Iriarte v Micronesian Developers, Inc [1994] FMSC 50; 6 FSM Intrm. 332 (Pon. 1994) (16 February 1994)

THE SUPREME COURT OF THE
FEDERATED STATES OF MICRONESIA
Cite as Iriarte v. Micronesian Developers, Inc., [1994] FMSC 50; 6 FSM Intrm. 332 (Pohnpei 1994)

[1994] FMSC 50; [6 FSM Intrm. 332]

SALVADOR IRIARTE, individually, and
on behalf of his FAMILY and CO-TENANTS,
Plaintiffs,

vs.

MICRONESIAN DEVELOPERS, INC., BLACK DEVELOPMENT CORPORATION and POHNPEI AGGREGATE PRODUCTS,
Defendants.

CIVIL ACTION NO. 1992-164

MEMORANDUM OF DECISION

Andon L. Amaraich
Associate Justice

Hearing: January 19, 1994
Decided: February 16, 1994

APPEARANCES:

For the Plaintiffs:
John Brackett, Esq.
P.O. Box 208
Kolonia, Pohnpei FM 96941

For the Defendants:
Fredrick L. Ramp, Esq.
P.O. Box 1480
Kolonia, Pohnpei FM 96941

For the Defendant (Micronesian Developers):
James McCaffrey, Esq.
P.O. Box 672
Kolonia, Pohnpei FM 96941

[6 FSM Intrm. 333]

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HEADNOTES

Attorney, Trial Counselor and Client; Settlement
The parties, not their attorneys, have ultimate responsibility to determine the purposes to be served by legal representation. Thus, clients always have the right, if acting in good faith, to agree to settle their own case, with or without the consultation or approval of counsel, even when their attorneys have failed to settle. Iriarte v. Micronesian Developers, Inc., [1994] FMSC 50; 6 FSM Intrm. 332, 334 & n.1 (Pon. 1994).

Attorney, Trial Counselor and Client; Settlement
Counsel's own dissatisfaction with the settlement agreement reached by his clients without counsel's consultation or approval does not take precedence over the clients' rights to settle their claims themselves. Iriarte v. Micronesian Developers, Inc., [1994] FMSC 50; 6 FSM Intrm. 332, 334-35 (Pon. 1994).

Contracts - Interpretation
Contracts frequently do not specify the time of performance and courts routinely decide what a reasonable time for performance is in those cases where no time has been specified. Iriarte v. Micronesian Developers, Inc., [1994] FMSC 50; 6 FSM Intrm. 332, 335 (Pon. 1994).

Contracts
Problems regarding the timing of performance, or the existence of vague terms will not necessarily interfere with the enforceability of a contract. Iriarte v. Micronesian Developers, Inc., [1994] FMSC 50; 6 FSM Intrm. 332, 335 (Pon. 1994).

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COURT'S OPINION

ANDON L. AMARAICH, Associate Justice:

BACKGROUND

On December 22, 1992, the plaintiffs filed this action alleging that the quarry operation on land adjacent to their property and residence have diminished the value of their property, caused them emotional suffering, and deprived them of the full use of their property. Damages for these alleged harms were sought under a number of legal theories, including intentional assault, negligent operation of machinery, and nuisance.

The defendants have moved to dismiss the action in its entirety on the basis of a written settlement agreement that they entered into with the plaintiffs. The agreement provides that the plaintiffs will seek dismissal of the lawsuit with prejudice in exchange for a lump sum payment of $18,000. The agreement further provides that the defendants will pay the plaintiffs an amount of money equal to 2% of the defendants' gross sales of crushed rock products until March 31, 2011, in consideration for the plaintiffs' agreement not to sue the defendants in the future. It is uncontested that the plaintiffs have accepted the $18,000 lump sum payment and have begun to accept monthly payments representing 2% of the defendants' gross sales of crushed rock products.

Counsel for the plaintiffs argues that the action should not be dismissed because there is a

[6 FSM Intrm. 334]

disagreement about a major element of how the settlement is to be performed. Specifically, counsel states that the plaintiffs expected that the 2% royalty payments would be made in advance on a lump sum basis, whereas the defendants have been making the payments on a monthly basis. However, while counsel is objecting to the settlement entered into by his clients, he produced no affidavit, testimony, or other evidence suggesting that any of his clients are unsatisfied with the settlement. Indeed, counsel for the plaintiffs did not dispute that his clients have already accepted the $18,000 lump sum payment and have begun to accept the monthly royalty payments.

On January 19, 1994, a hearing was held on the motion to dismiss at which counsel for all the parties appeared. Based on a careful review of the submissions and the oral presentations of counsel, the Court believes it should grant the motion to dismiss.

ANALYSIS

The parties, not their attorneys, have ultimate responsibility to determine the purposes to be served by legal representation. Model Rules of Professional Conduct Rule 1.2 cmt. (Scope of Representation); see also FSM Adm. R. VII (adopting the Model Rules of Professional Conduct). Thus, the parties always have the right to agree to settle their own case, with or without the consultation or approval of counsel.^[1] In the instant case the parties exercised that right by settling the case themselves when their attorneys failed to do so.

Counsel for the plaintiffs attacks the agreement reached by his clients on the grounds that the method of payment of the 2% royalties, which he claims is a major element of the agreement, is not specified. First we note that there is no evidence that the plaintiffs themselves considered any particular payment schedule a major element of the settlement or that they are dissatisfied with the monthly method of payments adopted by the defendants. Similarly, although the plaintiffs' counsel stated that the settlement agreement is confusing and ambiguous, he submitted no evidence that his clients found the agreement confusing or ambiguous. Indeed, even though the issue of his client's apparent satisfaction with the arrangement was explicitly brought up at the hearing, counsel for the plaintiffs never stated that the plaintiffs themselves objected to the monthly payment approach or wished to repudiate the agreement, and given the fact that the plaintiffs have already begun accepting these monthly payments the Court may reasonably infer that they are content with that means of payment.^[2] Counsel's own dissatisfaction with the settlement agreement does not

[6 FSM Intrm. 335]

take precedence over his clients' rights to settle their claims themselves.

Secondly, even if there were a dispute between the parties themselves about whether the royalty payments should be made in a lump sum, as opposed to month-by-month, that would probably not render the contract unenforceably vague. Contracts frequently do not specify the time of performance and courts routinely decide what a "reasonable time" for performance is in those cases where no time has been specified. See 1 Corbin on Contracts § 96 (1960). Here the contract clearly stated the important terms ) $18,000 paid in a lump sum and 2% of the defendant's gross sales of rock products after that ) and the plaintiffs have already begun to accept performance. The fact that the agreement does not specify when the royalty payments are to be made suggests that the parties did not regard any specific point in time as essential. Id. Uncertainties of that type are seldom held to make a contract too uncertain to be enforced. Id. This Court, although it has not ruled on the precise question presented here, has in the past declined to allow problems regarding the timing of performance, or the existence of vague terms, interfere with the enforceability of a contract. See, e.g., Ponape Transfer & Storage, Inc. v. Wade, [1992] FMSC 37; 5 FSM Intrm. 354, 356 (Pon. 1992); Panuelo v. Pepsi Cola Bottling Co. of Guam, [1991] FMSC 36; 5 FSM Intrm. 123, 127-28 (Pon. 1991).

Finally, the contract term regarding the royalty payments explicitly stated that those payments were to be made in consideration for the plaintiffs' covenant not to sue in the future, not for the plaintiffs' promise to seek dismissal of this action. Under the contract the $18,000 lump sum payment was the sole consideration for the agreement to dismiss the action, and there is no alleged confusion regarding that consideration. That lump sum payment has been made by the defendants and accepted by the plaintiffs.

CONCLUSION

The Court concludes that the settlement agreement calling for the dismissal of this action in exchange for the $18,000 lump sum payment is enforceable. It appears, moreover, that there is no longer any live dispute between the parties themselves. Therefore, a final judgment shall be entered dismissing this action with prejudice, each side to bear their own costs.

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^[1] As stated in 7 Am. Jur. 2d Attorneys At Law § 179 (1980) (footnotes omitted):

[A]t any time before judgment, the client may, if acting in good faith, compromise, settle, or adjust his cause of action out of court without the intervention, knowledge, or consent of his attorney. The client may take such action even though he has agreed with his attorney not to do so, and the compromise or settlement may be effectively concluded even though the adverse party has knowledge of the agreement with the attorney and of the attorney's fee claim.

^[2] Counsel for the plaintiffs also stated that in prior contracts negotiated by the defendants lump sum payments were made, and that the plaintiffs therefore had a right to expect the same. Even if such a course of dealing with other individuals could be shown it does not matter if the parties in this case have decided that the payment may be made in monthly installments. Moreover, the defendants noted that the lump sum payments identified by the plaintiffs' counsel were for future rental payments. The total amount of future rent under a lease may be known in advance with certainty, thus making a lump sum payment more workable than in the case of future gross sales.