FSM 3 Intrm. 445-453

In a case in which the High Court of the Trust Territory of the Pacific Islands did not transfer the case to the FSM Supreme Court or to the Truk State Court because it failed to act in conformity with the purpose of Secretarial Order No. 3039 which was to provide maximum permissible self government to the newly self-governing entities, and because the High Court's determination that the case was in active trial and therefore need not betransferred was incorrect, the High Court is not deprived of jurisdiction wherethe presently objecting party failed to make any objection before the High Court and where the judgment by the High Court is being collaterally attacked. United Church of Christ v. Hamo, 3 FSM Intrm. 445, 451-52 (Truk 1988).

A party is not deprived of due process of law in a case in which a judgment is entered against it on a cause of action raised by the trial court, where the party had notice and an opportunity to be heard, even though the cause of action does not appear in the pleadings and no amendment of the pleadings was made. United Church of Christ v. Hamo, 3 FSM Intrm. 445, 453 (Truk 1988).

This matter came before the Court on motion of each party for an order granting summary judgment. The parties agree that there exists no genuine issue as to any material fact, and each party contends that-it is entitled to judgment as a matter of law.

In this action the plaintiff (hereinafter United Church of Christ) seeks a declaration that the 1985 judgment of the High Court of the Trust Territory of the Pacific Islands (hereinafter High Court) in the case of Achuo Hamo, on behalf of the Wito Clan v. United Church of Christ of Moen, Civil Action No. 1-76, is void. United Church of Christ also seeks an injunction preventing the defendant (hereinafter Wito Clan) from attempting to enforce the judgment. United church of Christ alleges that the High Court lacked jurisdiction, and that the High Court judgment deprived United Church ofChrist of due process of law in that a monetary award was given without notice.

The monetary award arose in the following manner: During a pretrial conference the High Court trial judge stated that a monetary award might be given under the court's equitable powers to prevent unjust enrichment. Wito Clan had not petitioned for such relief and no pleading exists in which a monetary award is put in issue. The pleadings were not amended. United

Church of Christ requested and obtained an opportunity to consider the matter presented by the Court. Several days later the pretrial conference resumed. United Church of Christ made no objection to the interjection of the "unjust enrichment" issue and submitted the case to the court for decision.

The allegation of lack of jurisdiction arises from the failure of the High Court to transfer the case in accordance with Secretary of the Interior Order No. 3039 upon the determination by the Chief Justice of the High Court that functioning courts had been established first in the FSM (the FSM Supreme Court) and later in Truk State (the Truk State Court).

In 1884 Trukese landowners conveyed 5 parcels of land which adjoined one another on Moen Island, Truk, to the American Board of Commissioners for Foreign Missions (hereinafter American Board). The conveyance recited that the land was "to be used for the purposes for which said board is organized."

Later the American Board conveyed its interest to United Church Board of World Ministries (hereinafter United Church Board). Over the years the property was used as the site for Logan Memorial Church and for Mizpah High School. In 1971 United Church Board decided to close Mizpah High School.

In 1972 United Church Board and Wito Clan each applied to the Land Commission for the registration of the land. In 1975 the Land commission referred the case to the High Court.

In 1973 United Church Board leased to the Trust Territory of the Pacific Islands (hereinafter TTPI) that portion of the land upon which Mizpah High School had been located. In 1978 TTPI filed its complaint in intervention asking that title be registered in the name of United Church Board.

On May 5, 1981, the Chief Justice of the High Court determined that the FSM Supreme Court was functioning. On June 17, 1981, United Church Board assigned all its rights to the land to United Church of Christ. On July 25, 1981, TTPI assigned Truk State all lease rights, and on February 19, 1982, Truk State was substituted in the case for intervenor, TTPI.

On February 6, 1984, United church of Christ and Wito Clan appeared for a pretrial conference. The joint pretrial statement was not ready and the conference did not proceed. Counsel were ordered to file the statement by March 15, 1984. The statement was filed on that date. It contained a stipulation that United Church of Christ be substituted for United Church Board. On April 2, 1984, Wito Clan filed a motion asking that the High Court retain jurisdiction of Civil Case No. 1-76. This motion was served upon United church of Christ. On April 20, 1984, the Chief Justice of the High Court determined that Truk State had established a functioning court.

On March 15, 1985, counsel ratified the March 15, 1984, pretrial statement and the pretrial conference already noticed was held on March 18, 1985. At this point, the High Court on its own initiative raised the issue of a monetary award. The pretrial conference was continued to allow United Church of Christ an opportunity to consider the issue on March 21, 1985, the pretrial conference resumed. The parties submitted the case for decision on the pleadings. Leave was given to the United Church of Christ to file an additional brief by April 1, 1985. United Church of Christ did file two motions, neither of which addressed the issue.

The High Court issued its judgment on August 19, 1985. The court held that the deed conveyed a fee simple determinable title to the American Board; that the leasing of the Mizpah High School site to TTPI breached the condition in the deed causing title to revert automatically; and that United Church of Christ was to pay the sum of $300,060.00 together with interest at 9% from June 29, 1973, to Wito Clan to prevent United Church of Christ from being unjustly enriched.

1. Is the High Court deprived of jurisdiction to enter judgment after failing to transfer the case to the FSM Supreme Court, or later to Truk State Court as required by Secretarial Order No. 3039?

2. Did the High Court deprive United Church of Christ of due process of law by entering the money judgment against United Church of Christ on an issue that was not pleaded, but raised sua sponte by the High Court?

1. The failure of the High Court to transfer the case either to the FSM Supreme Court or later to the Truk State Court through a misapplication of Secretarial Order No. 3039 does not divest the High Court of jurisdiction.

2. The issue of unjust enrichment did not deprive the United Church of Christ of due process. It had notice, an opportunity to be heard, and did not object to this issue.

The Secretarial order became effective in the FSM on May 10, 1979, the date of the commencement of constitutional government in the FSM. The following sections of the Order are the provisions germane to the issue presented:

Section 1. Purpose. The purpose of this Order is to provide the maximum permissible amount of self-government, consistent with the responsibilities of the

Secretary under Executive Order 11021, for the Federated States of Micronesia, the Marshall Islands, and Palau, pursuant to their respective constitutions as and when framed, adopted, and ratified, pending termination of the 1947 Trusteeship Agreement under which the UnitedStates of America undertook to act as Administering Authority for the Trust Territory of the Pacific Islands.

Section 2. Delegation of Authority. Until the termination of the Trusteeship Agreement and subject to the limitations contained in this Order and in existing treaties, laws, and regulations of the United States generally applicable in the Trust Territory of the Pacific Islands, executive, legislative, and judicial functions of the Government of the Trust Territory of the Pacific Islands are, except as otherwise provided herein, hereby delegated to the three political subdivisions of the Trust Territory known as the Federated States of Micronesia, the Marshall islands, and Palau.

a. Pending Cases. The present Community and District Courts and the Trial and Appellate Divisions of the High Court of the Trust Territory of the Pacific Islands shall continue to function and operate in accordance with the present procedural and jurisdictional provisions of Trust Territory law until the Federated States of Micronesia, the Marshall Islands, and Palau have established functioning Courts pursuant to the terms of their respective constitutions. The determination that such functioning courts exist shall be made in writing by the Chief Justice of the High Court of the Trust Territory of the Pacific Islands upon written request of the chief judicial officer of the respectivejurisdictions. A denial of the request may be appealed to the Secretary.

Government or the High Commissioner, currently pendingbut not in active trial before the Community Courts, the District Courts, and the Trial Division of the High Court shall be transferred to the functioning courts of such jurisdiction, provided that the legal rights of the parties in any case in controversy pending before a Community Court, a District Court, or the Trial or Appellate Division of the High Court shall in no way be impaired by this Order.

Upon the determination by the Chief Justice of the High Court on May 5, 1981, that a functioning Supreme Court existed in the FSM, Civil Case No. 1-76 should have been transferred to this court. Diversity of citizenship existed between Wito Clan and United Church Board. Because the TTPI was an intervenor, Civil Case No. 1-76 was not a suit "against the Trust Territory of the Pacific Islands Government." Section 5(a) of the Secretarial Order did not prevent transfer. In any case, Truk State was substituted for the TTPI, as already noted, on February 19, 1982. The diversity continued until March 15, 1984, at which date, as earlier noted, United Church of Christ was substituted for United Church Board.

The issues presented now were first presented to the High Court in 1986. On January 20, 1987, the High Court issued its denial of relief sought by United Church of Christ. On the question of the transfer of jurisdiction, the court said,

Regarding issue No. 1 [jurisdiction of High Court to enter judgment], both counsel stipulated that the best and easiest way to determine if this case was in "active trial" as provided for in Secretarial Order 3039 on the date when the Supreme Court of the Federated States of Micronesia was certified as a court of record, was for me to telephone Judge Harold Burnett in Honolulu to determine what the status of this case was on the date of the certification. Judge Burnett was the Chief Justice of the Trust Territory High Court who certified the Supreme Court of the Federated States of Micronesia.

On December 11, 1986, I telephoned Judge Burnett wherein he told me that on or about the date of the above referred to certification, he made the decision that because the Trust Territory of the Pacific Islands was a party to the lawsuit and because of the long history of the matter, he determined that the Mizpah High School case was in "active trial" pursuant to Secretarial Order No. 3039.

An analysis of the reasoning, however, reveals an incorrect application of Secretarial Order No. 3039. First, although the TTPI was a party as intervenor, the case was not "against the Trust Territory of the Pacific Islands." Second, the fact that the case had had a long history does not mean that it was in "active trial." A long period of pendency does not at all indicate that a case is in active trial.

When the Truk State Court was determined to be a functioning court on April 20, 1984, Civil Case No. 1-76 came within its jurisdiction. As to the failure of the High Court to transfer the case at that time, the High Court stated in the same order of January 20, 1987,

[a]fter the Truk State Court was certified on April 20, 1984, Chief Justice Soukichi Fritz and I met to discuss the future handling of this case and determined that the case was still in "active trial" pursuant to Secretarial Order 3039 and we agreed that the High Court would retain jurisdiction.

The reasoning again fails to satisfy if the surrounding circumstances are examined: Up to April 20, 1984, no pretrial conference had been held. Pursuant to an order of February 6, 1984, a joint pretrial statement was to be filed by March 15, 1984, as outlined above. A pretrial conference was scheduled for December 7, 1984. The recitation of these facts demonstrate that at the time the High Court said the case was in "active trial," on or about April 20, 1984, no pretrial conference yet had been held, and none was scheduled until December 7, 1984. The only preparation for trial consisted of the filing of a joint pretrial statement on March 15, 1984. I can find no factual basis for a determination by the High Court that the case was in "active trial." To say that the case was in "active trial" in these circumstances is to deprive the term of any meaning at all.

I conclude that both the purpose of Secretarial Order No 3039 to provide the maximum permissible amount of self-government, and the provisions of 3039 for transfer of pending cases required the High Court to transfer the case.

There are two reasons, however, why this does not deprive the High Court of jurisdiction. First, United Church of Christ may not raise the issue of jurisdiction after failing to raise it in the High Court. United Church of Christ failed to object to the retention of the case by the High Court at any time prior to the judgment. Even when Wito Clan moved that the High Court retain jurisdiction, United Church of Christ failed to object.

Having thus acquiesced in the matter, and, for all the record shows, having deliberately chosen the High Court as a more hospitable forum to adjudicate the claims of United Church of Christ, it is unjust now to accept United Church of Christ's claims. In seeking an injunction against the enforcement of the 1985 High Court judgment, the United Church of Christ must

show that it acted without fault in the matter it seeks to correct. Sautbine v. Keller, 423 P.2d 447 (Okla. 1966); 43 C.J.S. Injunctions § 26 (1945). United Church of Christ fails to meet that requirement.

The second reason the High Court's failure to transfer does not deprive the High Court of jurisdiction involves the nature of United Church of Christ's cause of action in the FSM Supreme Court. United Church of Christ now collaterally attacks the judgment by seeking relief in a separate action in a different court, instead of directly attacking the judgment by appeal1 or otherwise in the High Court.

In entering the judgment of 1985, the High Court implicitly found that it had jurisdiction. This determination by the High Court is res judicata. 1B J. Moore, Moore's Federal Practice ¶ 0.405[4.-l] (2d ed. 1985) at 199; Underwriters Nat'l Assurance Co. v. N.C. Life & Accident, 455 U.S. 691, 102 S. Ct. 1357, 71 L. Ed. 2d 558 (1982); Stoll v. Gottlieb, 305 U.S. 165, 59 S. Ct. 134, 83 L. Ed. 104 (1938); See Allen v. McCurry, 449 U.S. 90, 101 S. Ct. 441, 66 L. Ed. 2d 308 (1980); Ortiz v. Suazo, 570 P.2d 309 (N.M. 1977). It is not subject to collateral attack, except in "very rare" cases involving a clear usurpation of authority. 7 J. Moore, Moore's Federal Practice ¶ 60.25[2] (2d ed. 1985) at 60-227 to 230. To successfully attack the judgment collaterally, the judgment would have to be found void because of a defect fatal to the action, such as failure to give notice or an opportunity to be heard. No such fatal defect exists in this case.

No earlier case is before the FSM Supreme Court that might serve as precedent as to the effect of an incorrect failure to transfer. Therefore the Court accepts an analogous situation presented. Jurisdiction of U.S. district courts depends upon diversity of citizenship of the parties. It is settled in the United States that even if the finding of diversity is erroneous, the proceedings cannot be collaterally attacked. Honneus v. Donovan, 691 F.2d 1 (1st Cir. 1982); Des Moines Nav. & R.R. v. Iowa Homestead Co., 123 U.S. 52, 8 S. Ct. 217, 31 L. Ed. 202 (1887).

For the reasons stated, this court cannot say that the High Court lacked jurisdiction to enter its judgment of 1985.

II. Due Process and the Monetary Award.
United Church of Christ next asserts that the monetary award was entered against it in violation of its due process rights because it had no

The facts outlined above show that these contentions are not supported by the record. The ground for this relief was set out by United Church of Christ before the January 20, 1987 order of the High Court was entered. The High Court's order sets out in detail the circumstances surrounding the entry of the monetary award. The recitation of facts in the High Court order is uncontested and this, with the minutes entry of March 21, 1985, forms the basis for the facts set forth in this order. The facts show that the High Court raised the issue of unjust enrichment itself, continued the pretrial hearing at the request of United Church of Christ in order that the church might consider the issue presented by the High Court, and upon the resumption of the hearing some three days later, United Church of Christ submitted all issues to the High Court for decision.

The procedure in this matter would be governed by Rule 15(b) of the Rules of Civil Procedure of the Trust Territory Courts. This court is unable to say that the procedure fails to give notice and an opportunity to be heard.

United Church of Christ has failed to establish that it is entitled to judgment in its favor as a matter of law. Its motion is accordingly denied.

Wito Clan has established that it is entitled to a judgment in its favor as a matter of law. Its motion is accordingly granted. Wito Clan is entitled to a judgment dismissing this action brought by United Church of Christ.

1. The United Church of Christ filed a timely notice of appeal from the 1985 judgment. It was returned, however, because the $5.00 filing fee was not submitted. United Church of Christ then sent in the notice of appeal and the fee. Both were returned as untimely filed. No issue is now being made of this by the United Church of Christ.

2. At oral argument this court inquired into the legal and factual basis for the award. Later, memoranda were requested and furnished. I conclude that no basis exists which would justify any award. The United Church of Christ explicitly chose not to make this a separate issue in support of its cause of action.