Nahnken of Nett v United States (I) [1994] FMSC 48; 6 FSM Intrm. 318 (Pon. 1994) (21 January 1994)

THE SUPREME COURT OF THE
FEDERATED STATES OF MICRONESIA
Cite as Nahnken of Nett v. United States (I), [1994] FMSC 48; 6 FSM Intrm. 318 (Pohnpei 1994)

[1994] FMSC 48; [6 FSM Intrm. 318]

THE ISO NAHNKEN OF NETT,
SALVADOR IRIARTE,
Plaintiff,

vs.

GOVERNMENT OF THE UNITED STATES OF AMERICA, on its own and standing in the place of
THE TRUST TERRITORY OF THE PACIFIC ISLANDS, THE POHNPEI PUBLIC LANDS BOARD OF TRUSTEES,
THE ETSCHEITS, and JOHN DOES 1-49,
Defendants.

CIVIL ACTION NO. 1993-026

MEMORANDUM OF DECISION

Andon L. Amaraich
Associate Justice

Hearing: January 11, 1994
Decided: January 12, 1994
Opinion Issued: January 21, 1994

APPEARANCES:

For the Plaintiff:
Mary Berman, Esq.
P.O. Box 163
Kolonia, Pohnpei FM 96941

For the Defendants: (Robert Etscheit, Jr.) (Camille Etscheit)
Daniel J. Berman, Esq.
Rush, Moore, Craven, Sutton, Morry & Beh
2000 Hawaii Tower
745 Fort Street
Honolulu, HI 96813-3862

[6 FSM Intrm. 319]

For the Defendants: (Adams and Varner)
Fredrick L. Ramp, Esq.
P.O. Box 1480
Kolonia, Pohnpei FM 96941

For the Defendant: (Public Lands Board)
Joi L. Saylor
Assistant Attorney General
Office of the Pohnpei Attorney General
Kolonia, Pohnpei FM 96941

* * * *

HEADNOTES

Courts - Recusal
The court is required by statute to rule on a motion to disqualify the sitting justice before proceeding further on the matter. Nahnken of Nett v. United States (I), [1994] FMSC 48; 6 FSM Intrm. 318, 320 n.1 (Pon. 1994).

Courts - Recusal
In order for a justice to be recused for an interest in the subject matter in controversy not only must the justice have an interest, but also it must be such that the interest could be substantially affected by the outcome of the proceeding. Nahnken of Nett v. United States (I), [1994] FMSC 48; 6 FSM Intrm. 318, 321 (Pon. 1994).

Courts - Recusal
A litigant's unsupported allegations that the trial judge may have subconscious misgivings is is speculation and is insufficient to support the judge's disqualification. Nahnken of Nett v. United States (I), [1994] FMSC 48; 6 FSM Intrm. 318, 322 (Pon. 1994).

Courts - Recusal
Where the trial justice resides in housing provided for him by the national government by statute and is not an intended third-party beneficiary to the government's lease of the land and the action is only for money damages concerning the land the trial justice has no financial or other interest in the matter that may serve to disqualify the justice. Nahnken of Nett v. United States (I), [1994] FMSC 48; 6 FSM Intrm. 318, 322 (Pon. 1994).

Courts - Recusal
Given the social and geographical configuration of Micronesia the Rule of Necessity may oblige judges to hear and decide cases from which they would otherwise recuse themselves. Factors to be considered include delay, expense, and impact on other cases. Nahnken of Nett v. United States (I), [1994] FMSC 48; 6 FSM Intrm. 318, 323-24 (Pon. 1994).

* * * *

COURT'S OPINION

ANDON L. AMARAICH, Associate Justice:

On October 4, 1993, the plaintiff filed a motion to disqualify the presiding judge in this

[6 FSM Intrm. 320]

action, Acting Chief Justice Andon L. Amaraich.^[1] On January 11, 1994, a hearing was held on the motion at which argument was heard from counsel for the plaintiff, counsel for defendant Robert Etscheit, Jr., counsel for defendants Yvette Etscheit Adams and Renee Etscheit Varner, and counsel for defendant Pohnpei Public Lands Board of Trustees. Counsel for each of the various defendants opposed the motion for disqualification.^[2] On January 12, 1994, this Court issued an order denying the plaintiff's motion, and the Court now explains the basis for its decision.

BACKGROUND

The plaintiff is the Iso Nahnken of Nett, a traditional leader, who claims that the land involved in this lawsuit and claimed by defendants Etscheits is actually owned by him in his traditional capacity. In this lawsuit he does not seek, however, to quiet title to the land or to have title issued in his name, but rather demands judgment of $50,000,000 in damages from the defendants for acts and omissions that have allegedly deprived him of possession and use of the land.

The FSM Judiciary Act states that "[f]urnished housing and utilities shall be provided without cost to each Justice of the Supreme Court." 4 F.S.M.C. 108(4). In the case of the presiding justice, the housing provided by the national government is located on the land that this lawsuit involves,^[3] in a house rented to the national government by one of the defendants, Robert Etscheit, Jr. Defs. Etscheit's Opp'n To Disqualification Motion, Ex. A. The presiding justice is not a signatory to the lease, is not mentioned in the lease, took no part in the selection of this house for leasing by the government, was not involved in the negotiation of the lease and exchanges no money with either Robert Etscheit, Jr., or the national government, for the house. Id. Exs. A, B. All complaints or requests for repairs are communicated to Mr. Etscheit by administrators with the national government. Id. Ex. B para. 8. It is uncontradicted that the rental arrangement between Mr. Etscheit and the national government for the house is neither better nor worse than the many other commercial lease relationships that Mr. Etscheit has. Id. Ex. B para. 9. There is no evidence in the record that the rental agreement is better than ones that are available from other lessors on Pohnpei.

ANALYSIS

The plaintiff's motion argues that the presiding judge should disqualify himself because of the fact that he lives in a house on the land involved in this lawsuit in a house rented by the defendant Robert Etscheit, Jr. Disqualification of an FSM Supreme Court Justice is controlled by 4

[6 FSM Intrm. 321]

F.S.M.C. 124.^[4] Section 124(2) articulates eight specific bases for disqualifying a Justice. The only one of those eight that the plaintiff has claimed is applicable here is contained in section 2(d), which concerns "financial interest" or "other interest" and states that the Justice shall disqualify himself:

where he knows that he, individually or as a fiduciary, or his spouse or minor child residing in his household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding.

4 F.S.M.C. 124(2)(d). Section 124(1) contains a more general provision which states that "A Supreme Court Justice shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned." 4 F.S.M.C. 124(1). The plaintiff also claims that this section warrants disqualification of the presiding justice.

Regarding "financial" or "other" interest under section 124(2)(d), it is undisputed that the presiding justice does not own the house, and that since the house is rented and paid for by the national government, not by the justice, it is not possible that he could realize any financial benefit from a discount, if any, in the rent charged.^[5] Moreover, the justice's right to housing arises under the statute, not under the lease agreement, which does not mention the justice by name or by position.

The plaintiff advances three arguments for disqualification under section 124(2)(d): that "[b]y living in [a house built by the Etscheits on the disputed land] the Acting Chief Justice receives a direct benefit from the wrongdoing of the defendant Etscheit"; that "[t]he Acting Chief Justice may, subconsciously or otherwise, anticipate with some misgivings the prospect or possibility of losing the house in which he resides"; and, that as a "third-party beneficiary" of the lease agreement the Acting Chief Justice has a disqualifying "financial interest" in the land.

All three of these arguments ignore the fact that section 124(2)(d) requires not only that the justice have an interest in the land, but also that such interest "could be substantially affected by the outcome of the proceeding." (emphasis added). However, in this case all the plaintiff has asked for in his prayer for relief is "$50,000,000, plus interest, costs and attorneys fees." He does not ask for an order to issue or quiet title in his name, or to return the land to him in some other way. There is not even a general relief request. All the plaintiff asks for in this lawsuit is money. Thus, it does not matter if the Court grants all of the relief sought by the plaintiff or none of it- the national government's lease for the house in which the presiding justice lives will not be affected. Moreover, even if this was a suit where ownership of the land was at stake, the plaintiff provides no authority for the claim that victory by the plaintiff would void a lease entered into by a lessor who was operating under color of facially valid title. Nor does counsel for the plaintiff provide an affidavit or other evidence showing that the plaintiff would not simply renew or ratify a void lease if that situation should be presented to him. Thus it is clear that even if the presiding

[6 FSM Intrm. 322]

judge had a financial interest in this lawsuit, that interest would not be "substantially affected" so as to make disqualification proper.

Moreover, the various "interests" that the plaintiff claims the presiding justice has evaporate under scrutiny. The plaintiff claims that the presiding justice by living on the land "receives a direct benefit from the wrongdoing of the defendant Etscheit." However, as explained above, the Judiciary Act provides that the national government must provide each justice with housing. Thus, the presiding justice is entitled to housing, either on the disputed property or elsewhere. His benefit comes to him under the Judiciary Act, not under the lease agreement.

Nor does the plaintiff's conjecture that the presiding justice "may" have "subconscious[] misgivings" about having to move establish an "interest" for purposes of section 124(2). As stated above, regardless of whether the Court gives the plaintiff all or none of the relief requested the lease will be unaffected. Moreover, speculation about the justice's subconscious frame of mind is insufficient to create a basis for disqualification. As this Court noted in FSM v. Skilling, [1984] FMSC 6; 1 FSM Intrm. 464, 477 (Kos. 1984), "facts, rather than litigants' speculations or fears, must be produced." Here the plaintiff's own motion states that "[t]he Acting Chief Justice may, subconsciously or otherwise, anticipate with some misgivings the prospect or possibility of losing the house in which he resides." (emphasis added). Absolutely no evidence that the presiding justice has acted in a biased manner is introduced, nor is there anything else in plaintiff's supporting affidavit which tends to show the existence of the frame of mind feared. Fact-free speculation about what a justice's subconscious frame of mind "may" be cannot serve as a basis for disqualification.

The plaintiff's argument that the presiding justice has a "financial interest" is similarly unsupported. The plaintiff looks to 4 F.S.M.C. 124(4)(c) which defines a "financial interest" as including "ownership of a legal or equitable interest however small." The plaintiff asserts that "[a]n equitable interest includes benefits received under any contract, such as a lease." However, the plaintiff makes this claim without citing any authority at all. Black's Law Dictionary defines an "equitable interest" as being "[t]he interest of a beneficiary under a trust." Black's Law Dictionary 483 (5th ed. 1979). The justice is not a "beneficiary under a trust" with respect to the house.

In addition, the plaintiff merely asserts that the presiding justice is a "third-party beneficiary" of the lease. Generally for a person to be a third-party beneficiary the "contract must have been intended for the benefit of the third person" and the parties must have intended that the third person could enforce that benefit in the courts. 17A Am. Jur. 2d Contracts § 440 (1991). The question of how that intent must be manifested has not been addressed by this Court, but some United States jurisdictions have held that a person is not a third-party beneficiary unless the contract expressly mentions the person. Id. § 444. Even in some jurisdictions where express identification of the third-party is not necessary "the parties' intent to benefit a third party must be shown on the face of the agreement." Id. § 441, at 464 n.23. In this case the contract is between the national government and Robert Etscheit, Jr., and there is no reference to the presiding justice by name or title, or to the existence of any third party. Nor is there any other indication in that contract that it was made with the presiding justice in mind. Certainly, the contract in no way indicates that the presiding justice was meant to have a right to enforce the terms of the lease in court, as a third-party beneficiary would be able to do. If the national government wished, for its own reasons, to relocate the chief justice in other suitable housing, the lease provides him with no means for challenging that action. Thus not only will the outcome of this action for money damages not affect the national government's lease on the house currently occupied by the presiding justice, but the presiding justice himself has no "financial or other interest" in that lease.

[6 FSM Intrm. 323]

The plaintiff also argued that disqualification was warranted under section 124(1), which states that a justice must disqualify himself if "his impartiality might reasonably be questioned." Counsel argued that this "rule requires the judge to step down when it might appear to the public that there could be bias." However, that is not the applicable standard. In FSM v. Skilling this Court stated that the reasonableness of questioning the justice's impartiality should be considered from the perspective of "a disinterested reasonable person who knows all the circumstances." 1 FSM Intrm. at 475; see also Jano v. King, [1992] FMSC 2; 5 FSM Intrm. 266, 270 (Pon. 1992). The plaintiff argued for a very different standard without ever citing Skilling, much less providing a basis for abandoning the standard pronounced there. The Court concludes that a reasonable person knowing all the circumstances- including the fact that the lawsuit seeks money damages only, and the facts surrounding the national government's lease on the house- would not conclude that those circumstances create any basis for questioning the presiding justice's impartiality in this case.

While not mentioning this Court's decision in Skilling, the plaintiff does cite to litigation in Guam, Cushing Zoo v. Cleveland Wrecking Co. and Royal Palm Resort Hotel, where two judges in a factually dissimilar case have disqualified themselves. However, the plaintiff does not rely on a published decision or slip opinion, but on a newspaper account of what happened. Therefore, it is quite possible that these decisions are not formally reported and have no precedential value in Guam, let alone here. Moreover, because the decisions are not available to this Court, we are deprived of the judge's actual reasoning and are being asked to accept the plaintiff's characterization of that reasoning. The Court concludes that under the circumstances the decisions should be given no weight at all.

Moreover, the plaintiff's vague and unsubstantiated fears about the presiding justice's subconscious impartiality must be balanced against very concrete administrative problems that, given the "social and geographical configuration of Micronesia," FSM Const. art. XI, § 11, would flow from disqualification. In ruling on the disqualification motion in Skilling the Court considered factors affecting court administration such as: the relatively small number of justices on the FSM Supreme Court (two at that time); the fact that the justices reside in locations hundreds of miles apart; the delay and expense involved with assigning temporary justices; and, the fact that temporary justices have not undergone constitutional nomination, advise and consent, and do not have life tenure. 1 FSM Intrm. at 469-70. The Court stated that such factors "could be viewed as justifying invocation of the Rule of Necessity, whereby judges are obliged to hear and decide cases from which they might otherwise recuse themselves." Id. at 470.

In the instant case disqualification would be much more of an administrative burden than in Skilling because it might well mean that the presiding justice would have to disqualify himself in numerous other cases that are currently pending in this Court that relate in one way or another to ownership of the same tract of land involved here. Reassigning all those cases to visiting justices from outside Pohnpei would involve massive delay, expense, and inconvenience. Outside justices would have to spend large amounts of time on Pohnpei- thus creating a severe hardship for them and staggering travel expenses for the Court. Lengthy pleadings filed in Pohnpei would have to be copied and sent to judges elsewhere, thereby burdening the clerk's office. In all likelihood many hearings would be held by conference call, which is not only expensive, but also confusing due to poor connections, the problems involved with translation, and the inability of multiple participants to see each other and therefore know who is speaking. Experience has shown this Court that such reassignments are extremely burdensome even when they are relatively rare, as they have been in the past. Reassignment of the large number of cases that involve ownership of this particular tract of land would be unworkable for the Court.

[1994] FMSC 37; [6 FSM Intrm. 324]

Moreover, because Pohnpei has a relatively small business community it is likely that justices will often have ongoing commercial relationships with parties who come before the Court- the Banks where they keep their money will bring collection actions, Continental-Air Micronesia will have contract disputes, and so on. It would be incompatible with the realities of the FSM to adopt a rule under which justices have to recuse themselves whenever they have frequent commercial contacts with a party. Indeed, in the instant case, all three justices on the FSM Supreme Court have used accommodations on the disputed property and anyone who lives on Pohnpei for an extended period of time is likely to shop in one of the Etscheit stores. It is therefore entirely possible that under the plaintiff's reasoning the other FSM justices would also have to recuse themselves, thereby necessitating the reassignment of the cases to non-FSM justices. The plaintiff has not cited a single case, FSM or United States, in which a judge recused himself because he had frequent commercial contact with a party. Given the realities of the "social and geographical configuration of Micronesia," it would be ill-advised for the Court to adopt a rule that so often resulted in disqualification.

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^[1] Under 4 F.S.M.C. 124(6), the Court was required to rule on the motion to disqualify before proceeding further in the matter.

^[2] The Government of the United States claims that they have not been properly served and are not a party.

^[3] The lot of land that the house is situated on is one-half of one acre or less. Defendants Etscheit's Opposition To Summary Judgment Motion, Ex. B para. 10. The total land involved in this action is approximately 1250 acres.

^[4] The memorandum filed by the plaintiff in support of the motion to disqualify did not cite to this provision, but rather to 5 F.S.M.C. 541, which pertains to disqualification of Trust Territory judges, not to justices of the FSM Supreme Court. At oral argument counsel for the plaintiff conceded that 5 F.S.M.C. 541 was not applicable to this case.

^[5] It is undisputed that the national government receives no rental discount on the house. Defs. Etscheit's Opp'n To Pl.'s Summary Judgment Motion, Attach. B para. 4.