FSM SUPREME COURT TRIAL DIVISION

Cite as Ehsa v. Kinkatsukyo , 16 FSM Intrm. 450 (Pon. 2009)

CIVIL ACTION NO. 2006-006

Trial: February 17-18, 2009

Decided: May 27, 2009

APPEARANCES:

HEADNOTES

COURT'S OPINION

ANDON L. AMARAICH, Chief Justice:

    This matter came on for trial on February 17, 2009, at 10:00 a.m. Plaintiff Perdus Ehsa dba Pohnpei Foods & Services ("Ehsa") was represented by attorney Joseph Phillip. Defendants Kinkatsukyo aka National Offshore Tuna Fisheries Association of Japan and Akihiko Yatsuzuka ("Kinkatsukyo") were represented by attorneys Fred Ramp and Kembo Mida, Jr.

    Ehsa's complaint, filed February 20, 2006, alleges that Kinkatsukyo and National Oceanic Resource Management Authority ("NORMA") conspired together in August 2004 to prevent the timely issuance by NORMA of a fishing permit for the fishing vessel Katzutoku No. 1 (also known as Katzutoku Maru No. 1 or Katzutoku).

    Likewise, at trial, Ehsa claimed that Kinkatsukyo and NORMA conspired to delay the issuance of a fishing permit by NORMA for Katzutoku. Before the permit was issued, Katzutoku was fined $400,000 for fishing without a permit. Ehsa theorized that but for Kinkatsukyo's interference with the permit issuance process, no civil penalties would have ever been imposed against Katzutoku and therefore, one of Ehsa=s companies, Pacific Foods and Services, Incorporated (PFSI), would not have been liable for the $400,000 in penalties that were levied against the vessel. Ehsa further claimed that Kinkatsukyo's conduct resulted in lost income that would have otherwise been earned had Katzutoku not left the FSM, which it did after imposition of the fines.

    Prior to plaintiff's opening statement, counsel for Ehsa and counsel for Kinkatsukyo stipulated to the admission of various documents and based thereon, jointly moved to admit into evidence plaintiff's exhibits A through O and defendants' exhibits 1 through 35 and numbers 38 through 41.

After review of the foregoing exhibits, the court later admitted plaintiff's exhibits A through O and defendant exhibits 1 through 35 and numbers 38 through 41 into evidence.

    Ehsa's case-in-chief consisted of the documentary evidence in exhibits A through O and the examination of four witnesses: Perdus Ehsa, Jun Tams, Glen Jano, and Eugene Pangelinan. At the conclusion of Ehsa=s case-in-chief, Kinkatsukyo moved to dismiss plaintiff's case pursuant to FSM Civil Rule of Civil Procedure Rule 41. In pertinent part, FSM Civil Rule of Civil Procedure Rule 41(b) states, "After the plaintiff has completed the presentation of plaintiff=s evidence, the defendant, without waiving defendant=s right to offer evidence in the event the motion is not granted, may move for a dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief." This rule goes on to state, "If the court renders judgment on the merits against the plaintiff, the court shall make findings as provided in Rule 52(a)." After hearing argument from all parties on the Rule 41(b) motion to dismiss, and having considered the presentation of the evidence at trial, the court issued a ruling from the bench granting defendants= motion to dismiss. Ehsa failed to meet his burden of showing by a preponderance of the evidence that Kinkatsukyo was liable under any theory asserted in Ehsa's complaint.

    Therefore, having reviewed the testimony and other evidence of record in this matter, the court makes the following findings of fact and conclusions of law pursuant to FSM Civil Rule of Civil Procedure 52(a). Based on these findings and conclusions, and as set forth further below, the court finds in favor of Kinkatsukyo and against Ehsa. Each of Ehsa=s claims and his complaint are dismissed with prejudice. Judgment shall enter accordingly.

I. FINDINGS OF FACT

    1. Katzutoku No. 1 was a member of Kinkatsukyo, a Japanese fishing association.

    2. In August 2004, Katzutoku retained the services of Pohnpei Foods & Services, Incorporated ("PFSI") to procure a fishing permit with an effective date of August 17, 2004 that would allow it to fish in the FSM Exclusive Economic Zone ("FSM EEZ").

    3. The fishing permit for Katzutoku was issued by NORMA on August 27, 2004, but not until after Katzutoku No. 1 was found fishing on August 18, 19 and 20 in the FSM EEZ without a permit.

    4. These three days of illegal fishing resulted in $400,000 of fines against Katzutoku.

    5. Katzutoku No. 1 was later released from the Pohnpei Port pursuant to an agreement made on September 13, 2004 between the Federated States of Micronesia and Pacific Foods and Services, Inc., wherein PFSI agreed to be held liable for the vessel and any judgment arising from the then-pending civil action arising out of the illegal fishing. Katzutoku No. 1 then left the jurisdiction and did not return to the FSM.

    6. Perdus Ehsa, an individual, filed this lawsuit under the name of "Perdus Ehsa dba Pohnpei Foods and Services."

    7. During the years of 2003 and 2004, Perdus Ehsa was the President of Pohnpei Food & Services, Incorporated ("PFSI"), Pohnpei Marine Industries Company ("PMIC"), Incorporated, and Pacific Fishers Services Company.

    8. Ehsa, personally as an individual, did not enter into or make any agency agreement with the fishing vessel Katzutoku No. 1.

    9. Ehsa, personally as an individual, did not enter into any written agreement with the National Oceanic Resource Management Authority ("NORMA") or any other individual or entity for the repayment of any fines incurred by or judgment amounts entered against the fishing vessel Katzutoku No. 1.

    10. PFSI did not have any agreement in force with NORMA during August 2004, but did have an agreement with NORMA that expired in June 2003 and another which commenced in October 2004. See Defs.' Exs. 8 and 41. Pohnpei Marine Industries Company, Incorporated did have an agency agreement in place with NORMA during August 2004. See Defs.' Ex. 7.

    11. Pohnpei Marine Industries Company, Incorporated did not act on behalf of and was not an agent of Pohnpei Foods & Services, Incorporated.

    12. PFSI, Pohnpei Marine Industries Company Incorporated and Pacific Fisheries Services Company, entered into written agreements with NORMA that were virtually identical in substance. Paragraph 32 of each of these agreements to which Ehsa's companies (PFSI, Pohnpei Marine Industries Company Incorporated and Pacific Fisheries Services Company) and NORMA were parties require the company contracting with NORMA to ensure compliance with the agreement and the laws of the FSM regarding fishing. E.g., see Defs.' Exs. 6, 7, 8 and 41.

    13. Prior to receiving a permit from NORMA for Katzutoku No. 1, PFSI informed Katzutoku No. 1 that a permit with an effective date of August 17, 2004 would be issued by NORMA.

    14. On August 16, 2004, Pohnpei Foods & Services, Incorporated filed an "application for permit renewal for foreign fishing vessels" with NORMA for the fishing vessel Katzutoku No. 1. See Defs.' Ex. 16. The renewal application did not result in the processing or issuance of a permit for Katzutoku No. 1 because it was improper for PFSI to file a "renewal" application.

    15. Katzutoku No. 1 entered the FSM EEZ on August 17, 2004, without a valid fishing permit.

    16. On August 19, 2004, Pacific Foods & Services, Incorporated filed the correct and proper application for a fishing permit for Katzutoku No. 1. See Defs.' Ex. 15. Pacific Foods & Services, Incorporated asked NORMA for a permit to be issued that same day.

    17. Katzutoku No. 1 engaged in fishing operations within the FSM Exclusive Economic Zone on the dates of August 18, 19 and 20, 2004 without a permit. As a result, Katzutoku No. 1 and its captain were assessed civil penalties in the amount of $400,000 and judgment was entered against them in that amount in FSM Supreme Court Civil Action No. 2004-053. Judgment in that case did not enter against Ehsa. Ehsa was not a party to that case. See Defs.' Ex. 11.

    18. After Katzutoku No. 1 was arrested, it was detained at the Pohnpei Port for more than one week, during which time PFSI assisted the captain and crew of the vessel by providing food and provisions for them, among other things.

    19. No communication with NORMA regarding the fishing permit for Katzutoku No.1 was made by Ehsa personally. The bulk of the communications were made by Jun Tams, an employee of PFSI who was responsible for submitting the application to NORMA in August 2004 for a fishing permit for Katzutoku No. 1.

    20. Katzutoku No. 1 had multiple communications devices on board, including radio, satellite telephone and satellite fax machine capabilities. See Defs.' Ex. 35. None of these devices were used by Ehsa or PFSI to communicate with the vessel.

    21. Kinkatsukyo did not know that PFSI had filed an application for a fishing permit for Katzutoku No. 1 until on or around August 25, 2004. See Defs.' Ex. 30.

    22. NORMA's standard agreement for domestic based foreign fishing vessels requires the vessel to have on board the original permit. See Defs.' Exs. 6, 7 and 8.

    23. A fishing permit for Katzutoku No. 1 with an effective date of August 27, 2004, was issued by NORMA on August 27, 2004. See Pl.'s Ex. F. This fishing permit was issued as a result of the application filed by PFSI, which application bears the date of August 19, 2007.

    24. Katzutoku No. 1 was a member of Kinkatsukyo and was a registered foreign fishing vessel with NORMA through the Kinkatsukyo association as of August 9, 2004.

    25. The duration of time taken by NORMA to issue the fishing permit for Katzutoku No. 1 after NORMA=s receipt of the application for the fishing permit by PFSI was approximately eight days.

    26. Between October 2004 and October 2005, approximately 54 vessels were licensed through Ehsa's various companies with NORMA. Between October 2005 and October 2006, approximately 54 vessels were licensed through Ehsa's various companies with NORMA.

    27. Katzutoku No. 1 was released from the Pohnpei Port pursuant to an agreement made on September 13, 2004 between the Federated States of Micronesia and Pacific Foods and Services, Inc. See Pl.'s Ex. L. Perdus Ehsa, as an individual, was not party to that agreement.

    28. After Katzutoku's release from the Pohnpei Port, it did not return to the FSM and did not utilize the services of PFSI again.

II. CONCLUSIONS OF LAW

    1. Perdus Ehsa, in filing this lawsuit as "Perdus Ehsa dba Pohnpei Foods and Services," filed this lawsuit as an individual and not on behalf of any of his companies or corporations. None of Ehsa's corporations, including Pohnpei Foods and Services, Incorporated, is a party to this case.

    2. Ehsa did not carry his burden of proof of showing by a preponderance of the evidence that Kinkatsukyo violated Ehsa's civil rights as governed by 11 F.S.M.C. 701(3).

    3. Ehsa did not carry his burden of proof of showing by a preponderance of the evidence that Kinkatsukyo interfered with Ehsa's business operations.

    4. Ehsa did not carry his burden of proof by showing by a preponderance of the evidence that Kinkatsukyo conspired to interfere with Ehsa's business operations.

    5. Ehsa did not carry his burden of proof of showing by a preponderance of the evidence that Kinkatsukyo interfered with a business contract to which Ehsa was a party.

    6. Ehsa did not carry his burden of proof of showing by a preponderance of the evidence that Kinkatsukyo is obligated to indemnify Ehsa in any amount.

III. DISCUSSION

A. Perdus Ehsa, in filing this lawsuit as "Perdus Ehsa dba Pohnpei Foods and Services," filed this lawsuit as an individual and not on behalf of any of his companies or corporations.

    As a preliminary yet significant matter, Perdus Ehsa, in filing this lawsuit as "Perdus Ehsa dba Pohnpei Foods and Services," filed this lawsuit as an individual and not on behalf of any of his companies or corporations. A dba cannot be a party to a civil action. Jackson v. Pacific Pattern, Inc., 12 FSM Intrm. 18, 20 (Pon. 2003). No other corporation owned or operated by Ehsa, including Pohnpei Foods and Services, Incorporated, is a party to this case and no other plaintiff is set forth in the caption of Ehsa's complaint other than "Perdus Ehsa dba Pohnpei Foods and Services." Accordingly, the court treats this action as having been brought by Perdus Ehsa individually. Moreover, the court's conclusions set forth herein would remain the same even if the plaintiff were one of Ehsa's corporations as opposed to Ehsa personally.

B. Ehsa did not carry his burden of proof of showing by a preponderance of the evidence that Kinkatsukyo violated Ehsa's civil rights as governed by 11 F.S.M.C. 701(3).

    Ehsa testified that the property right he claimed defendants deprived from him were "damages" to his company. Ehsa did not specify as to which company this testimony referred, nor did he testify about what he meant by the term "damages." There is no property right that is recognized by the law of the FSM as "damages." Damages is a legal term of art that refers generally to a remedy which may be granted by the court to a party in a civil action. The only conceivable property right that Ehsa may have even claimed was deprived was a contract right or benefit flowing therefrom. However, even if Ehsa had testified that defendants' conduct somehow deprived him of some unidentified contractual right, the court would still rule in favor of defendants on this claim because there was no evidence of any contract to which Ehsa personally was a party; nor was there any testimony from any witness as to any specific contract right that was allegedly deprived from Ehsa. Thus, Ehsa civil rights claim fails.

C. Ehsa did not carry his burden of proof of showing by a preponderance of the evidence that Kinkatsukyo interfered or conspired to interfere with Ehsa's business operations or any contract.

    In a civil case, the plaintiff has the burden of proving each element of his cause of action by a preponderance of the evidence, and if he fails to do so, judgment will be entered against him. Tulensru v. Wakuk, 10 FSM Intrm. 128, 132 (App. 2001). The preponderance of the evidence standard also applies to a civil action for conspiracy. Opet v. Mobil Oil Micronesia, Inc., 3 FSM Intrm. 159, 165 (App. 1987).

1. Interference with a contract and with prospective business advantage.

    Interference with a contract and interference with prospective business advantage are both causes of action that arise under Pohnpei state law. Foods Pacific, Ltd. v. H.J. Heinz Co., Australia, 10 FSM Intrm. 200, 203 (Pon. 2001). Federated Shipping Co. v. Ponape Transfer & Storage Co., 4

FSM Intrm. 3, 13-14 (Pon. 1989) discusses generally the torts of interference with contractual relations and prospective economic advantage: "[i]t may be sufficient to impose liability . . . that the defendant has acted intentionally to interfere with a known contract or prospect of economic advantage, that he has caused harm in so doing, and that he has acted in pursuit of some purpose considered improper." The specific elements of the causes of action for interference with contract are 1) a valid contract; 2) knowledge by the defendant of the contract; 3) intentional interference by the defendant which induces breach of the contract; 4) absence of justification on the part of the defendant; and 5) resulting damages. See Jano v. Fujita, 16 FSM Intrm. 323, 327 (Pon. 2009) (citing Saey v. Xerox Corp., 31 F. Supp. 2d 692, 700 (E.D. Mo. 1998)). The elements of a cause of action for interference with prospective business advantage or expectancy are 1) plaintiff's existing or reasonable expectation of economic benefit or advantage; 2) defendant=s knowledge of that expectancy; 3) defendant's wrongful intentional interference with that expectancy; 4) reasonable probability that the plaintiff would have received anticipated economic benefit in absence of interference; and 5) damages resulting from interference. See id. at 327 (citing Herbert v. Newton Memorial Hosp., 933 F. Supp. 1222, 1229 (D.N.J. 1996), aff'd, 116 F. Ed 468 (3d Cir. 1997)). Both the cause of action for interference with contract and the cause of action for interference with prospective business advantage require a showing of damages. Although Ehsa has styled his cause of action in this case as one for interference with "business operations," the court construes this as meaning a cause of action for interference with prospective business advantage.

    At trial, various written agreements were admitted into evidence, such as PFSI=s agreement for foreign fishing vessels with NORMA, Defs.' Ex. 41. Ehsa was not a party to any of these agreements. Thus, since plaintiff Ehsa did not have a valid contract with anyone or any entity, the first element required for proving interference – a valid contract – cannot be met and Ehsa cannot not therefore recover against Kinkatsukyo under an interference with contract theory. Even assuming that Ehsa did have a valid contract with any entity relevant to this action, the court=s ruling would remain the same because Ehsa did not prove that Kinkatsukyo took any action that could be reasonably interpreted as interference with a contract. Ehsa failed to prove that Kinkatsukyo had specific knowledge of any contract to which any of Ehsa's various corporations were a party and even if Ehsa had proved otherwise, there was no showing of any intentional conduct which resulted in any interference or breach of contract. Finally, Ehsa did not make a showing that he was harmed in any way by the alleged interference and the scarce evidence Ehsa did provide on any purported damages for interference was unfounded and speculative. Though Ehsa did testify that Katzutoku No. 1 left the jurisdiction after being fined, never to return, he did not make a showing that Katzutoku No. 1 would have continued to do business with Ehsa or any of his companies had it returned to fish in the FSM EEZ.

2. Conspiracy

    Ehsa failed to meet his burden of proof on the conspiracy claim. Prior FSM cases have not addressed the precise elements of a civil conspiracy cause of action. In such instances, the court may look to authorities from other jurisdictions in the common law tradition. Rauzi v. FSM, 2 FSM Intrm. 8, 14-15 (Pon. 1985). "[L]iability for civil conspiracy depends on performance of some underlying tortious act, [but] the conspiracy is not independently actionable; rather, it is a means for establishing vicarious liability for the underlying tort." Halberstam v. Welch, 705 F.2d 472, 479 (D.C. Cir.1983). The RESTATEMENT (SECOND) OF TORTS ' 876, cmt. b (1977) states, "The mere common plan, design or even express agreement is not enough for liability in itself, and there must be acts of a tortious character in carrying it into execution." See Chapman v. Pollock, 148 F. Supp. 769, 772 (W.D. Mo.1957) (holding that a plaintiff who charged the defendants with "conspiring to perpetrate an unlawful purpose" could not recover because the defendants committed no unlawful act); see also Beck v. Prupis, 529 U.S. 494, 502-03, 120 S. Ct. 1608, 1614-15, 146 L. Ed. 2d 561, 570 (2000). Since Ehsa has not met his burden of showing that Kinkatsukyo is liable on any underlying tort theory, his

claim that Kinkatsukyo conspired to commit such a tort must also fail.

    Ehsa also based his interference and conspiracy claims on two e-mails, both dated August 25, 2004, both of which were sent by Kinkatsukyo to NORMA, Defs.' Ex. 30. In each e-mail, Kinkatsukyo stated that it "no longer" had an objection to issuing licenses to "Japanese logline [sic] vessels outside of the bilateral agreement" and requested that NORMA "process the issuance of licenses for" Katzutoku No. 1. Ehsa would have the court believe these e-mails alone establish Kinkatsukyo's liability for interference. Glen Jano (Licensing Officer at NORMA) and Eugene Pangelinan (Deputy Director of NORMA) both testified convincingly that routine NORMA procedure was followed regarding the permit applications for Katzutoku No. 1 without regard to whether or not any objection was or was not made by Kinkatsukyo. In addition, both testified that the requested permit for Katzutoku No. 1 was issued within reasonable time after NORMA's receipt from PFSI of the correct fishing permit application. The court accepts Mr. Jano's and Mr. Pangelinan's testimony on this point as credible and true. Kinkatsukyo and NORMA did not conspire or agree to improperly prohibit a fishing permit from being issued. A fishing permit for Katzutoku was issued on August 27, 2007, which was roughly eight days after PFSI submitted the correct permit application to NORMA, a reasonable time within which to process the application and issue a permit. This conclusion is supported by the testimony of Glen Jano that NORMA is permitted 30 days to process any given permit application. Based on the foregoing, Ehsa's claims of interference and conspiracy fail.

D. Ehsa did not carry his burden of proof of showing by a preponderance of the evidence that Kinkatsukyo is obligated to indemnify Ehsa in any amount.

    Although plaintiff did not specifically address his indemnity claim at trial, the court nonetheless will address it here. In the case of Joy Enterprises, Inc. v. Pohnpei Utilities Corp., 8 FSM Intrm. 306, 311 (Pon. 1998), the court stated, "Although the FSM Supreme Court has recognized claims for indemnity based on contractual provisions between two parties, and required precise clarity in the indemnification clause language, it is not prepared to create a common law indemnity claim." Even assuming the court had found any liability of any defendant to this case, which it does not, no contractual provision for indemnification between Ehsa and any of the defendants was presented to the court. Accordingly, Ehsa's claim for indemnity fails.

IV. CONCLUSION

    The court finds in favor of the defendants Kinkatsukyo aka National Offshore Tuna Fisheries Association of Japan and Akihiko Yatsuzuka and against the plaintiff Perdus Ehsa. Kinkatsukyo's Rule 41(b) motion to dismiss is hereby granted. Each of Ehsa's causes of action is hereby dismissed with prejudice. A judgment consistent with these findings of fact and conclusions of law will issue herewith.