FSM SUPREME COURT TRIAL DIVISION

Cite as People of Rull ex rel. Ruepong v. M/V Kyowa Violet, 14 FSM Intrm. 533 (Yap 2007)

[14 FSN Intrm. 533]

THE PEOPLE OF THE MUNICIPALITIES OF RULL AND

GILMAN, YAP STATE, by and through CHIEF

ANDREW RUEPONG, CHIEF THOMAS FALGNIN

and CHIEF JAMES LIMAR,

Plaintiffs,

vs.

M/V KYOWA VIOLET (O.N. 15005-85-CH), its

engines, masts, bowsprit, boats, anchors, chains,

cable, rigging, apparel, furniture, and all other

necessaries thereunto pertaining;

In Rem Defendant,

KYOWA SHIPPING CO., LTD., PACIFIC LINE

TRADING INC. (PANAMA), and TORITEC CO. LTD.,

In Personam Defendants.

CIVIL ACTION NO. 2003-3002

ORDER SETTING SUPERSEDEAS BOND AND GRANTING STAY

Dennis K. Yamase

Associate Justice

Hearing: January 5, 2007

Decided: January 8, 2007

APPEARANCES:

For the Plaintiffs:       Daniel J. Berman, Esq.

                                  Berman OíConnor & Mann

                                  111 Chalan Santo Papa, Suite 503

                                  Hagatna, Guam   96910

                                  James P. Walsh, Esq. (pro hac vice)

                                  Davis Wright Tremaine LLP

                                  One Embarcadero Center, Suite 600

                                  San Francisco, CA   94111

 

For the Defendants:   David Ledger, Esq. (pro hac vice)

                                   Carlsmith Ball LLP

                                   134 West Soledad Avenue, Suite 401

                                    P.O. Box BF

                                    Hagatna, Guam   96932-5027

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HEADNOTE

Appellate Review ) Stay ) Civil Cases

      When the defendants attempted to obtain an $8.1 million standby letter of credit through the Bank of the FSM, Colonia, Yap, but were unable to because that bank was institutionally unable to handle such a letter of credit for a sum larger than $2.5 million; when the possibility that the other bank in the FSM, the Bank of Guam, might be able to issue such a letter of credit was not explored; and the defendants submitted a surety bond from the Travelers Casualty and Surety Company of Hartford, Connecticut; and when the court issued its order, it was under the impression that a standby letter of credit could be issued through the Bank of the FSM, Yap, and if it had had any hint that such was not possible, the order would have specified a letter of credit through any bank in the FSM and only if that was unavailable would an alternative bond have been considered; the court will approve the Travelers surety bond that the defendants have already obtained and stay execution on the judgment pending appeal and further court order. People of Rull ex rel. Ruepong v. M/V Kyowa Violet, 14 FSM Intrm. 533, 534-35 (Yap 2007).

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COURTíS OPINION

DENNIS YAMASE, Associate Justice:

      This came before the court for hearing (telephonically) on the defendantsí submission of an $8.1 million supersedeas bond in the form of surety bond issued by the Travelers Casualty and Surety Company of Hartford, Connecticut, U.S.A. The plaintiffs objected to this form of surety bond on the grounds that it did not comply with the courtís December 13, 2006 order that the supersedeas bond could take the form of either cash deposited in the courtís registry or a standby letter of credit drawn on a financial institution in Colonia, Yap and that Travelers was not licensed to do business in the Federated States of Micronesia.

      The defendants attempted to obtain a standby letter of credit through the Bank of the Federated States of Micronesia, Colonia, Yap, but were unable to because that bank was institutionally unable to handle such a letter of credit for a sum larger than $2.5 million. (The possibility that the other bank in the Federated States of Micronesia, the Bank of Guam, might be able to issue such a letter of credit was not explored.) The defendants therefore submitted the Travelersí surety bond and contend, relying on Panuelo v. Amayo, 10 FSM Intrm. 558 (App. 2002), that this meets the requirements of the courtís December 13, 2006 order.

     At the hearing preceding the December 13, 2006 order, the defendants had not raised an objection to a supersedeas bond in the form of a letter of credit if their proffered letter of undertaking was not satisfactory security to obtain a stay while their appeal was pending. When the court issued that order, it was under the impression that a standby letter of credit could be issued through the Bank of the Federated States of Micronesia, Yap office. If it had had any hint that such was not possible, the order would have specified a letter of credit through any bank in the Federated States of Micronesia in either Yap or Pohnpei (where the appellate clerkís office is) and only if that was unavailable would an alternative bond have been considered.

     Since a standby letter of credit in the required amount cannot be issued in Colonia, Yap, now therefore it is hereby ordered that the surety bond that the defendants have already obtained from the Travelers Casualty and Surety Company of Hartford, Connecticut is approved and it is further ordered that execution on the September 21, 2006 judgment (and on any amendment to that judgment for

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attorneysí fees and costs) is stayed pending appeal and further order of the court.

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