[24 FSM R. 357]

CIVIL ACTION NO. 2023-007

Decided: December 13, 2023

APPEARANCES:

For the Plaintiff:               Marstella E. Jack, Esq.
                                        P.O. Box 2210
                                        Kolonia, Pohnpei FM 96941

For the Defendant:          Aaron L. Warren, Esq.
 (Western Union defs.)    Mooney Wieland Warren PLLC
                                        P.O. Box 3501
                                        Pago Pago, American Samoa AS 96799

For the Defendant:          Stephen V. Finnen, Esq.
 (Peter & CTSI defs.)       P.O. Box 1450
                                        Kolonia, Pohnpei FM 96941

HEADNOTES

Constitutional Law – Case or Dispute – Standing; Contracts – Breach; Contracts – Third-Party Beneficiary

A plaintiff can prove standing in a breach of contract claim if the plaintiff is an intended beneficiary of the transaction between the defendants and the promissee, in this case, the sender of the wire transfer. Reffner v. Western Union Fin. Servs., Inc., 24 FSM R. 357, 359 (Pon. 2023).

Civil Procedure – Pleadings; Constitutional Law – Case or Dispute – Standing

Whether the elements of the claim, e.g., standing, are adequately alleged, depends on whether the complaint gives the defendant notice of the essence of the plaintiff's claim with sufficient clarity to enable the defendant to answer, that is, fair notice of factual wrong openly stated on the basis of the facts asserted. Reffner v. Western Union Fin. Servs., Inc., 24 FSM R. 357, 359 (Pon. 2023).

Civil Procedure – Judgment on the Pleadings

In ruling on a motion for judgment on the pleadings, a court must presume the non-moving party's factual allegations to be true and view the inferences drawn therefrom in the light most favorable to the non-moving party. Reffner v. Western Union Fin. Servs., Inc., 24 FSM R. 357, 360 (Pon. 2023).

Civil Procedure – Judgment on the Pleadings

For purposes of a motion for judgment on the pleadings, all well-pleaded material allegations of the opposing party's pleadings are taken as true and all allegations of the moving party that have been denied are taken as false, and judgment is granted only if the movant is clearly entitled to judgment on the facts as so admitted. Reffner v. Western Union Fin. Servs., Inc., 24 FSM R. 357, 360 (Pon. 2023).

Torts – Conversion

The elements of an action for conversion are the plaintiff's ownership and right to possession of the personalty, the defendant's wrongful or unauthorized act of dominion over the plaintiff's property inconsistent with or hostile to the owner's right, and resulting damages. Reffner v. Western Union Fin. Servs., Inc., 24 FSM R. 357, 360 (Pon. 2023).

Torts – Conversion

Civil Procedure – Judgment on the Pleadings

On a defendant's motion for judgment on the pleadings, to the extent the plaintiff's and the defendants' allegations disagree, the opposing party's – the plaintiff's – allegation must be taken as true, and the factual conflicts raised by the defendants' pleadings will have to be resolved at a later stage. Reffner v. Western Union Fin. Servs., Inc., 24 FSM R. 357, 361 (Pon. 2023).

Torts – Conversion; Torts – Damages

When the measure of damages for conversion is the converted property's market value plus the legal rate of interest and when the plaintiff has received full payment and does not identify any loss other than the one-day delay in payment, his damages are limited to the interest component. Reffner v. Western Union Fin. Servs., Inc., 24 FSM R. 357, 361 (Pon. 2023).

Contracts – Breach; Contracts – Damages; Torts – Conversion; Torts – Damages – Nominal

The lack of substantial damages does not preclude a plaintiff from pursuing his claim, when, although damages are an element of both breach of contract actions and conversion actions, the failure to prove such damages is not a barrier to an award of nominal damages in either instance. Reffner v. Western Union Fin. Servs., Inc., 24 FSM R. 357, 361 (Pon. 2023).

COURT'S OPINION

DENNIS L. BELCOURT, Associate Justice:

This matter is before this Court on a motion to dismiss, pursuant to FSM Rule of Civil Procedure 12(h)(3), and a motion for judgment on the pleadings, pursuant to FSM Rule of Civil Procedure 12(c) filed by Defendants Western Union Financial Services, Inc., and the Western Union Company on October 24, 2023 and joined by Defendants Apdin Peter d/b/a Ray & Dor's Store, CTSI Logistics, Inc., CTSI Logistics Pohnpei, Inc., and CTSI Logistics FSM (Micronesia), filed on October 27, 2023. I deny the motions. My reasons follow.

1. THE COMPLAINT SUFFICIENTLY ALLEGES A BASIS FOR STANDING (RULE 12(h)(3))

Plaintiff is suing for breach of contract and conversion theories when Defendants made him wait one day to collect on a wire transfer sent to him from Hawaii. Defendants contend that Plaintiff lacks standing and therefore this Court lacks subject matter jurisdiction, because Plaintiff can only assert his own rights.

Plaintiff can prove standing in a breach of contract claim if he is an intended beneficiary of the transaction between Defendants and the promissee, in this case the sender of the wire transfer. Mailo v. Penta Ocean, Inc., 8 FSM R. 139, 141 (Chk. 1997). Whether the elements of the claim, e.g., standing, are adequately alleged, depends on whether the complaint gives "the defendant notice of the essence of the plaintiff's claim with sufficient clarity to enable the defendant to answer, that is, fair notice of factual wrong openly stated on the basis of the facts asserted." Solomon v. FSM, 20 FSM R. 396, 401 (Pon. 2016); Mwoalen Wahu Ileile en Pohnpei v. Peterson, 20 FSM R. 632, 640 (Pon. 2016) (when the defendants challenge standing in a motion to dismiss or as an affirmative defense, the plaintiffs' complaint must contain facts that, if true, would be sufficient to establish that standing exists).

The Complaint, in alleging that Plaintiff was a "recipient" under a wire transfer sale receipt of funds sent to him from Hawaii, which after a day's delay he succeeded in collecting from one of the Western Union outlets in Pohnpei, suffices to allege that Plaintiff was a third-party beneficiary entitled to claim the wired funds. I therefore deny the motion on subject matter jurisdiction, without prejudice to reconsideration should proof depart from allegation.

2. THE CONVERSION CLAIM SURVIVES THE MOTION FOR JUDGMENT ON THE PLEADINGS (RULE 12(c))

A. Standard for Motion for Judgment on the Pleadings

In ruling on a motion for judgment on the pleadings a court must presume the non-moving party's factual allegations to be true and view the inferences drawn therefrom in the light most favorable to the non-moving party. Semwen v. Seaward Holdings, Micronesia, 7 FSM R. 111, 113 (Chk. 1995).

For purposes of a motion for judgment on the pleadings, all well-pleaded material allegations of the opposing party's pleadings are taken as true and all allegations of the moving party that have been denied are taken as false, and judgment is granted only if the movant is clearly entitled to judgment on the facts as so admitted. Setik v. Pacific Int'l, Inc., 17 FSM R. 277, 280 (Chk. 2010).

B. Conversion Elements

The elements of an action for conversion are the plaintiff's ownership and right to possession of the personalty, the defendant's wrongful or unauthorized act of dominion over the plaintiff's property inconsistent with or hostile to the owner's right, and resulting damages. Bank of Hawaii v. Air Nauru, 7 FSM R. 651, 653 (Chk. 1996). The "personalty" at issue in this matter is money. "[M]oney can be the subject of a conversion action if the funds can be described, identified or segregated and there is an obligation to treat the funds in a specific manner." Koss Corp. v. American Exp. Co., 309 P.3d 898, 914 (Ariz. 2013).

C. Sufficiency of Allegation of Conversion

In the Complaint, Plaintiff alleges that

•    "According to the tracking code sent to Plaintiff, the funds were available to be collected at any Western Union station in FSM [sic] on the same date it was sent, April 04, 2023." Compl. ¶ 18;

•    Plaintiff went to three Western Union outlets in town and at each "was told that there was no cash available to disburse his funds." Compl. ¶ 10;

•    "Plaintiff was not able to collect his funds until the next day, over 24 hours later." Compl. ¶ 12;

•    "[A]ccepting the payment of funds from the sender in Hawaii for immediate cash transfer to the Plaintiff, and, without any notice of any kind, later willfully holding, delaying, and preventing the Plaintiff from receiving immediate cash benefit, the Defendant Western Union wrongfully and without any authorization acted to convert the Plaintiff's property by taking dominion over the Plaintiff's funds . . . ." Compl. ¶ 18.

Thus, Plaintiff contends, at least by implication, that the funds transferred to him were identified to him and available in Pohnpei, but were not released to him when requested by him although he was entitled to them.

Defendants, on the other hand, state that the Receipt with tracking number 177-738-3870, provides that "funds availability depends on" currency availability. Western Union Answer ¶ 4. They further contend that "[b]y being named as the 'Receiver' of an amount in a wire transfer, the Plaintiff did not obtain a proprietary interest in any particular funds." Western Union Answer ¶ 5.

However, this matter is still at the pleading stage. To the extent Plaintiff's and Defendants' allegations disagree, the opposing party's--Plaintiff's--allegation must be taken as true. Setik, 17 FSM R. at 280. Plaintiff's allegations sufficiently allege conversion of the money, The factual conflicts raised by Defendants' pleadings will have to be resolved at a later stage.

D. Lack of Damages

Defendants contend that Plaintiff suffered no damages due to the one-day delay in his receiving the funds. Plaintiff does not allege that he incurred damages, although his prayer for relief seeks monetary damages. Defendants point out that missing element, in response to which Plaintiff asserts that there were damages, the measure of which is the converted "property's market value . . . plus the legal rate of interest . . . ." Fishy Choppers, Inc. v. M/V Marita 88, 22 FSM R. 305, 315 (Pon. 2019).

As Plaintiff has received full payment of the money transfer and does not identify any loss other than the one-day delay, under Fishy Choppers, Inc., he is limited to the interest component. According to Plaintiff, the wire-transfer payment was $1700. Applying the legal rate of interest (nine percent a year, as provided in 6 F.S.M.C. 1401) divided by 365 to the $1700, the one day's interest is less than forty-two cents ($0.42). Thus, Plaintiff's claim of actual damages might reasonably be valued at forty-two cents.

The lack of substantial damages does not preclude Plaintiff from pursuing his claim. Although damages are an element of both breach of contract actions, FSM v. GMP Hawaii, Inc., 17 FSM R. 555, 570 (Pon. 2011), and conversion actions, Air Nauru, 7 FSM R. at 653, failure to prove such damages is not a barrier to an award of nominal damages in either instance. GMP Hawaii, Inc., 17 FSM R. at 573 (even if a contract breach causes no loss or if the amount of loss is not proved with sufficient certainty, the injured party can recover as nominal damages a small sum, commonly six cents or a dollar, fixed without regard to the amount of loss); Illinois Educ. Ass'n v. Illinois Fed'n of Teachers, 437 N.E.2d 1265, 1267 (Ill. App. Ct. 1982) (on return of converted funds to treasury without loss, only nominal damages recoverable).

In conclusion, Plaintiff has sufficiently alleged standing and claims for relief for breach of contract and conversion. Defendants' motions are denied.