Cite as Lee v. Han,13 FSM Intrm. 571 (Chk. 2005)

[13 FSM Intrm. 571]

CIVIL ACTION NO. 2003-1023

Decided: December 29, 2005

APPEARANCES:

HEADNOTES

Civil Procedure – Motions

A filing that asks the court to do something is considered a motion because a request to the court asking for an order is a motion regardless of what the party has chosen to call it. Lee v. Han, 13 FSM Intrm. 571, 575 & n.1 (Chk. 2005).

Civil Procedure – Parties

In case of any transfer of interest, the action may be continued by the original party, unless the

[13 FSM Intrm. 572]

court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party. The motion for substitution may be made by any party and shall be served on the parties in the manner provided in Rule 5 and upon persons not parties in the manner provided in Rule 4 for the service of a summons. Lee v. Han, 13 FSM Intrm. 571, 575 (Chk. 2005).

Civil Procedure – Parties

Before the court can act on a motion to substitute a party, the motion would have to be served on all other parties and also on the non-party sought to be substituted and proof of this service should be filed with the court. Lee v. Han, 13 FSM Intrm. 571, 575 (Chk. 2005).

Civil Procedure – Motions

Failure to oppose a motion is generally deemed a consent to the motion. But even if there is no opposition, the court still needs good grounds before it can grant the motion. Lee v. Han, 13 FSM Intrm. 571, 576 (Chk. 2005).

Jurisdiction – Diversity

Minimal diversity of citizenship, not complete diversity, is the rule in the Federated States of Micronesia. Lee v. Han, 13 FSM Intrm. 571, 576 (Chk. 2005).

Courts – Forum non Conveniens

Forum non conveniens is a common law doctrine which allows a court the discretion to refuse to hear a case, even though personal jurisdiction and venue are properly established, if the forum is inappropriate or inconvenient for the defendant. Lee v. Han, 13 FSM Intrm. 571, 576 (Chk. 2005).

Common Law

The court may employ a common law principle from other jurisdictions with a common law tradition when it is not contrary to the FSM Constitution, statutes, or custom and tradition and if it is suitable for adoption here. Lee v. Han, 13 FSM Intrm. 571, 576 n.2 (Chk. 2005).

Courts – Forum non Conveniens

Forum non conveniens is not a claim that the court lacks jurisdiction over the case, but is a doctrine that the court may, as a matter of its sound discretion, decline jurisdiction and dismiss a case when the parties' and the witnesses’ convenience and the ends of justice would be better served if the action were brought and tried in another forum in which the action could be heard. Lee v. Han, 13 FSM Intrm. 571, 576 (Chk. 2005).

Courts – Forum non Conveniens

Generally, a court with jurisdiction over a case is bound to decide it. The forum non conveniens doctrine is the rare exception to this principle, and the defendant's burden on a forum non conveniens motion to dismiss is a strong one. The doctrine does not come into play unless the court in which the action was brought has both subject matter and personal jurisdiction and is a proper venue. Lee v. Han, 13 FSM Intrm. 571, 577 (Chk. 2005).

Courts – Forum non Conveniens

The objection of forum non conveniens is not a defense of improper venue, which must be asserted by preliminary motion or answer. It is simply a motion which may be addressed to the discretion of the court at any time. It may be raised after as well as before answer, but the objection should be taken with reasonable promptness. Lee v. Han, 13 FSM Intrm. 571, 577 (Chk. 2005).

Courts – Forum non Conveniens

There is no time limit on when a motion to dismiss on the ground of forum non conveniens can

[13 FSM Intrm. 573]

be made. However, if the litigation has progressed significantly in the court a defendant's belated assertion that that forum is inconvenient is likely to be dimly viewed by the court. Lee v. Han, 13 FSM Intrm. 571, 577 (Chk. 2005).

Courts – Forum non Conveniens

When, although it has been quite some time since the suit was filed, only the issues of personal jurisdiction over a defendant and whether he had defaulted have been litigated; no discovery has been requested; and trial is months away, the court cannot say that the litigation has progressed significantly with respect to that defendant. Thus that defendant's forum non conveniens motion is not too late and the issue has not been waived. Lee v. Han, 13 FSM Intrm. 571, 577 (Chk. 2005).

Courts – Forum non Conveniens

There is one mandatory prerequisite and a number of factors that the court must consider before granting a forum non conveniens motion to dismiss. The forum non conveniens doctrine can only be applied if the plaintiff has an adequate alternative forum. The factors to be considered include both private and public interests. The private interest factors are: 1) the relative ease of access to sources of proof; 2) the availability of compulsory process for the attendance of unwilling witnesses; 3) the costs of obtaining the attendance of willing witnesses; 4) the possibility of a site view, if appropriate to the case; and 5) any other practical problems that make a case's trial easy, inexpensive, and expeditious. The public interest factors to consider include: 1) administrative difficulties from court congestion; 2) the local interest in having localized disputes decided locally; 3) the interest in having a diversity case tried in a forum at home with the law that must govern the action; and 4) avoidance of any unneeded problems in the conflict of laws or the application of foreign law. Lee v. Han, 13 FSM Intrm. 571, 577 (Chk. 2005).

Courts – Forum non Conveniens

When most of the parties to a contract, and all of the parties that that contract required future payment to, and payment from, are Korean citizens and residents although at the time the contract was executed most were resident in Chuuk; when this, and the Korean, lawsuit are all about that payment; when the parties to the Korean lawsuit (with the exception of a d/b/a of a Korean citizen and resident which is located in Texas) are all Korean citizens and residents; when the plaintiff in this case, and his wife and another Korean citizen and resident, are the plaintiffs in the Korean case; when the two Korean defendants in this case are the defendants in the Korean case; when all of the probable witnesses, with the exception of one (and maybe one other Chuukese), are present in Korea and no compulsory process is available to bring any of them to Chuuk if they are unwilling; when the cost to bring willing witnesses to Chuuk is higher than to bring the one possible witness in Chuuk to Korea, and if his testimony were needed, his deposition could have been noticed and taken here anytime while this case was pending in this court, but was not; when the sources of proof, to the extent they are documents from the parties' business records from when they were all in business together in Chuuk, are available in Korea and a site view is not needed; trying the case here would not be as easy, inexpensive, or expeditious as the current case in Korea, and it appears that it would be duplicative. The private interest factors thus strongly favor a forum non conveniens dismissal. Lee v. Han, 13 FSM Intrm. 571, 577-78 (Chk. 2005).

Civil Procedure – Service

The FSM Supreme Court can issue subpoenas to persons in foreign countries only to those who are FSM nationals or residents. Lee v. Han, 13 FSM Intrm. 571, 578 n.3 (Chk. 2005).

Courts – Forum non Conveniens

When, although the dispute originated in Chuuk, it cannot be said that it is a local dispute in which there is local interest even though Chuuk contract law would apply; and when the FSM Supreme

[13 FSM Intrm. 574]

Court would be more at home with Chuuk contract law than a Korean court, but there appears to be no reason why the Korean court would not be capable of adequately applying Chuuk contract law since it is based primarily on common law principles, widely known and discoverable, although Korea is not a country in the common law tradition, the public interest factors do not preclude the application of the forum non conveniens doctrine. Lee v. Han, 13 FSM Intrm. 571, 578 (Chk. 2005).

Courts – Forum non Conveniens

When there is an adequate, alternative forum in Korea (in which the principal parties are actively litigating the issue); when the private interest factors strongly favor Korea as the most convenient forum and Chuuk as being an inconvenient forum; and when the public interest factors do not contradict this, the court concludes that this case should be dismissed under the forum non conveniens doctrine. Lee v. Han, 13 FSM Intrm. 571, 578 (Chk. 2005).

Contracts – Forum Selection Clause

Parties may by contract designate a forum in which any litigation is to take place, and forum selection clauses are presumed valid, and enforcement will be ordered absent a strong showing that it should be set aside, and unless it clearly would be unreasonable and unjust, or that the clause is invalid for such reasons as fraud or overreaching. Lee v. Han, 13 FSM Intrm. 571, 578 (Chk. 2005).

Contracts – Forum Selection Clause

A forum selection clause would usually be given full effect, although a forum selection clause may be subject to judicial scrutiny for fundamental fairness. In determining fundamental fairness, courts consider such factors as: 1) whether the forum was selected by one party as a bad faith tactic to discourage pursuit of legitimate claims by the other; 2) whether consent to the forum selection clause was obtained by fraud or overreaching; or 3) whether the contesting party had no notice of the forum provision. Lee v. Han, 13 FSM Intrm. 571, 579 (Chk. 2005).

Contracts – Forum Selection Clause; Courts – Forum non Conveniens

When the plaintiff has actively pursued litigation in a Korean court, both before and during the time the litigation was pending here, and the defendant actively defended that action, it would be unreasonable and unjust to require the Korean defendants to litigate this case twice, with the second time in a forum where, although it (Chuuk) was convenient when it was chosen and all the parties had business interests here, is no longer convenient, reasonable, or just. Under the circumstances, the plaintiff has waived enforcement of the forum selection clause. Limited to this case's particular facts and circumstances, the forum selection clause will not bar dismissal of this case without prejudice under the forum non conveniens doctrine. Lee v. Han, 13 FSM Intrm. 571, 579 (Chk. 2005).

Civil Procedure – Dismissal

When a plaintiff has been served with notice from the court that, if further steps were not taken to prosecute a case against a defendant, the case against him would be subject to dismissal for want of prosecution and when no steps have been taken to further prosecute the case against that defendant, the case against that defendant will be dismissed with prejudice for lack of prosecution. Lee v. Han, 13 FSM Intrm. 571, 579 (Chk. 2005).

*    *    *    *

COURT'S OPINION

DENNIS K. YAMASE, Associate Justice:

There are three filings before the court for its consideration:

[13 FSM Intrm. 575]

1) a document improperly entitled as a "Complaint," with attachments that purports to show that the plaintiff, Dong Hun Lee, has transferred his interest in the settlement agreement that underlies his claim in this suit to an entity called C.I.T.A. Trading Company and further stating that Lee should have nothing further to do with this suit, filed on October 26, 2005 by defendant Won Don Han, acting pro se;

2) Plaintiff's Motion for Determination That Service of Process on Defendant Han Was Valid or That Defendant Han Waived Threshold Defenses in General Including Defense of Service of Process and Motion for Reinstatement of the Default Judgment Against Defendant Han, filed on November 14, 2005, by plaintiff Dong Hun Lee, acting pro se; and

3) Motion to Dismiss on Ground of Forum non Convenience [sic], filed on November 15, 2005 by defendant Won Don Han by and through his counsel of record.

I. FILING NO. 1 – MOTION TO SUBSTITUTE

In the first filing,¹ defendant Han asks the court to substitute C.I.T.A. Trading Company for Dong Hun Lee as plaintiff in this matter on the ground that Lee no longer has an interest in the promissory note and settlement agreement upon which this lawsuit is based. Civil Procedure Rule 25(c) therefore applies. It states that:

In case of any transfer of interest, the action may be continued by . . . the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party. Service of the motion shall be made as provided in subdivision (a) of this rule.

FSM Civ. R. 25(c). Subdivision (a) provides that "[t]he motion for substitution may be made by any party . . . and . . . shall be served on the parties in the manner provided in Rule 5 and upon persons not parties in the manner provided in Rule 4 for the service of a summons."

Therefore before the court can act on this motion, it would have to be served on all other parties and also on C.I.T.A. Trading Company and proof of this service should be filed with the court. This has not been done, although the court's October 27, 2005 order pointed this deficiency out to all parties. Although a party would usually be given sufficient time to accomplish this task and to allow those served an adequate time to respond, because of the court's ruling on the other two filings, infra, it is unnecessary to await compliance with Rule 25 or to rule on this motion.

II. FILING NO. 2 – MOTION TO REINSTATE JUDGMENT

Lee's November 14, 2005 motion contains lengthy legal arguments that his service of process on defendant Won Don Han of the original was valid; that if it was not valid, defendant Won Don Han waived any right to challenge its validity by appearing; that the amended complaint's service was therefore valid; that defendant Won Don Han's default was properly entered and that the default judgment against him that the court vacated by its May 20, 2005 Order Granting and Denying Relief from Judgment, Lee v. Lee, 13 FSM Intrm. 252 (Chk. 2005), should be reinstated. In essence, Lee asks that the court reconsider its May 20, 2005 ruling.

[13 FSM Intrm. 576]

No response has been filed to Lee's motion. Failure to oppose a motion is generally deemed a consent to the motion. Naoro v. Walter, 11 FSM Intrm. 619, 621 (Chk. 2003); FSM Civ. R. 6(d). But even if there is no opposition, the court still needs good grounds before it can grant the motion. Senda v. Mid-Pacific Constr. Co., 6 FSM Intrm. 440, 442 (App. 1994).

The court has carefully considered this motion. The bulk of the reconsideration motion consists of restatements of arguments about service of process and waiver of defenses that the court previously rejected in its May 20, 2005 order. Nothing in the motion persuades the court to alter its previous decision. The motion to reinstate the previous default judgment against defendant Won Don Han is therefore denied.

Lee's motion also asks that the court confirm that his September 1, 2005 service of the Amended Complaint on defendant Won Don Han was valid. Won Don Han has not moved to challenge the validity of this service. No confirmation is therefore necessary.

Lastly, Lee's motion, apparently in response to Won Don Han's motion to dismiss (filing no. 3), asserts that the FSM Supreme Court is the correct forum for this lawsuit to enforce the September 27, 2000 Settlement Agreement, in part because that agreement stated that it was enforceable in FSM courts, and in part because this "defense" had been waived because it was not raised earlier. These points will be addressed below.

III. FILING NO. 3 – MOTION TO DISMISS

Won Don Han's motion to dismiss has two grounds: 1) that there is a lack of subject matter jurisdiction because complete diversity of citizenship between the parties does not exist or because all parties are foreigners and diversity jurisdiction does not exist, and 2) that under the doctrine of forum non conveniens the case should be dismissed because the action would more conveniently be tried in another forum.

The first ground is without merit. Minimal diversity of citizenship, not complete diversity, is the rule in the Federated States of Micronesia. Luzama v. Ponape Enterprises Co., 7 FSM Intrm. 40, 48 (App. 1995). Wesley W. Simina, a citizen of Chuuk, is also a defendant, so minimal diversity is present and all parties are not foreigners. The court has subject matter jurisdiction over the case.

Won Don Han also moves that this case be dismissed under the doctrine of forum non conveniens because a virtually identical case, filed in 2002, has been tried in a Korean court. "Forum non conveniens is a common law² doctrine which allows a court the discretion to refuse to hear a case, even though personal jurisdiction and venue are properly established, if the forum is inappropriate or inconvenient for the defendant." Alan Reed, To Be or Not to Be: The Forum non Conveniens Performance Acted Out on Anglo-American Courtroom Stages, 29 GA. J. INT'L & COMP. L. 31, 36 (2000). Forum non conveniens is not a claim that the court lacks jurisdiction over the case, but is a doctrine that the court may, as a matter of its sound discretion, decline jurisdiction and dismiss a case when the parties' and the witnesses' convenience and the ends of justice would be better served if the action were brought and tried in another forum in which the action could be heard. BLACK'S LAW DICTIONARY 589 (5th ed. 1979).

[13 FSM Intrm. 577]

Generally, a court with jurisdiction over a case is bound to decide it. See England v. Louisiana State Bd. Med. Exam'rs, 375 U.S. 411, 415, 84 S. Ct. 461, 464-65, 11 L. Ed. 2d 440, 445 (1964); cf. Gilmete v. Carlos Etscheit Soap Co., 13 FSM Intrm. 145, 150 (App. 2005) (national court's solemn obligation to uphold a party's constitutional right to invoke its jurisdiction). The forum non conveniens doctrine is the rare exception to this principle, and the defendant's burden on a forum non conveniens motion to dismiss is a strong one. 15 CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE § 3828, at 291 (2d ed. 1986). The doctrine "does not come into play unless the court in which the action was brought has both subject matter and personal jurisdiction and is a proper venue." Id. at 287.

Lee contends that Won Don Han cannot make this motion because he has waived any defenses related to venue since such defenses must be raised at the first opportunity and Han did not do so. Lee misunderstands the forum non conveniens doctrine.

The objection of forum non conveniens is not a defense to improper venue, which must be asserted by preliminary motion or answer. It is simply a motion which may be addressed to the discretion of the court at any time. It may be raised after as well as before answer, but the objection should be taken with reasonable promptness.

Fifth & Walnut, Inc. v. Loew's, Inc., 76 F. Supp. 64, 67 (S.D.N.Y. 1948) (citations omitted). "[T]here is no time limit on when a motion to dismiss on the ground of forum non conveniens can be made. However, if the litigation has progressed significantly in the . . . court a defendant's belated assertion that that forum is inconvenient is likely to be dimly viewed by the court." 15 WRIGHT, MILLER & COOPER, supra, § 3828, at 291 (footnote omitted).

The court cannot say that this litigation has progressed significantly with respect to defendant Won Don Han. Although it has been quite some time since the suit was filed, only the issues of personal jurisdiction over Han and whether he had defaulted have been litigated. No discovery has been requested. Trial is months away. The court concludes that Han's forum non conveniens motion is not too late and that the issue has not been waived.

There is one mandatory prerequisite and a number of factors that the court must consider before granting a forum non conveniens motion to dismiss. The forum non conveniens doctrine can only be applied if the plaintiff has an adequate alternative forum. 15 WRIGHT, MILLER & COOPER, supra, § 3828, at 288-90 (footnotes omitted); 20 AM. JUR. 2D Courts § 174 (1965). It is apparent that such a forum exists. Lee and Han (and others) have been litigating this matter in the Korean courts since 2002.

The factors to be considered include both private and public interests. The private interest factors are: 1) the relative ease of access to sources of proof; 2) the availability of compulsory process for the attendance of unwilling witnesses; 3) the costs of obtaining the attendance of willing witnesses; 4) the possibility of a site view, if appropriate to the case; and 5) any other practical problems that make a case's trial easy, inexpensive, and expeditious. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n.6, 102 S. Ct. 252, 258 n.6, 70 L. Ed. 2d 419, 427 n.6 (1981). The public interest factors to consider include: 1) administrative difficulties from court congestion; 2) the local interest in having localized disputes decided locally; 3) the interest in having a diversity case tried in a forum at home with the law that must govern the action; and 4) avoidance of any unneeded problems in the conflict of laws or the application of foreign law. Id.

The contract at issue in this case (the September 27, 2000 settlement agreement executed in Civil Action No. 2000-1012) and the case in Korea was executed (between mostly Korean citizens) in Chuuk with defendant Wesley W. Simina acting on behalf of one side. Most of the parties to that

[13 FSM Intrm. 578]

contract, and all of the parties that that contract required future payment to, and payment from, are Korean citizens and (now) residents although at the time the contract was executed most were resident in Chuuk. It is that payment that this, and the Korean, lawsuit are all about. The parties to the Korean lawsuit (with the exception of C.I.T.A. Trading Co., which is located in Texas, and is a d/b/a of a Korean citizen and resident) are all Korean citizens and residents. The plaintiff in this case, and his wife and another Korean citizen and resident, are the plaintiffs in the Korean case. The two Korean defendants in this case (Yong Yee Lee and Won Don Han) are the defendants in the Korean case. It appears that all of the probable witnesses, with the exception of Simina (and maybe one other Chuukese), are present in Korea. No compulsory process is available to bring any of them to Chuuk if they are unwilling.³ The cost to bring willing witnesses to Chuuk is higher than to bring the one possible witness in Chuuk (Simina) to Korea, if his testimony were needed, although if he were unwilling to go there seems to be no way to compel his attendance there. If Simina's testimony were needed, his deposition could have been noticed and taken here anytime while this case was pending in this court. It was not. The sources of proof, to the extent they are documents from the parties' business records from when they were all in business together in Chuuk, appear to be available in Korea.⁴ A site view is not appropriate to this case. In general, trying this case here would not be as easy, inexpensive, or expeditious as the current case in Korea, and moreover, it appears that it would be duplicative. The private interest factors thus strongly favor a forum non conveniens dismissal.

Turning to the public interest factors, although, because of its current calendar, the court could not schedule trial in this case before June, 2006, the court cannot conclude that the administrative difficulties from court congestion are so severe that it would necessarily make trying the case on this court's docket an inconvenient forum. Although the dispute originated in Chuuk, it cannot be said that it is a local dispute in which there is local interest. Since the contract was formed in Chuuk, Chuuk contract law would apply. (The contract itself also provides that it will "be governed, construed and interpreted in accordance with the laws of the Federated States of Micronesia." Settlement Agreement para. 15.) While this court would be more at home with Chuuk contract law than a Korean court, there appears to be no reason why the Korean court would not be capable of adequately applying Chuuk contract law since it is based primarily on common law principles, widely known and discoverable, although Korea is not a country in the common law tradition.

Considering that there is an adequate, alternative forum in Korea (in which the principal parties are actively litigating the issue); that the private interest factors strongly favor Korea as the most convenient forum and Chuuk as being an inconvenient forum; and that the public interest factors do not contradict this; the court concludes that this case against defendant Don Won Han should be dismissed under the forum non conveniens doctrine.

Lee also asserts that this court should retain the case because the settlement agreement contains a provision that "[a]ny action to enforce this agreement shall be brought in the Trial Division of the Supreme Court of the Federated States of Micronesia." Settlement Agreement para. 16 (Sept. 27, 2000). Parties may by contract designate a forum in which any litigation is to take place, and forum selection clauses are presumed valid, and enforcement will be ordered absent a strong showing that it should be set aside, and unless it clearly would be unreasonable and unjust, or that the clause is invalid for such reasons as fraud or overreaching. National Fisheries Corp. v. New Quick Co., 9 FSM Intrm. 120, 125 (Pon. 1999).

[13 FSM Intrm. 579]

Thus, a forum selection clause such as the one in the September 27, 2000 settlement agreement would usually be given full effect, although a forum selection clause may be subject to judicial scrutiny for fundamental fairness. In determining fundamental fairness, courts consider such factors as: 1) whether the forum was selected by one party as a bad faith tactic to discourage pursuit of legitimate claims by the other; 2) whether consent to the forum selection clause was obtained by fraud or overreaching; or 3) whether the contesting party had no notice of the forum provision. Id. at 126. None of these factors seem to apply here. However, since Lee himself has actively pursued litigation in a Korean court, both before and during the time the litigation was pending here, and Han actively defended that action, it would be unreasonable and unjust to require the Korean defendants to litigate this case twice, with the second time in a forum where, although it (Chuuk) was convenient when it was chosen and all the parties had business interests here, is no longer convenient, reasonable, or just. Under the circumstances, Lee has waived enforcement of the forum selection clause. Therefore limited to the particular facts and circumstances of this case, the court concludes that the forum selection clause will not bar dismissal of this case without prejudice under the forum non conveniens doctrine.

IV. DEFENDANT SIMINA

On January 20, 2005, plaintiff Dong Hun Lee was served with notice from the court that if further steps were not taken to prosecute this case against defendant Wesley W. Simina, the case against him would be subject to dismissal for want of prosecution. Since then, Lee has taken no steps to further prosecute this case against defendant Simina. The case against Simina is therefore dismissed with prejudice for lack of prosecution. FSM Civ. R. 41(b).

V. CONCLUSION

Accordingly, Dong Hun Lee's motion to reinstate the default judgment against defendant Won Don Han is denied; Han's motion to dismiss without prejudice under the forum non conveniens doctrine is granted; and the case against defendant Wesley W. Simina is dismissed for want of prosecution.

¹ This filing is considered a motion because a thing is what it is regardless of what someone chooses to call it. MMcIlrath v. Amaraich, 11 FSM Intrm. 502, 505-06 (App. 2003). A request to the court asking for an order is a motion regardless of what the party has chosen to call it. See FSM Civ. R. 7(b)(1) ("An application to the court for an order shall be by motion . . . .")

² The court may employ a common law principle from other jurisdictions with a common law tradition when it is not contrary to the FSM Constitution, statutes, or custom and tradition and if it is suitable for adoption here. Senda v. Semes, 8 FSM Intrm. 484, 495 (Pon. 1998); see also Black Micro Corp. v. Santos, 7 FSM Intrm. 311, 314 (Pon. 1995).

³ Under Rule 45(e)(2)(A), the court can issue subpoenas to persons in foreign countries only to those who are FSM nationals or residents.

⁴ Lee did use this case to subpoena copies of relevant local bank records.