Cite as George v. Alik 13 FSM Intrm. 12 (Kos. S. Ct. Tr. 2004)

[13 FSM Intrm. 12]

CIVIL ACTION NO. 98-02

Trial: July 21, 2004
Submitted: August 27, 2004

Decided: October 5, 2004

APPEARANCES:

[13 FSM Intrm. 13]

HEADNOTES

Contracts

A contract is a promise between two parties for the future performance of mutual obligations. For the promise to be enforceable, there must be an offer, acceptance, consideration and definite terms. George v. Alik, 13 FSM Intrm. 12, 14 (Kos. S. Ct. Tr. 2004).

Contracts

Issues regarding the timing of performance will not necessarily interfere with the enforceability of a contract. George v. Alik, 13 FSM Intrm. 12, 14 (Kos. S. Ct. Tr. 2004).

Contracts

When an agreement does not specify when the payment was to be made by the defendant to the plaintiff, it suggests that the parties did not regard any specific point in time as essential. Accordingly, the court will adopt a "reasonable time" as the time for performance of the contract. George v. Alik, 13 FSM Intrm. 12, 14-15 (Kos. S. Ct. Tr. 2004).

Contracts

When one party fails to perform his promise, there is a breach of contract. A breach of contract which is material justifies a halt in performance under the contract by the injured party. George v. Alik, 13 FSM Intrm. 12, 15 (Kos. S. Ct. Tr. 2004).

Contracts – Damages – Mitigation of

In a breach of contract case, the injured party is expected to take appropriate actions to mitigate, or lessen, his damages. George v. Alik, 13 FSM Intrm. 12, 15 (Kos. S. Ct. Tr. 2004).

Contracts – Damages – Mitigation of

When the defendant failed to buy, as agreed, for the plaintiff's damaged car, the plaintiff was expected to, and did, mitigate his damages by selling the car to someone else. The car's sale price was its fair market value at the time of the sale and the value of the plaintiff's mitigation. George v. Alik, 13 FSM Intrm. 12, 15 (Kos. S. Ct. Tr. 2004).

Contracts – Damages

The trial court has wide discretion in determining the amount of damages in a contract case. In a breach of contract case, the non-breaching party is entitled to damages that will put the party in the position he would have been in if not for the breach. George v. Alik, 13 FSM Intrm. 12, 15 (Kos. S. Ct. Tr. 2004).

Contracts – Damages

When the defendant's obligation under the contract was to pay the plaintiff the amount of $2,400 in return for the damaged vehicle and the damages were mitigated by the plaintiff's sale of the vehicle for $800, the damages are reduced by $800 to $1,600, and judgment will be entered in the plaintiff's favor and against the defendant in the amount of $1,600. George v. Alik, 13 FSM Intrm. 12, 15 (Kos. S. Ct. Tr. 2004).

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COURT'S OPINION

ALIKSA B. ALIKSA, Associate Justice:

This matter was called for trial on July 21, 2004. Snyder Simon appeared for the Plaintiff. Defendant was represented by Canney Palsis, MLSC. The following persons testified at trial: Robert R. George, Cathrine R. George, Greg George, Likiak R. Alik and Remus Nena. Closing arguments were filed by both parties in writing on August 27, 2004. Following the trial and the filings of closing arguments, I took this matter under advisement. This Memorandum sets for the Court's decision and reasoning on this matter.

I. Findings of Fact.

On about January 28, 1998, the Defendant, while driving his own car, hit the Plaintiff's car. The Plaintiff's car was significantly damaged. It is undisputed that the Defendant did damage Plaintiff's car and is liable for damages to the car. After the accident, the parties then met on two occasions to discuss the Defendant's payment to Plaintiff for the damaged car.

The first meeting took place at Kosrae State Hospital a few months after the accident. The Defendant's brothers, Larry Alik and Alik Alik, were present at the meeting. Mr. Alik Alik promised to pay for the damages to Plaintiff's car on behalf of the Defendant. Mr. Alik promised to wire the money to the bank. The wire transfer was never made.

A second meeting of the parties took place in Pohnpei in July 2002. Cathrine Roney George, was present at this meeting. The parties executed a written agreement whereby the Defendant agreed to pay the Plaintiff the amount of $2,400 for the damaged car. In return, the Plaintiff agreed to give the Defendant the damaged car. Mrs. George witnessed the meeting and viewed the written agreement. The document is now missing and was not presented at trial. Both parties agreed that there was an agreement by which the Defendant promised to pay the Plaintiff the amount of $2,400 and the Plaintiff was to give the Defendant the damaged car.

The Defendant did not make any payments to Plaintiff for the damaged car. The Plaintiff later sold the damaged vehicle to one Remus Nena, for the amount of $800. This lawsuit followed.

II. Legal analysis.

A contract is a promise between two parties for the future performance of mutual obligations. For the promise to be enforceable, there must be an offer, acceptance, consideration and definite terms. Malem v. Kosrae, 9 FSM Intrm. 233 (Kos. S. Ct. Tr. 1999). After the accident, the parties reached an understanding of the promises to be completed by each party. In response to damaging the Plaintiff's car, the Defendant agreed to pay the Plaintiff the amount of $2,400. The Plaintiff agreed to give the Defendant the damaged vehicle. The timing of the contract terms were not agreed upon. Issues regarding the timing of performance will not necessarily interfere with the enforceability of a contract. O'Byrne v. George, 9 FSM Intrm. 62 (Kos. S. Ct. Tr. 1999). Accordingly, I conclude that the parties' agreement whereby the Defendant was to pay the Plaintiff the amount of $2,400, and whereby the Plaintiff was to give the Defendant the damaged car, is an enforceable contract.

The timing of the contract terms was not specified in the contract. The fact that the agreement did not specify when the payment was to be made by the Defendant to the Plaintiff suggests that the parties did not regard any specific point in time as essential. See Iriate v. Micronesia Developers, Inc., 6 FSM Intrm. 332 (Pon. 1994). Accordingly, this Court adopts a "reasonable time" as the time for

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performance of the contract. It is undisputed that the Defendant had failed to make any payments to the Plaintiff at any time for the damaged car.

When one party fails to perform his promise, there is a breach of contract. Malem v. Kosrae, 9 FSM Intrm. 233 (Kos. S. Ct. Tr. 1999). Here, the Defendant breached the contract by failing to pay the Plaintiff the amount of $2,400. A breach of contract which is material justifies a halt in performance under the contract by the injured party. O'Byrne v. George, 9 FSM Intrm. 62 (Kos. S. Ct. Tr. 1999). Here, the Defendant's failure to pay the Plaintiff for the damaged car was a material breach. Accordingly, the Plaintiff was justified in halting performance under the contract and was not required to give the damaged car to the Defendant. The Plaintiff was damaged in the amount of the Defendant's obligation for payment to Plaintiff: $2,400.

In a breach of contract case, the injured party is expected to take appropriate actions to mitigate, or lessen, his damages. See Panuelo v. Pepsi Cola Bottling Co of Guam, 5 FSM Intrm. 123 (Pon. 1991). Accordingly, the Plaintiff in this matter was expected to take action to lessen his damages. The Plaintiff did so. He sold of the damaged car to Remus Nena for $800. The sale of the damaged vehicle by the Plaintiff to Remus Nena serves as mitigation of damages. The Plaintiff mitigated or reduced his damages by the sales price of the vehicle: $800.

Defendant argued that the fair market value of the vehicle was $800, as evidenced by the sale price of the vehicle by Plaintiff to Remus Nena. It is important to note that the $800 price paid by Mr. Nena was for the vehicle, after it had been damaged by the Defendant. The value of the vehicle prior to the damage caused by the Defendant was more than $800, as evidenced by the agreement reached by the parties. I conclude that the $800 was the sales price for the damaged vehicle and may reflect the fair market value of the damaged vehicle. I further conclude that $800 was not the fair market value of the vehicle before it was damaged by the Defendant. The fair market value of the vehicle, before it was damaged by the Defendant, was more than $800.

III. Damages.

The trial court has wide discretion in determining the amount of damages in a contract case. In a breach of contract case, the non-breaching party is entitled to damages that will put the party in the position he would have been in if not for the breach. Kihara Real Estate Inc. v. Estate of Nanpei (III), 6 FSM Intrm. 502 (Pon. 1994); O'Byrne v. George, 9 FSM Intrm. 62 (Kos. S. Ct. Tr. 1999). Here, the Plaintiff is entitled to damages that will put him in the position he would have been in, if not for the Defendant's breach.

Based upon the evidence presented at the trial, the terms of the enforceable contract made by the parties, and applicable law, I conclude that the Defendant is liable to the Plaintiff for the total amount of $2,400. The Defendant's obligation under the contract was to pay Plaintiff the amount of $2,400 for the damaged vehicle. The damages were mitigated by the Plaintiff's sale of the vehicle for the amount of $800. Therefore, the damages are reduced by the amount of $800, to the amount of $1,600. Accordingly, taking into consideration the mitigative actions taken by the Plaintiff, the Defendant is liable to the Plaintiff in the amount of $1,600. Judgment shall be entered in favor of the Plaintiff and against the Defendant in the amount of $1,600.