FSM SUPREME COURT TRIAL DIVISION

FSM Social Sec. Admin. v. Fefan Municipality,

14 FSM Intrm. 544 (Chk. 2007)

FSM SOCIAL SECURITY ADMINISTRATION,

Plaintiff,

vs.

FEFAN MUNICIPALITY,

Defendant.

CIVIL ACTION NO. 2006-1012

ORDER GRANTING SUMMARY JUDGMENT

Dennis K. Yamase

Associate Justice

Hearing: January 30, 2007

Decided: February 5, 2007

APPEARANCES:

For the Plaintiff:   Michael J. Sipos, Esq.

                              P.O. Box 1491

                              Kolonia, Pohnpei   FM   96941

For the Defendant:   Joses Gallen, Esq.

                                   Attorney General

                                   Office of the Chuuk Attorney General

                                   P.O. Box 189

                                   Weno, Chuuk   FM   96942

[14 FSM Intrm. 543]

HEADNOTES

Civil Procedure ) Pleadings

      General denials are disfavored, but when the pleader does intend to controvert all of the complaint’s averments, including averments of the grounds upon which the court’s jurisdiction depends, the pleader may do so by general denial subject to the obligations of honesty in pleading set forth in Rule 11. FSM Social Sec. Admin. v. Fefan Municipality, 14 FSM Intrm. 544, 546 (Chk. 2007).

Civil Procedure ) Summary Judgment

      A summary judgment movant must go forward on the nonmovant’s affirmative defenses, since the burden of demonstrating that no triable fact issues exist encompasses affirmative defenses as well as the movant’s own factual allegations. FSM Social Sec. Admin. v. Fefan Municipality, 14 FSM Intrm. 544, 546 (Chk. 2007).

Civil Procedure ) Pleadings; Statutes of Limitation

      The statute of limitations is an affirmative defense which must be raised in a responsive pleading, such as an answer. It is an expressly stated affirmative defense to an action under Civil Rule 8(c), and as such, it is waived if it is not pled, or if it is not raised in a Rule 12(b)(6) motion for failure to state a claim. FSM Social Sec. Admin. v. Fefan Municipality, 14 FSM Intrm. 544, 546 (Chk. 2007).

Civil Procedure ) Pleadings

      A defendant who has failed to raise any affirmative defenses in his answer, or to amend his answer to add any, has waived and lost his right to assert affirmative defenses. FSM Social Sec. Admin. v. Fefan Municipality, 14 FSM Intrm. 544, 546 (Chk. 2007).

Civil Procedure ) Pleadings; Statutes of Limitation

      When the defendant has waived any statute of limitations defense, the limitations statute will not, as a matter of law, bar a summary judgment for the plaintiff. FSM Social Sec. Admin. v. Fefan Municipality, 14 FSM Intrm. 544, 547(Chk. 2007).

Civil Procedure ) Summary Judgment

      When the moving party has made out a prima facie case that there are no triable issues of fact and that it is entitled to summary judgment as a matter of law, the nonmoving party cannot rely upon a general denial in its answer to overcome the affidavit and the documents produced by the moving party and may not rely on unsubstantiated denials of liability or inferences culled from the record to carry its burden, but must present some competent evidence that would be admissible at trial that there is a genuine issue of material fact. FSM Social Sec. Admin. v. Fefan Municipality, 14 FSM Intrm. 544, 547 (Chk. 2007).

Social Security

       The existence of employees without social security numbers cannot relieve an employer of liability for social security contributions for those employees. Ensuring that all employees have, or acquire, properly issued social security numbers, is the employer’s responsibility. An employer cannot avoid liability for social security contributions by not reporting an employee’s social security number or by employing someone without a social security number. FSM Social Sec. Admin. v. Fefan Municipality, 14 FSM Intrm. 544, 547 (Chk. 2007).

[14 FSM Intrm. 544]

COURT’S OPINION

DENNIS YAMASE, Associate Justice:

      On January 30, 2007, this came before the court for hearing on the plaintiff’s Motion for Summary Judgment, filed on December 28, 2006; the defendant’s opposition, filed January 8, 2007; and the plaintiff’s reply, filed January 23, 2007. The parties submitted their arguments on their papers.

I.

      On June 5, 2006, the plaintiff, Federated States of Micronesia Social Security Administration ("Social Security"), filed its complaint seeking payment by the defendant employer, Fefan Municipality, of the social security contributions Fefan should have made for the wages it paid to its employees in the fourth quarter of 1993 through the third quarter of 1998. Fefan filed its answer on September 22, 2006. In its answer, Fefan admitted paragraph one of the Complaint ) that the plaintiff is an FSM national government statutory instrumentality responsible for administering the FSM social security system and collecting social security tax contributions from employers. Fefan’s answer generally denied all of the rest of the complaint’s allegations including that Fefan was an employer with employees and that this court had jurisdiction over the case. Fefan’s answer did not plead any affirmative defenses.

      General denials are disfavored, but when the pleader does intend to controvert all of the complaint’s averments, including averments of the grounds upon which the court’s jurisdiction depends, the pleader may do so by general denial subject to the obligations of honesty in pleading set forth in Rule 11. Marar v. Chuuk, 9 FSM Intrm. 313, 314 n.1 (Chk. 2000). That does not seem to be the case here since Fefan never moved for dismissal on the ground that the court lacks jurisdiction, and, in its opposition to the summary judgment motion, did not deny that the court had jurisdiction or that Fefan as an employer.

II.

       A summary judgment movant must go forward on the nonmovant’s affirmative defenses, since the burden of demonstrating that no triable fact issues exist encompasses affirmative defenses as well as the movant’s own factual allegations. Bank of the FSM v. Mori, 11 FSM Intrm. 13, 14 (Chk. 2002). Fefan, however, did not raise any affirmative defenses, although it would have seemed obvious for Fefan to raise one ) the statute of limitations.

        The statute of limitations is an affirmative defense which must be raised in a responsive pleading, such as an answer. FSM Civ. R. 8(c). A statute of limitations is an expressly stated affirmative defense to an action under Civil Rule 8(c), and as such, it is waived if it is not pled, Andrew v. FSM Social Sec. Admin., 12 FSM Intrm. 78, 80 (Kos. 2003); Senda v. Semes, 8 FSM Intrm. 484, 493 (Pon. 1998); see also Tolenoa v. Kosrae, 11 FSM Intrm. 179, 185 (Kos. S. Ct. Tr. 2002), or if it is not raised in a Rule 12(b)(6) motion for failure to state a claim, see Kinere v. Kosrae Land Comm’n, 13 FSM Intrm. 78, 80 (Kos. S. Ct. Tr. 2004); see also Segal v. National Fisheries Corp., 11 FSM Intrm. 340, 342 (Kos. 2003). A defendant who has failed to raise any affirmative defenses in his answer, or to amend his answer to add any, has waived and lost his right to assert affirmative defenses. Shrew v. Killin, 10 FSM Intrm. 672, 674 (Kos. S. Ct. Tr. 2002). Fefan has thus waived any statute of limitations defense, and the limitations statute will not, as a matter of law, bar a summary judgment for Social Security.

III.

       Social Security, in its summary judgment motion, supported by affidavit and exhibits, has made out a prima facie case that there are no triable issues of fact and that it is entitled to summary judgment as a matter of law. Fefan’s opposition relies on its (general) denial in its answer that it does not owe Social

[14 FSM Intrm. 545]

Security the amount stated and adds, culling two references from Social Security’s supporting exhibits, that facts remain in dispute because a few persons (two on one exhibit sheet and three on another) listed as Fefan employees have no social security numbers listed.

      When the moving party has made out a prima facie case that there are no triable issues of fact and that it is entitled to summary judgment as a matter of law, the nonmoving party cannot rely upon a general denial in its answer to overcome the affidavit and the documents produced by the moving party and may not rely on unsubstantiated denials of liability or inferences culled from the record to carry its burden, but must present some competent evidence that would be admissible at trial that there is a genuine issue of material fact. Marar, 9 FSM Intrm. at 314-15. Fefan has not presented any competent evidence that there is an genuine issue of material fact.

      The existence of employees without social security numbers cannot relieve an employer of liability for social security contributions for those employees, see generally 53 F.S.M.C. 605, and ensuring that all employees have, or acquire, properly issued social security numbers, is the employer’s responsibility. An employer cannot avoid liability for social security contributions by not reporting an employee’s social security number or by employing someone without a social security number.

IV.

      Accordingly, Social Security’s summary judgment motion is granted. Social Security shall file and serve, no later than February 23, 2007, its request for the attorney fees and costs award prayed for in its complaint and its calculation of principal, interest, and penalties through March 5, 2007. Fefan may respond to Social Security’s costs and fees request no later than March 2, 2007.

[14 FSM Intrm. 546]