THE SUPREME COURT OF THE
FEDERATED STATES OF MICRONESIA
Cite as Mid-Pacific Constr. Co. v. Senda,
7 FSM Intrm. 129 (Pohnpei 1995)
MID-PACIFIC CONSTRUCTION CO., INC.,
on Assignment for Benefit of Creditors,
AMBROS T. SENDA,
CIVIL ACTION NO. 1988-099
Andon L. Amaraich
Decided: April 27, 1995
For the Plaintiff: Daniel J. Berman, Esq.
Rush, Moore, Craven, Sutton, Morry & Beh
2000 Hawaii Tower
745 Fort Street
Honolulu, HI 96813-3862
For the Defendant: R. Barrie Michelsen, Esq.
Law Offices of R. Barrie Michelsen
P.O. Box 1450
Kolonia, Pohnpei FM 96941
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Judgments ) Relief from Judgment
The purpose of Civil Rule 60(b) is to provide the trial court with a tool for navigating between the conflicting principles that litigation must be brought to an end and that justice should be done. Mid-
Pacific Constr. Co. v. Senda, 7 FSM Intrm. 129, 133 (Pon. 1995).
Judgments ) Relief from Judgment
Civil Rule 60(b) does not afford relief to a party where the errors complained of were calculated by that party, submitted to the court by that party, and judicially noticed upon that party's request, because it is apparent that that party seeks relief from the insufficient preparation, the carelessness, and the neglect of its own counsel. Mid-Pacific Constr. Co. v. Senda, 7 FSM Intrm. 129, 135 (Pon. 1995).
Judgments ) Relief from Judgment
A party may be estopped from seeking Rule 60(b)(1) relief from acts voluntarily undertaken by that party. Mid-Pacific Constr. Co. v. Senda, 7 FSM Intrm. 129, 135 (Pon. 1995).
Judgments ) Relief from Judgment
Even where a request for Rule 60(b) relief is filed within the stated one-year time limit, a court still must examine whether the filing was made within a "reasonable time." In determining this issue, the court reviews all of the facts and circumstances surrounding the case and may require the party seeking Rule 60 relief to offer a sufficient explanation for not having taken appropriate action in a more timely manner. Mid-Pacific Constr. Co. v. Senda, 7 FSM Intrm. 129, 136 (Pon. 1995).
* * * *
ANDON L. AMARAICH, Chief Justice:
This action is before the Court on remand from the Appellate Division. The issue before the Court concerns whether the plaintiff, Mid-Pacific Construction Co., Inc. ("Mid-Pac"), is entitled to relief pursuant to FSM Civil Rule 60(b)(1), based on its own mistake, surprise, inadvertence or excusable neglect, in failing to request the proper amount of judgment. If Rule 60(b) relief is appropriate under these circumstances, this Court must then consider whether plaintiff's request for relief, made almost one full year after the entry of final judgment, was sufficiently reasonable and timely to justify the relief requested.
On December 14, 1990, this Court issued its opinion finding in favor of Mid-Pac. Mid-Pac Constr. Co. v. Senda, 4 FSM Intrm. 376 (Pon. 1990).1 Five days later, on December 19, 1990, the Court entered final judgment in the amount of $222,073.36. The amount of the award was equal to the amount requested by Mid-Pac and was, according to Mid-Pac, the sum-total of all of the unsatisfied
judgments that had been entered against Mid-Pac in favor of individual Mid-Pac creditors.2 In entering the amount of final judgment, the Court relied on evidence that was supplied by plaintiff Mid-Pac, and that was judicially noticed at Mid-Pac's request.3
Defendant appealed and the appellate division affirmed the trial division's taking of judicial notice of the amounts requested by plaintiff and upheld judgment in the stated amount. Senda v. Mid-Pac Constr. Co., 5 FSM Intrm. 277, 280-81 (App. 1992).
On December 13, 1991, 364 days after the opinion of the trial court, plaintiff filed a Petition for Relief From Prior Order to Account For Interest, Costs, Clerical Mistake and Credit in Accounting, seeking relief from the judgment pursuant to Rule 60(a) & Rule 60(b)(1) of the FSM Rules of Civil Procedure. The petition, which forms the basis for the instant action, states as follows:
The Court's monetary judgment entered herein was for 232,271.28 [sic] in December 1990. The calculation was based on [plaintiff's] Motion to Take Judicial Notice. The Motion to Take Judicial Notice filed by Plaintiff on January 15, 1990  was based nearly in whole upon the Special Master Report dated March 30, 1988. Both the pleading and report contained clerical errors in accounting, and thus corrections with explanation. The mistakes are easily verified by the original court files in each instance.
Thus, plaintiff's petition seeks relief from the very amount that plaintiff originally requested in its Motion to Take Judicial Notice, because that amount had been based on "clerical errors" that were contained in the court document prepared by the Special Master.4 Plaintiff's petition then proceeded to detail the clerical errors contained in the Special Master's Report. According to plaintiff, the Special Master erred by incorrectly reporting the quantity5 and amounts6 of some of the judgments outstanding
against Mid-Pac, and by miscalculating the amount of interest that should have been applied to those judgments.7 In sum, plaintiff petitioned the Court to increase the amount of the earlier judgment by $77,082.99, from $222,073.36 to $299,156.35. Plaintiff contends that the requested relief is necessary in order to remedy the injustice caused by plaintiff's reliance on the errors contained in the official court document prepared by the Special Master. In reviewing plaintiff's motion, the then presiding justice, Chief Justice King, indicated that he likely would grant plaintiff's Rule 60(b) motion, but nonetheless gave the opposition ten days to respond. Before Chief Justice King decided this issue, but after the deadline for responding had passed without any response from defendant, however, the case was transferred to another justice. The new justice then proceeded to carry out his predecessor's inclination by granting plaintiff's unopposed request for relief and amending the final judgment by the amount requested by plaintiff. Mid-Pac Constr. Co. v. Senda, Civil Action No. 1988-099, slip op. (Oct. 5, 1993). The Court based its decision to amend on Rule 60(a) as well as Rule 60(b)(1) of the FSM Rules of Civil Procedure. Id.
Defendant appealed and the appellate division reversed. Senda v. Mid-Pac Constr. Co., 6 FSM Intrm. 440 (App. 1994). In its opinion, the appellate division held that plaintiff was not entitled to relief under Rule 60(a), which permits a court to remedy clerical errors contained in court documents, because, in contrast to the assertions plaintiff made to the trial court, the errors that were contained in plaintiff's Motion to Take Judicial Notice, and which formed the basis for Court's award of final judgment, were not derived from the figures in the court document prepared by the Special Master. Rather, the appellate division concluded that the mistakes were a product of plaintiff's own, independent calculations.8 As to plaintiff's claim for Rule 60(b) relief, however, the appellate division remanded the case to this Court for a determination as to whether the errors cited by plaintiff constitute the type of "mistake, inadvertence, surprise, or excusable neglect" appropriate for Rule 60(b) relief, and if so, whether plaintiff's near one-year delay in requesting such relief was reasonable. FSM Civ. R. 60(b). We now proceed to that examination.
Rule 60(b) of the FSM Rules of Civil Procedure denotes the circumstances under which a party is entitled to relief from a judgment finally entered. Rule 60(b)(1), the portion of the rule here at issue, states as follows:
On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect . . . The motion shall be made within a reasonable time . . . [and] not more than one year after the judgment, order, or proceeding was entered or taken.
The purpose of this rule is to provide the trial court with a tool for navigating between "the conflicting principles that litigation must be brought to an end and that justice should be done." 11 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 2851 (1973). To meet this intended purpose, Rule 60(b), which combines aspects of both law and equity,9 reposes a high degree of discretion in the trial court. Nevertheless, there are certain instances where the grant of Rule 60 relief would be so inappropriate as to constitute a clear abuse of discretion. It is with these boundaries in mind that the Court reexamines plaintiff's request for relief under Rule 60(b)(1).
In plaintiff's Supplemental Memorandum of Points and Authorities for Relief from Judgment, filed pursuant to the appellate division's remand on the issue of Rule 60(b) relief, plaintiff, notwithstanding the appellate division's unmistakable invitation to do so, makes no attempt to identify which of the four grounds listed in Rule 60(b)(1) forms the basis for its request for relief. Additionally, although plaintiff's memorandum states that it is a supplemental memorandum of "Points and Authorities," that submission does not contain a single citation in support of its claim for relief. Instead, plaintiff merely asserts that the case was very complicated, and that counsel should not be held responsible for failing to determine the proper amount of judgment because, in addition to the case's complexity, counsel was very busy during the time in question and because the other lawyers on Pohnpei also would not have been able to determine the proper amount of judgment.10 In essence, plaintiff argues, without providing any
authority in support, that it should be granted relief from the inability or neglect of plaintiff's own counsel.11
Defendant responds by arguing that plaintiff's injury was occasioned by its own failure to prepare adequately for trial, and that Rule 60(b) is not meant to relieve a party from its own carelessness and neglect, or from the carelessness and neglect of its counsel. Defendant also disputes plaintiff's current assertions regarding the complexity of the case, noting that plaintiff's current view of the case differs substantially from its earlier position wherein plaintiff asserted that "[t]he mistakes [in question] are easily verified by the original court files in each instance." In other words, plaintiff originally argued that the mistakes made were simple ones that easily could have been avoided by reviewing the original court files. Apparently, plaintiff made no attempt to review these files when preparing its motion for judicial notice. Finally, defendant maintains that even if the Court accepts plaintiff's requested grounds for relief, the court nonetheless should conclude that plaintiff's motion, filed almost a full year after the entry of final judgment, should be denied because it was not filed in a reasonably timely manner.12
Evaluating the parties' arguments pursuant to Rule 60(b)(1), this Court concludes that plaintiff is not entitled to relief from the judgment entered in this case. The errors complained of by plaintiff were calculated by plaintiff, submitted to the Court by plaintiff, and judicially noticed upon plaintiff's request. It is therefore apparent that plaintiff seeks relief from the insufficient preparation, the carelessness, and ultimately, the neglect, of plaintiff's own counsel. Unfortunately for plaintiff, however, these are not the types of injury for which Rule 60(b) affords relief. In fact, the universal approach of the United States federal courts in applying their identical Rule 60(b) to these cases is to preclude Rule 60(b) relief where the complained-of injuries result solely from the carelessness or neglect of the moving party, or of the moving party's counsel.13 See Lavespere v. Niagara Mach. & Tool Works, Inc., 910 F.2d 167 (5th Cir. 1990) (prohibiting Rule 60 relief based solely on negligence or carelessness of injured party); Lomas & Nettleton Co. v. Wiseley, 884 F.2d 965 (7th Cir. 1989) (same result, notwithstanding fact that counsel was small-town, sole practitioner); Cline v. Hoogland, 518 F.2d 776 (8th Cir. 1975) (ignorance or carelessness of attorney will not provide justification for Rule 60 relief).14
Plaintiff's relief also must be denied because Plaintiff's injury was caused by Plaintiff's own voluntary act in requesting judicial notice. According to the federal courts of the United States, a party may be estopped from seeking Rule 60(b)(1) relief from acts voluntarily undertaken by that party. See Allinsmith v. Funke, 421 F.2d 1350 (6th Cir. 1970) (affirming district court's refusal to set aside a consent decree that had been approved by counsel for the party seeking relief); Hoffman v. Celebrezze, 405 F.2d 833 (8th Cir. 1969) (refusing to permit Rule 60(b)(1) relief from a provision of a consent judgment that was knowingly and intentionally included by the party seeking relief).
The present case is identical to that of Allinsmith and Hoffman. Here, plaintiff elected to petition this Court to take judicial notice of the amount of final judgment. Having granted plaintiff's request to take judicial notice of the amount of judgment, it would be inequitable for this Court now to relieve plaintiff from that earlier strategic decision merely because plaintiff was careless and because that strategy proves ill-advised in hindsight.15 Accordingly, plaintiff is estopped from attacking the validity of its own act voluntarily undertaken.
In summary, plaintiff's request for relief pursuant to Rule 60(b)(1) must be denied. Although this finding eliminates the need for the Court to examine the timeliness of plaintiff's motion, the Court nonetheless will address that issue. According to Rule 60(b), a motion for relief based on mistake, inadvertence, surprise, or excusable neglect must be filed within a reasonable time and under no circumstances later than one year after the entry of final judgment. FSM Civ. R. 60(b)(1). In other words, even where a request for Rule 60(b) relief is filed within the stated one-year time limit, the Court still must examine whether the filing was made within a "reasonable time." In determining this issue, the Court reviews all of the facts and circumstances surrounding the case and may require the party seeking Rule 60 relief to offer a sufficient explanation for not having taken appropriate action in a more timely manner.
In the present case, plaintiff filed its Rule 60 motion one day prior to the expiration of the one year deadline for requesting Rule 60(b) relief. Plaintiff's justifications for its delay are that the case was very complicated and because counsel was preoccupied with other matters. In light of the facts and circumstances surrounding this case, however, these excuses are insufficient to justify plaintiff's delay.
Plaintiff filed the complaint in this case in September 1988, more than two years prior to the entry of final judgment, and three years before plaintiff filed its motion for relief from judgment. In that time, however, plaintiff never made a reasonable attempt to determine the actual amounts of the unsatisfied judgments against Mid-Pac. Had plaintiff done so, plaintiff would have discovered most, if not all, of the errors from which it now seeks relief. Instead of making such an inquiry prior to trial, or shortly after trial, Plaintiff waited until the last possible moment permitted under the rules to file a request for relief. Moreover, plaintiff's present claim regarding the complex nature of the mistakes made flies directly in the face of plaintiff's earlier assessment of the case, wherein plaintiff admitted that the errors made were easily discoverable. After reviewing both of plaintiff's assessments, the Court finds that earlier view is more accurate and that these "mistakes [could have been] easily verified by the original court files in each instance." These mistakes consist of dates and amounts of judgments that were improperly reported in plaintiff's submissions to the Court, as well as judgments that were left out of plaintiff's request entirely. Based upon the relatively simple nature of these mistakes and
omissions, as well as the fact that plaintiff did not discover these simple mistakes until almost a full year after the entry of final judgment, the Court concludes that plaintiff's delay in requesting Rule 60 relief was unreasonable and untimely.
For the reasons set out above, it is hereby ordered that plaintiff's request for post-judgment relief pursuant to Rule 60(b)(1) is denied. The basis for Plaintiff's request for relief, the negligence and carelessness of counsel, is not a sufficient ground for such relief. In addition, the Court also concludes that based on the facts and circumstances of this case, plaintiff's request also must be denied because the plaintiff failed to file that request in a reasonably and timely manner.
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1. Although knowledge of the underlying facts of this case is unnecessary for an understanding of the issues presently before the Court, a brief review of those facts nonetheless may prove helpful. In 1988, after Mid-Pac had become insolvent, the unsatisfied judgment creditors of Mid-Pac brought suit against the Defendant, Ambros Senda, an incorporator and director of the troubled company. Mid-Pac v. Senda, 4 FSM Intrm. 376 (Pon. 1990) ("Mid-Pac I"). In Mid-Pac I, Plaintiffs contended, and the Court agreed, that "because Mid-Pac never met the requirements for doing business as a corporation, Mr. Senda, as an incorporator and director, is jointly liable for Mid-Pac's debts." Id. at 378. The Court then proceeded to enter judgment against Ambros Senda in the amount of $222,073.36.
2. Although Mid-Pac is the named plaintiff in this case, Mid-Pac is in fact operating for the benefit of the Mid-Pac creditors. Accordingly, the real parties in interest are the unsatisfied judgment creditors of Mid-Pac.
3. In its Motion to Take Judicial Notice of Court Judgments Against Mid-Pac Construction Co., Inc. (Jan. 15, 1990) plaintiff submitted an attached list entitled "Monetary judgments entered by this court against Mid-Pac Construction Co., Inc." The attachment contained a list of the individual Mid-Pac creditors, the civil action numbers of the cases in which they won judgments against Mid-Pac, the actual amounts of those judgments, and the dates on which those judgments were entered. Finally, plaintiff totalled these amounts, subtracted the amounts that already had been collected, and concluded that the "Total Amount Owed" to plaintiff was $222,073.36.
4. In 1988, the Court assigned a Special Master to this case. The Special Master was assigned to review the figures at issue in this case and to report his findings with respect to those figures. On March 30, 1988, the Special Master submitted its report to the Court and to the parties. Unfortunately, it was discovered later that the report contained numerous errors with respect to the number and amounts of the judgments outstanding against Mid-Pac, as well as the proper amount of interest to be applied to the outstanding judgments.
5. According to plaintiff's petition, the Special Master's Report failed to include a number of judgments that had been entered against Mid-Pac, either because those judgments had been entered after the date of completion of the Special Master's Report or because they were left out accidentally.
6. Plaintiff claims that the Special Master improperly reported the actual amounts of the individual unsatisfied judgments that were entered by the courts in certain instances. For example, plaintiff contends that the Report incorrectly listed the judgment for Virgilio Gayas as $1,203.05, when the actual judgment entered by the Court was for $1,503.76.
7. Plaintiff claims that the Special Master's Report listed dates of judgment that were later than the dates that the judgment actually was entered, thereby reducing the amount of interest to which plaintiff was entitled. For example, plaintiff complained that the Report listed the date of the Mid-Pac judgment in favor of the FSM National Government as November 25, 1987, rather than the actual date of November 25, 1985, thereby costing plaintiff two-years in accumulated interest payments.
8. In plaintiff's original motion seeking Rule 60 relief, plaintiff stated to this Court that the amount that they sought was "based nearly in whole upon the Special Master Report." Plaintiff then argued that since Rule 60 permits relief from "[c]lerical mistakes in judgments, orders, or other parts of the record," FSM Civ. R. 60(a), and because the report was a court document, plaintiff was entitled to Rule 60 relief. Relying on the veracity of plaintiff's assertions, and in light of the fact that defendant did not file an opposition to those assertions, this Court granted plaintiff's request, and amended the final judgment in the amount requested by plaintiff. On review, however, the appellate division found that the assertions that the plaintiff made to this Court were inaccurate, and that the figures contained in plaintiff's motion did not in fact derive from the report prepared by the Special Master. See Senda v. Mid-Pac Constr. Co., 6 FSM Intrm. 440, 443 (App. 1994). The Court is disturbed by these events and notes that the time and energy invested both here and at the appellate level could have been avoided had plaintiff reported the underlying facts in a more candid manner.
9. Equity is "[j]ustice administered according to fairness as contrasted with the strictly formulated rules of common law." Black's Law Dictionary 484 (5th ed. 1979). Although the law of the FSM, unlike that of the United States, was never directly influenced by the historic merger of courts of law and equity, the principles of equity impact upon the FSM's rules of civil procedure as an indirect result of the FSM's adoption of the United States' Federal Rules of Civil Procedure and its reliance upon the legal interpretations of those rules by the United States federal courts. See generally FSM v. Ponape Building Constr. Inc., 2 FSM Intrm. 48 (Pon. 1985).
10. Despite the lack of clarity of plaintiff's memorandum, it appears that plaintiff raises one other argument for increasing the amount of the final judgment in this case. According to plaintiff, the Court never took judicial notice of the actual amount of the final judgment. Rather, plaintiff claims that the Court only took judicial notice of the method for determining the amount of final judgment (i.e., totalling the unsatisfied court judgments entered against Mid-Pac). As such, plaintiff argues that the Court now should recalculate the final judgment amount in order to arrive at the higher amount. In Plaintiff's words, the court should simply "apply the truth of its own records to calculating the correct balance due from Defendants to Plaintiff."
Plaintiff's revised view of the facts, however, bears no resemblance to the actual events surrounding the Court's judicial notice decision. First, plaintiff's judicial notice motion did not petition the Court merely to take judicial notice of the method for determining the amount of final judgment. Had Plaintiff made such a request, it unquestionably would have been denied as too uncertain a basis for granting judicial notice. See FSM Evid. R. 201 (recognizing that a fact cannot be judicially noticed unless it is sufficiently certain and "not subject to reasonable dispute").
Second, the content of plaintiff's judicial notice motion likewise contradicts plaintiff's present claim. In that motion, plaintiff submitted an extensive set of attachments, providing the civil action numbers of cases filed against Mid-Pac, the amounts of the judgments entered in those cases, reductions in the amount owed to Mid-Pac as a result of payments previously made, and interest calculations. Based on these figures, plaintiff concluded its motion by petitioning the Court to adopt its figure of $222,073.36 as the amount of final judgment. In response to plaintiff's specific request, the Court took judicial notice, and entered judgment, in the actual dollar amount requested by plaintiff.
11. To the extent that plaintiff persists in arguing that the errors forming the basis for this appeal were the result of mistakes made by the Special Master, as opposed to mistakes made by plaintiff's counsel, plaintiff's argument must be rejected. The opinion of the appellate division conclusively, and unmistakably, resolved this issue against plaintiff. In finding that the figures submitted in plaintiff's motion in support of judicial notice were not clerical errors contained in the court document prepared by the Special Master, the appellate division necessarily concluded that the mistakes contained in those figures were the product of plaintiff's counsel's independent effort. Accordingly, the law of the case, as determined by the appellate division, requires this Court to treat the mistakes that resulted in the allegedly inaccurate final judgment as mistakes attributable directly to plaintiff.
12. Defendant, too, complains that mistakes were made in determining the amount of final judgment, and that the amount of final judgment should have been even lower than the amount initially entered by the trial Court. Accordingly, defendant argues that if any Rule 60 relief is appropriate, then that relief should come in the form of a new trial, so that both sides are given the opportunity to correct mistakes previously made. Although a new trial was not the relief requested by plaintiff, defendant apparently bases his suggestion upon the provision in Rule 60(b) which gives the trial court the express authority to grant relief "upon such terms as are just." See Hritz v. Woma Corp., 732 F.2d 1178, 1182 n.3 (3d Cir. 1984) (permitting the trial court to impose whatever additional conditions it deems appropriate to the grant of post-judgment relief). Although the Court appreciates the logic of defendant's suggestion, the Court nonetheless concludes that a new trial would be inappropriate at this late stage. This case has witnessed more than five years of continuous litigation, during which time a final judgment was entered and two appeals taken. In its discretion, the Court does not believe that the interests of justice would be served by vacating this case and starting again.
13. See generally FSM v. Ponape Building Constr. Inc., 2 FSM Intrm. 48 (Pon. 1985) (recognizing that the courts of the FSM may turn to the interpretations of the United States Federal Rules of Civil Procedure by United States federal courts for guidance in interpreting similar rules in place in the FSM).
14. In a limited number of cases, United States courts have set aside default judgments on the basis of excusable neglect, where counsel for the defaulting party was preoccupied with other matters. See, e.g., Greater Baton Rouge Golf Ass'n v. Recreation & Park Comm'n, 507 F.2d 227 (5th Cir. 1975) (setting aside default judgment entered after plaintiff failed to notify judge that he would be late to a hearing; plaintiff was twenty eight minutes late). Although plaintiff here seeks to justify his delay in responding on the grounds that he was preoccupied with other matters, plaintiff's argument bears almost no relation to the case cited above. Far from a default judgment, the plaintiff received a final adjudication on the merits. As such, Plaintiff had a full opportunity to present his view of the facts. Moreover, this case also does not involve a short period of time wherein counsel was doggedly working on other matters. Rather, plaintiff's delay stretched out over a full year. The Court rejects plaintiff's contention that his counsel, over the course of a full year, was too busy to devote the necessary attention to this matter, and finds instead that plaintiff's counsel's preoccupation with other matters was insufficient to excuse a one-year delay in seeking Rule 60(b) relief.
15. The basic unfairness of plaintiff's request for relief is made even more apparent by the fact that plaintiff waited almost a full year after the entry of final judgment before requesting relief from that judgment. Rule 60(b), as mentioned above, is based upon competing notions of fairness and finality. The conflicting nature of these principles is based on the premise that,although it is desirable to bring litigation to a final resolution, the interest in finality, standing alone, is insufficient to prevent a court from remedying the injustice of an incorrect final judgment. As more time passes, however, it becomes less fair to subject a losing party to uncertainties about the magnitude of his liability, and after an extended period of time, the interests of justice and finality become aligned, such that the interests of fairness likewise favor the finality of the judgment. At such times, a final judgment should be altered only where the magnitude of the injustice sought to be remedied is so overwhelming as to shock the conscience.
It is obvious that plaintiff cannot demonstrate the overwhelming injustice that would be necessary to overturn a final judgment entered almost twelve full months prior to plaintiff's petition for relief.