Alik v Kosrae Hotel Corporation [1992] FMSC 5; 5 FSM Intrm. 294 (Kos. 1992) (13 April 1992)

[1992] FMSC 5; 5 FSM Intrm 294 (Kos 1992)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION

FSM CIVIL ACTION 1991-2001

LANDSON ALIK
Plaintiff

V

KOSRAE HOTEL CORPORATION et al.
Defendants

OPINION: April 13, 1992

BEFORE: The Honorable Martin Yinug, Associate Justice, FSM Supreme Court

APPEARANCES: For the Plaintiff Delson Ehmes; For the Defendants: Glenn Jewel, Assistant Attorney General

HEADNOTES

Civil Procedure - Summary Judgment
In a motion for summary judgment the moving party has the initial burden of showing that there are no triable issues of fact. Once the moving party has done this the burden then shifts to the non-moving party to show that there is a triable issue. The non-moving party must show that there is enough evidence supporting his position to justify a decision upholding his claim by a reasonable trier of fact. Alik v. Kosrae Hotel Corp., [1992] FMSC 5; 5 FSM Intrm. 294, 295 (Kos. 1992).

Employer - Employee
Where an employer terminates an employee without proper notice the termination will be given effect at the end of the proper notice period and the employee is entitled to any compensation he would have received during the notice period. Alik v. Kosrae Hotel Corp., [1992] FMSC 5; 5 FSM Intrm. 294, 296 (Kos. 1992).

Constitutional Law - Kosrae - Due Process
The wording of the due process clause of the Kosrae State Constitution is identical to the wording of the due process clause of the FSM Constitution. Therefore the Court will treat the clauses as identical in meaning and in scope. Alik v. Kosrae Hotel Corp., [1992] FMSC 5; 5 FSM Intrm. 294, 297 (Kos. 1992).

Constitutional Law - Due Process
The actions of a private corporation partly owned by a government should not be considered "state action" for the purposes of due process analysis. Alik v. Kosrae Hotel Corp., [1992] FMSC 5; 5 FSM Intrm. 294, 298 (Kos. 1992).

OPINION

MARTIN YINUG, Associate Justice:

The defendants in this case have filed a motion requesting that this Court grant a partial summary judgment on plaintiff's first cause of action and a full summary judgment on plaintiff's second cause of action. For the reasons stated herein, the motion is hereby granted.

In this civil action, the plaintiff, Mr. Alik, alleges that Kosrae Hotel Corporation and its co-defendants, State of Kosrae, Mobil Oil, and the board of directors for Kosrae Hotel Corporation, breached an employment contract with Mr. Alik. Mr. Alik alleges in his first cause of action that the defendants' failure to give him 30 days advance notice of his termination violated the terms of his employment contract and caused him to suffer monetary damages.

In his second cause of action, Mr. Alik alleges that the defendants' failure to provide advance notice and a hearing regarding his termination deprived him of his due process rights under Article II Section 1(b) of the Kosrae State Constitution and article IV, section 3 of the Constitution of the FSM. He seeks damages in the amount of $5,000 plus attorney's costs.

DISCUSSION

This Court has dealt in some detail with the question of summary judgment. Rule 56(c) of the FSM Rules of Civil Procedure states that a motion for summary judgment should be granted if "the pleadings, depositions, answers to interrogatories, and admissions on file, 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."

In interpreting this rule, this Court has held that, in considering a motion for summary judgment, the facts and inferences to be drawn from those facts must be viewed by the court in the light most favorable to the party opposing the motion. FSM v. Ponape Builders Constr. Co., 2 FSM Intrm. 48, 52 (Pon. 1985). It is clear that the moving party has the initial burden of showing, through the pleadings, depositions, etc., that there are no triable issues of fact. Id.

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. Federated Shipping Co. v. Ponape Transfer & Storage, 4 FSM Intrm. 3, 16 (Pon. 1989). 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." Id. (citing Anderson v. Liberty Lobby, Inc., [1986] USSC 144; 477 U.S. 242 (1986)).

In Anderson, the United States Supreme Court stated that the inquiry made by the court, at this stage, is one of determining whether there is need for a trial, whether "there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson at 251. The Court compared the inquiry to that performed by a court in considering a motion for directed verdict. 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. Id.

In applying the above analysis to the case at bar, it is clear to this Court that the defendants should, as a matter of law, be granted a partial summary judgment on plaintiff's first cause of action. This is so because the defendants are, for purposes of this motion, willing to stipulate that there was a thirty day notice requirement in the contract and that plaintiff was entitled to receive that notice rather than the one day notice he did receive. The defendants submit, and this Court agrees, that if we view the facts in a light most favorable to the non-moving party the most that the plaintiff could be entitled to under the first cause of action is 30-days compensation. This finding is supported by a wealth of case law.

In cases such as this one, where an issue before this Court has not been addressed by the case law of the FSM and cannot be resolved by the custom and traditional laws of Micronesia, it is appropriate to turn to the case law of the United States and other jurisdictions for guidance. Semens v. Continental Airlines, Inc. (I), [1985] FMSC 3; 2 FSM Intrm. 131, 140-141 (Pon. 1985). There is a great deal of precedent in the United States which holds that in a situation where an employer terminates an employee without proper notice, as is alleged here, the termination will be given effect at the end of the proper notice period. See Annotation, Effect of Attempt To Terminate Employment or Agency Contract Upon Shorter Notice than Stipulated in Contract, 96 A.L.R.2d 262 (1964). The employee, under this rule, is entitled to any compensation he would have received during the notice period. Id. at 277-79. There are two exceptions to this general rule. First, where some unrealized but existing right over and above normal compensation for the stipulated notice period would be forfeited by the employee, such as a salesman's commission on pending sales, the rule does not apply. Id. at 2 79-80. The rule also does not apply in cases where the contract affords the employee the right, during the notice period, to perform certain acts which would negate the employer's right to terminate the employment relationship. Id. at 280-81. Neither of these two exceptions are applicable to this case.

This Court, having viewed the facts in a light most favorable to the plaintiff, believes that, as a matter of law, the most the plaintiff is entitled to is 30 days compensation. Accordingly, the defendants' motion for partial summary judgment on the first cause of action is granted.

If the parties are unable to settle this case before trial, there will be only two issues left to be resolved. The first issue is whether the plaintiff is entitled to 30 days compensation or to some lesser amount. The second issue is the determination of the value of the compensation, if any, owed to the plaintiff. This order does not preclude the defendants from arguing that the contract extension given to the plaintiff obviated the giving of notice to the plaintiff. Additionally, consistent with this order, the plaintiff may argue at trial that the compensation to which he is entitled includes not merely salary but also others forms of valuable compensation such as housing allowances.

Turning to the plaintiff's second cause of action, the due process claim, this Court believes that the defendants should be granted a full summary judgment. First, the wording of the due process clause of the Kosrae State Constitution is identical to the wording of the due process clause of the FSM Constitution. This Court will, therefore, treat the clauses as identical in meaning and in scope. It is doubtful that the due process clause of either Constitution is applicable to this case because the plaintiff's employment contract does not amount to a property interest.

Assuming, arguendo, that the firing of the defendant constitutes "state action", which is doubtful, there must still exist some cognizable property interest which the state action takes from the plaintiff. In Suldan v. FSM (II), [1983] FMSC 14; 1 FSM Intrm. 339, 352 (Pon. 1983), this Court held that "[t]o be property protected under the Constitution, the employment right must be supported by more than merely the employee's own personal hope. There must be a claim of entitlement based upon governmental assurance of continual employment or dismissal for only specified reasons." In Suldan, the Court found there was a property interest because Mr. Suldan was a national government employee who could only be terminated with compliance to the National Public Services System Act. Id.

In the instant case, the plaintiff had what amounts to an at will employment contract which could be terminated at any time with 30 days notice. The most that can be said about his notice provision is that it gives the plaintiff a contractual right to 30 days notice. There is no "government assurance of continual employment" as required by the Suldan holding.

Beyond this the plaintiff has made no showing, through affidavits, pleadings, or otherwise, that his termination constituted a "state action". Federated States of Micronesia case law suggests that state action is required to invoke the due process clause. In Falcam v. Federated States of Micronesia (II), [1987] FMSC 17; 3 FSM Intrm. 194, 200 (Pon. 1987), the Court stated that the due process clause "prevents governmental authorities" from depriving individuals of property interests without first affording an opportunity to be heard.

Further, the due process clause of our Constitution is based on the due process clause of the United States Constitution. This Court has stated that we may look to interpretations of the U.S. Constitution for guidance in interpreting the Constitution of the Federated States. Ludwig v. FSM, 2 FSM Intrm. 27, 35 (App. 1985). It is well established that the due process clause of the United States Constitution cannot be invoked in the absence of state action. The clause protects against governmental rather than private deprivations of property. See, e.g., Nowak, Rotunda, Young, Constitutional Law, 546 (2d ed. 1983). Generally, the party alleging a due process violation has the burden of showing that the defendant is a state actor and that the conduct in question was a state action. See Johnson v. Educational Testing Serv., [1985] USCA1 37; 754 F.2d 20, 23 (1st Cir. 1985).

In the instant case, the plaintiff merely alleges that the government of Kosrae was, at the time of the action alleged, a shareholder of a private corporation. This does not seem to be the type of government participation described in Johnson and other relevant cases. Plaintiff has not cited, and this Court has not located, any case law which indicates that the actions of a private corporation which is partly owned by a government should be considered "state action" for purposes of due process analysis.

Given this analysis, the plaintiff may not prevail on his due process cause of action and the defendants are entitled to a summary judgment as a matter of law. Accordingly, the defendants' motion for summary judgment on the second cause of action is granted.