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HEADNOTES

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COURT'S OPINION

MARTIN G. YINUG, Chief Justice:

This comes before the court on the defendants Malayan Towage and Salvage Corporation and M/Tug Trabajador-I's (i) Rule 12(b)(2) Motion to Dismiss for Lack of Personal Jurisdiction and (ii) Rule 12(b)(7) Motion to Dismiss for Failure to Join Indispensable Parities or in the Alternative to Stay Proceedings, filed February 10, 2012 with supporting joint memorandum; Plaintiffs['] Opposition to Defendants['] Motion to Dismiss, filed March 12, 2012 with supporting affidavit of Joshua D. Walsh; and Plaintiffs' Supplement to Opposition to Defendants' Motion to Dismiss, filed March 26, 2012.

I. PARTIES' POSITIONS

The movants seek the dismissal of the M/Tug Trabajador-I and of the F/V Teraka No. 168 for the lack of personal jurisdiction and the dismissal of the entire action for the failure to join indispensable parties or, in the alternative, to stay the proceedings. They contend that the court cannot exercise personal jurisdiction over the M/Tug Trabajador-I because it is not now present in the Federated States of Micronesia and it was never served with arrest papers when it was present. They further contend that court cannot exercise personal jurisdiction over the M/Tug Trabajador-I and the F/V Teraka No. 168 because the plaintiffs did not verify the amended complaint. They also contend that named defendants Captain Masanaga Shimazu, Yuh Yow Fishery Company, Ltd., and Hsin Horng Fishery Company, Ltd. have never been properly served and are thus not parties but that their presence is indispensable and that therefore this action must be dismissed in its entirety. In the alternative, the movants contend that this action should be stayed until those other defendants are properly served and made parties.

The plaintiffs contend that the motion must be denied because defendants must make Rule 12(b) motions either before or at the same time as their answer and the defendants have already answered the plaintiffs' November 8, 2011 amended complaint. They further contend that the F/V Teraka No. 168 was properly arrested and that their failure to verify the complaint was a de minimus matter that the defendants waived by their appearance and, if it was not, then the plaintiffs should be granted leave to amend their complaint. The plaintiffs also contend that the absence of certain defendants does not warrant dismissal because the court can achieve a just resolution without them so they are not indispensable and that for the same reasons a stay of proceedings is unwarranted.

II. M/TUG TRABAJADOR-I

The M/Tug Trabajador-I in its joint answer with co-defendant Malayan Towage and Salvage

[18 FSM R. 288]

Corporation asserted lack of personal jurisdiction over it as a defense. It therefore preserved that defense for determination before trial. FSM Civ. R. 12(d); see, e.g., Cooper v. Westchester County, 42 F. Supp. 1, 3 (S.D.N.Y. 1941) (Rule 12(b) defenses raised in the answer may be heard and determined before trial). It may move for determination of the issue as a preliminary matter.

The only way a vessel can be a defendant in a civil action is if the proceeding against it is in rem, and in order for a court to exercise in rem jurisdiction, the vessel over which jurisdiction is to be exercised (or its substitute, e.g., a posted bond) must be physically present in the jurisdiction and seized by court process and under the court's control, whereby it is held to abide such order as the court may make concerning it. Moses v. M.V. Sea Chase, 10 FSM Intrm. 45, 51 (Chk. 2001). When a vessel was never seized and brought under the court's control and is not in, or is no longer in, the FSM, the court has not acquired in rem jurisdiction over it and all claims against the vessel will be dismissed without prejudice unless a letter of undertaking or a bond has been made a substitute res for the vessel in lieu of the vessel's seizure. People of Gilman ex rel. Tamagken v. M/V Easternline I, 17 FSM Intrm. 81, 84-85 (Yap 2010); M.V. Sea Chase, 10 FSM Intrm. at 51-52; Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 370 (Kos. 2000); In re Kuang Hsing No. 127, 7 FSM Intrm. 81, 82 (Chk. 1995).

It is undisputed that the M/Tug Trabajador-I is not present in the FSM and was not arrested when it was present and that no bond or letter of undertaking has been posted to provide a substitute res over which the court could exercise jurisdiction. Accordingly, the complaint against the M/Tug Trabajador-I must be dismissed without prejudice.

III. F/V TERAKA NO. 168

The movants contend that the court cannot exercise in rem jurisdiction over F/V Teraka No. 168 because the complaint was not verified. "In actions in rem the complaint shall be verified on oath or solemn affirmation." FSM Mar. R. C(2). The movants contend that the plaintiffs' failure to verify at least the in rem portions of their complaint is fatal and the complaint against F/V Teraka No. 168 must be dismissed even though the complaint does allege that the F/V Teraka No. 168 is present in the FSM because it alleges that the F/V Teraka No. 168 has run hard aground on the reef of Eauripik atoll and remains there still.

The cases cited by the movants, Pizani v. M/V Cotton Blossom, 669 F.2d 1084, 1090 (5th Cir. 1982) and Madeja v. Olympic Packers, LLC, 310 F.3d 628, 637 (9th Cir. 2002) both hold that an in rem judgment cannot or should not have been entered against a vessel if the complaint was not verified or if the vessel has not made a general appearance (M/V Cotton Blossom). Neither case states that an unverified complaint cannot be amended and verified before trial or judgment. Such amendment has been permitted. When a defendant objected that the libel (complaint) had not been verified, the court ruled that the requisite amendment to verify could be had on prompt application because in admiralty cases it was "'the long-established rule that omissions and deficiencies in pleadings may be supplied and errors and mistakes in practice in matters of substance, as well as of form may be corrected at any stage of the proceedings for the furtherance of justice.'" Joyce v. United States, 106 F. Supp. 719, 722 (D.N.J. 1952) (quoting Deupree v. Levinson, 186 F.2d 297, 303 (6th Cir. 1950)).

In Mori v. Hasiguchi, 17 FSM Intrm. 630, 639 (Chk. 2011), the court held that since the failure to verify the complaint in a shareholders' derivative action was a technical defect that can be cured by amendment, it would not entitle the defendants "to an immediate dismissal or to a summary judgment because the Civil Procedure Rules reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits." The court could "require the plaintiff to verify it by filing an affidavit within a reasonable time." Id. (but other defects precluded amendment). The

[18 FSM R. 289]

court sees no reason why the same principle should not hold for an in rem admiralty proceeding and the plaintiffs be given a reasonable time to amend their complaint by verifying it by affidavit. Accordingly, the motion to dismiss the F/V Teraka No. 168 will be denied and the plaintiffs given a reasonable time to amend their complaint.

The plaintiffs also contend that the F/V Teraka No. 168 has waived any objection to the lack of verification because it made a general appearance by filing an answer. That answer appears to be a general denial – that is, it denies everything, including the jurisdictional allegations, except that the F/V Teraka No. 168 ran aground on Eauripik atoll. General denials are disfavored, but when a pleader does intend to controvert all 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. Albert v. George, 15 FSM Intrm. 574, 577 n.1 (App. 2008) (cautioning counsel that pleadings that deny facts known by the pleader to be true subject counsel to possible sanctions under Rule 11); FSM Social Sec. Admin. v. Fefan Municipality, 14 FSM Intrm. 544, 546 (Chk. 2007); Marar v. Chuuk, 9 FSM Intrm. 313, 314 n.1 (Chk. 2000). This is because "an answer consisting of a general denial will be available to a party acting in good faith only in the most exceptional cases." 5 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1265, at 403 (2d ed. 1990). Since it seems uncertain whether this general denial would constitute a general appearance that would entitle the plaintiffs to claim waiver, the court feels that the better course is to allow the plaintiffs to amend their complaint.

IV. ALLEGED INDISPENSABLE PARTIES

The movants seek the dismissal of the entire action for the plaintiffs' failure to join indispensable parties or, in the alternative, to stay the proceedings until they are joined. All of the appearing defendants in their answers asserted the plaintiffs' failure to join indispensable parties as a defense. They therefore preserved that Rule 12(b)(7) defense for determination before trial. FSM Civ. R. 12(d); see also Cooper, 42 F. Supp. at 3. Moreover, a Rule 12(b)(7) motion to dismiss for failure to join an indispensable party under Rule 19 is a defense that, by rule, is specifically preserved and may be raised as late in the proceedings as at the trial on the merits. Marsolo v. Esa, 18 FSM Intrm. 59, 63 (Chk. 2011); M.V. Sea Chase, 10 FSM Intrm. at 49 (citing FSM Civ. R. 12(h)(2)).

The movants contend that Captain Masanaga Shimazu, Yuh Yow Fishery Company, Ltd., and Hsin Horng Fishery Company, Ltd. are all indispensable parties but, although named in the amended complaint, have never been properly joined or served. They further contend that their joinder is not feasible if they cannot be served with process or are otherwise not subject to the court's jurisdiction. The movants assert that they will be prejudiced if they have to defend a negligence claim implicating them while the primary actor, Captain Masanaga Shimazu, whose acts will be judged, remains unavailable. The movants doubt the court's ability to shape relief that would not prejudice them or to formulate an adequate judgment without the participation of all of the allegedly negligent defendants. The movants, realizing that dismissal of the entire action is a drastic step, suggest, as an alternative, that the proceedings be stayed until the plaintiffs have served the absent defendants.

In determining whether a case ought to be dismissed because necessary and indispensable parties are not joined, the court must consider: 1) to what extent a judgment rendered in the person's absence might be prejudicial to that person or to those already parties; 2) the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; 3) whether a judgment rendered in the person's absence will be adequate; and 4) whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder. FSM v. GMP Hawaii, Inc., 16 FSM Intrm. 479, 483 n.1 (Pon. 2009); Ifenuk v. FSM Telecomm. Corp., 11 FSM Intrm. 403, 404-05 (Chk. 2003). If an indispensable party cannot be made a party, the court

[18 FSM R. 290]

must determine whether in equity and good conscience the action should proceed among the parties before it or whether it must be dismissed. Ifenuk, 11 FSM Intrm. at 404. A motion to dismiss for failure to join indispensable parties will be denied when the court has not been shown that it cannot afford complete relief between the parties already present in the action without the joinder of others. Marsolo, 18 FSM Intrm. at 63.

Captain Masanaga Shimazu was an agent of the F/V Teraka No. 168's owner, the principal who the plaintiffs seek to hold vicariously liable. Since an agent is not an indispensable party to a vicarious liability claim against the principal, the principal will not be prejudiced if the complaint against it included a vicarious liability claim against the principal for an agent's acts even if the plaintiffs do not also sue the agent. Nakamura v. Mori, 16 FSM Intrm. 262, 268 (Chk. 2009). Yuh Yow Fishery Company, Ltd., and Hsin Horng Fishery Company, Ltd. are alleged to be joint tort-feasors for attempting to free the F/V Teraka No. 168 from the Eauripik reef at the direction of the vessel's owner. Joint tortfeasors are not indispensable parties. Id. at 267 (citing Samaha v. Presbyterian Hosp., 757 F.2d 529, 531 (2d Cir. 1985)). A necessary party is one who has an identifiable interest in the action and should normally be made a party to the lawsuit, but whose interests are separable from the rest of the parties or whose presence cannot be obtained; whereas an indispensable party is one to whom any judgment, if effective, would necessarily affect his interest, or would, if his interest is eliminated, constitute unreasonable, inequitable, or impractical relief. Nahnken of Nett v. United States (III), 6 FSM Intrm. 508, 517 (Pon. 1994). Captain Masanaga Shimazu, Yuh Yow Fishery Company, Ltd., and Hsin Horng Fishery Company, Ltd. are thus necessary parties whose presence in the action may be desirable but are not indispensable. The movants' arguments are very convincing that Captain Masanaga Shimazu is an important and desirable witness, and there are discovery advantages if Captain Masanaga Shimazu is a party. For example, parties are expected to be available for depositions, see FSM Dev. Bank v. Adams, 14 FSM Intrm. 234, 254 (App. 2006) (it would be an extraordinary case where examination of other witnesses would take the place of a party's examination), and a party's deposition may be used by an adverse party for any purpose, FSM Civ. R. 32(a)(2), and interrogatories, FSM Civ. R. 33, and requests for the production of documents, FSM Civ. R. 34, may be submitted to parties, but not non-parties.

For the foregoing reasons, Captain Masanaga Shimazu, Yuh Yow Fishery Co., Ltd., and Hsin Horng Fishery Co., Ltd. are not indispensable parties, and, even if they were, it has not been shown that prejudice in shaping the relief would prevent a just resolution or an adequate judgment and it appears that the plaintiffs would otherwise be denied effective relief if the action were dismissed. Accordingly, the motion to dismiss is denied as well as the alternative motion to stay.

V. CONCLUSION

Accordingly, the motion to dismiss the M/Tug Trabajador-I is granted and that defendant is dismissed without prejudice. The motion to dismiss the F/V Teraka No. 168 is denied since the plaintiffs will be permitted an opportunity to verify their complaint within a reasonable time. The motion to dismiss the action in its entirety on the ground certain parties have not been joined is denied, as is the alternative motion to stay proceedings until those parties are joined.