Cite as Isaac v. Palik,13 FSM Intrm. 396 (Kos. S. Ct. Tr. 2005)

[13 FSM Intrm. 396]

CIVIL ACTION NO. 32-05

Hearing: August 11, 2005
Trial: August 19, 2005
Decided: September 16, 2005

APPEARANCES:

HEADNOTES

Civil Procedure – Summary Judgment

Summary judgment must be granted if the pleading, discovery responses under oath, and affidavits show that there is no genuine issue to any material fact and that the moving party is entitled to a judgment as a matter of law. In considering a summary judgment motion, the court must view the facts and inferences in a light that is most favorable to the party opposing the motion. The burden of showing a lack of triable issues of fact belongs to the moving party. Isaac v. Palik, 13 FSM Intrm. 396, 399 (Kos. S. Ct. Tr. 2005).

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, and for the agreement to be binding it must be definite and certain as to its terms and requirements, and it must identify the subject matter and spell out the essential commitments and agreements with

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respect thereto. Isaac v. Palik, 13 FSM Intrm. 396, 399 (Kos. S. Ct. Tr. 2005).

Property – Deeds

A court interpreting a deed should attempt to determine the meaning of the words used. Isaac v. Palik, 13 FSM Intrm. 396, 399 (Kos. S. Ct. Tr. 2005).

Contracts

When the plaintiff promised to pay the defendant the amount of $10,000 and the defendant promised to sell to the plaintiff certain parcels and convey all her rights therein and certified that she was the "legal title holder" of the subject parcels through certificates of title and as the legal basis for her promise to transfer her ownership rights in the two parcels, the subject matter, the essential commitments and the agreement were all definite and certain as to its terms and requirements. And since the "Quitclaim Deed" is evidence of the parties' agreement for the sale and transfer of title to the subject parcels, the Quitclaim Deed is an enforceable contract. Isaac v. Palik, 13 FSM Intrm. 396, 399-400 (Kos. S. Ct. Tr. 2005).

Contracts – Breach; Civil Procedure – Summary Judgment

When one party fails to perform his promise, there is a breach of contract. Thus, when the plaintiff performed his promise to pay the defendant the amount of $10,000, but the defendant failed to perform her promise to transfer her right, title and interest in two parcels to the plaintiff, the defendant breached the contract with the plaintiff by her failure to perform. The defendant is liable to the plaintiff for breach of contract and the plaintiff is entitled to summary judgment on the issue of defendant's liability for breach of contract. Isaac v. Palik, 13 FSM Intrm. 396, 400 (Kos. S. Ct. Tr. 2005).

Torts – Fraud

In order to make a prima facie case of intentional misrepresentation, a plaintiff must produce some evidence of 1) a misrepresentation by the defendant, 2) scienter or the defendant's knowledge that the statements were untrue, 3) intent to cause the plaintiff to rely on the misrepresentations, 4) causation or actual reliance by the plaintiff, 5) justifiable reliance by the plaintiff and 6) damages. The misrepresentation must be a false and material representation of a past or present fact. Isaac v. Palik, 13 FSM Intrm. 396, 401 (Kos. S. Ct. Tr. 2005).

Torts – Fraud

In considering evidence relevant to misrepresentation, actions or conduct, as well as words, can constitute the necessary misrepresentation for fraud. In some cases, the misrepresentations may be made by a failure to disclose information. Isaac v. Palik, 13 FSM Intrm. 396, 401 (Kos. S. Ct. Tr. 2005).

Torts – Fraud

When the defendant, an elderly widow, unsophisticated in legal terminology and property transactions, in good faith believed that as owner of the two parcels, she had the authority to sell them to the plaintiff and also believed, in good faith, that execution and filing of the "quitclaim deed" would be adequate documentation to transfer title to the plaintiff, the defendant did not have knowledge that her representations regarding her authority to sell the subject parcels were untrue or incorrect, the plaintiff has failed to sustain his burden of proof as to all elements required for the tort of intentional misrepresentation or fraud. Isaac v. Palik, 13 FSM Intrm. 396, 401 (Kos. S. Ct. Tr. 2005).

Contracts – Damages

Generally, punitive damages are not a contract remedy, because only compensatory damages are usually allowed for breach of contract. Isaac v. Palik, 13 FSM Intrm. 396, 401 (Kos. S. Ct. Tr.

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2005).

Torts – Damages – Punitive

Punitive damages may be awarded when a tort was committed with actual malice, or deliberate violence, or the acts complained of were wanton, reckless, malicious and oppressive and are given to enhance compensatory damages. But when the plaintiff has failed to sustain his burden of proof against the defendant on his cause of action based in tort: fraud, and therefore has not prevailed upon his fraud claim, punitive damages may not be imposed. Isaac v. Palik, 13 FSM Intrm. 396, 402 (Kos. S. Ct. Tr. 2005).

Attorney and Client – Fees

The court is without authority to award attorney's fees in the absence of a specific statute or contractual provision allowing recovery of such fees, so that when the plaintiff has not presented any evidence of a statutory or contractual provision which would allow him to recover his attorney's fees from the defendant, his request for the recovery of attorneys' is without merit and must be denied. Isaac v. Palik, 13 FSM Intrm. 396, 402 (Kos. S. Ct. Tr. 2005).

Contracts – Damages

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. Once a party's entitlement to damages is established, the amount of damages is an issue of fact for the finder of fact. Isaac v. Palik, 13 FSM Intrm. 396, 402 (Kos. S. Ct. Tr. 2005).

Costs

Rule 54(d) presumes that costs will be allowed to the prevailing party, unless the court directs otherwise. Accordingly, a prevailing plaintiff may file and serve his requests for costs to be taxed against the defendant, who shall respond to the request within 10 days of the request's service. The court shall thereafter rule on the request for allowance of costs. Isaac v. Palik, 13 FSM Intrm. 396, 402 (Kos. S. Ct. Tr. 2005).

COURT'S OPINION

YOSIWO P. GEORGE, Chief Justice:

Plaintiff's Motion for Partial Summary Judgment was heard on August 11, 2005 on the issue of liability for breach of contract. The Court granted the Plaintiff's Motion for Partial Summary Judgment and set the remaining issued for trial on August 19, 2005. Trial was held on August 19, 2005. Paliknoa Welly appeared for the Plaintiff. Defendant was represented by Sasaki George, MLSC. The follow witnesses testified at the trial: Arkelus Esau, Donnie Palik, Alokoa Sigrah, Grant Jonas and Sepe Tilfas. Closing arguments were submitted in writing on August 26 and 29, 2005.

This Memorandum of Decision sets forth my findings and conclusions on the Plaintiff's Motion for Partial Summary Judgment and on the issues heard at trial on August 19, 2005.

I. PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT.

Plaintiff filed a Motion for Partial Summary Judgment on the issue of Defendant's liability for breach of contract on August 10, 2005. Defendant's Opposition was filed on August 11, 2005. A hearing on Plaintiff's Motion was also held on August 11, 2005. Based upon the arguments of counsel,

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the information submitted to the Court, the file in this matter, and applicable law, I granted the Plaintiff's Motion for Partial Summary Judgment.

The standard for the granting of summary judgment is established by the KRCP, Rule 56(c) as follows:

Rule 56(c)     SUMMARY JUDGMENT

(c) Motion and Proceedings Thereon

. . . The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. . . .

Summary judgment must be granted if the pleading, discovery responses under oath, and affidavits show that there is no genuine issue to any material fact and that the moving party is entitled to a judgment as a matter of law. In considering a summary judgment motion, this Court must view the facts and inferences in a light that is most favorable to the party opposing the motion. Sigrah v. Kosrae State Land Comm'n, 11 FSM Intrm 169 (Kos. S. Ct. Tr. 2002).

The burden of showing a lack of triable issues of fact belongs to the moving party. Kihara Real Estate, Inc. v. Estate of Nanpei (I), 6 FSM Intrm. 48 (Pon. 1993). Based upon the submissions of the parties and the competent evidence present in the record of this matter, I found the following undisputed facts.

The Plaintiff, through his agent, Arkelus Esau, arranged to purchase two parcels of land at Pukusrik: parcels 031-K-07 and 031-K-12. Following negotiations between Arkelus Esau and the Defendant, an agreement was reached that the Plaintiff would purchase the two parcels for the total consideration in the amount of $10,000. A "Quitclaim Deed" was executed on about April 10, 2003. Arkelus Esau signed the Deed on behalf of the grantee, Plaintiff. Defendant signed as Grantor. The "Quitclaim Deed" states the terms of the agreement, the sale of the two parcels to the Plaintiff, the consideration amount of $10,000 paid by the Plaintiff to the Defendant. The "Quitclaim Deed" further states the registry description and areas of the subject two parcels. The "Quitclaim Deed" was witnessed by two persons, notarized and filed with the Kosrae Land Court. The Plaintiff paid the full consideration amount of $10,000 to Defendant by check on April 17, 2005. Defendant cashed the check on April 21, 2003 at the local Bank of the FSM.

Plaintiff sought summary judgment on the issue of liability, based upon breach of contract. 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. Livaie v. Weilbacher, 13 FSM Intrm. 139, 143 (App. 2005). For an agreement to be binding it must be definite and certain as to its terms and requirements, and it must identify the subject matter and spell out the essential commitments and agreements with respect thereto. Kilafwakun v. Kilafwakun, 10 FSM Intrm. 189, 194 (Kos. S. Ct. Tr. 2001). A court interpreting a deed should attempt to determine the meaning of the words used. Melander v. Kosrae, 3 FSM Intrm. 324, 328 (Kos. S. Ct. Tr. 1988).

Here, there was a promise between the Plaintiff and the Defendant for the performance of future obligations. The Plaintiff promised to pay the Defendant the amount of $10,000. The Defendant promised to sell to the Plaintiff parcels 031-K-07 and 031-K-12, convey all her rights therein. Defendant certified that she is the "legal title holder" of the subject parcels through Certificates of Title

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and as the legal basis for her promise to transfer her ownership rights in the two parcels. The subject matter, the essential commitments and the agreement were all definite and certain as to its terms and requirements. The "Quitclaim Deed" is evidence of the agreement between the Plaintiff and the Defendant for the sale and transfer of title to the subject parcels. The Quitclaim Deed is an enforceable contract.

When one party fails to perform his promise, there is a breach of contract. George v. Alik, 13 FSM Intrm. 12, 15 (Kos. S. Ct. Tr. 2004). Here, the Plaintiff performed his promise to pay the Defendant the amount of $10,000. Defendant failed to perform her promise to transfer her right, title and interest in parcels 031-K-07 and 031-K-12 to the Plaintiff. Defendant breached the contract with the Plaintiff by her failure to perform. Defendant is liable to the Plaintiff for breach of contract. Plaintiff is entitled to summary judgment on the issue of Defendant's liability for breach of contract.

Based upon these reasons, at the hearing on Plaintiff's Motion on August 11, 2005, I granted Plaintiff's Motion for Partial Summary Judgment. Trial on the remaining issues was held on August 19, 2005.

II. FINDINGS OF FACT.

Based upon the evidence presented at trial, I find the following facts. Plaintiff, through his nephew and agent, Arkelus Esau, sought to purchase land in Kosrae. Arkelus Esau made arrangements with the Defendant to purchase two parcels in Pukusrik: parcels 031-K-07 and 031-K-12, also called Pukusrik. A document entitled "Quitclaim Deed" was executed by Arkelus Esau, on behalf of the Plaintiff, and by Defendant. Arkelus Esau signed the "Quitclaim Deed" on February 10, 2003. Defendant signed the Deed on April 10, 2003. The "Quitclaim Deed" purports to convey title to parcels 031-K-07 and 031-K-12 from Defendant to the Plaintiff, in consideration for the amount of $10,000. The Defendant certified that she is the "legal title holder of this piece of land with rightful owner document known as Certificate of Title which is inserted in the Kosrae Land Court registry file." The "Quitclaim Deed" was filed with the Kosrae Land Court Registrar on April 10, 2003. The Plaintiff provided payment of $10,000 to Defendant by check # 0451 on April 17, 2003. This check was cashed by the Defendant at the Bank of the FSM on April 21, 2003.

After the "Quitclaim Deed" was executed and after Plaintiff made payment to Defendant, Plaintiff requested the Certificate of Title for the subject parcels. Plaintiff made several requests for issuance of the Certificates of Title in his name to the Kosrae Land Court. Kosrae Land Court declined to issue the Certificates of Title to Plaintiff due to restrictions imposed on selling the subject parcels through the Will of Musrasrik. Musrasrik is the late father of the Defendant, whose Will dated April 17, 1969 is filed with the Kosrae Land Court. The Will of Musrasrik prohibits the sale of his land at Pukusrik. Notwithstanding the prohibition stated in the Will of Musrasrik regarding land at Pukusrik, two Pukusrik parcels had already been sold: 031-K-08 and 031-K-11. For reasons unknown, the Land Commission completed the transfer of title to these two parcels in violation of the Will of Musrasrik.

The land of Pukusrik was originally registered and mapped as two parcels: 031-K-04 and 031-K-05. After the death of Musrasrik, these two parcels at Pukusrik were subdivided by the children of Musrasrik into eight separate parcels: four oceanside and four mountainside parcels. Parcels 031-K-07 and 031-K-012, Defendant's parcels following subdivision, consists of one oceanside parcel and the corresponding mountainside parcel. The land registry for these two parcels list Defendant and her late husband Winton Palik as owners.

Defendant is an elderly widow, unsophisticated in legal terminology and property transactions. Defendant, in good faith, believed that as owner of the two parcels, she had the authority to sell them

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to the Plaintiff. Defendant also believed that execution and filing of the "Quitclaim Deed" would be adequate documentation to transfer title to the Plaintiff. Defendant stated that she knew about the restrictions against sale of Pukusrik land stated in the Will of Musrasrik. However, since other parcels subject to the Will have been sold in the past, Defendant believed that she had authority to sell parcels 031-K-07 and 031-K-12 to the Plaintiff. The Defendant did not intend to defraud the Plaintiff in the transaction.

Defendant does not dispute that she must return the $10,000 paid to her by the Plaintiff. Defendant testified that she has already spend the $10,000, that she is indigent, but will pay back the full amount to the Plaintiff eventually.

III. PLAINTIFF'S REMAINING CLAIMS.

A. Fraud.

Plaintiff seeks judgment and recovery of damages on the cause of action of fraud or intentional misrepresentation. In order to make a prima facie case of intentional misrepresentation, a plaintiff must produce some evidence of:

1 - a misrepresentation by the defendant,

2 - scienter or the defendant's knowledge that the statements were untrue,

3 - intent to cause the plaintiff to rely on the misrepresentations,

4 - causation or actual reliance by the plaintiff,

5 - justifiable reliance by the plaintiff and

6 - damages.

The misrepresentation must be a false and material representation of a past or present fact. Eram v. Masaichy, 7 FSM Intrm. 223, 225 (Chk. S. Ct. Tr. 1995). In considering evidence relevant to misrepresentation, actions or conduct, as well as words, can constitute the necessary misrepresentation for fraud. In some cases, the misrepresentations may be made by a failure to disclose information. Kaminanga v. FSM College of Micronesia, 8 FSM Intrm. 438, 443 (Chk. 1998).

Based upon the evidence presented at trial, that the Defendant is an elderly widow, unsophisticated in legal terminology and property transactions, I conclude that the Defendant did not know that her representations to Plaintiff's agent regarding her authority to sell parcels 031-K-07 and 031-K-12 were incorrect. Defendant, in good faith, believed that as owner of the two parcels, she had the authority to sell them to the Plaintiff. Defendant also believed, in good faith, that execution and filing of the "Quitclaim Deed" would be adequate documentation to transfer title to the Plaintiff. I conclude that the Defendant did not have knowledge that her representations regarding her authority to sell the subject parcels were untrue or incorrect. Based upon the evidence presented at trial, the Plaintiff has failed to sustain his burden of proof as to all elements required for the tort of intentional misrepresentation or fraud. Plaintiff's Second Claim for Relief against the Defendant, fraud, therefore fails.

B. Punitive Damages.

Plaintiff requests the imposition of punitive damages against the Defendant. 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). Accordingly, punitive damages may not be awarded on Plaintiff's breach of contract claim.

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Punitive damages may be awarded when a tort was committed with actual malice, or deliberate violence, or the acts complained of were wanton, reckless, malicious and oppressive and are given to enhance compensatory damages. Primo v. Refalopei, 7 FSM Intrm. 423, 435-36 & n.29 (Pon. 1996). As set forth above, Plaintiff has failed to sustain his burden of proof against the Defendant on his cause of action based in tort: fraud. Therefore, Plaintiff has not prevailed upon his fraud claim. Accordingly, punitive damages may not be imposed upon the Defendant in this matter. Plaintiff's request for the imposition of punitive damages is denied as without merit.

C. Attorneys' Fees.

The Plaintiff seeks an award of attorneys' fees, as a component of damages awarded in this matter. When there is no statutory or contractual basis for a request for attorney fees, each party will normally bear its own attorney's fees. FSM Telecomm. Corp. v. Worswick, 9 FSM Intrm. 6 (Yap 1999). This court is without authority to award attorney's fees in the absence of a specific statute or contractual provision allowing recovery of such fees. Phillip v. Marianas Ins. Co., 12 FSM Intrm. 464, 471 (Pon. 2004). The Plaintiff has not presented any evidence of a statutory or contractual provision which would allow Plaintiff to recover his attorney's fees from Defendant. Accordingly, Plaintiff's request for the recovery of attorneys' fees from the Defendant is without merit and must be denied.

D. 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). Once a party's entitlement to damages is established, the amount of damages is an issue of fact for the finder of fact. Kosrae v. Langu, 9 FSM Intrm. 243, 250 (App. 1999). Based upon the evidence presented at trial, I conclude that the Plaintiff has been damaged in the amount of $10,000.

IV. JUDGMENT.

Judgment is entered in favor of the Plaintiff and against the Defendant in the amount of ten thousand dollars ($10,000).

V. ORDER ON COSTS

Plaintiff, in his Motions for Expedited Hearing and for Order in Aid of Judgment, sought costs to be assessed against the Defendant. KRCP Rule 54(d) provides that costs be allowed as a matter of course to the prevailing party. The Plaintiff is the prevailing party in this matter. KRCP Rule 54(d) presumes that costs will be allowed to the prevailing party, unless the Court directs otherwise. Accordingly, Plaintiff may file and serve his requests for costs to be taxed against the Defendant. Defendant shall respond to the request within 10 days of service of the request. The Court shall thereafter rule on the Plaintiff's request for allowance of costs.