Appellate Division
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Appeal No. 1-99(A)


          Argued: May 4, 2000
          Decided: January 9, 2001


For the Appellant:      Fred Ramp, Esq.
P.O. Box 1480
Kolonia, Pohnpei Fr: 96941

For the Appellee:      Kosaksy Phillip, Esq.
 (Micah)                      Micronesian Legal Services Crop.
                                    P.O. Box 129
Kolonia, Pohnpei FM 96941

For the Appellee:      Delson Ehmes, Esq.
(Pohnpei)                   Attorney General
Pohnpei Department of Justice
P.O. Box 1555
Kolonia, Pohnpei FM 96941


Hon. Judah C. Johnny, Chief Justice, Pohnpei Supreme Court  
Hon. Nelson A. Joseph, Assoc. Justice, Pohnpei Supreme Court

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Hon. Yoster Carl, Temporary Justice, Pohnpei Supreme Court
JUDAH C. JOHNNY, Chief Justice


     This appeal arises from the trial court's grant of summary judgment in favor of the defendants Risiel Micah and the State of Pohnpei and its Division of Lands, Department of Resources Management and Development, with respect to the leasehold rights of public land Tract No. 011-A-23. Plaintiff-appellant Agnes Etscheit seeks a judgment that gives effect to her assignment of rights in the lease of Tract No. 011-A-23, or in the alternative, one that vacates the Board of Trustees' lease to Micah and directs the Board of Trustees to provide a hearing at which Etscheit and Micah would each be given a fair and equal opportunity to present their competing claims.

     We hold that that trial court erroneously gave effect to the assignment to Micah while at the same time ignoring the assignment to Etscheit and erroneously found that Etscheit was not denied due process when he Board of Trustees granted the least to Micah without also providing Etscheit with notice and the opportunity to present her

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interest in the lot. The trial court judgment is thereby reversed. Our reasoning follows:


     In 1971, the Trust Territory Government issued to Molens Joab a twenty-five year residential lease agreement for a lot in Kolonia, Tract No. 011-A-23. On January 20, 1992, Mr. Joab executed a document transferring his leasehold, use or license rights in a potion of the lot to his niece, Agnes Etscheit. In reliance upon the transfer, Etscheit built a warehouse on that portion of the lot to support the operation of her retail store, A-1 Store. On November 7, 1995, Molens Joab executed a second document in which he transferred all of his lease hold right in Tract No. 0?1-A-23, including that which he had purportedly transferred to Etscheit, to his daughter-in-law, Risiel Micah.

     In September 1996, after the death of Mr. Joab, Etscheit met with Lolita Nelber, the administrative officer of the Division of Land, Department of Resource Management and Development, and gave her a copy of the January 20, 1992 document. Ms. Nelber advised Etscheit that she would be notified of the meeting at which the Pohnpei Public
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Lands Board of Trustees (hereinafter, the "Board") would discuss the disposition of Tract No. 011-A-23. That meeting was held on October 17, 1996, but Etscheit was not notified of the meeting. The Board approved the assignment to Micah and issued a new twenty-five year residential least to her.

     On July 24, 1997, Etscheit filed a trespass action against Micah. The trial court entered summary judgment against Etscheit and in favor of the defendants on January 7, 1999. It held that Etscheit was not denied due process, as she had no vested property right in the lease, and dismissed the case. Etscheit consequently appeals.  


     The appellant raises two issues. She claims that the trial court erred in a January 7, 1999 ruling that Micah was the rightful owner of the leasehold interest in Tract 011-A-23. Etscheit also contends that the trial court erred in concluding that the Board did not violate her due process rights under the Pohnpei and FSM constitutions when it did not provide notice and an opportunity to be heard for her claim of interest in Tract No. Oll-A-23.

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     We apply the same standard in reviewing a trial court's grant of a summary judgment motion that the trial court initially employed under Rule 51(c). We, viewing the facts in the light most favorable to the party against whom judgment was entered, determine de novo whether genuine 7 issues of material fact are absent and whether the prevailing party is entitled to judgment as a matter of law. See Nahnken of Nett v. United States, 7 FSM Intrm. 581., 585-85 (App. 1996); Tafunsak v. Kosrae, 7 FSM Interm. 344, 347 (App. 1995) .


A. Due Process

     Appellant Etscheit appeals the trial court ruling that the Board did not violate her due process right under the Pohnpei and FSM constitutions when it did not give her notice of the meeting and a opportunity to present her claim of interest in Tract No. 011-A-23. Etscheit asserts that she was entitled to notice and an opportunity to be heard prior to the Board's decision to approve the transfer  to Micah and prior to granting the lease to Micah.

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     Etscheit's reliance upon Etpison v. Perman, l FSM Intrm. 405 ({pm.198) is persuasive. In that case, the Board had renewed a lese to the original lessor, Perly Phillip, without giving notice to the claimant, Feliciano Perman. The Board had been given notice of Perman's adverse claim. The FSM Supreme Court found that Perman was entitled to notice and that the Board failed to comply means reasonably calculated to provide notice to him. See id. at 427. The Court thus concluded that Perman was deprived of due process in connection with the determination of his claim concerning the public land lease. See id. at 428.

     The fact of this case are similar to Etpison, in which the Court found it significant that Perman had a directs and serious claim based on his activities on and actual possession of the land during the leasehold period, and that Perman had given written notice to the Board of his objection to the renewal of Phillips lease and his wish to assert a claim to the lease. In that case at bar, Etscheit had also given notice to the Board that she had a direct and adverse claim to the lease when she spoke with Ms. Nelber and gave her a copy of the document of transfer. Ms.

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Nelber assured Etscheit that the Board would be notified of her claim and that she would be notified of the hearing concerning the disposition of the lease. Furthermore, Etscheit's warehouse on the lot, which has been here since 1992, should have alerted the Board of Etscheit's interest in the lease. Despite these factors, the Board did not afford Etscheit the opportunity to be heard. In fact, the Board made no attempt to notify Etscheit.

     Micah and the Board assert that because Etscheit had no cognizable property interest in Tract No. 011-A-23, she had no procedural due process right to invoke. In other words, Etscheit never ad the express written consent of the Board for her transfer, as required by law, and therefore, the Board had no duty to notify Etscheit of any meeting regarding the disposition of the lease. This argument is inaccurate. Indeed, Etscheit never had the consent of the Board, but neither did Micah. Micha's transfer was approved by the Board after the critical October 17, 1996 hearing. It became a lawful transfer only after the fact. Furthermore, the Board did have a duty to notify Etscheit, in the same way that it had a duty to notify Perman.

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     The appellees rely primarily upon MLSC, v. Ludwig, 1 P.S.Ct.R. 465 (Tr. Div. 1987), which involved claimant, Luther Ludwig, who had been occupying one of the parcels in question only by virtue of his employment with Mobil Oil Micronesia, the original lessor. There was no evidence of an attempt by Mobil Oil to transfer its interest in the parcels to Ludwig. Shortly after Mobil Oil Micronesia relinquished its lease rights, the Board granted to Micronesia Legal Services Corporation use rights in the parcels.1 Mr. Ludwig was a mere squatter when he continued to occupy the parcels after Mobil Oil had relinquished its use rights. In this case, however, Mr. Joab clearly manifested his intent to transfer his leasehold interest in a portion of the lot to Etscheit in the January 20, 1992 document. Ludwig is distinguishable and not controlling in the analysis of this case.

     The following quote is especially compelling with respect to the Board's responsibilities to the public when administering public land:

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A body such as the Public Lands Authority [the Board] mandated to decide who will be permitted to use land holds an awesome power indeed.
Basic notions of fair play, as well as the Constitution require that such significant decisions be made openly and after giving appropriate opportunity for participation by the public and interested parties. A Public Lands Authority, of all scrupulous in developing fair procedures and zealous in recognizing those decisions which require exercise of discretion and call for public participation and observation.

Etpison v. Perman, 1 FSM at 420-21 (Pon. 1984) (emphasis added).

     The evidence reveals that the procedure employed by the Board in this case was unfair to Etscheit, clearly an interested party, as she was given neither notice of nor the opportunity to participate in the October 17, 1996 hearing. The Board was well aware of the adverse claim to the lot when they conducted the hearing, and yet still neglected to afford Etscheit a reasonable opportunity to come forward with her claim. Indeed, Etscheit was deprived her due process rights with respect to the disposition of Tract No. 011-A-23.

     A, Who is the rightful lessee?

     We do not reach the question of which party should be awarded the lease. Having concluded the Etscheit has a right to notice and an opportunity to be heard before the

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Board decided to whom the lease would be issued, supra, the Board's decision to award the lease to Micha, without also allowing Etscheit to present her claim to the lot, was improperly reached. To the extent that the trial court gave effect to that decision and implied that Micah was the rightful owner of the lot, that decision is vacated.


     Trial Court decision is reversed in part and vacated in part. We remand the matter to the Trial Division to vacate the Board's decision, consistent with this opinion. The Trial Division is to remand the matter to the Board for a properly noticed hearing that will allow both Etscheit and Micah to appear before it to present their claim to Tract No. 011-A-23.

So Ordered this 9th day of January, 2001.

/s/                                                               /s/
Nelson A. Joseph                                   Yoster Carl
Associate Justice                                   Associate Justice

Judah C. Johnny
Chief Justice


1 In Ludwig, I held that the agreement between the Board and MLSC was null and void, as the Legislature never authorized the Board to lease the lot. I also held that Ludwig had no legal right of possession, lease or use in the parcels.Back to Opinion