Salik v U Corporation [1989] FMSC 7; 4 FSM Intrm. 048 (Pon. 1989) (8 April 1989)

4 FSM Intrm. 48 (Pon. 1989)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION

FSM CIVIL ACTION NO. 1987-077

GREGORIO SALIK

Plaintiff

V

U CORPORATION

Defendant

BEFORE: The Honourable Edward C. King, Chief Justice

APPEARANCES: For the Plaintiff: Sungiwo Hadley; For the Defendant: Douglas Cushnie and Martin Mix

OPINION: April 8, 1989

HEADNOTES

Civil Procedure
Procedural matters in litigation before the FSM Supreme Court are governed by the FSM Rules of Civil Procedure and national statutes, rather than by state law. Salik v. U Corp., 4 FSM Intrm. 48, 49-50 (Pon. 1989).

Costs
Expenses such as faxing and telephoning to and from counsel, and travel, incurred because the defendant selected off-island counsel, fall outside the kind of expenses traditionally payable by the losing party and will be disallowed as costs, except where there is a showing of the unavailability of local counsel. Salik v. U Corp., 4 FSM Intrm. 48, 49 (Pon. 1989).

Attorney, Trial Counselor and Client
Costs
As a general rule, attorney's fees will be awarded as an element of costs only if it is shown that such fees were traceable to unreasonable or vexatious actions of the opposing party, but where the basic litigation flows from a reasonable difference of interpretation of a lease, the court is disinclined to attempt to sort out or isolate particular aspects of one claim or another of the parties and to earmark attorney's fees awards for those specific aspects. Salik v. U Corp., 4 FSM Intrm. 48, 49 (Pon. 1989).

COURT'S OPINION

BEFORE EDWARD C. KING, Chief Justice:

After a full trial on the issues of this case, the Court found the allegations of the plaintiff to be factually unsubstantiated and legally without merit. The Court therefore found in favor of the defendant, dismissing all of the plaintiff's claims.

Defendant now moves for an award of costs. The claimed expenses for surveys and depositions fall within the traditional cost awards and may be granted without extensive comment. See Semens v. Continental Airlines, Inc., [1986] FMSC 7; 2 FSM Intrm. 200, 203 (Pon. 1985); Tolenoa v. Kosrae, [1986] FMSC 16; 2 FSM Intrm. 247, 259 (Kos. 1985), rev'd on other grounds, 3 FSM Intrm. 169 (App. 1987).

Other of the expenses claimed, e.g., faxing and telephoning to and from counsel, and travel, relate to expenses incurred because U Corporation selected off-island counsel. These fall outside the kinds of expenses traditionally payable by the losing party as costs, except where there is a showing of the unavailability of local counsel. Cf. Ray v. Electrical Contracting Corp., 2 FSM Intrm. 21, 26 (App. 1985). No such showing has been made and the request for reimbursement of these expenses therefore will be denied.

Defendant's request to have its own attorney's fees included in the award of costs payable by Mr. Salik does require reflection and comment. As a general rule, attorney's fees will be awarded as an element of costs only if it is shown that such fees were traceable to unreasonable or vexatious actions of the opposing party. Semens v. Continental Airlines Inc. (II), [1986] FMSC 7; 2 FSM Intrm. 200, 208 (Pon. 1986). The defendant seeks to avoid this normal presumption against attorney's fees by pointing to the Pohnpei statute, Public Law 2L-160-82, which, at section 13, specifically provides that the court may award attorney's fees as an element of costs. However, procedural matters in litigation before this Court, including awards of costs, are governed by the FSM Rules of Civil Procedure and national statutes, rather than by Pohnpei state law. Thus, the Semens rule applies.

There are some strong hints here that the plaintiff might have instituted this litigation principally for vexatious purposes, to harass the defendant, without any substantial basis for believing that liability would be imposed.

For example, plaintiff asserted in his pleadings that the extension of island power onto the leased property was done improperly, in a manner which exposed him and his family to danger. Yet, no testimony whatever was presented in support of those allegations.

Moreover, there is reason to question plaintiff's good faith. Mr. Salik disavowed having seen the finalized lease, which included an exhibit showing that the intent of the parties was that the leased premises would extend up to the old Japanese road which had run through the area. That testimony was flatly contradicted not only by Mr. Salik's own signature on the lease, but also by the testimony of Dahker Daniel, an employee of the Pohnpei State Supreme Court, who testified that Mr. Salik signed the lease in the presence of Mr. Daniel.

That having been said, however, the fact remains that there did exist non-frivolous grounds for Mr. Salik to hold a reasonable belief that he might be entitled to relief as against U Corporation. The testimony ultimately established that the now existing road through U Municipality is some 20 feet inland from the location of the old Japanese road. That Japanese road is shown on the map attached to the lease as forming the inland border of the leased property. The lease did not specifically state in direct terms that U Corporation's purpose was to obtain access to the road which was to be built and to any island utility lines, nor did it provide for the eventuality that the road might be at a location different from the Japanese road.

Thus, there was reasonable ground for dispute as to whether the lease covered the land up to where the road now is. It therefore cannot be said that all positions taken by the plaintiff in this case were frivolous or simply vexatious. Where the basic litigation flows from a reasonable difference of interpretation, this Court is disinclined to attempt to sort out or isolate particular aspects of one claim or another of the parties and to earmark attorney's fees awards for those specific aspects.

U Corporation has not here sought to distinguish among the costs attributable to defending against particular claims of Mr. Salik and no reason appears why the Court should depart in this case from a policy of viewing the litigation as a whole, rather than piecemeal.

Finally, the Court observes that there is practically no supporting documentation establishing that the attorney's fees requested were reasonable in amount. It is quite unlikely that this Court would ever require payment by one party of another party's attorney's fees in the absence of submission of a detailed billing report showing the date, the work done, and the amount of time spent on each service for which a claim for compensation is made. See Tolenoa v. Alokoa, [1986] FMSC 16; 2 FSM Intrm. 247, 258, rev'd on other grounds[1987] FMSC 15; , 3 FSM Intrm. 167 (App. 1987).

In fact, even the costs which the Court is awarding here have not been properly documented. These costs are awarded simply because the plaintiff has not challenged the reasonableness of the awards and because the amounts claimed do on their face appear reasonable.

CONCLUSION

An order shall be entered by the Chief Clerk of Courts requiring plaintiff, Gregorio Salik, to pay costs to the defendant, U Corporation, for preparation of surveys, and for depositions in the aggregate amount of $326.25.

So ordered the 8th day of April, 1989.