KOSRAE STATE COURT TRIAL DIVISION

Cite as George v. George, 15 FSM Intrm. 270 (Kos. S. Ct. Tr. 2007)

[15 FSM Intrm. 270]

WEBSTER GEORGE,

Plaintiff,

vs.

ERSINA V. GEORGE,

Defendant.

CIVIL ACTION NO. 30-064

MEMORANDUM OF DECISION; JUDGMENT

Aliksa B. Aliksa

Chief Justice

Decided: September 17, 2007

APPEARANCES:

For the Plaintiff:        Snyder H. Simon, Esq.

                                 P.O. Box 1017

                                 Tofol, Kosrae   FM   96944
 

For the Defendant:    Canney L. Palsis, Esq.

                                   Micronesian Legal Services Corporation

                                   P.O. Box 38

                                   Tofol, Kosrae   FM   96944

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HEADNOTES

Civil Procedure ) Pleadings; Statutes of Limitations

      The affirmative defense of statute of limitations is to be raised affirmatively in the responsive pleading; it is not a defense that may be brought by a Rule 12(b) motion. George v. George, 15 FSM Intrm. 270, 273 (Kos. S. Ct. Tr. 2007).

Statutes of Limitations

      The statute of limitations for an action on an open account is six years and when the testimony at trial shows transactions on the open account within the six-year statutory period a motion to dismiss on statute of limitations will be denied. George v. George, 15 FSM Intrm. 270, 273 (Kos. S. Ct. Tr. 2007).

Contracts ) Formation

      When the plaintiff exchanged goods with the defendant in exchange for the defendant agreeing to make payments on the account, the defendant indicated her acceptance of this exchange by making payments. These actions created an enforceable contract. George v. George, 15 FSM Intrm. 270, 273 (Kos. S. Ct. Tr. 2007).

[15 FSM Intrm 271]

Contracts; Remedies ) Restitution

       When the court concludes that there was a contract between the plaintiff and the defendant, it will not address the plaintiff’s alternative claims under unjust enrichment and promissory estoppel. George v. George, 15 FSM Intrm. 270, 273 (Kos. S. Ct. Tr. 2007).

Evidence ) Burden of Proof

      In a civil case, a plaintiff must prove the allegations of their complaint by a preponderance of evidence in order to prevail. Preponderance of the evidence is not evidence to a moral certainty or clear and convincing evidence. As a standard of proof, preponderance of the evidence means that the facts asserted by the plaintiff are more probably true than false. But, if the plaintiff’s evidence is less convincing than that offered in opposition, then defendant’s version of events is the more likely, and the plaintiff fails to meet its burden of proof. George v. George, 15 FSM Intrm. 270, 274 (Kos. S. Ct. Tr. 2007).

Evidence ) Burden of Proof

      An open account is not self-proving; it must be supported by enough evidence to show the account’s accuracy. George v. George, 15 FSM Intrm. 270, 274 (Kos. S. Ct. Tr. 2007).

Evidence ) Burden of Proof

      When the evidence offered to support the amount claimed in the complaint is minimal and receipts, which the plaintiff’s own witnesses testified were available, were not offered into evidence; when one page of the ledger was identified and marked, but never offered into evidence; when the evidence to support the plaintiff’s claims consists of his former employees’ testimony on the amount owed and the defendant’s acknowledgment that she owes some amount but not the amount claimed; when the defendant could have used the receipts to show they did not support the amount in the ledger but did not and did not question the plaintiff’s witnesses as to the specific amounts shown in the receipts, the court was given no evidence to weigh in support of an alternative explanation and can only look at the testimony offered and determine whether the facts asserted by the plaintiff are more probably true than false. Thus, based on the defendant’s acknowledgment that some amount is owed, but not the $14,431.58 claimed by the plaintiff, and based on the testimony of the plaintiff’s witnesses about the ledger and the balance, the evidence weighs slightly to the plaintiff and that it is more probably true than false that the defendant owes the amount of $6,220.52. George v. George, 15 FSM Intrm. 270, 274-75 (Kos. S. Ct. Tr. 2007).

Evidence ) Burden of Proof

       When evidence is available but not offered, the question is raised whether the withheld evidence supported the claim. George v. George, 15 FSM Intrm. 270, 274 (Kos. S. Ct. Tr. 2007).

Evidence ) Burden of Proof

      The parties have the responsibility to put forward the evidence to support their client’s case. This is not the court’s responsibility. George v. George, 15 FSM Intrm. 270, 275 (Kos. S. Ct. Tr. 2007).

Contracts ) Damages; Interest and Usury

      The court has the discretion to award pre-judgment interest, but it is not a matter of right unless the debtor knows precisely what he is to pay and when payment is due. The purpose of awarding interest is to compensate the complaining party for losing use of the funds. George v. George, 15 FSM Intrm. 270, 275 (Kos. S. Ct. Tr. 2007).

Contracts ) Damages; Interest and Usury

      When the parties have a written agreement stating that interest would be added to the unpaid

[15 FSM Intrm 272]

balance, an award of pre-judgment interest has been upheld. George v. George, 15 FSM Intrm. 270, 275 (Kos. S. Ct. Tr. 2007).

Attorney’s Fees

      When an attorney’s fee award is sought, the retainer agreement is not relevant; it is not even discoverable because there is generally no relationship between the attorney’s fees and the subject matter of a pending action. The retainer agreement will therefore not be considered in deciding an attorney fee request. George v. George, 15 FSM Intrm. 270, 275 (Kos. S. Ct. Tr. 2007).

Attorney’s Fees

      Attorneys fees are allowable against the opposing party if a party acts vexatiously, in bad faith, presses frivolous claims, or employs oppressive litigation practices, or when a party’s successful efforts have generated a common fund or extended substantial benefits to a class. George v. George, 15 FSM Intrm. 270, 275-76 (Kos. S. Ct. Tr. 2007).

Attorney’s Fees

      Normally, in the absence of a statute to the contrary, a court will proceed on the assumption that the parties will bear their own attorney’s fees because the usual rule is that each party pays its own attorney’s fees. George v. George, 15 FSM Intrm. 270, 276 (Kos. S. Ct. Tr. 2007).

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COURT’S OPINION

ALIKSA B. ALIKSA, Chief Justice:

       Plaintiff filed his Complaint on April 10, 2006 asking for a judgment against the Defendant in the amount of $6,220.52, plus interest on the judgment, counsel fees and costs. He amended his Complaint on that same day to increase the amount to $9,775.12. Defendant filed an Answer on May 3, 2006. On June 12, 2006, Plaintiff requested permission to file another amended Complaint raising the amount claimed to $14,421.58 and to restate a legal theory. Defendant opposed this amendment. The Court granted permission to amend the Complaint and Defendant than filed another Answer on July 6, 2006. Snyder Simon represents Plaintiff. Canney Palsis represents Defendant.

      Counsel for Defendant moved to withdraw from the case in January 2007, one day before trial, because Defendant requested a continuance until May or June of 2008. Defendant was living in the United States at that time. Plaintiff also requested a continuance of the same hearing due to his hospitalization. This Court continued the hearing, but refused to grant Counsel’s motion to withdraw because Counsel had capably represented Defendant, was prepared for trial, and an extended continuance would not allow a prompt hearing. Defendant was advised that she could participate in the hearing by telephone.

      After additional discovery and another continuance at the request of Plaintiff, this matter was finally heard on August 15, 2007.

       Plaintiff argues that a contract exists between parties and that Defendant breached that contract by failing to pay for goods received on her open account. In the alternative, he argues that, if there is no contract, then he is entitled to be paid under the legal theories of unjust enrichment or promissory estoppel. In his closing argument, Plaintiff requests damages of $6,220.52 in principal, $8,211.06 in pre-judgment interest, and $2,164.74 in costs and attorney fees.

[15 FSM Intrm 273]

      Defendant argues that Plaintiff failed to prove his case because he did not submit the ledger into evidence and failed to prove she owes Plaintiff $14,431.58 as claimed in the second amended complaint. She acknowledges she owes Defendant some money, but not the amount claimed. She also argues that there is no basis to calculate pre-judgment interest and no grounds to award attorney fees. As an alternative, she argues that this Court should require Plaintiff to submit the receipts and that the amount of judgment should be only in the amount of those receipts.

      After the presentation of evidence, I then took the matter under advisement. The parties were required to submit written closing arguments. Now, after the submission of those arguments, this Memorandum of Decision sets forth my ruling and reasoning.

I.  Statute of Limitations

      Defendant filed a Motion to Dismiss on October 6, 2006 claiming the statute of limitations had passed on the claims. In the Order Denying the Motion, this Court noted that the affirmative defense of statute of limitations is to be raised affirmatively in the responsive pleading; it is not a defense that may be brought by motion under Kos. Civ. R. 12(b). However, because the transactions dates alleged by Plaintiff may not have been available prior to discovery, this Court considered the issue. The ledger offered by Plaintiff showed transactions as late as December 2000. The Complaint was filed in April 2006. The statute of limitations for an action on an open account is six years. Kos. S.C. § 6.2508. Defendant argued that the evidence at trial would show different facts that what was shown during discovery but offered no affidavits, testimony or other evidence on that point at the hearing on the motion. The Court denied the Motion in its November 17, 2006 order.

      Following presentation of evidence at the trial, Defendant renewed her motion to dismiss based on the running of the statute of limitations. Based on the testimony at trial showing transactions on the open account within the six-year statutory period, that motion was again denied.

II.  Findings of Fact

      Plaintiff exchanged goods with Defendant in exchange for Defendant agreeing to make payments on the account. Defendant indicated her acceptance of this exchange by making payments. I find that their actions created an enforceable contract.

      I also find that Defendant stopped making payments and that this failure to make payments constituted a breach of the contract.

      Because I find that there was a contract between Plaintiff and Defendant I do not address the alternative claims under unjust enrichment and promissory estoppel.

      Defendant had an open account with Plaintiff until Plaintiff’s store closed. Defendant acknowledges that she owes Plaintiff some money, but disagrees with the amounts claimed in the various complaints and disagrees with the amount shown on Plaintiff’s ledger, as relied on by Plaintiff’s witnesses.

      Plaintiff testified he was uncertain as to the amount owed. Merihse J. Albert and Joani A. Sigrah worked as bookkeepers for Plaintiff. They testified about the ledger kept by the business. Purchases were supported by receipts and entered into the ledger. The receipts would show the date, amount, and what was purchased. The ledgers show the date entries were made on the ledger, the amounts of payments and purchases (but not the dates of the payments and purchases), and the balance after each entry onto the ledger. The ledger does not show the same information that is shown on the

[15 FSM Intrm 274]

receipts. The balance shown on the last page of the ledger is $6,220.52.

      Their supervisor, Rickson W. George, testified that he had some of the receipts supporting the purchases listed in the ledger. However, no receipts were introduced into evidence. Also, the last page of the ledger for this Defendant was marked and identified, but it was never moved into evidence.

      On the question of pre-judgment interest, the evidence shows 1)  that there was no written agreement on payment of interest on Defendant’s open account, 2)  that the parties did not have an agreement or understanding to add interest to the account, and 3)  that Defendant made sporadic payments on the account.

III.  Analysis

Burden of Proof

      In a civil case, a Plaintiff must prove the allegations of their complaint by a preponderance of evidence in order to prevail. See generally Chipen v. Reynold, 9 FSM Intrm. 148, 149 (Chk. S. Ct. Tr. 1999). Preponderance of the evidence is not evidence to a moral certainty or clear and convincing evidence. As a standard of proof, preponderance of the evidence means that the facts asserted by the plaintiff are more probably true than false. But, if the plaintiff’s evidence is less convincing than that offered in opposition, then defendant’s version of events is the more likely, and the plaintiff fails to meet its burden of proof. FSM Telecomm. Corp. v. Worswick, 9 FSM Intrm. 6, 12 (Yap 1999) (referred to as Worswick).

      In Worswick, one of Telecomm’s customers disputed charges to her phone bill. This case presents some similarities. The dispute was about an open account. A number of years had passed since the time the charges were placed on the account, making the testimony of witnesses less reliable. The customer acknowledged that she owed some, but not all, of the amount claimed to be due and owing. In that case, the court noted that an open account is not self-proving; it must be supported by enough evidence to show the accuracy of the account. Worswick, 9 FSM Intrm. at 15.

      Here, the evidence offered to support the amount claimed in the complaint is minimal. Receipts, which Plaintiff’s own witnesses testified were available, were not offered into evidence to support the amount claimed. One page of the ledger was identified and marked, but never offered into evidence. The evidence to support Plaintiff’s claims consists of the testimony of his former employees on the amount owed and Defendant’s acknowledgment that she owes some amount, but not the amount claimed in the complaint.

      Defendant questions whether Plaintiff has carried the burden of proof under these circumstances. The Defendant’s argument is a tempting one. When evidence is available but not offered, the question is raised whether the evidence withheld, the receipts, supported the claim.

      However, Defendant acknowledges that some amount is owed, just not the amount claimed in the second amended complaint. Defendant could have used the receipts to show they did not support the amount in the ledger. But, she did not offer the receipts and did not question Plaintiff’s witnesses as to the specific amounts shown in the receipts. The Court was given no evidence to weigh in support of an alternative explanation.

      The Court can only look at the testimony offered by Plaintiff and determine whether the facts asserted by the plaintiff are more probably true than false. Based on Defendant’s acknowledgment that some amount is owed, but that the amount is not the $14,431.58 claimed by Plaintiff, and based on

[15 FSM Intrm 275]

the testimony of Plaintiff’s witnesses about the ledger and the balance, the Court finds the evidence weighs slightly to the Plaintiff and that it is more probably true than false that Defendant owes the amount of $6,220.52.

      In her closing argument, Defendant tries to shift the responsibility for producing evidence to the Court by stating the Court can instruct Plaintiff to submit these receipts. However, the parties have the responsibility to put forward the evidence to support their client’s case. This is not the Court’s responsibility. If Defendant had requested that the receipts be produced at the time of trial and the Plaintiff failed to do so, then this Court could have issued such as order. But, in this case, both counsel knew of this relevant evidence and neither of them made any effort to produce them at trial. Ultimately, Plaintiff must carry the burden of proving his case at trial, but Defendant bears a responsibility to put in evidence supporting her explanation, or theory of the case, as well.

Pre-judgment Interest

      Plaintiff requests pre-judgment interest in his complaint. The Court has the discretion to award pre-judgment interest, but it is not a matter of right unless the debtor knows precisely what he is to pay and when payment is due. The purpose of awarding interest is to compensate the complaining party for losing use of the funds. Coca-Cola Beverage Co. (Micronesia) v. Edmond, 8 FSM Intrm. 388, 392-93 (Kos. 1998).

       For example, in Kilafwakun v. Kilafwakun, 10 FSM Intrm. 189 (Kos. S. Ct. Tr. 2001), this Court did not award pre-judgment interest. In that case, the plaintiff relied on his brother’s promise to transfer land to him. He purchased materials and began building a house on the land. Before the house was finished, they had a disagreement. The plaintiff never finished the house and sued the brother for the amount spent on materials and beginning construction. The Court ordered defendant to pay plaintiff and held that pre-judgment interest was not appropriate. The reasons were that there was no contract between the parties to pay money and the amount of damages was not based on a contract. 10 FSM Intrm. at 197.

      When the parties have a written agreement stating that interest would be added to the unpaid balance, the FSM Court has upheld an award of pre-judgment interest. Jayko Int’l, Inc. v. VCS Constr. & Supplies, 10 FSM Intrm. 502, 504 (Pon. 2002). In Jayko, the Court held that the written agreement for 18% per annum on an unpaid balance was not usury and was not arbitrary and capricious.

      Here, the testimony shows that there was no written agreement on payment of interest on Defendant’s open account, that the parties did not have an agreement or understanding to add interest to the account, and that Defendant made sporadic payments on the account. Under these circumstances, I find that the Defendant did not have a requirement to pay a precise amount, nor was there a particular due date. Therefore, I hold that Plaintiff is not entitled to pre-judgment interest.

Costs and Attorney fees

      One final issue remains to be addressed. Plaintiff requests attorney fees and costs be awarded based on the retainer agreement between the Plaintiff and his attorney. The retainer agreement is not relevant; it is not even discoverable because there is generally no relationship between the attorney’s fees and the subject matter of a pending action. Mailo v. Twum-Barimah, 3 FSM Intrm. 179, 181 (Pon. 1987). The retainer agreement is therefore not being considered in this decision.

      When a plaintiff prevails, then a post-judgment motion for costs and attorney’s fees may be made. Attorneys fees are allowable against the opposing party if a party acts vexatiously, in bad faith,

[15 FSM Intrm 276]

presses frivolous claims, or employs oppressive litigation practices, or when a party’s successful efforts have generated a common fund or extended substantial benefits to a class. Normally, in the absence of a statute to the contrary, a court will proceed on the assumption that the parties will bear their own attorney’s fees. Coca-Cola Beverage Co. (Micronesia) v. Edmond, 8 FSM Intrm. 388, 392 (Kos. 1998); Semens v. Continental Air Lines, Inc. (II), 2 FSM Intrm. 200, 208 (Pon. 1986). The usual rule is that each party pays its own attorney’s fees. Semens v. Continental Air Lines, Inc. (II), 2 FSM Intrm. 200, 208 (Pon. 1986). See also Bank of Guam v. Nukuto, 6 FSM Intrm. 615, 617 (Chk. 1994).

      Plaintiff’s counsel has previously been advised that this issue is to be raised only in a post-judgment motion. These issues will only be considered if Plaintiff makes a post-judgment motion for costs and attorney’s fees.

III.  Judgment

      Judgment is entered in favor of the Plaintiff in the amount of $6,220.52 with post-judgment interest at the statutory rate.

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