FSM SUPREME COURT TRIAL DIVISION
Cite as Felix v. China Rwy. Constr. Co., 24 FSM R. 562 (Pon. 2024)
JOSEPHA (MASUMI) FELIX,
Plaintiff,
vs.
CHINA RAILWAY CONSTRUCTION COMPANY,
FEDERATED STATES OF MICRONESIA NATIONAL
GOVERNMENT, and FEDERATED STATES OF
MICRONESIA DEPARTMENT OF TRANSPORTATION,
COMMUNICATION & INFRASTRUCTURE,
Defendants.
CIVIL ACTION NO. 2020-002
ORDER OF DISMISSAL
Mayceleen J.D. Anson
Temporary Justice
Hearing: March 6, 2024
Decided: August 8, 2024
APPEARANCES:
For the Plaintiff:
Vincent Kallop, Esq.
Micronesian Legal Services Corporation
P.O. Box 129
Kolonia, Pohnpei, FM 96941
For the Defendant:
Erick Divinagracia, Esq.
(China Railway)
Ramp & Mida Law Firm
P.O. Box 1480
Kolonia, Pohnpei FM 96941
For the Defendant:
Jeffrey S. Tilfas, Esq.
(FSM defs.)
Assistant Attorney General
FSM Department of Justice
P.O. Box PS-105
Palikir, Pohnpei FM 96941
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The determination of whether a given individual is a managing or general agent is not made simply on the basis of the person's title. A factual analysis is needed. The rule's purpose is to assure that the person served can fairly be expected to know what to do with the papers so that the organization will have notice of the filing of the action. A person of authority and responsibility in the organization's operation is a managing or general agent for purposes of the rule. Felix v. China Rwy. Constr. Co., 24 FSM R. 562, 564 (Pon. 2024).
When the sufficiency of process under Rule 4(d)(3) is challenged, the plaintiff bears the burden of proving proper service, and the court must look to matters outside the complaint to determine what steps, if any, the plaintiff took to effect service. Such matters may include the return of service, affidavits submitted by the parties, and testimony or other evidence adduced at an evidentiary hearing. Felix v. China Rwy. Constr. Co., 24 FSM R. 562, 564-65 (Pon. 2024).
The great weight of the case law is to the effect that the party on whose behalf service has been made has the burden of establishing its validity. Felix v. China Rwy. Constr. Co., 24 FSM R. 562, 565 n.2 (Pon. 2024).
When a person was not named as an agent authorized by appointment to accept service, a project manager, or as an officer in any of the records provided by Registrar of Corporations, but was an engineer and credible evidence showed that another person was the project manager, the plaintiff has not met the burden of proof necessary to show that the person allegedly served was either an officer, manager, or general agent of the corporation. Felix v. China Rwy. Constr. Co., 24 FSM R. 562, 565-66 (Pon. 2024).
Time to serve a summons and complaint on a defendant may be enlarged for good cause shown if the enlargement is sought before the 120-day period has expired, or for excusable neglect if sought after the 120-day period has passed. Felix v. China Rwy. Constr. Co., 24 FSM R. 562, 566 (Pon. 2024).
Service of a summons and complaint must be by any person who is not a party and is not less than 18 years of age and generally must be made by some authorized, disinterested person. An attorney employed by the law firm that represents the plaintiff is not a disinterested person. Felix v. China Rwy. Constr. Co., 24 FSM R. 562, 566 (Pon. 2024).
Even if service of process had been completed in a timely manner and by a disinterested party, service on someone ultimately identified as a "worker" on the return of service form is prima facie evidence of invalid service. Although the decision about whether this person is an officer, manager, or general agent is not be made based the title of the position alone, when the plaintiff made no attempt to dispute this title or to establish any managerial authority or responsibility within the corporation, when there was no indication that the person served was an officer or was appointed to receive service on behalf of the foreign corporation; and when the person served was a native Chinese speaker and there was no indication that he spoke English, or how well, and if he could reasonably be expected to know what to do with the service of process papers, the plaintiff failed to meet the burden of proof necessary to support a finding that the person served was an officer, manager, or general agent of the corporation for the purposes of Rule 4(d)(3). Felix v. China Rwy. Constr. Co., 24 FSM R. 562, 566-67 (Pon. 2024).
A dismissal under Rule 41(b) other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an adjudication upon the merits unless the court specifies otherwise in its dismissal order. Felix v. China Rwy. Constr. Co., 24 FSM R. 562, 567 (Pon. 2024).
When a plaintiff fails to properly serve a defendant, the court in which the case is filed does not possess the authority to assert jurisdiction over that defendant, and the case may not proceed, and the general rule is that a judgment for the defendant based on lack of jurisdiction does not bar the plaintiff from bringing another action. Felix v. China Rwy. Constr. Co., 24 FSM R. 562, 567 (Pon. 2024).
A dismissal for lack of jurisdiction should recite that fact, so as to make it clear that the dismissal is without prejudice. Felix v. China Rwy. Constr. Co., 24 FSM R. 562, 567 (Pon. 2024).
The failure to effect proper service of process is a fatal jurisdictional defect and proper grounds for dismissal. Felix v. China Rwy. Constr. Co., 24 FSM R. 562, 567 (Pon. 2024).
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MAYCELEEN J.D. ANSON, Temporary Justice:
On July 22, 2022, the FSM Supreme Court, Appellate Division, vacated and remanded the Trial Division's Order of Dismissal.1 [Felix v. China Rwy. Constr. Co., 23 FSM R. 596 (App. 2022).] Subsequently, this court held several evidentiary hearings, heard representations from both parties, accepted briefs, and subpoenaed records from the Registration of Corporations (ROC) on the factual issue of whether Shi Shou Liu (Liu) was a person who qualifies as an officer or manager of the China Railway Construction Company (CRCC). Upon consideration, the court finds that Liu is not an agent for the purposes of FSM Civil Rule 4(d)(3). Service on CRCC was therefore improper and the court dismisses the case without prejudice for the reasons that follow.
Pursuant to FSM Civil Rule 4(d)(3), service shall be made as follows:
Upon a domestic or foreign corporation or upon a partnership or other unincorporated association which is subject to suit under a common name, by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process and, if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the defendant.
(emphasis added).
The determination of whether a given individual is a managing or general agent is not made simply on the basis of the person's title. A factual analysis is needed. The purpose of the rule is to assure that the person served can fairly be expected to know what to do with the papers so that the organization will have notice of the filing of the copy of the action. A person of authority and responsibility in the organization's operation is a managing or general agent for purposes of the rule.
Luda v. Maeda Road Constr. Co., 2 FSM R. 107, 109 (Pon. 1985) (emphasis added). "When the sufficiency of process is challenged under [Rule 4(d)(3)], the plaintiff bears the burden of proving proper service." Signal Quest, Inc. v. Tien-Ming Chou, 284 F.R.D. 45, 46 (D.N.H. 2012) (emphasis added) (citation omitted) (quotation omitted).2 "In resolving the motion, the court must look to matters outside the complaint to determine what steps, if any, the plaintiff took to effect service. Such matters may include the return of service, affidavits submitted by the parties, and testimony or other evidence adduced at an evidentiary hearing." Id.
On May 2, 2024, the ROC responded to the subpoena. The records and the records indicate that CRCC met the requirements to operate under Title 36 and is a registered foreign corporation in the FSM for the purposes of construction and maintenance.3 The Articles of Incorporation indicate that Zhang Tingiun, is the chairman of CRCC.4 He is also named as the Legal Representative of CRCC.5 The Articles of Incorporation further indicate that Wu Yankun is the General Manager of CRCC. The Articles of Incorporation indicated that Wang Hongwei, and Wang Huan are the two Vice General Manager's of the CRCC. Further, Zhao Chenglin filed forms and made payments on behalf of CRCC. Liu was not named as an agent authorized by appointment to accept service, a project manager, or as an officer in any of the records provided by ROC.
On the March 6, 2024, this court held a second evidentiary hearing where defendants represented that Liu is an engineer, not a project manager, as characterized by Officer Mc. Ioanis in the Certificate of Service.6 This was supported by a sworn affidavit which was not refuted by the plaintiffs.7 Further, plaintiff's own discovery, submitted to the court, confirms Liu to be an engineer.8 Although the decision is not be made based the title of the position alone, it is a factor, and the change in the mistake of his title leaves us with no evidentiary support to believe that Liu had any managerial role within the CRCC. To the contrary, Defendants presented credible evidence that Cui Chengwen is the Project Manager, with authority over other CRCC business activities in Lukop, Madolenihmw and has been since 2019.9 In general, an engineer is "a person who designs, builds, or maintains engines, machines or structures."10 Even though it is possible that an engineer might also be manager, officer, or agent of a corporation, the plaintiff failed to show any evidence thereof.11 The Court furthermore notes that Liu is a native speaker of Chinese, and there was no indication that Liu speaks English, or how well, and if he could reasonably be expected to know what to do with the service of process papers. In short, plaintiff has not met the burden of proof necessary to show that Liu was either an officer, manager, or general agent of CRCC.
On June 16, 2023, defendants filed a Motion to Dismiss based on FSM Civil Rule 4(j). On June 26, 2023, plaintiffs filed an opposition thereto. Pursuant to FSM Civil Rule 4(j),
If service of the summons and complaint is not made upon a defendant within 120 days after the filing of the complaint, the action shall be dismissed as to that defendant without prejudice upon motion or upon the court's own initiative. If service is made by mail pursuant to Rule 4(d)(8), service shall be deemed to have been made for the purposes of this provision as of the date on which the process was accepted or refused; or if returned as unclaimed if an affidavit is filed showing that a radio announcement was made to the defendant, and was reasonably calculated to give notice to the defendant and an opportunity to obtain the registered or certified notice. This subdivision shall not apply to service in a foreign country pursuant to Rule 4(i).
(emphasis added). "Time to serve a summons and complaint on a defendant may be enlarged for good cause shown if the enlargement is sought before the 120-day period has expired, or for excusable neglect if sought after the 120-day period has passed." Nakamura v. Mori, 16 FSM R. 262, 270 (Chk. 2009).
On June 15, 2023, Geng Shang Shong (Shong) was served with the complaint and summons. As previously noted, the complaint was filed on February 7, 2020, and this service of process was made several years after the 120 day limitation. Moreover, that court Order noted that this service may have been rendered invalid by the nature of an apparent conflict of interest. Pursuant to FSM Civil Rule 4(c)(1), "Service of a summons and complaint shall be made by any person who is not a party and is not less than 18 years of age except as provided in subdivision (c) (2) of this rule." (emphasis added). "Service of the complaint and summons . . . generally must be made by some authorized, disinterested person." Heirs of Jonah v. Department of Transp. & Infrastructure, 20 FSM R. 118, 120 (Kos. 2015) (emphasis added); see Lee v. Lee, 13 FSM R. 252, 256 (Chk. 2005) ("disinterested person"). In this case, service was performed by Benedict Robert, Esq. who is an attorney employed at MLSC. MLSC is representing the plaintiff in this case. The firm that represents a client often has a direct financial interest in the outcome of the case, or some other materially adverse interest to the opposing party, and is not a disinterested person. However, the court rests its opinion on the more substantive reason below.
Even if service had been completed in a timely manner, by a disinterested party, Shong was ultimately identified as a "worker" on the Return of Service form, dated June 15, 2023. Although the decision as to whether this person is an officer, manager, or general agent is not be made based the title of the position alone, this is prima facie evidence of invalid service. See FSM R. 4(d)(3). Plaintiff made no attempt to dispute this title or to establish any managerial authority or responsibility within CRCC.12 Nor is there any indication that Shong was an officer or was appointed to receive service on behalf of the foreign corporation from the ROC records. The Court furthermore notes that Shong is a native speaker of Chinese, and there was no indication that he speaks English, or how well, and if he could reasonably be expected to know what to do with the service of process papers. In short, plaintiff failed to meet the burden of proof necessary to support a finding that he was an officer, manager, or general agent of CRCC for the purposes of FSM Civil Rule 4(d)(3).
On June 16, 2023, defendants filed a renewed Motion to Dismiss based on FSM Civil Rule 41(b). On June 26, 2023, plaintiffs filed an opposition the motion thereto. Pursuant to FSM Civil Rule 41(b),
For failure of the plaintiff to prosecute or to comply with these rules or any order of court, a defendant may move for dismissal of an action or of any claim against him. After the plaintiff has completed the presentation of plaintiff's evidence, the defendant, without waiving defendant's right to offer evidence in the event the motion is not granted, may move for a dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. The court as trier of the facts may then determine them and render judgment against the plaintiff or may decline to render any judgment until the close of all the evidence. If the court renders judgment on the merits against the plaintiff, the court shall make findings as provided in Rule 52(a). Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an adjudication upon the merits.
(emphasis added). "Where a plaintiff fails to properly serve a defendant, the court in which the case is filed does not possess the authority to assert jurisdiction over that defendant, and the case may not proceed." Berman v. Santos, 6 FSM R. 532, 534 (Pon. 1994). The general rule is "that a judgment for the defendant based on lack of jurisdiction does not bar the plaintiff from bringing another action." National Fisheries Corp. v. New Quick Co., 9 FSM R. 147, 148 (Pon. 1999) (citation omitted). "Indeed, a judgment entered upon a dismissal for lack of jurisdiction should recite that fact, so as to make it clear that the dismissal is without prejudice." Id.
In this case, the failure to effect proper service, on the multiple grounds stated above, is a fatal jurisdictional defect and proper grounds for dismissal.
Plaintiff failed to carry its burden of proof in showing that the service of process was ever performed on an officer, manager, or general agent of CRCC. Furthermore, service itself was not made in a timely manner and may have been rendered invalid due to a conflict of interest. Ultimately, the failure to acquire personal jurisdiction over the defendant in this case is cause for dismissal.
IT IS HEREBY ORDERED, this case is DISMISSED, without prejudice, pursuant to FSM Rule 41(b) for lack of personal jurisdiction. Plaintiff is not barred from filing another action, with proper service over a foreign corporation, in compliance with FSM Civil Rule 4(d)(3).
_______________________________Footnotes:
1 See Notice of Dismissal for Lack of Jurisdiction Over All Defendants (Oct. 25, 2020).
2 "The great weight of the case law is to the effect that the party on whose behalf service has been made has the burden of establishing its validity." 5B CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1353, at 342 (3d ed. 2004); see Rivera–Lopez v. Municipality of Dorado, 979 F.2d 885, 887 (1st Cir. 1992) ("plaintiffs have the burden of proving proper service"); Aetna Bus. Credit, Inc. v. Universal Decor & Interior Design, Inc., 635 F.2d 434, 435 (5th Cir. 1981) ("When service of process is challenged, the party on whose behalf it is made must bear the burden of establishing its validity")
3 See Articles of Incorporation (Dec. 27, 2018), subpoena at 31; see also Certificate of Authority for corporate registration (Jan. 31, 2019).
4 See subpoena at 5, Cover Letter of the Certificate of Authority (Jan. 31, 2019).
5 See subpoena at 40, Business License.
6 Sworn on September 16, 2020, but filed on August 22, 2020.
7 Attached to defendant's Motion to Dismiss (June 16, 2024).
8 See Pl.'s Report to the Court (Jan. 11, 2023) ("The individual . . . is listed as an engineer").
9 As required by the court, attorney for the defendant submitted both the mailing address and physical address of the CRCC project manager, Cui Chengwen.
10 OXFORD DICTIONARY OF ENGLISH 78 (2d ed. 2009); see Oxford English Dictionary online https://www.oed.com/search/dictionary/?scope=Entries&q=engineer ("a person who designs or builds engines or other machinery").
11 The plaintiff did not subpoena Liu or offer any other documentary evidence.
12 Notwithstanding instructions from the Appellate Division that it was necessary to show that the person served "was a person of authority and responsibility in the organization's operation." See Felix v. China Rwy. Constr. Co., 23 FSM R. 596, 603 (App. 2022).
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