As long as the funds remain on deposit, neither the Louis Family nor the bank are prejudiced.

The bank also contends that Rudolph's motion should be denied because he has failed to comply with Civil Procedure Rule 24(c) because he has not attached a pleading to his motion. Rule 24(c) provides that: "The motion [to intervene] shall state the grounds therefor and shall be accompanied by a pleading setting forth the claim or defense for which intervention is sought." No pleading was attached.

In Alexander v. Hall, 64 F.R.D. 152, 156 (D.S.C. 1974), the court held that the intervenor's statement in its motion that it would adopt the plaintiffs' complaint as its complaint in intervention was sufficient to satisfy the Rule 24(c) pleading requirement. But in Paasche v. Atlas Powder Co., 31 F. Supp. 31, 32 (N.D. Ill. 1939), the intervenor was granted leave to intervene but did not file any pleading, and since the intervenor was an indispensable party, the entire case was dismissed. In Walker v. Reynolds Metal Co., 87 F. Supp. 283, 284 (D. Or. 1949), intervention was denied when the would-be intervenor failed to file a pleading and the court had no means of discovering the would-be intervenor's position in relation to the litigants. It therefore seems proper that if Rudolph is permitted to intervene he should be required to file a pleading.

Accordingly, Rudolph's application to intervene is denied with the exception of his and his lineage's claim to funds on deposit with the court. Rudolph will be permitted to intervene for the limiting purpose of protecting his and his lineage's claim to those funds if he files and serves, no later than May 26, 2003, his pleading asserting only his claim to the funds deposited with the court. If Rudolph complies with this condition, it is expected that these funds will remain on deposit with the

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court until the land title proceedings in the state judicial system have been resolved.

¹ "Partial payments on a judgment are first to be applied to the accrued interest and then to reduction of the principal. The subsequent statutory interest is computed only on the remaining principal." Senda v. Creditors of Mid-Pacific Constr., 7 FSM Intrm. 664, 670-71 (App. 1996) (citations omitted).

² Although the court must first look to FSM sources of law rather than begin with a review of cases decided by other courts, see FSM Const. art. XI, § 11; Alaphonso v. FSM, 1 FSM Intrm. 209, 214 (App. 1982), when the court has not previously construed an FSM Civil Procedure Rule which is identical or similar to a U.S. counterpart, it may look to U.S. sources for guidance in interpreting the rule, see, e.g., Primo v. Pohnpei Transp. Auth., 9 FSM Intrm. 407, 413 n.3 (App. 2000). FSM Civil Rule 24 governing intervention is similar to the U.S. federal rule of the same number, and this is the first FSM case of someone seeking intervention after judgment.