[24 FSM R. 375]

CIVIL ACTION NO. 2013-036

Hearing: August 15, 2023
Decided: January 16, 2024

APPEARANCES:

For the Plaintiff:           Michael J. Sipos, Esq.
                                    P.O. Box 2069
                                    Kolonia, Pohnpei FM 96941

For the Defendant:      Josephine Leben James, Esq.
                                    Assistant Attorney General
                                    FSM Department of Justice
                                    P.O. Box PS-105
                                    Palikir, Pohnpei FM 96941

HEADNOTES

Civil Procedure – Summary Judgment – Procedure

The standard for granting a summary judgment motion is whether the pleadings, depositions, answers to interrogatories, and admissions on file, taken together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law. The burden is on the movant, and the court, in reviewing a summary judgment motion, must view the facts, and any inferences deduced therefrom, in the light most favorable to the party opposing the summary judgment. Before summary judgment will be granted it must be clear what the truth is, and any doubt as to the existence of a genuine issue of material fact will be resolved against the movant. Pohnpei Port Auth. v. FSM, 24 FSM R. 375, 378 (Pon. 2024).

Civil Procedure – Summary Judgment – Procedure

The movant has the initial burden of showing, through the pleadings, depositions, etc., that there are no triable issues of fact. Once the movant has done this, the burden shifts to the non-movant, and it is not enough for the non-movant to simply disagree with the movant and attempt to show, through affidavits or otherwise, that there is a triable issue. The opposing party must show that there is enough evidence supporting its position to justify a decision upholding his claim by a reasonable trier of fact. If the evidence, affidavits, and pleadings present a sufficient disagreement to require submission to a fact finder, then the motion should be denied, but if the evidence is so one-sided that the movant must prevail as a matter of law, then the motion should be granted. Pohnpei Port Auth. v. FSM, 24 FSM R. 375, 378 (Pon. 2024).

Civil Procedure – Affidavits; Civil Procedure – Summary Judgment – Procedure

On summary judgment motions, supporting and opposing affidavits must be made on personal knowledge, set forth such facts as would be admissible in evidence, and show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts thereof referred to in an affidavit must be attached thereto or served therewith. The court may permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, or further affidavits. Pohnpei Port Auth. v. FSM, 24 FSM R. 375, 378 (Pon. 2024).

Civil Procedure – Summary Judgment – Procedure

On a summary judgment motion, the initial burden is on the movant to substantiate, with competent evidence, that there are no triable issues of fact and that it is entitled to judgment as a matter of law. Pohnpei Port Auth. v. FSM, 24 FSM R. 375, 378 (Pon. 2024).

Contracts – Interpretation

Interpretations of contract terms are matters of law to be determined by the court as trier of law. Courts interpret and enforce agreements on an objective basis, according to the parties' reasonable expectations or understanding based upon the circumstances known to the parties and their words and actions, at the time the agreement was entered into. Pohnpei Port Auth. v. FSM, 24 FSM R. 375, 380 (Pon. 2024).

Contracts – Interpretation

In interpreting a contract, the words thereof are to be given their plain and ordinary meaning. Pohnpei Port Auth. v. FSM, 24 FSM R. 375, 381 (Pon. 2024).

Admiralty – Ships; Marine Resources – Regulation of

The 24 F.S.M.C. 805 exemption for the FSM's liability applies to vessels arrested under the Marine Resources Act of 2002, and not to vessels arrested under the National Maritime Act of 1997. Pohnpei Port Auth. v. FSM, 24 FSM R. 375, 381 (Pon. 2024).

Civil Procedure – Summary Judgment – Procedure

If the court does not grant a summary judgment motion in its entirety, it shall, if practicable, ascertain what material facts exist without substantial controversy and what material facts are actually and in good faith controverted, and it shall thereupon make an order specifying the facts that appear without substantial controversy, including the extent to which the amount of damages or other relief is not in controversy, and directing such further proceedings in the action as are just. Pohnpei Port Auth. v. FSM, 24 FSM R. 375, 381 (Pon. 2024).

Admiralty – Ships; Contracts – Interpretation

When the FSM has contractually guaranteed the reasonable and standard docking fees for the a vessel's use of dock space, the contract's express language limits docking fees to fees for the use of the docks and its plain and ordinary meaning does not require that the FSM guarantee interest, penalties or other port fees not imposed for use of the dock, e.g., entry fees. Pohnpei Port Auth. v. FSM, 24 FSM R. 375, 382 (Pon. 2024).

COURT'S OPINION

DENNIS L. BELCOURT, Associate Justice:

This matter comes before the Court on Defendant FSM National Government's motion for summary judgment, filed on July 20, 2023. Argument was heard on August 15, 2023. I deny the motion and confirm liability on the part of Defendant FSM National Government for docking fees, not including interest or penalties, as discussed below.

I. BACKGROUND

Plaintiff Pohnpei Port Authority (PPA) filed this lawsuit on December 16, 2013, claiming the FSM National Government ("FSM" or "the National Government") owes it $157,932.40 in docking fees for the period from April 1, 2004 to July 12,2009, during which the National Government's Marine Surveillance Division berthed a fishing vessel, the Oryo Maru, that it had arrested under a warrant issued by the FSM Supreme Court in a civil dispute.

PPA's stated basis for the obligation is a memorandum of understanding (MOU) dated August 2, 1989 between the National Government and the State of Pohnpei concerning Marine Surveillance's use of space at the State's dock, including for a patrol boat and for "vessels in the custody of the FSM pending civil and criminal proceedings." While the use of the dock by the FSM of the patrol boat was not to be charged,¹ the MOU requires that "[t]he FSM shall guarantee the payment of reasonable and standard docking fees for the use of dock space by vessels under its custody and control apart from said patrol boat."

This lawsuit also claims, as a second cause of action, that the FSM has also repeatedly used PPA property in excess of what is permitted by the MOU, without compensation.

The National Government argues that the use by the National Government of the dock does not implicate the MOU, because, while its Marine Surveillance took custody of the Oryo Maru, it did not have "control" over the vessel because it was not a party to Civil Action No. 2003-21 and was rather an involuntary custodian, acting at the direction of the Court. It contends that its duty under the MOU as guarantor of dockage fees is only implicated as to vessels arrested by marine surveillance under the Marine Resources Act of 2002, Subtitle I of Title 24 of the FSM Code.

The National Government also contends that 24 F.S.M.C. 805 bars it from facing liability.

II. STANDARD FOR SUMMARY JUDGMENT

The standard for granting a motion for summary judgment is whether the pleadings, depositions, answers to interrogatories, and admissions on file, taken together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FSM Civ. R. 56(c). See also Bank of Guam v. Island Hardware, Inc., 2 FSM R. 281, 284 (Pon. 1986). Moreover, the burden is on the movant, and the Court, in reviewing a motion for summary judgment, must view the facts, and any inferences deduced therefrom, in the light most favorable to the party opposing the summary judgment. Id. Of course, before summary judgment will be granted it must be clear what the truth is, Poller v. Columbia Broadcasting Sys., Inc., 368 U.S. 464, 82 S. Ct. 486, 7 L. Ed. 2d 458 (1962), and any doubt as to the existence of a genuine issue of material fact will be resolved against the movant.

Berman v. Santos, 7 FSM R. 231, 235 (Pon. 1995).

The order of burdens in a motion for summary judgment is as follows:

[T]he moving party has the initial burden of showing, through the pleadings, depositions, etc., that there are no triable issues of fact. Once the moving party has done this, however, the burden shifts to the non-moving party. It is not enough for the non-moving party to simply disagree with the moving party and attempt to show, through affidavits or otherwise, that there is a triable issue. The party opposed to the motion "must show that there is enough evidence supporting his position to justify a decision upholding his claim by a reasonable trier of fact. If the evidence, affidavits, and pleadings present a sufficient disagreement to require submission to a fact finder, then the motion should be denied. If, however, the evidence is so one-sided that one party must prevail as a matter of law, then the motion should be granted."

Alik v. Kosrae Hotel Corp., 5 FSM R. 294, 295-96 (Kos. 1992) (citations omitted).

FSM Rule of Civil Procedure 56(e) requires as follows:

Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith. The court may permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, or further affidavits.

The initial burden is thus on the movant, in this case the FSM, to substantiate, with competent evidence, that there are no triable issues of fact and that it is entitled to judgment as a matter of law.

III. ANALYSIS OF THE FSM'S MOTION FOR SUMMARY JUDGMENT

A. Contract Liability

1. Undisputed facts. The undisputed facts of this matter and terms of the contract are that:

a. PPA is a corporate entity created under the state law of Pohnpei and is the successor in interest to the State of Pohnpei under prior use agreements for port facilities now under its jurisdiction. Compl. para. 1.

b. On or about August 2, 1989, the FSM National Government, through President Haglelgam, executed a contract with Pohnpei State "regarding the use of the dock at Deketik at Kolonia Harbor." Compl. para. 4.

c. The contract contained the following terms:

i. It was entitled "Memorandum of Understanding Between the National Government of the Federated States of Micronesia and Pohnpei State Regarding the Use of the Dock at Deketik at Kolonia Harbor." Compl. para. 4, ex. A.

ii. The Memorandum of Understanding (MOU) is entered into between the National Government of the FSM (FSM) and the Government of the State of Pohnpei (State) in order to set forth the understandings and agreements between the two governments regarding the use by the FSM of the dock and contiguous area at Kolonia Harbor which is owned, operated and controlled by the State. Id.

iii. The parties understand and stipulate that

a). "[t]he dock and contiguous area at Deketik at Kolonia Harbor is owned, operated, and otherwise controlled by the State through the Division of Sea & Air Transportation of the Pohnpei State Department of Public Works."

b). "[t]he Division of Marine Surveillance of the Office of the Attorney General of the FSM (Marine Surveillance) requires use of approximately 120 feet of space at said dock for the berthing and exclusive use of a patrol boat."

c). "Marine Surveillance requires use of contiguous space for the building and operation of a workshop for the care and maintenance of said patrol boat."

d). Marine Surveillance at various times requires the use of dock space for the berthing of vessels in the custody of the FSM pending civil and criminal proceedings."

e). The State requires the services of Marine Surveillance for Medical Evacuations and for Search and Rescue operations until such time as the State comes into possession of a proposed vessel suitable for such purposes." Id.

iv. "The State shall provide a space sufficient for the berthing of [the] Marine Surveillance patrol boat along with contiguous space for the construction of a workshop, without charge or other encumbrance unless subsequently agreed to by both parties, and all such space shall be for the exclusive use of Marine Surveillance." Id.; Compl. para. 5.

v. "The FSM shall perform services as required by the State for emergency medical evacuations requiring use of said patrol boat, as well as necessary Search and Rescue operations until the receipt by the State of a vessel sufficient for performance of these services, PROVIDED however that the State shall reimburse the FSM for fuel for such operations as are required by the State." Compl. para. 4, ex. A.

vi. "The FSM shall guarantee the payment of reasonable and standard docking fees for the use of dock space by vessels under its custody and control apart from said patrol boat." Id.

vii. "The FSM shall be responsible for security of the dock space and contiguous space assigned to the FSM. The FSM shall pay for all utilities and other additional services provided to Marine Surveillance, FSM." Id.

viii. The agreement was signed August 4, 1989. Id.

d. As stated by this court in Civil Action No. 2003-021, the longline vessel Oryo Maru was ordered seized and, several years later, was sold, recovering only a small portion of dockage fees and penalties it incurred:

i. On August 11, 2003, RRG (FSM), Inc. and Robert Koon Kee filed a complaint in rem and in personam in this Court, Civil Action No. 2003-021, to recover for services they had provided to the Oryo Maru in the Port of Pohnpei in the amount of $219,435.93. The FSM Clerk of Courts ordered the FSM National Police seize and arrest the vessel Oryo Maru, her tackle, apparel, furniture, etc, and to retain such vessel in its custody until further order from this Court. Compl., Civil Action No. 2003-021.

ii. "On January 21, 2004, RRG and Kee filed a motion to the modify order of arrest, requesting the Court to order less vigorous security in order to reduce costs as they were bearing the cost of paying the FSM National Police to maintain 24-hour security of the vessel. On March 12, 2004, the Court entered a modified warrant of arrest granting RRG and Kee's request. In that modified warrant of arrest, the Court included the following condition: 'The Plaintiffs shall bear the costs of all dockage fees for the F/V ORYO MARU and shall provide evidence of payment of the same to the FSM National police, through the FSM Attorney General's Office.'" Default J., Civil Action No. 2003-021.

e. As further stated by this Court in Civil Action No. 2003-021, "[t]he F/V Oryo Maru was eventually sold for $10,000, all of which was awarded to PPA and paid on September 13, 2013 in partial satisfaction of its lien for unpaid port fee charges and penalties." Id.

2. Interpretation of the MOU

Interpretations of contract terms are matters of law to be determined by the court as trier of law. Pohnpei v. Ponape Constr. Co., 7 FSM R. 613, 621 (App. 1996); FSM v. GMP Hawaii, Inc., 17 FSM R. 555, 588 (Pon. 2011). Courts interpret and enforce agreements on an objective basis, according to the parties' reasonable expectations or understanding based upon the circumstances known to the parties and their words and actions, at the time the agreement was entered into. Johnny v. Occidental Life Ins., 19 FSM R. 350, 357 (Pon. 2014).

The basis for PPA's first cause of action is the provision in the MOU whereby "[t]he FSM shall guarantee the payment of reasonable and standard docking fees for the use of dock space by vessels under its custody and control apart from (its) patrol boat." See PPA's Mot. for Summ. J. at 6 (May 1, 2023). PPA contends that the plain language of that clause is clearly invoked by the FSM National Police taking custody of a vessel under an order of the FSM Supreme Court.

The National Government, acknowledging that the FSM Supreme Court, in issuing the arrest and seizure order, exercised control over the Oryo Maru, contends that it is insulated from liability by the separation of powers, i.e.,that the FSM bears no liability because the executive branch of the National Government did not "control" the Oryo Maru. Implicit in this argument is that FSM Courts, created under the FSM Constitution, were not intended by the parties to the MOU to be included in the term "National Government of the FSM."

In interpreting a contract, the words thereof are to be given their plain and ordinary meaning. Hairens v. Federated Shipping Co., 20 FSM R. 404, 408 (Pon. 2016). I find that PPA's interpretation is based on the plain and ordinary meaning of "National Government of the FSM." Under the proper interpretation of the MOU, the guarantee is invoked when custody of the vessel is in the executive branch of the National Government of the FSM and control is in the judicial branch of the National Government of the FSM.

B. 24 F.S.M.C. 805

Section 805 of title 24 reads as follows:

The Government of the Federated States of Micronesia shall not be liable to any person for any loss, damage or deterioration in the condition of any vessel, vehicle, aircraft, fishing gear or other property which is in its custody pursuant to this subtitle, and all costs of maintaining such property while in custody shall, unless otherwise provided, be borne by the operator upon a finding by the FSM Supreme Court that such property was used in or connected with a violation of this subtitle.

If the National Government's purpose in citing to 24 F.S.M.C. 805 is to support a contention that it is not liable under the MOU, 24 F.S.M.C. 805 does not fulfill that purpose. First, 24 F.S.M.C. 805 applies to vessels arrested under the Marine Resources Act of 2002, and not to vessels arrested under the National Maritime Act, 1997, which was the authority for taking custody of the Oryo Maru. Second, the MOU did not relieve the operator of the Oryo Maru of dockage fees incurred to maintain it. Simply stated, 24 F.S.M.C. 805 does not prevent this Court from giving effect to the FSM's guaranty of docking fees owed for the Oryo Maru to PPA.

The National Government's motion fails to establish entitlement to summary judgment. It is therefore denied.

IV. REMAINDER OF CONTROVERSY

FSM Rule of Civil Procedure 56(d) provides that

If on motion under this rule judgment is not rendered upon the whole case or for all the relief asked and a trial is necessary, the court at the hearing of the motion, by examining the pleadings and the evidence before it and by interrogating counsel, shall if practicable ascertain what material facts exist without substantial controversy and what material facts are actually and in good faith controverted. It shall thereupon make an order specifying the facts that appear without substantial controversy, including the extent to which the amount of damages or other relief is not in controversy, and directing such further proceedings in the action as are just. Upon the trial of the action the facts so specified shall be deemed established, and the trial shall be conducted accordingly.

See People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM R. 532 (Yap 2013).

I find that the FSM has guaranteed "the reasonable and standard docking fees for the use of dock space by" the Oryo Maru during its stay at the Deketik dock under the custody and control of the FSM National police to be without substantial controversy. However, I expressly depart from the inclusion of interest, penalties, or other port charges of this Court in Civil Action No. 2003-021 in "dockage fees" in the context of the default judgment against RRG and Kee. The express language of the MOU limits docking fees to fees for the use of the docks. Its plain and ordinary meaning did not require that the FSM guarantee interest, penalties or other port fees not imposed for use of the dock, e.g., entry fees.

The FSM National Government's liability under the MOU for reasonable and standard docking fees for the use of dock space by the Oryo Maru, not including other port fees or interest or penalties, in an amount to be proved at trial, is hereby deemed established.

V. CONCLUSION

Defendant National Government's Motion for summary judgment is denied. Further, pursuant to FSM Rule of Civil Procedure 56(d), the National Government is liable, in an amount to be proved at trial, for reasonable and standard docking fees, not including interest or penalties, for the use of dock space at Deketik by the Oryo Maru, while such was held by the National Government under this Court's order.

The parties are directed to propose to the Court two alternative trial dates, falling either on or before February 22, 2024 or on or after March 11, 2024, for this court to set for trial.

Footnotes:

¹ The MOU also provides that the FSM patrol boat would be available to perform services as required by the State for emergency medical evacuations and search and rescue, and according to an earlier court filing by PPA, its regulations except government vessels from its dockage fees. PPA Seaport Reg., ch. 10, § 1003. See Mot. for Default J. Against Defs. in Intervention, Civil Action No. 2003-21, Ex. A to the Dec. 5, 2014 Joint Status Rep. in this proceeding.