THE SUPREME COURT OF THE
FEDERATED STATES OF MICRONESIA
Cite as Bank of Guam v. O'Sonis ,
8 FSM Intrm. 301 (Chk. 1998)
BANK OF GUAM,
ASSOCIATE JUSTICE MACHIME O'SONIS,
in his individual and official capacities, and
CIVIL ACTION NO. 1997-1057
Richard H. Benson
Hearing: May 19, 1998
Decided: June 18, 1998
APPEARANCES:For the Plaintiff: Anita P. Arriola, Esq. (brief)
Arriola, Cowan & Bordallo
P.O. Box X
Agaņa, Guam 96910
Fredrick L. Ramp, Esq. (argued)
P.O. Box 1480
Kolonia, Pohnpei FM 96941
For the Defendants: Manny Otoko, Trial Counselor
P.O. Box 903
Wesley Simina, Esq. (supervising attorney)
P.O. Box 94
Weno, Chuuk FM 96942
* * * *
Civil Procedure ) Motions
When defendants do not oppose a motion, they are deemed to have consented to it, but before a motion can be granted, proper grounds must exist. Bank of Guam v. O'Sonis, 8 FSM Intrm. 301, 304 (Chk. 1998).
Attachment and Execution; Constitutional Law ) Due Process ) Notice and Hearing
A non-party is deprived of due process of law when a case is started against it without notice
or it having been made a party, when an order in aid of judgment has been issued against the non-party without a judgment and a hearing held following notice, and when a writ of execution has been issued against a non-party and without notice or hearing to determine the amount to be executed upon. Bank of Guam v. O'Sonis, 8 FSM Intrm. 301, 304 (Chk. 1998).
Wilful and malicious deprivation of a person's due process rights to notice and an opportunity to be heard, are a violation of that person's civil rights. Bank of Guam v. O'Sonis, 8 FSM Intrm. 301, 304 (Chk. 1998).
Courts ) Recusal
A judge who represented a party in an earlier action involving the identical claim is required to recuse himself from the case. Bank of Guam v. O'Sonis, 8 FSM Intrm. 301, 305 (Chk. 1998).
Constitutional Law ) Due Process; Courts ) Recusal
It is a due process violation for a former trial counselor or attorney to preside as a trial judge over litigation involving the same issues and interests he had been intimately involved with as a trial counselor or attorney, particularly where he had represented one of the litigants. Bank of Guam v. O'Sonis, 8 FSM Intrm. 301, 305 (Chk. 1998).
Constitutional Law ) Due Process; Courts ) Recusal
A party has a due process right to a hearing before an unbiased judge and a judge without an interest in the case's outcome. Bank of Guam v. O'Sonis, 8 FSM Intrm. 301, 305 (Chk. 1998).
Attachment and Execution
A writ of execution issued in violation of statute, against the property of a non-party in a case for which no judgment has been issued and in which the judge should have recused himself is a wrongfully-issued writ. Bank of Guam v. O'Sonis, 8 FSM Intrm. 301, 305 (Chk. 1998).
Civil Procedure ) Injunctions
A non-party is entitled to permanent injunctive relief against the issuance of a writ of execution when its due process rights are violated because no adequate remedy at law exists when the non-party has no right to appeal, cannot move for the judge's disqualification, or a stay of the writ pending appeal, and a motion to intervene as a party was never acted upon, and because the injury is irreparable in that if the writ is enforced, there is no assurance that the financial loss could be recovered. Bank of Guam v. O'Sonis, 8 FSM Intrm. 301, 305-06 (Chk. 1998).
Civil Procedure ) Declaratory Relief
Declaratory relief is inappropriate when the plaintiff has already succeeded in procuring permanent injunctive relief based on the nonexistence of any genuine issue of any material fact involving deprivation of the plaintiff's constitutional rights and violation of statute and the settled principle of res judicata. In this regard, declaratory relief would be redundant. Bank of Guam v. O'Sonis, 8 FSM Intrm. 301, 306 (Chk. 1998).
* * * *
RICHARD H. BENSON, Associate Justice:
On February 3, 1998, my Order Setting Further Proceedings was entered. It provided in part:
"By May 1, 1998 All pretrial motion [sic] will be filed and served. May 19, 1998 Hearing on pretrial motions . . . ." On April 29, 1998, the plaintiff filed its Motion for Partial Summary Judgment. A certificate of service was filed on the same day reciting service on April 29, 1998 on the defendants' counsel.
At the May 19th pretrial motion hearing, the defendants' counsel stated that the Motion for Partial Summary Judgment had not been served on him. By agreement of the parties, the plaintiff made its oral argument in support of the motion, with the defendants having the right to file and serve a written opposition within 10 days. According to this agreement, the plaintiff had five days to reply to the opposition. After those periods passed the motion was to be considered submitted for decision.
No opposition was filed within the 10 days or to date.
The following summary of allegations in the complaint which are admitted by the defendants suffices to indicate the circumstances giving rise to this case.
On May 1, 1989, trial counselor Machime O'Sonis, acting on behalf of Samuel Hartman, filed a petition in the Chuuk State Supreme Court to probate the estate of Fritz Hartman, Samuel's brother. That case was removed to the FSM Supreme Court and assigned civil action docket number 1989-1023. See In re Estate of Hartman, 4 FSM Intrm. 386 (Chk. 1989). The FSM Supreme Court resolved the issues raised by the case and determined the distribution of the estate's assets. In re Estate of Hartman, 6 FSM Intrm. 326 (Chk. 1994).
On November 30, 1994, Samuel Hartman filed a petition in the Trial Division of the Chuuk State Supreme Court. This commenced Probate Case No. 25-94. The petition alleged that 1976 war claim funds received by his brother Fritz Hartman had been deposited in the Bank of Guam, Chuuk Branch, and now belonged to him. The petition sought a full accounting from the bank. The Bank of Guam was not made a party to this action nor was it served with a summons or any other formal pleading.
Defendant O'Sonis, Hartman's prior attorney in an identical probate matter, presided over Probate Case No. 25-94. On May 9, 1995, he held that Hartman was the proper and right person to replace his brother on certain bank accounts and to have control of them. O'Sonis ordered the manager of the Bank of Guam, Chuuk Branch, to substitute the name of Fritz Hartman with the name of Samuel Hartman on the accounts. The bank refused because those accounts had no money in them and had been closed for years.
Samuel Hartman then filed a civil action in the FSM Supreme Court, FSM Civil Action No. 1995-1008, Hartman v. Bank of Guam, which alleged conversion of the 1976 war claim funds. The FSM court held that the claims were barred by the statute of limitations and by Hartman's failure to prosecute his case.
Hartman then applied for and received from O'Sonis an Order for Aid of Judgment entered January 17, 1997. The order recited that the bank had not followed the May 9, 1995 order and directed the bank to comply with it. The bank filed a motion to reconsider this order, contending that Hartman's claim was barred by res judicata by the final judgment in FSM Civil Action No. 1995-1008.
The motion to reconsider was heard on July 16, 1997. At the hearing the bank argued, in addition to res judicata, that the court had no jurisdiction over the bank since it was not a party to the action, that O'Sonis was disqualified from hearing the case because of his prior representation of
[8 FSM Intrm. 304]
Hartman in an identical matter (the first Fritz Hartman probate case), that the claim was barred by collateral estoppel, and that the bank could not comply with the order because the accounts had long been closed.
O'Sonis denied the motion for reconsideration on September 8, 1997. In the order denying the motion he also ordered that if the bank failed to comply with the Order in Aid of Judgment within 30 days execution would issue. On November 13, 1997, O'Sonis issued a Writ of Execution, ordering the bank to pay $167,976.40, which sum included interest of over $111,000.00.
This present action was filed on December 9, 1997.
In its Motion for Partial Summary Judgment the plaintiff seeks judgment on five of its seven causes of action. These will be addressed one by one.
Plaintiff's Causes of Action
Since the defendants did not oppose the motion, they are deemed to have consented to it. FSM Civ. R. 6(d). Before the motion can be granted, however, proper grounds must exist. Senda v. Mid-Pacific Constr. Co., 6 FSM Intrm. 440, 442 (App. 1994). I have examined the motion itself, the affidavits in support thereof, the transcript of the testimony presented on February 2, 1998 and the defendants' answer.
A. Violation of Due Process of Law (First Cause of Action)
There exists no genuine dispute as to the following material facts.
1. Probate Case No. 25-94 was commenced without making the bank a party or giving it any notice of the proceeding. Thereafter defendant O'Sonis issued an order directing the bank to substitute the name of Samuel Hartman on two certificates of deposit. This was done without previous notice to the bank.
2. Two years later, Hartman applied for and received an Order in Aid of Judgment in which O'Sonis ordered the bank to comply with the earlier order. Again the bank had no notice prior to this action being taken. According to Title 8 section 55 of the Trust Territory Code such orders can only be directed to a party, when a judgment exists and after a hearing has been held following notice.
3. The Writ of Execution was directed against a non-party and thus violates section 53 of Title 8. No notice was given or hearing held at which the amount to be executed upon was determined.
I conclude the plaintiff was deprived in each of these ways of its right to due process of law before the loss of property in violation of article IV, section 3 of the FSM Constitution.
B. Deprivation of Civil Rights (Second Cause of Action)
The defendants wilfully deprived the plaintiff of due process by depriving them of notice and an opportunity to be heard, as specified above under part A, in that O'Sonis issued the orders or presided over the matter, and Hartman instigated the action. Hartman was malicious as well as wilful since his petition in 25-94 contained the false statement that his right to the 1976 war claim fund was "pursuant to a Court Judgment in FSM Civil Action No. 1989-1023."
O'Sonis wilfully deprived the plaintiff of due process by presiding over Probate Action No. 25-94
as a judge, when he had represented Hartman in an earlier action involving the identical war claim fund. Both the Chuuk State Judiciary Act of 1990 and the Model Code of Judicial Conduct, enacted into positive law in the State of Chuuk by section 25 of the 1990 Judiciary Act, required him to recuse himself. In Etscheit v. Santos, 5 FSM Intrm. 35 (App. 1991) the court held that it was a violation of due process for a former trial counselor or attorney to preside as a trial judge over litigation involving the same issues and interests he had been intimately involved with as a trial counselor or attorney, particularly where he had represented one of the litigants. Id. at 44-45.
The bank was also deprived of its due process right to a hearing before an unbiased judge in that O'Sonis entertained a bias against the plaintiff. Cf. Damarlane v. Pohnpei Legislature, 8 FSM Intrm. 23, 27-28 (App. 1997). The judge also had an interest in the outcome of the case. Samuel Hartman stated in court, under oath, that if he succeeded in obtaining cash from the Bank of Guam as a result of Probate Case 25-94, he would then owe O'Sonis a fee of an unspecified amount for O'Sonis's work on the original probate case. In Etscheit, the trial judge also had an unresolved claim to some of the property at issue as his attorney's fee for his earlier work. Etscheit, 5 FSM Intrm. at 44.
All the facts stated in the foregoing three paragraphs, are material and no genuine issue exists as to any. I conclude that the existence of these facts constitutes a deprivation of the civil rights of the plaintiff.
C. Wrongful Execution (Third Cause of Action)
O'Sonis issued the Order in Aid of Judgment in violation of the statute, as cited above, in that it was directed to a non-party, and there was no judgment. It was also wrongful in that O'Sonis was disqualified through his earlier representation of Hartman, through his actual bias against the plaintiff and by his interest in the case's outcome.
O'Sonis issued the Writ of Execution also in violation of the statute as cited above in that it was against the property of a non-party, and no judgment had issued in Probate Action 25-94. O'Sonis's required disqualification also rendered the issuance of the Order and the Writ wrongful.
Hartman procured and caused the issuance of the above Order and Writ. No genuine dispute as to any of these material facts exists.
D. Injunctive Relief (Fifth Cause of Action)
I conclude that the plaintiff is entitled to the permanent injunctive relief that it seeks. No adequate remedy at law exists because the non-party has no right to appeal, and although the bank has moved O'Sonis to intervene as a party, O'Sonis has never taken any action on the motion. And as a non-party the bank cannot move for the disqualification of O'Sonis. It attempted to do so, and its recusal motion was denied on this very ground. It also moved for a stay of the writ pending appeal, and that motion was also denied on the ground that the bank was not a party. Not only is Probate Case 25-94 barred by FSM Civil Action 1995-1008, but it is also barred by Civil Action No. 1989-1023, the original probate case. In that case the court found that "[t]he funds received in 1976 through a war claim are not an asset of [Fritz Hartman's] estate, and may not be traced to any present asset." In re Estate of Hartman, 6 FSM Intrm. 326, 329 (Chk. 1994). That finding was not appealed following the final judgment entered February 10, 1997. (This case also determined that funds from a different, later war claim were not assets of the estate, but were lineage property under Samuel Hartman's control. Id. at 330.) The subject matter of Probate Case 25-94 is res judicata. Accordingly, the defendants have violated the due process rights of the plaintiff and apparently will continue to do so unless enjoined therefrom.
The injury to which the plaintiff is exposed is irreparable in that if the writ is enforced, there is no assurance that the financial loss to the plaintiff can be recovered. Further, O'Sonis may use the contempt power permitted under the statute to enforce payment of the execution, thereby exposing plaintiff's employees to loss of liberty.
E. Declaratory Relief (Sixth Cause of Action)
I cannot conclude that declaratory relief is appropriate in this case since the matters have progressed to a point where the bank has succeeded in procuring injunctive relief against any further action by the defendants in regard to Probate Case No. 25-94. Injunctive relief is based on the nonexistence of any genuine issue as to any material fact involving deprivation of constitutional rights and violation of statute and the settled principle of res judicata. In this regard, declaratory relief would be redundant. In addition, the bank has sought damages against the defendants and that claim is pending. The plaintiff has thus sought affirmative relief because of the wrongs alleged. Declaratory relief is therefore not suitable.
Partial summary judgment is accordingly granted on the plaintiff's first, second and third causes of action. Summary judgment is also granted on the plaintiff's fifth cause of action. Plaintiff shall, after allowing defendants' counsel and supervising attorney to see it, submit a proposed permanent injunction. The injunction shall include language containing an FSM Rule of Civil Procedure 54(b) determination of no just reason for delay and directing entry of a final judgment on those claims for which this order grants partial summary judgment. Although litigants may appeal "from interlocutory orders of the Federated States of Micronesia Supreme Court trial division granting, continuing, modifying, refusing, or dissolving injunctions, or refusing to dissolve or modify injunctions," FSM App. R. 4(a)(1)(B), a Civil Rule 54(b) determination to enter final judgment to fewer than all the claims presented by the case will clearly permit appeal from this order granting partial summary judgment.