Francis v Chuuk Public Utilities Corporation [2019] FMCSC 9; 22 FSM R. 434 (Chk. S. Ct. Tr. 2019) (19 December 2019)

CHUUK STATE SUPREME COURT TRIAL DIVISION
CSSC-CIVIL ACTION NO. 001-2017

YOKICHY FRANCIS,
Plaintiff,

vs.

CHUUK PUBLIC UTILITIES CORPORATION,
Defendant.
__________________________________________

ORDER RE: DEFENDANT’S MOTION FOR COSTS UNDER RULE 68

Repeat R. Samuel
Associate Justice

Decided: December 19, 2019

APPEARANCES:

For the Plaintiff: Pastor Suzuki
Micronesian Legal Services Corporation
P.O. Box D
Weno, Chuuk FM 96942

For the Defendant: Erick B. Divinagracia, Esq.
Ramp & Mida Law Firm
P.O. Box 1480
Kolonia, Pohnpei FM 96941

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HEADNOTES

Costs - When Taxable; Settlement
Rule 68 provides that the defendant may serve an offer to allow judgment to be taken against the defendant for the money with costs then accrued. If within 10 days after the offer’s service, the plaintiff serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof. If the plaintiff rejects this offer, and the judgment finally obtained by plaintiff is not more favorable than the offer, the plaintiff must pay the costs incurred after the offer was made. Francis v. Chuuk Public Utilities Corp., 22 FSM R. 434, 436 (Chk. S. Ct. Tr. 2019).

Costs - When Taxable; Settlement
When the defendant made a Rule 68 offer of judgment for $1,000 and when, after trial, the plaintiff was awarded nothing, the plaintiff is liable for the defendant’s costs after the offer date. Francis v. Chuuk Public Utilities Corp., 22 FSM R. 434, 436 (Chk. S. Ct. Tr. 2019).

Civil Procedure - Filings; Settlement
A Rule 68 settlement offer may only be filed if accepted by the other party. When the plaintiff rejects an offer, there is no need to file the rejected offer of judgment with the court before the court issues a judgment in the matter. Francis v. Chuuk Public Utilities Corp., 22 FSM R. 434, 436 (Chk. S. Ct. Tr. 2019).

Costs - When Taxable
Actions alleging due process violations involving land are not exempt from Rule 68 offer of judgment sanctions. Nor are proclamations of indigence. Francis v. Chuuk Public Utilities Corp., 22 FSM R. 434, 436-37 (Chk. S. Ct. Tr. 2019).

Costs - When Taxable; Settlement
Rule 68 exists to encourage compromise when a case lacks merit. When a plaintiff fails to see the lack of merit within his case, Rule 68 sanctions such failure by awarding costs to the party that made the settlement offer. Francis v. Chuuk Public Utilities Corp., 22 FSM R. 434, 437 (Chk. S. Ct. Tr. 2019).

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COURT’S OPINION

REPEAT R. SAMUEL, Associate Justice:

I. INTRODUCTION

Francis filed a case against CPUC for trespass, nuisance, and due process violations. Francis’ sole relief was monetary damages. On September 5, 2019 CPUC served a Rule 68 offer of judgment to Francis’ counsel of record, where CPUC agreed to have a judgment for trespass, nuisance, and due process violations entered against it -and be liable for $1,000 to Francis. Francis rejected this offer when he proposed a counter offer in the amount of $5,000 on September 17, 2019.

This Court concluded trial on September 17, 2019. Francis only prevailed on the due process violation, but received nothing, as the court found that Francis sustained no damages.
CPUC submitted a motion for the Court to award costs incurred by CPUC after the September 5, 2019 offer. Francis opposed this motion.

II. ISSUES

1. Whether failure to file a Rule 68 offer of judgment with the court, despite proper service to the opposing party, deprives the Court of power to award costs incurred after the offer was made.

2. Whether an actual finding of due process violations in less than the amount offered under a Rule 68 offer of judgment deprives the Court of power to award costs incurred after the offer was made.

III. LAW

a. Rule 68

Rule 68 provides that the defendant may serve an offer to allow judgment to be taken against the defendant for the money with costs then accrued. If within 10 days after the service of the offer the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof. Chk. Civ. R. 68(a). If the adverse party rejects this offer, and the judgment finally obtained by Plaintiff is not more favorable than the offer, the plaintiff must pay the costs incurred after the making of the offer. Chk. Civ. R. 68(b).

IV. ANALYSIS

On September 5, 2019, CPUC offered to have judgment entered against it for all remaining causes of action against it and to pay $1,000 in costs/damages - well after discovery concluded and the parties had ample time to weigh the evidence each would present at trial. Francis rejected the offer after weighing his case with his counsel (as evidenced by the e-mail Francis’ counsel sent with a counter-offer). The Court awarded nothing to Francis as damages - an amount less than $1,000 that CPUC proffered as part of the Rule 68 offer. Rule 68 provides for costs that followed the offer of judgment to be awarded in such circumstance. CPUC’s motion followed.

Francis argues that he was not properly served the Rule 68 offer as his lawyer fails to recall who from the Legal Services received service of it. The return of service, the validity of which is not contested, states that the counsel himself received service of the offer. Counsel’s affidavit does not contest the return of service on the document. Instead, the affidavit notes a lack of entry in Legal Services’ log and a lack of memory on part of the staff as to who received it. This affidavit remains compatible with counsel having received the document by hand (as shown on the return of service), responded to the matter in an E-mail (as attached to CPUC’s motion), and having conveniently forgotten all about this transaction. CPUC properly served Francis.

Next, Francis argues that CPUC’s offer violates Rule 4, which requires that all motions served are to be filed with the court. However, while Rule 4 remains the general rule for motions, Rule 68(a) specifically notes that the Rule 68 offer may only be filed if accepted by the other party. Rule 68 remains the more specific rule and thus controls circumstances surrounding offers of settlement. Here, Francis rejected the offer - no need existed for CPUC to file a rejected offer of judgment to the court prior to this court having issued a judgment on the matter.

Francis also argues that due process violations involving land should be exempt from this rule. This Court found that Francis suffered no harm from CPUC’s actions, nor that he attached much sentimentality to a lot he had purchased a decade prior and then sold at a profit to Chuuk State. Economic profit appeared to be the motive for this law suit.

Nor is this Court moved by Francis proclamation that Legal Services has a policy to represent only the indigent - and he would be too indigent to pay this judgment. This statement proves unreliable as legal services appears to have deviated from this policy in recent years. For example, this Court may take judicial notice that Legal Services represented Senator Gouland earlier this year before this court - not an indigent client. Legal Service’s un-adhered-to-policy may not be used to presume that Francis is indigent.

Rule 68 exists to encourage compromise where a case lacks merit. Here, Francis failed to see the lack of merit within his case. Rule 68 sanctions such failure by awarding costs to the party which made the offer.

V. CONCLUSION

This Court finds the following:

1. The failure to file a Rule 68 offer of judgment with the court, despite proper service to the opposing party, does not deprive the Court of power to award costs incurred after the offer was made.

2. An actual finding of due process violations in less than the amount offered under a Rule 68 offer of judgment does not deprive the Court of power to award costs incurred after the offer was made.

It follows that CPUC’s motion is granted. Francis shall be liable for costs incurred by CPUC in this matter after September 5, 2019. For this Court to calculate costs, CPUC shall submit the following: receipts and ticket stubs from airline boarding passes for trips made to Chuuk for the purposes of this case after September 5, 2019 and CPUC attorney’s affidavit as to: the length of his stay in Chuuk to attend trial, the cost of his plane ticket, and whether he attended any other matters on behalf of CPUC or other clients during that time. This Court will use the national per diem amounts to calculate costs - so an itemized receipt of anything other than the fare for the flight is unnecessary. CPUC shall submit originals of the documents requested by this court within 35 days of this order.

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