For the Appellant:   Stephen V. Finnen, Esq.

                                     P.O. Box 1450

                                     Kolonia, Pohnpei   FM   96941

* * * *

MARTIN G. YINUG, Associate Justice:

      This is an appeal of a judgment in favor of the plaintiff Fonoton Municipality and against the defendant Ponape Island Transportation Co. (PITC) in the amount of $24,500 on Fonoton’s claim of unjust enrichment. Other portions of the judgment were not appealed. The complaint originally pled a civil rights cause of action in addition to the unjust enrichment claim, but the civil rights claim was dismissed upon Fonoton’s motion made at the beginning of the trial. Fonoton did not file a responsive brief, and no other party appeared in the appeal. Judgment affirmed.

      The facts are set out at length in the trial court’s findings of fact and conclusions of law reported in Fonoton Municipality v. Ponape Island Transp. Co., 12 FSM Intrm. 337, 344-45 (Pon. 2004), and are summarized as follows. Fonoton desired to purchase 27 Yamaha outboard motors for use in its fisheries program. PITC offered the best price, but was prohibited by its distributorship agreement with Yamaha from selling outboard motors directly in Chuuk. The parties, along with one Rively Walter (Walter was originally a named defendant but was never served with the complaint or PITC’s cross-complaint and was dismissed at the time of trial) devised a plan whereby Billy Jonas, who was the manager of PITC, Walter, and Lukner Weilbacher formed a company called PLR in Pohnpei in April of 1998. Fonoton and PLR reached an agreement whereby PLR would sell the 27 motors to Fonoton after PLR had purchased them from PITC in Pohnpei, thus skirting the restriction in PITC’s distributorship agreement with Yamaha that prohibited direct sales by PITC in Chuuk. Fonoton’s check in the amount of $54,000 for the motors was made payable to PLR, and Jonas opened an account in the name of PLR into which he deposited the check. Jonas remitted $15,500 to Yamaha in Japan to get the order underway. The remainder of the money, with the exception of $3,500, was given to PITC and was used for various purposes unrelated to the outboard motor transaction. Fonoton received only 13 of the 27 motors it ordered, and sued to recover its losses.

      PITC raises fourteen issues on appeal. The first issue presented in PITC’s statement of issues (PITC addresses its issues in a different order in the body of its brief) is that the trial court’s findings of fact were clearly erroneous. This is a challenge to the sufficiency of the evidence in support of the trial court’s findings of fact ) the standard of review applicable to the trial court’s findings of fact is whether they are clearly erroneous. Damarlane v. United States, 8 FSM Intrm. 45, 53 (App. 1997). A finding is clearly erroneous when the reviewing court, after considering the evidence in the light most favorable to the appellee, is left with the firm and definite conviction that a mistake has been committed. Id. The trial court’s findings are presumptively correct. Thomas v. George, 8 FSM Intrm. 517, 522 (App. 1998). The remaining issues are interrelated and go to PITC’s contention that the trial court erred as a matter of law when it afforded Fonoton relief on its unjust enrichment claim against PITC. Issues of law are reviewed de novo. Kosrae v. Langu, 9 FSM Intrm. 243, 248 (App. 1999).

      We consider these questions in turn.

A.  The sufficiency of the evidence

      PITC challenges nine of the trial court’s findings of fact that it asserts are clearly erroneous. Appellant’s Br. at 35-40. While PITC has provided certain portions of the trial transcript in its brief and as part of its appendix, it does not direct the court to the relevant portions of the transcript that show that the trial court’s findings were clearly erroneous. Since it is not the court’s responsibility to search the record for error, the parties’ briefs must clearly identify those portions of the record which support their arguments. Nakamura v. Bank of Guam (I), 6 FSM Intrm. 224, 228 (App. 1993). In some instances, PITC asserts that there was no evidence to support certain findings, Appellant’s Br. at 36-39 (¶¶ 8-10,12,15), but because PITC has not provided a full transcript, the court cannot make the determination that there was no evidence before the court to support these findings. A transcript setting forth all of the evidence relevant to the trial court’s decision must be provided by the appellant if he is arguing on appeal that the trial court’s findings lack evidentiary support. Cheida v. FSM, 9 FSM Intrm. 183, 189 (App. 1999). Thus we are unable to identify any of the trial court’s findings of fact which are clearly erroneous.

      These concerns apart, PITC urges that Billy Jonas, who was PITC’s manager at relevant times, testified out of self-interest. PITC challenges his credibility. However, it is for the trial judge to assess a witness’ credibility, because it has the opportunity to observe the witness and the manner in which he testifies. Palik v. Kosrae, 8 FSM Intrm. 509, 512 (App. 1998). On the central issue of how the money from the Fonoton’s $54,000 check to PLR was disposed of, the court was presented with evidence that it was entitled to believe that all but $3,500, or $51,500, went to PITC. Billy Jonas testified that as PITC’s manager he was looking out for business for the company, Appellant’s Appx. at 66; that the underlying reason for the transaction was to give PITC business, id.; that the $54,000 check from Fonoton was deposited into PLR’s account, id. at 70; that $15,500 of that amount was used to initiate PITC’s order of motors from Japan, id. at 71; and that the remainder of the money in the PLR account, with the exception of $3,500, went to PITC, id. at 72-74. The trial court’s findings on these points were supported by the evidence, and were not clearly erroneous.

      PITC raises a further issue with respect to Jonas’s testimony about the transfer of the money. PITC challenges his testimony on the basis that Jonas offered no documentary evidence to show how the money from the $54,000 check was disposed of. PITC urges that Jonas "should have had receipts or records of transfers," Appellant’s Br. at 44, and further contends that "[t]o allow such suspect testimony to prove a transfer of funds is highly detrimental to the development of business principles in this nation, and there was no attempt to include any relevant documentary evidence on this transfer, such as bank or account information or receipts." Id. at 47. PITC appears to urge adoption of a rule that would require a party wishing to prove a money transfer to do so by documentary evidence only. We are unable to see this as a panacea in such cases. Certainly, sound documentary proof is preferable. But documents can be fabricated just as testimony can be. Every time a witness takes the stand the trier of fact must determine whether that witness is believable, and we remain confident that a trier of fact can perform this function regardless of whether financial transactions are the subject of the testimony. For example, a portion of the $54,000, or $30,000, was transferred at one time. Billy Jonas testified as follows:

Appellant’s Appx. at 70-71. Jonas went on to testify that the reason he did not use a cashier’s check to make the transfer was because it would please his co-workers to count that much cash, and would make them feel that the company was doing well. Id. at 72-73. The trier of fact was entitled to believe this testimony, which was supported by other evidence, including the memorandum of agreement among PITC, K/S Video Shack & Enterprises, and SeaSky Enterprises, Fonoton’s Ex. No. 4 (discussed infra), that PITC had in fact received full payment for the 27 outboard motors. Thus the trial court did not err to the extent that it relied on Jonas’s testimony in determining that PITC had received the bulk of the money from the $54,000 check.

B.  Unjust enrichment

      It is undisputed that there was a contract between PLR and Fonoton for Fonoton’s purchase of the 27 motors. This contract forms the linchpin for PITC’s unjust enrichment contentions. PITC urges that from the beginning, Fonoton’s remedy was to sue PLR, and only PLR, for the damages that it suffered as a result of PLR’s failure to deliver the motors, and not to claim unjust enrichment against PITC. In support of this argument, PITC asserts that the equitable doctrine of unjust enrichment is to be applied only where there is no enforceable contract, and that it was error for the court to grant equitable relief in this instance because of the existence of PLR’s contract with Fonoton.

      The equitable doctrine of unjust enrichment operates in the absence of an enforceable contract. Kilafwakun v. Kilafwakun, 10 FSM Intrm. 189, 195 (Kos. S. Ct. Tr. 2001). The principle requires that the party receiving something of value either pay for it or return it, and is based on the notion that one individual should not be allowed to enrich himself at another’s expense. Id. The doctrine was applied in Mauricio v. Phoenix of Micronesia, 8 FSM Intrm. 248, 262 (Pon. 1998), where the court found that a commercial enterprise had been unjustly enriched through the sale of a postcard containing the plaintiff’s image. In Adams v. Island Homes Construction, Inc., 11 FSM Intrm. 218, 232 (Pon. 2002), the court declined to apply the doctrine to permit the amendment of a complaint where the essential allegations were for breach of contract. The court noted that the contracts in question were "express agreements, and unjust enrichment is a theory applicable to implied contracts." Id.

      Here PITC urges that Fonoton’s remedy was to sue PLR on the contract it had with it. PITC notes that "[i]t is clear from the testimony that PITC was not involved in the original transaction. The written contract was between PLR and Fonoton." Appellant’s Br. at 42. However, these circumstances militate in favor of, and not against, the application of the equitable doctrine of unjust enrichment. To be sure, Fonoton had a contract remedy against PLR. That was, however, by no

means its exclusive remedy. By definition, PITC was not a party to the contract between PLR and Fonoton: as between PITC and Fonoton no privity of contract exists. It is for this very reason that unjust enrichment applies between Fonoton and PITC, since that principle operates in the absence of a contract between the parties concerned. The facts do not support PITC’s contention that the contractual relationship between Fonoton and PLR must govern the legal relationship between Fonoton and PITC. Such a holding would deprive Fonoton of an acknowledged legal right that it has under FSM law, Mauricio, 8 FSM Intrm. at 262; Kilafwakun, 10 FSM Intrm. at 195, and under the facts proven at trial.

      PITC urges that in order to secure the government money to pay for the engines, Fonoton had to rely on the contract between it and PLR. It contends that the Chuuk State Financial Management Act and the FSM Financial Management Act applied, and that the contract between PLR and Fonoton was necessary to secure compliance with these laws so that the check for $54,000 payable to PLR could be issued. PITC may well be correct on this point. However, it is the disposition of the check funds that forms the basis of this case, not whether the any statutory requirements for the issuance of the check were met in the first instant. Thus the necessary steps for the issuance of the check do not limit Fonoton’s remedy to a contract action against PLR.

      PITC also contends that by allowing Fonoton to sue PITC for unjust enrichment, PITC was deprived of any defenses it may have had against PLR. PITC urges that "[i]f a contract had been pled and tried, PLR would be sued as the contracting party, then if it in fact had a claim, it could bring a

claim against PITC for a potential breach of contract, which would allow PITC to raise whatever defenses were appropriate." Appellant’s Br. at 48. This ignores the realities of this case. PLR had nothing to lose, because it no longer had a business existence at the time suit was filed. Indeed, it appears from the record before the court that PLR did not answer the complaint (which alleged unjust enrichment against all of the defendants), and in fact PITC obtained an entry of default against PLR on its cross-claim on February 27, 2001. To suggest that PLR would have behaved differently if the complaint had alleged a contract cause of action against it, and would not only have answered, but filed a third-party complaint against PITC, is disingenuous. PLR would have had no more reason for actively litigating this case than it did under the complaint alleging unjust enrichment, since different allegations naming PLR as a defendant in a contract action would not have changed the relief that Fonoton was seeking from PLR, i.e., a money judgment. The more likely result is that PLR would have defaulted, just as it apparently did under the complaint as pled, and as it certainly did with respect to PITC’s cross-claim. Under these circumstances, PITC cannot be heard to say that it was deprived of contract defenses as a potential defendant in a third-party claim against it by PLR when Fonoton failed to allege a contract cause of action against PLR.

      A corollary to PITC’s contention that a contract action against PLR was Fonoton’s only remedy is PITC’s assertion that the record demonstrates no consent by the parties to try the case as a contract action, and that because a suit based on contract was its only remedy, the judgment cannot stand. PITC points to Rule 15(b) of the FSM Rules of Civil Procedure, which provides in part that "[w]hen issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings." Again, this argument flows from PITC’s assertion that Fonoton’s only remedy was to sue in contract. As just discussed, this is not so. Fonoton had a plain right under the facts of this case to pursue PITC for unjust enrichment. The action was tried as it was pled, which is to say an action for unjust enrichment. Thus, it is of no moment whether the parties consented under Rule 15(b) to try this matter as a contract action.

      PITC contends that the damages awarded by the trial court were not supported by the facts. The court awarded judgment in Fonoton’s favor in the amount of $24,500, based on testimony that Fonoton did not receive 14 motors, for which it had paid $2,000 each. This amounted to $28,000. From this amount the trial court deducted $3,500, which was kept by Jonas and Weilbacher and Weilbacher’s wife. The $28,000 amount, minus the $3,500 retained by Jonas and the Weilbachers, leaves $24,500, which is the amount of the judgment in favor of Fonoton and against PITC. PITC calculates damages in a different manner, based on allowing a profit of $350 to $400 per motor to PLR. According to PITC, if PITC had

Appellant’s Br. at 49. However, this manner of calculation does not take into account Billy Jonas’s testimony that the $350 to $400 profit per engine was not really profit, but was used for PITC’s other businesses. Appellant’s Appx. at 74. Thus, the trial court’s damages calculations were supported by the evidence.

      PITC asserts that the trial court committed error when it failed to grant PITC’s motion to dismiss at the end of Fonoton’s case in chief. Rule 41(b) of the FSM Rules of Civil Procedure provides that

      We affirm the judgment entered after trial. A predicate to this is that Fonoton not only made out a prima facie case for unjust enrichment sufficient to defeat PITC’s motion, but went further, and established by a preponderance of the evidence each element of its case. Thus it was not error for the trial court to deny the motion to dismiss.

      PITC asserts that the trial court erroneously admitted Fonoton’s Exhibit No. 4 at trial. PITC states that "[t]he appellate court is requested to review the admissibility of this document, and even if it is determined to be admissible, to question the weight of evidence given to the document." Appellant’s Br. at 19. Fonoton’s Exhibit No. 4 is a memorandum of agreement among PITC, K/S Video Shack & Enterprises, and SeaSky Enterprises. The agreement acknowledges that PITC had received payment in full for the 27 outboard motors ordered by Fonoton, that 13 had been delivered, and PITC still owed the balance of 14 units. It also sets out a plan whereby PITC was to order outboard motors and fulfill its commitment to Fonoton through the assistance of the other signatories to the agreement. On behalf of PITC, the agreement is signed by Damian Primo, its president, and Billy Jonas, its manager. Lukner Weilbacher signed on behalf of SeaSky Enterprises. (In its brief, PITC assesses SeaSky’s role in the agreement as being similar to that played by PLR in the agreement between PLR and Fonoton.) The agreement was cited by the trial court in its finding of fact number 16, when it found that PITC had received full payment for the motors that Fonoton ordered, and that 14 remained to be delivered. PITC questions the relevance of the document, and also asserts that even if it is admissible, it should be given little weight. We conclude that the agreement is relevant. PITC acknowledges in the agreement that it had received full payment for the 27 motors and still owed Fonoton 14 motors. This is admissible as an admission of a party-opponent under Rule 801(d)(2) of the FSM Rules of Evidence. Therefore the trial court did not err when it relied on Fonoton’s exhibit number 4 when it made its finding of fact No. 16. The exhibit was properly admitted, and the trial court was entitled to give it such weight as it saw fit.

      PITC contends that the actions of the other parties prevent them from being afforded equitable relief. PITC asserts that the doctrine of unclean hands prevents Fonoton from recovery. Unclean hands was not pled as a defense to Fonoton’s claim, and it was not argued in PITC’s closing statement. Also, a review of PITC’s appendix does not show that this issue was raised below, and thus it was waived. Paul v. Celestine, 4 FSM Intrm. 205, 210 (App. 1990). However, even if we were to consider this issue, we would still find that the trial court appropriately granted Fonoton relief based on its claim of unjust enrichment. The testimony supports the trial court’s finding that the purpose of establishing PLR was to circumvent the restriction in PITC’s distributorship agreement with Yamaha regarding PITC’s ability to make direct sales in Chuuk. Fonoton Municipality, 12 FSM Intrm. at 344 (Finding of Fact No. 8). All the parties were involved in this undertaking. However, as between Fonoton and PITC, PITC’s hands were more unclean than Fonoton’s, since it was PITC’s own ongoing distributorship agreement with Yamaha that it set out to circumvent or breach, Fonoton was not a party to that agreement, and

unlike PITC, owed no contractual or other obligation to Yamaha. In such a situation, the court may afford relief to the party who bears a lesser degree of fault. Senda v. Semes, 8 FSM Intrm. 484, 500 (Pon. 1998). Thus the trial court did not err when it granted Fonoton’s relief on its unjust enrichment claim.

III.  Conclusion

      For the foregoing reasons, the judgment of the trial court is affirmed in its entirety.