DJ Store v Joe [2006] FMKSC 6; 14 FSM Intrm. 83 (Kos. S. Ct. Tr. 2006) (17 February 2006)

KOSRAE STATE COURT TRIAL DIVISION
Cite case as DJ Store v. Joe, 14 FSM Intrm. 83 (Kos. S. Ct. Tr. 2006)

DJ STORE and YOUNG JOO KANG,
Plaintiff,

vs.

NORINSTON JOE,
Defendant.

CIVIL ACTION NO. 138-05

MEMORANDUM OF DECISION; JUDGMENT

Yosiwo P. George
Chief Justice

Trial: February 16, 2006
Decided: February 17, 2006

APPEARANCES:

For the Plaintiff:
Chang B. William, trial counselor
Kosrae State Legislature
P.O. Box 187
Tofol, Kosrae FM 96944

For the Defendant:
Lyndon L. Cornelius
Micronesian Legal Services Corporation
P.O. Box 38
Tofol, Kosrae FM 96944

* * * *

HEADNOTES

Contracts
When the existence of a contract is at issue, the trier of fact determines whether the contract did in fact exist. DJ Store v. Joe, 14 FSM Intrm. 83, 85 (Kos. S. Ct. Tr. 2006).

Contracts
In order for an agreement to be binding, an agreement must be definite and certain as to its terms and requirements, and it must identify the subject matter and spell out each party’s essential commitments. DJ Store v. Joe, 14 FSM Intrm. 83, 85 (Kos. S. Ct. Tr. 2006).

Contracts
When the parties’ discussion did not reach an agreement on the cement mixer’s sale price and the cement mixer’s sale price is a required definite term of the contract, as it would spell out the defendant’s essential commitment to pay the plaintiff a certain amount, the agreement is unenforceable and not binding

[14 FSM Intrm. 86]

because the parties did not agree to a sales price. DJ Store v. Joe, 14 FSM Intrm. 83, 85 (Kos. S. Ct. Tr. 2006).

Contracts; Remedies - Restitution
When no contract exists for lack of definite terms, the court may use its inherent equity power to fashion a remedy under the doctrine of restitution and where no contract exists for lack of an agreed sale price, restitution is applicable. The doctrine of unjust enrichment generally applies when there is an unenforceable contract. It is based on the idea that one person should not be permitted unjustly to enrich himself at the expense of another. DJ Store v. Joe, 14 FSM Intrm. 83, 85 (Kos. S. Ct. Tr. 2006).

Remedies - Restitution
When the defendant took the cement mixer in April 2001 and has maintained continuous possession and use for nearly five years without any payment to the plaintiff, the defendant has unjustly enriched himself through continued possession and use of the cement mixer, especially in his construction business, which has generated income for defendant. The defendant is thus liable to the plaintiff for restitution of the cement mixer’s value. DJ Store v. Joe, 14 FSM Intrm. 83, 85-86 (Kos. S. Ct. Tr. 2006).

Attorneys’ Fees; Costs
Attorney’s fees are not part of recoverable costs under the common law. DJ Store v. Joe, 14 FSM Intrm. 83, 86 (Kos. S. Ct. Tr. 2006).

Costs
Rule 54(d) permits costs to be allowed against the non-prevailing party. Accordingly, a prevailing plaintiff may request costs to be awarded by filing an affidavit. DJ Store v. Joe, 14 FSM Intrm. 83, 86 (Kos. S. Ct. Tr. 2006).

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COURT’S OPINION

YOSIWO P. GEORGE, Chief Justice:

This matter was called for trial on February 16, 2006. Chang William appeared for the Plaintiff. Defendant was represented by Lyndon Cornelius, MLSC. Young Joo Kang testified for the Plaintiffs and Norinston Joe testified for the Defendant. After completing the trial, I took the matter under advisement. This Memorandum of Decision sets forth my ruling and reasoning.

I. Findings of Facts.

In April 2001, Defendant went to Plaintiff’s location in Kiokat to look at a cement mixer. The parties discussed the Defendant’s interest in the mixer. The cement mixer was approximate one year old and had been purchased new by the Plaintiff for approximately $4,000. It was used, and then remained idle for about a year. The Plaintiff demonstrated the operation of the cement mixer to Defendant. The cement mixer operated well, except that one of the tires was low. The next day, the Defendant went back to Kiokat and removed the cement mixer, without the Plaintiff’s knowledge. The Plaintiff later met with the Defendant at the airport and asked Defendant if he intended to buy the mixer. Plaintiff informed the Defendant of the sales price for the cement mixer, which was $3,000. The Defendant promised to pay for the mixer, and continued to use the cement mixer in his construction business. At that time, the Defendant had construction contracts to build approximately seven buildings. Defendant used the cement mixer in at least three of those construction projects. Defendant had made some repairs and adjustments to the cement mixer, but did not report any problems to the Plaintiff. The Defendant still retains possession of the cement mixer.

[14 FSM Intrm. 87]

The Plaintiff approached Defendant several times to request payment for the cement mixer. The Plaintiff also approached Defendant on four checks he had written to DJ Store which had been bounced and returned by the bank unpaid. The total amount of the bounced checks and penalty fees was $365.58. The Plaintiff offered to pardon and forgive the bounced checks of the Defendant, and to apply the amount of $365.58 as a discount on the cement mixer price of $3,000. This discount left a total sales price claimed by the Plaintiff in the amount of $2,634.42 for the cement mixer. Plaintiff also requests the award of attorney fees and costs.

Defendant testified that he believed that the Plaintiff gave him the cement mixer free, as a gift. Defendant valued the cement mixer at $500. Defendant stated that a similar cement mixer could be purchased from True Value in Pohnpei for approximately $3,000, or from Guam for $1,600 plus freight.

II. Analysis.

The first determination required in this matter is whether an enforceable contract was formed between the parties for the purchase and sale of the cement mixer. When the existence of a contract is at issue, the trier of fact determines whether the contract did in fact exist. Tulensru v. Utwe, 9 FSM Intrm. 95 (Kos. S. Ct. Tr. 1999).

In order for an agreement to be binding, an agreement must be definite and certain as to its terms and requirements, and it must identify the subject matter and spell out the essential commitments of each party. Etscheit v. Adams, 6 FSM Intrm. 365 (Pon. 1994). At the April 2001 discussion between the parties at Kiokat, there was no agreement reached on the sale price of the cement mixer. The sale price of the cement mixer is a required definite term of the contract, as it would spell out the essential commitment of the Defendant to pay the Plaintiff a certain amount. Because no sales price was agreed to by the parties, the agreement made in April 2001 is unenforceable and not binding.

Where no contract exists for lack of definite terms, the court may use its inherent equity power to fashion a remedy under the doctrine of restitution. Jim v. Alik, 4 FSM Intrm. 198 (Kos. S. Ct. Tr. 1989). Here, where no contract exists for lack of an agreed sale price, restitution is applicable. The doctrine of unjust enrichment generally applies where there is an unenforceable contract. It is based on the idea that one person should not be permitted unjustly to enrich himself at the expense of another. Kilafwakun v. Kilafwakun, 10 FSM Intrm. 189 (Kos. S. Ct. Tr. 2001).

It is undisputed that the Defendant took the cement mixer in April 2001 and has maintained continuous possession and use for nearly five years without any payment to the Plaintiff. Defendant has unjustly enriched himself through continued possession and use of the cement mixer, especially in his construction business, which has generated income for Defendant. Defendant’s claim that he believed the cement mixer to be a gift from Plaintiff is rejected as not credible. I conclude that the Defendant is liable to the Plaintiff under the doctrine of restitution, for the value of the cement mixer at the time that Defendant took possession of the mixer in April 2001.

The amount of restitution must now be determined. The cement mixer was purchased new for approximately $4,000. Following one year of use, Plaintiff assessed the value of the cement mixer at $3,000, applying a 25% depreciation figure. Defendant provided the cost of a similar new cement mixer in Pohnpei, at $3,000. Transport of a cement mixer from Pohnpei to Kosrae would require additional freight charges. Based upon this evidence, I conclude that Plaintiff’s estimated value of the cement mixer, at $3,000, in April 2001, is reasonable, and accept it as the restitution amount. Accordingly, the Defendant is liable to Plaintiff for restitution of the value of the cement mixer in the amount of $3,000.

[14 FSM Intrm. 88]

Plaintiff further agreed to forgive or pardon the value of Defendant’s four checks to DJ Store which had been bounced by the bank. The total of these four checks is $365.58. Therefore, after applying the value of the pardoned checks, the Defendant is liable to Plaintiff for restitution in the amount of $2,634.42 for the cement mixer.

Plaintiff also claimed attorney’s fees and costs. Attorney’s fees are not part of recoverable costs under the common law. Cholymay v. Chuuk State Election Comm’n, 10 FSM Intrm. 220 (Chk. S. Ct. App. 2001). Plaintiff’s request for attorney’s fees is therefore denied. Plaintiff’s request for the award of costs is governed by KRCP, Rule 54(d). Rule 54(d) permits costs to be allowed against the non-prevailing party. Accordingly, Plaintiff may request costs to be awarded by filing an affidavit within 14 days of service of this Decision.

III. Conclusion.

Judgment shall be entered in favor of the Plaintiff and against the Defendant, in the amount of $2634.42.