Cite as FSM Dev. Bank v. Arthur,13 FSM Intrm. 1(Pon. 2004)

[13 FSM Intrm. 503]

APPEAL CASE NO. P2-2003

Argued: August 23, 2005
Decided: November 10, 2005

BEFORE:

Hon. Martin G. Yinug, Associate Justice, FSM Supreme Court
Hon. Dennis K. Yamase, Associate Justice, FSM Supreme Court
Hon. Yosiwo P. George, Specially Assigned Justice, FSM Supreme Court*

*Chief Justice, Kosrae State Court, Lelu, Kosrae

APPEARANCES:

[13 FSM Intrm. 504]

HEADNOTES

Civil Procedure – Pleadings

A "third-party complaint" is actually a counterclaim when it is made against someone already a party because a third-party complaint is a device used to bring a non-party into a case. Kitti Mun. Gov't v. Pohnpei, 13 FSM Intrm. 503, 506 n.1 (App. 2005).

Appellate Review – Decisions Reviewable

When a municipality's complaint alleged that the defendants damaged its reef, submerged lands, and resources but the trial court concluded that since the state owned the submerged lands and resources, the municipality was precluded from recovering damages for injury to the submerged lands and living marine resources, but if it was able to prove damage to other municipal resources, it would be provided that opportunity at trial; when no other claimed municipal resources were identified by either the court or a party, before or after that decision; and when the municipality stipulated to a final judgment being entered against it, it abandoned any claim that it might have had for damage to resources other than living marine resources; nothing remained for the trial court to adjudicate and the judgment was final and appealable. Kitti Mun. Gov't v. Pohnpei, 13 FSM Intrm. 503, 507 (App. 2005).

Appellate Review – Standard of Review – Civil Cases

The general rule is that on appeal a party is bound by the theory advanced in the trial court, and cannot urge a ground for relief which was not presented there, particularly when the party had ample opportunity to raise the issues in the trial court instead of presenting the issue for the first time on appeal. Kitti Mun. Gov't v. Pohnpei, 13 FSM Intrm. 503, 507 (App. 2005).

Federalism – Abstention and Certification

An abstention request that comes after trial, and after the case had been pending for approximately five years, is untimely. Kitti Mun. Gov't v. Pohnpei, 13 FSM Intrm. 503, 507 (App. 2005).

Federalism – Abstention and Certification

Although the national courts, in carrying out their judicial responsibilities, do have inherent power to certify issues, or to abstain partially or completely from exercising jurisdiction over a particular issue, or to exercise jurisdiction over part or all of a case; and although the trial court may raise the question of abstention or certification on its own motion; it is not mandatory that the court do so. And even if such a motion had been made, the choice of whether to abstain from a decision or to certify questions is one that lies wholly within the trial court's discretion. Kitti Mun. Gov't v. Pohnpei, 13 FSM Intrm. 503, 507 (App. 2005).

Federalism – Abstention and Certification

When no motion to abstain or to certify a question to the state court was made, the trial court could not abuse its discretion by not abstaining from deciding or by not certifying the ownership question to the state court. Kitti Mun. Gov't v. Pohnpei, 13 FSM Intrm. 503, 507 (App. 2005).

[13 FSM Intrm. 505]

Choice of Law

When the FSM Supreme Court, in the exercise of its jurisdiction, decides a matter of state law, the court's goal should be to apply the law the same way the highest state court would. But a state court trial division case that was not decided by the highest state court may be deemed not to be controlling, if it appears that the highest state court would decide the question differently. Kitti Mun. Gov't v. Pohnpei, 13 FSM Intrm. 503, 508 (App. 2005).

Property – Tidelands

During the German Administration, it was widely known on Ponape that all property from high-water mark out was considered to belong to the German Government with the exception of three private mangrove reserves. Subsequently, the Japanese claimed everything below the high water mark. In due course this passed to the Trust Territory, which shortly before the Trust Territory broke up, granted its rights to the several districts. In the area that became the Federated States of Micronesia, the districts became states. Pohnpei thus became the owner of the marine areas below the high water mark. Such ownership rests with the sovereign, and in this case the sovereign is the State of Pohnpei. Kitti Mun. Gov't v. Pohnpei, 13 FSM Intrm. 503, 508 (App. 2005).

Property – Tidelands

The national government does not own or control tidelands, reefs, or natural resources within 12 nautical miles of the island baselines. Kitti Mun. Gov't v. Pohnpei, 13 FSM Intrm. 503, 509 (App. 2005).

Property – Tidelands

Chuuk, in its Constitution, retroceded tideland rights to their traditional holders. Kitti Mun. Gov't v. Pohnpei, 13 FSM Intrm. 503, 509 (App. 2005).

Transition of Authority

The states of Yap and Kosrae repealed the Trust Territory Code when they enacted their state codes. Kitti Mun. Gov't v. Pohnpei, 13 FSM Intrm. 503, 509 (App. 2005).

Property – Tidelands

When the people of Kitti, as opposed to the municipal government, were not parties to the case, the trial court decision did not affect were the traditional rights of the people of the various municipalities to fish in the submerged reef areas. These rights of the people to marine resources remain unaffected and are protected by Trust Territory statute. Kitti Mun. Gov't v. Pohnpei, 13 FSM Intrm. 503, 509 (App. 2005).

*    *    *    *

COURT'S OPINION

MARTIN YINUG, Associate Justice:

This is an appeal from an FSM Supreme Court trial division judgment, Chief Justice Andon L. Amaraich presiding, that the State of Pohnpei, not Kitti Municipality, owned the submerged land and reef within Kitti. Affirmed.

In April, 1997, the KSVI No.3, owned by Kosrae Sea Venture, Inc., and managed by National Fisheries Corporation, ran aground on a reef in Pohnpei off the coast of Kitti Municipality. On March 17, 1998, the State of Pohnpei, seeking damages for this grounding, filed suit against the KSVI No.3, and NFC. Then on November 13, 1998, the Kitti Municipal government also filed suit against KSVI

[13 FSM Intrm. 506]

No.3, NFC, and KSVI seeking damages for the same occurrence. On June 17, 1999, the trial court entered an order consolidating both civil actions into one case. That order also granted a motion giving KSVI No.3, NFC, and KSVI leave to file a third-party complaint against Pohnpei,¹ which Pohnpei then answered.

On February 16, 2001, the trial court ruled that Pohnpei, not Kitti, owned the reef on which the KSVI No.3 ran aground and the living marine resources that the grounding may have damaged. It held that a municipality is precluded from recovering damages for injury to the submerged lands and living marine resources damaged by a fishing vessel grounding, but would be provided an opportunity at trial to prove any damage to other municipal resources. Pohnpei v. KSVI No.3, 10 FSM Intrm. 53, 67 (Pon. 2001). On January 20, 2003, the trial court dismissed Pohnpei's claims against KSVI No.3, KSVI, and NFC because they had settled the claims among themselves. Kitti and KSVI No.3, KSVI, and NFC then filed a stipulated motion for entry of judgment against Kitti. On March 14, 2003, the trial court granted the motion and entered a final judgment. Kitti filed a timely notice of appeal.

I. ISSUES

Kitti presents four issues for appellate review, summarized as follows:

1) the trial court erred as a matter of law in concluding that Kitti did not own the submerged land within its boundaries because it was contrary to the majority decision in Damarlane v. United States, 7 FSM Intrm. 56 (Pon. S. Ct. App. 1995);

2) the trial court erred in not abstaining or certifying the issue of ownership of submerged lands to the Pohnpei Supreme Court appellate division;

3) even if Damarlane were dicta, the trial court erred in not ruling that the submerged lands in Pohnpei are owned by the municipalities and not the State of Pohnpei; and

4) the trial court decision was contrary to the Constitution's Judicial Guidance Clause.

Pohnpei frames the issues slightly differently and adds one. Summarized, they are:

1) the appellate court does not have jurisdiction over this appeal;

2) the trial court did not err in finding that Pohnpei, and not the municipalities, owned the submerged lands and marine resources, notwithstanding the opinions in State of Pohnpei v. Damarlane, PCA No. 025-91 ("Damarlane I") and Damarlane v. United States, 7 FSM Intrm. 56 (Pon. S. Ct. App. 1995) ("Damarlane II");

3) the trial court did not violate the Judicial Guidance Clause when it made its decision; and

4) the trial court did not commit reversible error by not abstaining from deciding, or by not certifying, certain issues to the Pohnpei Supreme Court appellate division.

[13 FSM Intrm. 507]

II. DISCUSSION

A. Appellate Jurisdiction

Appellee contends that the court lacks jurisdiction because Kitti's appeal is not from a final order or judgment since the entire litigation was not disposed of and issues remained for trial. Under FSM Rule of Appellate Procedure 4(a)(1)(A), and subject to exceptions not applicable here, an appeal to this court may be taken only from a final decision of the court appealed from. According to Pohnpei, the issue that remained for trial is Kitti's claim for damage to any other unspecified municipal resources. Kitti responds that its complaint only sought damages for the submerged lands and living resources that it claimed to own.

Kitti's complaint alleged that the defendants damaged its "reef, submerged lands, and resources." Complaint ¶ 10 (Nov. 13, 1998). The trial court concluded that since Pohnpei owned the submerged lands and resources, "Kitti is precluded from recovering damages for injury to the submerged lands and living marine resources allegedly damaged by the grounding of the KSVI #3. However, if Kitti is able to prove damage to other municipal resources, it shall be provided that opportunity at trial." Pohnpei v. KSVI No.3, 10 FSM Intrm. 53, 67 (Pon. 2001). No other resources claimed by Kitti have been identified by either the court or a party, before or after that decision.

By stipulating to a final judgment being entered against it, Kitti abandoned any claim, if it ever had any (and which it denies), that it might have had for damage to resources other than living marine resources. Thus nothing remained for the trial court to adjudicate. The judgment was final and appealable.

B. Abstention or Certification

Kitti contends that the trial court erred either by not abstaining from deciding the ownership question or by not certifying that question to the Pohnpei Supreme Court appellate division. No motion was made before the trial court for either. Pohnpei asserts that since Kitti did not raise the issue in a timely manner before the trial court, it cannot raise it now.

The general rule is that on appeal a party is bound by the theory advanced in the trial court, and cannot urge a ground for relief which was not presented there, particularly where the party had ample opportunity to raise the issues in the trial court instead of presenting the issue for the first time on appeal. Paul v. Celestine, 4 FSM Intrm. 205, 210 (App. 1990). Furthermore, an abstention request that comes after trial, and after the case had been pending for approximately five years, is untimely. Weno v. Stinnett, 9 FSM Intrm. 200, 210 (App. 1999). Although the national courts, in carrying out their judicial responsibilities, do have inherent power to certify issues, or to abstain partially or completely from exercising jurisdiction over a particular issue, or to exercise jurisdiction over part or all of a case, Gimnang v. Yap, 5 FSM Intrm. 13, 19 (App. 1991); and although the trial court may raise the question of abstention or certification on its own motion, see Stinnett, 9 FSM Intrm. at 209; it is not mandatory that the court do so. And even if such a motion had been made, the choice of whether to abstain from a decision or to certify questions is one that lies wholly within the trial court's discretion. Gimnang v. Trial Division, 6 FSM Intrm. 482, 485 (App. 1994). Since no motion was made, the trial court could not abuse its discretion by not abstaining from deciding or by not certifying the ownership question to the Pohnpei Supreme Court.

C. Ownership of the Reef and Natural Resources

Kitti contends that the trial court erred when it determined that Pohnpei, not Kitti, owned the

[13 FSM Intrm. 508]

submerged reef and living natural resources where the KSVI No.3 ran aground. To support its contention that in Pohnpei the municipalities own the submerged lands and resources, Kitti relies on two state court cases: Pohnpei v. Damarlane, 4 Pon. L.R. 288 (Tr. 1991) (PCA No. 025-91, Declaratory Judgment, Mar. 14, 1991) (referred to as "Damarlane I"), and Damarlane v. United States, 7 FSM Intrm. 56 (Pon. S. Ct. App. 1995) (referred to as "Damarlane II"). Kitti further contends that the trial court erred because it did not follow the majority opinion in Damarlane II or statements in Damarlane I that submerged lands could be considered luehn wei or municipal lands, and that the trial court was bound to follow these state court decisions in this state law matter.

"When this court, in the exercise of its jurisdiction, decides a matter of state law, the Court['s] . . . goal should be to apply the law the same way the highest state court would." Edwards v. Pohnpei, 3 FSM Intrm. 350, 360 n.22 (Pon. 1988). Applying this principle here, we cannot say that the trial court erred or that the highest state court would rule that the municipalities owned the submerged land.

Damarlane I was a trial division case – it was not decided by the highest state court – and may be deemed not to be controlling, if it appears that the highest state court would decide the question differently. That case was an action brought by the state, which had been dredging part of the lagoon, to determine the rights to the subsurface of the lagoon. The court held that ownership of the dredged materials lay with the state and not with the abutting landowners. The court also said: "By operation of law, namely, the Pohnpei Constitution and D.L. No. 4L-69-76 as superseded by S.L. No. 1L-155-87, the management and administration of the marine areas below the ordinary high water mark was entrusted to the board of trustees of the Pohnpei public lands trust." Pohnpei v. Damarlane, 4 Pon. L.R. 288, 351 (Tr. 1991). Management of the marine areas below the ordinary high water mark by a state agency implies control or ownership by the state. Instead, Kitti relies on dicta in this case that unused land should be luehn wei.

Damarlane II was a Pohnpei Supreme Court appellate division decision replying to two questions certified to it by the FSM Supreme Court. Those two questions only asked what compensable rights abutting [dry] landowners have and what compensable rights users of a damaged fish weir have when the state has dredged the lagoon. 7 FSM Intrm. at 60. The then Chief Justice Edwel Santos indicated, in dicta, that he would hold that the municipalities had ownership rights in the submerged lands. Id. at 66 n.5. Although then Associate Justice (now Chief Justice) Judah C. Johnny and Chief Justice Santos both agreed on the answer to the two certified questions posed in Damarlane II, Justice Johnny evidently felt strongly enough about the dicta that Chief Justice Santos included in his opinion that instead of joining that opinion he wrote his own. Id. at 69-74. The third justice, Karl Kohler, had died before the opinions were prepared, so it cannot be said that either opinion is a majority one.

Nor can it be said that in this case the trial court erred, or that the highest state court would rule that the municipalities owned the submerged land. "In aboriginal times," all land and submerged land in Pohnpei was owned by the various Nahnmwarkis. Pohnpei v. Damarlane, 4 Pon. L.R. 288, 335 (Tr. 1991). Thus the Nahnmwarkis were the sovereigns before the Germans divested them of their sovereign rights: during the German Administration, "[i]t was widely known on Ponape that all property from high-water mark out was considered to belong to the German Government with the exception of three private mangrove reserves." Protestant Mission v. Trust Territory 3 TTR 26, 31 (Pon. 1965) (citing 1 LAND TENURE PATTERNS [Fisher] 126-27 (1958)). Subsequently, the Japanese claimed everything below the high water mark. Id. at 32. In due course this passed to the Trust Territory, which shortly before the Trust Territory broke up, granted its rights to the several districts. In the area that became the Federated States of Micronesia, the districts became states. Pohnpei thus became the owner of the marine areas below the high water mark. Such ownership rests with the sovereign, and in this case the sovereign is the State of Pohnpei.

[13 FSM Intrm. 509]

D. Judicial Guidance Clause

Kitti also asserts that the trial court erred because it failed to follow the Judicial Guidance Clause, which provides that "[c]ourt decisions shall be consistent with the Constitution, Micronesian customs and traditions, and the social and geographical configuration of Micronesia. In rendering a decision, a court shall consult sources of the Federated States of Micronesia." FSM Const. art. XI, § 11. Kitti urges that since traditional and customary rights are protected and the municipalities existed before Pohnpei or the Trust Territory existed as entities, the court should have ruled in Kitti's favor. However, this adds nothing to Kitti's previous argument that the marine areas below the high water mark are traditionally and customarily owned by the municipalities. Irrespective of how these contentions are couched, the argument is unpersuasive.

We emphasize that the issue here is a matter of Pohnpei law. It is not a matter of national law except to the extent that the national government does not own or control tidelands, reefs, or natural resources within 12 nautical miles of the island baselines. Chuuk v. Secretary of Finance, 9 FSM Intrm. 424, 434 (App. 2000). It is not a matter of state law in, nor does it concern, the other three states. It is not a matter of Chuuk law because Chuuk, in its Constitution, retroceded tideland rights to their traditional holders. Chk. Const. art. IV, § 4. The States of Yap and Kosrae repealed the Trust Territory Code, including the provision relied upon by Pohnpei,² when they enacted their state codes. Kos. S.C. § 1.301 et seq.; 1 Y.S.C. § 101. Pohnpei has not repealed the Trust Territory Code nor does its Constitution contain a provision that overrides that part of the Trust Territory Code.

If the people of Pohnpei want the municipalities to own the reefs and submerged land within their boundaries, this is a change in the law that should not be made by an unelected court. It should be made by the elected Legislature or by the people themselves through constitutional processes. Judges should not be the ones to legislate this result from the bench.

Other rights that the trial court decision did not affect were the traditional rights of the people of the various municipalities to fish in the submerged reef areas. The people of Kitti, as opposed to the municipal government, were not parties to this case. These rights of the people to marine resources remain unaffected and are protected by the Trust Territory statute, 67 TTC 2(1)(e),³ and by the later state statute, Pon. S.L. No. 3L-114-95, § 6 ("Traditionally recognized subsistence fishing rights in submerged reef areas wherever located within state waters shall be preserved and respected."). Only the Kitti municipal government, an entity created by a higher government, is a party, and today's holding adjudicates a single question, that of Kitti's claim of legal title. In contrast, the people of Kitti are not parties to this action. Thus our holding today does not affect the traditionally recognized rights that any of Kitti's residents, families, lineages, or clans may have to use or otherwise enjoy the submerged land and reef areas within municipal boundaries.

[13 FSM Intrm. 510]

III. CONCLUSION

For the foregoing reasons, we affirm the judgment of the trial court in its entirety.

¹ This was actually a counterclaim against Pohnpei and not a "third-party complaint" because a third-party complaint is a device used to bring a non-party into a case and Pohnpei was already a party. See FSM Civ. R. 14(a). For a full account of the case's procedural history see Kitti Mun. Gov't v. Pohnpei, 11 FSM Intrm. 622, 625-26 (App. 2003).

² Section 1 of Title 67 of the Trust Territory Code provides in pertinent part that "[p]ublic lands are defined as being those lands situated within the Trust Territory which were owned or maintained by the Japanese Government as government or public lands."

³ This section provides in pertinent part as follows: