Nahnken of Nett v Pohnpei [1995] FMSC 27; 7 FSM Intrm. 171 (Pon. 1995) (30 June 1995)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite as Nahnken of Nett v Pohnpei, [1995] FMSC 27; 7 FSM Intrm. 171 (Pon. 1995)

ISO NAHNKEN OF NETT,
Plaintiff,

vs.

POHNPEI STATE GOVERNMENT,
and its agents, employees and entities created by state law,
Defendants.

CIVIL ACTION NO. 1994-098

ORDER

Andon L. Amaraich
Chief Justice

Hearing: November 29, 1994
Decided: June 30, 1995

APPEARANCES:

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

For the Defendants:
Richard L. Counts, Esq.
Assistant Attorney General
Office of the Pohnpei Attorney General
P.O. Box 1555
Kolonia, Pohnpei FM 96941

* * * *

HEADNOTES

Equity - Laches, Estoppel and Waiver; Property - Adverse Possession
The doctrine of adverse possession is unrelated to the defense of laches. Nahnken of Nett v. Pohnpei, [1995] FMSC 27; 7 FSM Intrm. 171, 176 n.8 (Pon. 1995).

Civil Procedure - Summary Judgment
If, when determining whether a triable issue of material fact exists and viewing the facts presented and the inferences drawn from them in the light most favorable to the non-moving party, a court determines that there is only one reasonable conclusion that can be drawn from the undisputed facts, there is no question of material fact and the case is ripe for disposition by summary judgment. Nahnken of Nett v. Pohnpei, [1995] FMSC 27; 7 FSM Intrm. 171, 176 (Pon. 1995).

Equity - Laches, Estoppel and Waiver
The two elements to a laches defense are inexcusable delay or lack of diligence by a plaintiff in bringing suit, and injury or prejudice to the defendant from the plaintiff's delay. Inexcusable delay exists when plaintiff knew or had notice of the defendant's conduct which gave rise to plaintiff's cause of action, had an opportunity to bring suit, but failed to do so. Nahnken of Nett v. Pohnpei, [1995] FMSC 27; 7 FSM Intrm. 171, 177 (Pon. 1995).

Torts - Trespass
A trespass cause of action accrues when there is an intrusion upon the land of another which invades the possessor's interest in the exclusive possession of his land. Nahnken of Nett v. Pohnpei, [1995] FMSC 27; 7 FSM Intrm. 171, 177 (Pon. 1995).

Civil Procedure - Notice
Constructive notice is a concept through which actual notice is imputed to a party regardless of whether that party has actual knowledge of the imputed facts. A party has constructive notice when from all the facts and circumstances known to him at the relevant time, he has such information as would prompt a person exercising a reasonable care to acquire knowledge of the fact in question or to infer its existence. Nahnken of Nett v. Pohnpei, [1995] FMSC 27; 7 FSM Intrm. 171, 177 n.11 (Pon. 1995).

Civil Procedure - Notice; Torts - Trespass
Substantial, open and notorious occupation of land is constructive notice of occupant's claim and puts all persons on inquiry as to the nature of occupant's claim, and whoever willfully avoids learning of such trespass will be charged with constructive notice. Nahnken of Nett v. Pohnpei, [1995] FMSC 27; 7 FSM Intrm. 171, 177-78 (Pon. 1995).

Equity - Laches, Estoppel and Waiver
The determination whether a plaintiff's delay in bringing suit is sufficient to justify the application of laches is made on a case by case basis. Nahnken of Nett v. Pohnpei, [1995] FMSC 27; 7 FSM Intrm. 171, 178 (Pon. 1995).

Equity - Laches, Estoppel and Waiver
Where plaintiff inexcusably waited fifteen years after accrual of cause of action and prejudiced the state by allowing it to make substantial costly improvements the doctrine of laches will bar plaintiff's claims. Nahnken of Nett v. Pohnpei, [1995] FMSC 27; 7 FSM Intrm. 171, 178 (Pon. 1995).

Equity - Laches, Estoppel and Waiver
The doctrine of laches may not be used as a defense against the government in an action brought by the government, but may be used as a defense by the government against a suit brought by a private party. Nahnken of Nett v. Pohnpei, [1995] FMSC 27; 7 FSM Intrm. 171, 179 (Pon. 1995).

Civil Procedure - Frivolous Actions
The court strongly disapproves of as frivolous and a waste of the court's resources the same plaintiff, represented by the same counsel, in an action involving the same land, repeatedly asserting previously denied theories. Nahnken of Nett v. Pohnpei, [1995] FMSC 27; 7 FSM Intrm. 171, 180 (Pon. 1995).

Equity - Laches, Estoppel and Waiver
A party whose conduct regarding the subject of the litigation is unconscionable, or its actions constitute deceit, fraud, or misrepresentation has unclean hands and thus may not invoke the equitable defense of laches. Nahnken of Nett v. Pohnpei, [1995] FMSC 27; 7 FSM Intrm. 171, 180 (Pon. 1995).

Equity - Laches, Estoppel and Waiver; Statutes of Limitation
The equitable defense of laches and the statute of limitations are neither synonymous nor mutually exclusive. Unlike statutes of limitation, which forever bar an action after a fixed period of time, laches depends upon considerations of fairness, justice, and equity, and is invoked when the applicable statute of limitations has not yet expired. Nahnken of Nett v. Pohnpei, [1995] FMSC 27; 7 FSM Intrm. 171, 181 (Pon. 1995).

Civil Procedure - Notice
A plaintiff cannot contend that he had no notice of his causes of action until a certain date when before that date he had filed a prior suit involving the same claims and land. Nahnken of Nett v. Pohnpei, [1995] FMSC 27; 7 FSM Intrm. 171, 181-82 (Pon. 1995).

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COURT'S OPINION

ANDON L. AMARAICH, Chief Justice:

Introduction

This action is brought by the Iso Nahnken of Nett, Mr. Salvador Iriarte, purportedly on behalf of the people of Nett, seeking title to much, if not all, of the public lands located within Nett, as well as monetary damages from the State of Pohnpei ("State"), for the State's alleged unlawful utilization and occupation of the same public lands.

On November 29, 1994, the Court held hearings on the numerous pending motions in this action, including several dispositive motions filed by the State. Among the dispositive motions considered by the Court was the State's FSM Civil Rule 12(b)(6) motion for judgment on the pleadings, seeking to dismiss this action as barred by the doctrine of laches. During the course of the hearing, the Court concluded that resolution of the State's motion required review of matters outside of the pleadings. Accordingly, pursuant to FSM Civil Rule 12(b)[1], the Court both informed the parties that it would be treating the State's motion as one for summary judgment and offered the parties the opportunity to submit briefs presenting any additional arguments or evidence relating to the State's motion.

Having now considered the briefs and oral arguments of the parties regarding the State's laches defense, the Court is convinced that plaintiff has delayed, inexcusably, for almost fifteen years, the commencement of this action, and that permitting this action to go forward would severely prejudice the State. Accordingly, the Court will grant summary judgment for the State based upon the defense of laches.

Facts and Plaintiff's Causes of Action

On February 9, 1979, the Trust Territory Government transferred by quitclaim deed public lands in Pohnpei to the Ponape District Public Lands Authority ("PDPLA"), now known as the Pohnpei Public Lands Board of Trustees ("PPLBT"). This conveyance was accomplished for the primary purpose of returning the control of public property to local authorities. See Secretarial Order. No. 2969, § 1. Exc from this conveyanceyance were properties actively used by government, such as the sites upon which public schools, medical facilities, and government administrative offices were located. How the quitclaim deed specifiecified that if any of the property retained for the "active use" of government should ever cease being used for governmental purposes, then title to such property shall automatically vest in the PDPLA. Quitclaim Deed from The Trust Territory of The Pacific Islands to Ponape District Public Lands Authority at 10 (Feb. 9, 1979). Many if not all of the sites retained for the active use of government continue to be used by the State today.

Plaintiff, purportedly acting on behalf of the people of Nett,[2] apparently lays claim to both the land quitclaimed to the PDPLA and the land reserved for the "active use" of government in the 1979 deed. The Court's uncertainty as to the scope of plaintiff's claim arises from inconsistencies in plaintiff's claim. Plaintiff alternatively has stated that the subject of his claim is only the property quitclaimed to the PDPLA in 1979 or that his claim is limited to the property reserved for the "active use" of government.[3] However, the Court will overlook, for the purposes of this opinion, the contradictions in plaintiff's filings and assume that plaintiff's claim encompasses both the real property deeded to the PDPLA as well as the real property retained by the government for its own active use.[4]

Plaintiff premises his claim to ownership of public lands in Nett upon Secretarial Order 2969 which authorized the conveyance to the PDPLA of public lands "subject to valid existing rights." S.O. 2969, § 4.[5] Plaintiff contends that among the valid existing rights, at the time of conveyance, was the people of Nett's right to title to all public lands locatedhe municipality. The people of Nett's and plaintiff's rightright to title to all public lands in Nett is supposedly evidenced by a German Land Code, which, according to plaintiff, posited title to all public lands in the citizenry of the municipality where the land was located. Pl.'s Summary Judgment Brief at 2 (Feb. 28, 1995). Plaintiff argues that the German Land Code was the law of Pohnpei at the time of conveyance, and accordingly, conveyance of the public lands to the PDPLA, pursuant to valid existing rights, merely placed management of those lands in the PDPLA while plaintiff retained title to the property.[6]

Based upon plaintiff's alleged ownership of public lands, plaintiff asserts two primary causes of action. First, plaintiff alleges trespass, contending that the State and its agents have, since the date of the quitclaim deed in 1979, occupied and built upon public lands in Nett without plaintiff's permission. Second, plaintiff alleges violation of article XIII, section 5 of the FSM Constitution, which prohibits indefinite land use agreements. As adopted in 1979, article XIII, section 5 provided:

An agreement for the use of land for an indefinite term is prohibited. An existing agreement becomes void 5 years after the effective date of this Constitution. Within that time, a new agreement shall be concluded between the parties. When the national government is a party, it shall initiate negotiations.[7]

Plaintiff argues that the State has violated this provision of the Constitution by occupying public lands and failing to negotiate a lease with a definite term within five years of the adoption of article XIII, section 5. Plaintiff's complaint also alleges the State has violated article IV, section 3 by taking plaintiff's property without due process, as well as article V of the Constitution. Plaintiff does not specify which provision of article V has been violated or what state action constitutes a violation. These latter two causes of action have received only cursory mention in plaintiff's early filings and almost no mention in plaf's later filings, bringing into question whether plaintiffntiff continues to pursue these causes of action. However, whether or not plaintiff continues to proceed under these causes of action, they are encompassed within the Court's decision to grant summary judgment based upon the State's laches defense.

The Parties' Arguments in Support of and in Opposition to the State's
Motion for Summary Judgment Based upon Laches

The State argues that it has been occupying and building upon public lands in Nett since 1979 and that the size and scope of its occupation necessarily put plaintiff on actual and constructive notice of his causes of action for trespass and violation of article XIII, section 5. The State argues further that because plaintiff has been aware of the alleged trespass to public lands for more than fifteen years before bringing this action, plaintiff's claims should be barred by the doctrine of laches for inexcusable delay in commencing this action. Similarly, the State contends that plaintiff's claim for violation of article XIII, section 5 matured in 1984, five years after section 5 was adopted. The State argues, therefore, that this claim also should be barred by the doctrine of laches due to plaintiff's approximate ten year delay in asserting that claim.

Plaintiff raises numerous defenses to the State's equitable defense of laches. Several of these defenses are so frivolous, are based upon such a gross misunderstanding of the law, or are so irrelevant as to be unworthy of a response by the Court.[8] Nonetheless, the Court will address plaintiff's primary arguments in opposition to the State's motion for summary judgment. First, plaintiff contends that the defense of laches is not available in cases involving disputes over title to public lands. Second, plaintiff contends that the State comes before this Court with unclean hands and thus is barred from invoking the equitable defense of laches. Third, plaintiff argues that the State's alleged continuing trespass on plaintiff's land tolls the running of the statute of limitations. Plaintiff furthermore contends that the fact that there is a statute of limitations applicable to plaintiff's causes of action bars the application of laches.[9] Fourth, plaintiff argues that there has been no delay in the commencement of this action because plaintiff's cause of action did not accrue until the administrative denial of his claim pursuant to S.L. No. 2L-192-91, § 24 by the State Attorney General by letter dated June 22, 1994.[10]

Standard for Summary Judgment

A motion for summary judgment shall be granted when the movant demonstrates that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. FSM Civ. R. 56(c); Kihara Real Estate, Inc. v. Estate of Nanpei (I), 6 FSM Intrm. 48, 52 (Pon. 1993). In determining whether a triable issue of fact exists, the Court must view the facts presented and the inferences to be drawn from those facts in the light most favorable to the party opposing summary judgment. Damarlane v. Pohnpei Transp. Auth., 5 FSM Intrm. 1, 3 (Pon. 1991). However, when there is only one reasonable conclusion that can be drawn from the undisputed facts, there is no question of material fact and the case is ripe for disposition on summary judgment. Cook v. Providence Hosp., [1987] USCA6 1063; 820 F.2d 176, 179 (6th Cir. 1987).

Discussion

I. Application of the Laches Defense to this Action

At the outset, the Court must decide whether there are any outstanding issues of material fact regarding the State's laches defense. See FSM Dev. Bank v. Rodriguez Corp., [1985] FMSC 2; 2 FSM Intrm. 128, 130 (Pon. 1985) (instructing that question of material fact prohibits entry of summary judgment). There are few factual disputes in this action, with the exception of the mixed question of law and fact as to when plaintiff received notice of the existence of the causes of action asserted in this case. As is discussed infra, the Court concludes that there can be no question under the facts and theories as asserted by plaintiff as to when plaintiff received notice of the accrual of his causes of action. Plaintiff received actual or constructive notice of the State's alleged trespass in 1979 and notice of the State's alleged violation of article XIII, section 5 in 1984. Accordingly, this action is ripe for disposition of the State's motion for summary judgment on its laches defense.

There are two elements to the laches defense: 1) inexcusable delay or lack of diligence by a plaintiff in bringing suit, and 2) injury or prejudo the defendefendant from plaintiff's delay. Mid-Pacific Constr. Co. v. Semes (II), [1993] FMSC 45; 6 FSM Intrm. 180, 185-86 (Pon. 1993);ostello v. United States[1961] USSC 19; , 365 U.S. 265, 282[1961] USSC 19; , 81 S. Ct. 534, 543[1961] USSC 19; , 5 L. Ed. 2d 551, 562 (562 (1961). Inexcusable delay in bringing suit exists when a plaintiff knew or had notice of the conduct of defendant which gave rise to plaintiff's cause of action, and plaintiff had an opportunity to bring an action but failed to do so. Semes(II), 6 FSM Intrm. at 186; Nahnken of Nett v. United States (III), [1994] FMSC 3; 6 FSM Intrm. 508, 522 (Pon. 1994).

According to plaintiff's own theory of the case, the State has been trespassing upon public lands located in Nett since 1979. A cause of action for trespass accrues when there is an intrusion upon the land of another which invades the possessor's interest in the exclusive possession of his land. See In re Parcel No. 046-A-01[1993] FMSC 30; , 6 FSM Intrm. 149, 154 (Pon. 1993); 75 Am. Jur. 2d Trespass § 25, at 28 (1991). lleged tred trespass in this action has taken the form of the State's occupation and construction of substantial structures uponic lands without the permission or payment of compensation to plaintiff. The Court concludecludes, as a matter of both fact and law, that the nature of the State's occupation gave plaintiff notice of the accrual of his causes of action in 1979.

As a matter of fact, the Court can only conclude that the State's occupation of public lands in Nett was so substantial and so notorious that plaintiff must have had actual notice of the alleged trespass to public lands in Nett since 1979. For example, the State has constructed numerous substantial structures on these public lands, including schools, medical facilities, public utilities, roads, a seaport, and an airport. The arrival of commercial jetliners in Nett must have given plaintiff actual notice that the State was conducting operations on public lands in Nett.

Similarly, as a matter of law, the State's open occupation of public lands placed plaintiff on constructive notice of the accrual of his cause of action for trespass.[11] Even if plaintiff somehow managed to turn a blind eye to the State's occupation of public lands and avoid actual notice of the State's alleged trespass, the State's physical occupation of public lands gave plaintiff constructive notice of the accrual of his causes of action. 58 Am. Jur. 2d Notice § 21, at 586 (1989ossession oion of land is notice to the world of every legal or equitable right that the possessor has therein. It is a fact putting all persons on inquiry as t nature of the occupant's claims . . . "); seei>see Chipuelong v. Chuuk, [1993] FMCSC 3; 6 FSM Intrm. 188, 195 (Chk. S. Ct. Tr. 1993) (recognizing that continued substantial occupation of land gives constructive notice of an adverse claim to ownership ot lan party who willfuillfully ally avoids learning of the accrual of a cause of action will be charged with constructive notice of that cause of action. 58 Am. Jur. 2d Notice § 8, at 5989) ("a person has has no right to shut his eyes or ears to avoid information and then say he had no notice"). Accordingly, the State's open and substantial occupation of public lands put plff on constructive notice iice in 1979 of his claim for trespass.

With regard to plaintiff's article XIII, section 5 cause of action based on the State's failure to negotiate a definite land use agreement, plaintiff has been on notice of the accrual of his claim since 1984. According to plaintiff, pursuant to the terms of article XIII, section 5, the State was required to negotiate a definite land use agreement with plaintiff no later than 1984. Because the State has been openly and substantially occupying public lands since 1979 and did not negotiate a definite land use agreement with plaintiff by 1984, plaintiff has had notice of the existence of his cause of action since 1984. Despite having notice of the accrual of his article XIII, section 5 cause of action in 1984, plaintiff did not bring this action until approximately ten years later.

The determination as to whether plaintiff's delay in bringing an action is sufficient to justify the application of laches is made on a case by case basis. 27 Am. Jur. 2d Equity § 163, at 704 (1966verthelesseless, review of other cases where the Court has applied the doctrine provides significant guidance in determining whether a plaintiff's delay has been excessive. For example, in en of Nett v. United Statestates (III), [1994] FMSC 3; 6 FSM Intrm. 508, 522 (Pon. 1994), a case involving the same plaintiff in this action in a dispute over title to property, the Court concluded that a ten year delay by plaintiff in bringing his action justified the Court granting summary judgment for defendants based upon the laches defense. In this case, plaintiff first became aware of his cause of action for trespass more than fifteen years ago. The Court finds a fifteen year delay by plaintiff in asserting his alleged rights, under the facts of this case, where the existence of plaintiff's cause of action was so apparent, constitutes inexcusable delay.

The second element of the laches doctrine requires the State to demonstrate that it will suffer prejudice or injury from plaintiff's delay in bringing this action. The injury that would be suffered by the State due to plaintiff's inexcusable delay in bringing this action is both substantial and obvious. The State has occupied and built numerous substantial and costly structures on public lands in Nett, relying for the past fifteen years on its previously uncontested belief in its right to clear title to those public lands. In light of the substantial improvements to public lands performed by the State at great expense, permitting plaintiff to pursue an action for title, after having remained silent in the face of such expenditures, would wreak enormous prejudice upon both the State and the people of Pohnpei who rely on the services provided by these State constructed structures.

Proof of prejudice or injury consists frequently in evidence showing the expenditure of money or the incurring of obligations by the defendant in the belief that he had a clear or unencumbered right. The suit will be dismissed where it appears that the complainant stood by and permitted the defendant to expend sums of money in improving the property.

27 Am. Jur. 2d Equity § 171, at 7166).

>

Accordingly, because the Court finds that plaintiff has inexcusably delayed in bringing this action and that delay will substantially prejudice defendants, the Court findt the application of the dohe doctrine of laches is a bar both to plaintiff's claims for trespass and for violation of article XIII, section 5.

The Court will next discuss most of plaintiff's arguments in opposition to the application of the State's laches defense.

II. Plaintiff's Arguments Against Barring His Claims Due to Laches

A. Public Lands

Plaintiff contends that the doctrine of laches is inapplicable to cases involving public lands. To quote plaintiff, "[t]he doctrines of adverse possession and of laches cannot be used in regards to lands classified as public lands." Pl.'s Opp'n to Pohnpei State Government's Third Motion to Dismiss at 2 (Oct. 25, 1994). This contention oversimplifies and indeed misapplies the rule restricting the application of the laches doctrine. According to that rule, the doctrine of laches may not be used as a defense against the government in an action brought by a government entity to protect the government's interests or rights, including the government's rights to real property. Utah Power & Light Co. v. United States, [1917] USSC 66; 243 U.S. 389, 409[1917] USSC 66; , 37 S. Ct. 387, 391[1917] USSC 66; , 61 L. Ed. 791, 818 (1916) ("laches or neglect of duty on the part of officers of the government is no defense to a suit by [the government] to enforce a public right or protect a public interest"); 63A Am. Jur. 2d Public Lands § 130, at 6324) ("When the gohe government has a direct pecuniary interest in the subject matter of the litigation . . . the defense of cllem andm and laches cannot be set up as a bar."). The exemption to the laches defense relied upon by plaintiff inures only to the benefit of the government. See 27 Am. Jur. 2d Equity § 156, at 691 (1966). A adve adverse to the government may not invoke the exemption relied upon by plaintiff. Accordingly, plaintiff may not rely upon aches exemption because plaintiff seeks to assert the exemption against the government rath rather than on behalf of the government.

As an additional matter, plaintiff's suggestion that the application of the laches defense should be barred because public lands are the subject matter of this action is incorrect. The subject matter of the litigation is not the determinative factor in evaluating the applicability of the laches exemption. See id. (instructing that the laches exemption applies to any matter in which the sovereign has a direct pecuniary interest). Whatever the subject matter of the litigation, only the government, in this case the State of Pohnpei, may invoke the exemption from the application of the laches defense. Accordingly, plaintiff may not avoid application of the laches defense to his claims against the State based on the fact that public lands are involved in this action.

Moreover, the fact that plaintiff is allegedly acting on behalf of the people of Nett does not permit him to invoke the government's exemption to laches. Plaintiff, as a representative of the people of Nett, still is not a government entity, such as the State of Pohnpei, and the laches exemption is personal to the government. Nahnken of Nett (III), 6 FSM Intrm. at 523; 27 Am. Jur. 2d Equity § 156, at 691 (1966e laches ehes exemption may not be passed from the government to another litigant, such as plaintiff. Nahnken of Nett (III), 6 FSM Intrm. at 523.[12]

Distressingly to this this Court, from the standpoint of the efficient administration of justice, this exact same argument, that in cases involving title to public lands the Iso Nahnken's claims may not be barred by the doctrine of laches, has been previously rejected by the Court. In the case of Nahnken of Nett v. United States (III), [1994] FMSC 3; 6 FSM Intrm. 508, 523 (Pon. 1994), involving the same plaintiff as involved in this action, represented by the same counsel as in this action, the Court stated that assuming the lands involved in that action were public lands:

[the laches] exemption is personal to the sovereign and does not pass to another litigant. . . . In others, rde Nahnken caen can not stand in the place of either the Trust Territory government or a branch of the former district or state government of Pohnpei .㺼. vokinovereign rights exemption from laches ahes as a bs a bar toar to suit.

The Court strongly disapproves of the repeated assertion of previously denied theories as being both frivolous and a waste of the Court's limited resources.

B. Unclean Hands

Plaintiff next contends that the State should be barred from asserting the equitable defense of laches because the State has acted with unclean hands. Plaintiff is correct that a party who has acted with unclean hands may not invoke the doctrine of laches. Ponape Transfer & Storage v. Federated Shipping Co., [1987] FMSC 14; 3 FSM Intrm. 174, 178 (Pon. 1987). A party has unclean hands when its conduct regarding the subject of the litigation is unconscionable or when its actions constitute deceit, fraud, or misrepresentation. See 27 Am. Jur. 2d Equity § 138, at 671-73 (1966) (instructing that what constitutes unclean hands is not precisely definable, but willful actions which are inequitable, unconscionable,llegal constitute unclean hands and will bar equitable relief).

Plaintiff's bass basis for contending that the State has acted with unclean hands is that the State failed to negotiate a definite land use agreement as allegedly required by article XIII, section 5 of the FSM Constitution. However, assuming the State had such an obligation, there is no evidence to suggest that the State's failure to negotiate a lease is unconscionable, fraudulent, or otherwise intentionally wrong. The State has not attempted to negotiate a lease with plaintiff because the State believes that it rightfully possesses title to public lands in Nett. Because there is no evidence to suggest that the State does not have a good faith belief in ownership of Nett public lands, the State has not acted intentionally in a deceptive or otherwise unconscionable manner, and, accordingly, there is no basis for finding that the State has acted with unclean hands.

Plaintiff equates the existence of a cause of action with the existence of unclean hands. However, they are not the same. The mere existence of a cause of action, without intentional misconduct by a party[13], does not constitute unclean hands. As occurs in the majority of all civil actions, a party may act mistakenly and incorrectly without acting unconscionably. If the mere existence of a cause of action against a party constituted unclean hands, no equitable defense could ever be invoked. Because the State has not acted inequitably or unconscionably, the doctrine of unclean hands is inapplicable to the State's laches defense.

C. Statute of Limitations

Plaintiff presents two arguments encompassing the statute of limitations. First, Plaintiff argues that the existence of a twenty year statute of limitations[14] for bringing an action for trespass on real property bars the application of laches. By this first argument, plaintiff apparently contends that the defenses of laches and statute of limitations are mutually exclusive, such that the existence of a statute of limitations bars the application of laches. Second, plaintiff confuses the concepts of statute of limitations and laches and argues that statute of limitations on his claim has been tolled, and thus the doctrine of laches may not be invoked. As a subset of this second argument, plaintiff contends that the necessary period of delay for application of laches is the same as for the statute of limitations. By this second argument, plaintiff is essentially contending that the statute of limitations and laches are the same defense and the inapplicability of one makes the other inapplicable. Plaintiff's arguments are wrong. The equitable defense of laches and the statute of limitations are neither synonymous nor mutually exclusive.

The statute of limitations is a statutorily created fixed time period in which a plaintiff must bring his claim or forever be barred. While laches also bars a claimant who has not diligently protected his rights from pursuing stale claims, laches is an equitable defense which, unlike the statute of limitations, does not require the passage of some fixed period of time. Rather, the application of laches depends upon issues of fairness, justice, and equity. Thus, while the statute of limitations sets the outside limit for bringing a claim, considerations of fairness may require the bringing of a claim prior to the expiration of the statute of limitations. Accordingly, the defenses of laches and statute of limitations are not one and the same, and the inapplicability of one, as in this case the statute of limitations, does not mean that the other is per se inapplicable.

Conversely, the fact that there exists a statute of limitations for a cause of action, even though it has not expired, does not mean per se that laches may not act to bar an action. Palik v. Kosrae, [1991] FMKSC 2; 5 FSM Intrm. 147, 155 (Kos. S. Ct. Tr. 1991) (instructing that the period of time for application of laches may be less than the applicable statute of limitations). In fact, because the expiration of the statute of limitations is an absolute bar to the bringing of a claim, the only time that laches is invoked is when the applicable statute of limitations has not expired. Accordingly, the fact that there is an applicable statute of limitations for this action, or the statute of limitations may have been tolled or has not yet expired, is irrelevant for the purposes of determining whether plaintiff's claim is barred by the equitable defense of laches. Because plaintiff has inexcusably delayed the commencement of this action and because the State would be severely prejudiced by permitting this action to go forward, the defense of laches is applicable to this case regardless of whether the statute of limitations has expired on plaintiff's claims.

D. State Attorney General's Letter of June 22, 1994

Plaintiff contends that he had no notice of his various causes of action until he received the State's letter of June 22, 1994, where the State refused his administrative claim for relief. Accordingly, plaintiff argues that because plaintiff brought this action immediately upon learning of the State's adverse position the doctrine of laches is wholly inapplicable to this action. Plaintiff's position is stated in his brief in opposition to summary judgment:

The earliest date that the Iso Nahnken could reasonably be expected to have had open, notorious, hostile notice of an adverse claim by Pohnpei State is June 22, 1994, when the Acting State Attorney proclaimed in her letter . . the Ihnken that that all pull public lands in Nett are owned by the State Government.

Pl.'s Summary Judgment Brief a(Mar.1995).

As was discussed at length above, plaintiff has had notice of e of his chis cause of action for trespass since 1979 due to the State's substantial occupation of public lands throughout Nett. However, the Court wishes to specifically address plaintiff's contention that he had no notice of his causes of action until receipt of the State's letter of June 22, 1994, because this contention calls into question the candor of counsel for plaintiff.

In February or March of 1994, plaintiff in this action, represented by the same counsel, brought an action in Nett Municipal Court styled Iso Nahnken of Nett v. Pohnpei Public Land Board of Trustees, Civil No. 94-01. This Nett District Court action involved the same claims and lands as this action.[15] If plaintiff was able to file a separate Court action in February or March seeking title to the public lands involved in this action, plaintiff must have been aware no later than March, approximately four months before the June 22, 1994 letter, of the existence of his causes of action. Simply put, plaintiff had actual notice of his claims no later than March because he registered those very claims in Nett Municipal Court. Because counsel for plaintiff represented plaintiff in the Nett action, counsel must have been aware of the questionable veracity of her above quoted statement regarding the earliest date that plaintiff may have become aware of the existence of his causes of action. The Court reminds counsel that as a member of this bar she is under an obligation to be truthful when communicating with this Court. Accordingly, plaintiff's counsel is hereby notified that any future misrepresentations to this Court will result in sanctions.

Conclusion

The Court finds that plaintiff has delayed, inexcusably, the commencement of this action for almost fifteen years, and that permitting this action to go forward would severely prejudice the State. Accordingly, it is hereby ordered that defendants' Motion for Summary Judgment based upon the defense of laches is granted, and this case is dismissed.

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^[1] FSM Civil Rule 12(b) provides in pertinent part:

[i]f, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

^[2] The State contends that plaintiff, as Iso Nahnken, does not have standing to bring this action on his own behalf or on behalf of the people of Nett. Defs.' Motion to Dismiss for Failure to State a Claim (Sept. 2, 1994). The Court does not reach the issue of plaintiff's standing to bring this action based upon his status as Iso Nahnken, but will for the purposes of this opinion assume that plaintiff has standing to sue both on his own behalf and as a representative of the people of Nett. The Court does note that there is a serious question regarding whether plaintiff's customary role does in fact include the power to own and manage public lands and thus whether he has any standing to bring this claim. See Nahnken of Nett v. United States (III), [1994] FMSC 3; 6 FSM Intrm. 508, 513-14 (Pon. 1994).

^[3] For example, in plaintiff's Opposition to Motion to Dismiss (Aug. 15, 1994) plaintiff states, "[t]his lawsuit involves the lands presently used by the State Government under the `active use doctrine,'" while in plaintiff's Response to Pohnpei State's "Reply to Opposition . . ." at 4 (Sept.1994), plaintlaintiff states, "[t]he lands that are the subject of this lawsuit were transferred by a quitclaim deed in 1979, from the Trust Territory Government to the . . . Pohnpei Public Lards T"

^[4] Plaintiff also is either unable or unwilling to specify exactly which parcels of land in are tbject of his claim. However, plaintiff has clearclearly stly stated that he lays claim to property upon which numerous major public structures are located. During oral argument on November 29, 1994, when asked whether plaintiff's claim encompassed property such as the airport, public schools, and the radio station, counsel for plaintiff answered in the affirmative.

^[5] Section 4 of Secretarial Order 2969 provides in pertinent part: "Upon request, the High Commissioner is authorized and directed, subject to valid existing rights, to transfer and convey . . . to each distregal entity tity all right, title and interest of the Government of the Trust Territory of the Pacific Islands in public lands."

up>[6] By summarizing plaintiff's theory ofry of the the case, the Court does not mean to imply that plaintiff's theory does or does not have merit, but rather the Court presents plaintiff's theory of the case for the purpose of evaluating when plaintiff first had notice of his causes of action. Because the Court finds this action barred by laches, the Court has not evaluated the merits of plaintiff's causes of action. For the purpose of balance, the Court merely notes here that defendants contest the merits of plaintiff's claim, arguing that title to the disputed property is vested in the PPLBT pursuant to S.L. No. 1L-155-87.

^[7] In 1990, article XIII, section 5 was amended to read, "A lease agreement for the use of land for an indefinite term by a noncitizen, a corporation not wholly owned by citizens, or any government is prohibited."

^[8] For example, plaintiff's brief in opposition to summary judgment spends considerable time and effort explaining why defendants have not met the requirements for adverse possession of the public lands in Nett. Pl.'s Summary Judgment Brief at 8-9 (Feb. 28, 1995). The doctrine of adverse possession is entirely unrelated to the State's laches defense and in fact is not even an issue in this action as the State does not claim to have acquired title to public lands in Nett through prescription.

^[9] The statute of limitations is not an issue in this action. As is discussed infra, plaintiff repeatedly confuses the concepts of laches and statute of limitations.

^[10] S.L. No. 2L-192-91, § 24 requires plaintiff to file an administrative claim with the State Attorney General and await a final administrative determination before filing suit: "An action shall not be instituted upon a claim against the State . . ess taimant shat shall have have first presented the claim to the appropriate governmental agency and the claim shall have been ly deby the agency in writing." Pon. S.L. No. 2L-192-91, § 24.
^[11] Under United States law, constructive notice is a legal concept through which actual notice is imputed to a party regardless of whether that party has actual knowledge of the imputed facts. 58 AM. JUR. 2D Notice § 8, at 577 (1989). In othrd words, constructive notice "is the law's substitute for actual notice." Id. A party has "constructive notice of a faen from all the facts and circumstances known to him at the relevant time, he has reason toon to know that it exists. And a person has reason to know a fact when he has such information as would prompt a person exercising reasonable care to acquire knowledge of the fact in question or to infer its existence." 58 AM. JUR. 2D Notice § 9, 8 (1989). This Court hert hereby adopts

the legal concept of constructive notice into the body of FSM law.

Plaintiff, relying upon Public Lands Board of T of Trustees v. Yeneres, PCA No. 31-92, also contends that Pohnpei law does not recognize or approve of the application of the doctrine of laches in cases involving public property. Plaintiff's contention is incorrect. A careful reading of Yeneres demonstrates that the Court merely noted in non-binding dicta that the Court had concerns about whether the doctrine of laches was firmly established as part of the law of Pohnpei when applied to real property, including public lands. However, several cases decided under Pohnpei law expressly have recognized the applicability of the laches defense in cases involving disputed title to both public and private real property. See, e.g., Peter v. Alfons, 1 P.S.C.R. 41 (Tr. 1984); Kio v. Puesi, 6 TTR 12 (Truk 1972); Kanser v. Pitor, 2 TTR 481 (Truk 1963). See also Nahnken of Nett v. United States (III), 6 FSM Intrm. 508, 523 (Pon. 1994) (explicitly applying laches to claim to public lands).

[13] For example, if the State had delayed the commencement of this action by threatening plaintiff or intentionally had misled plaintiff regarding the State's claim to public lands in Nett, the State would have acted with unclean hands.

^[14] Plaintiff relies on 6 F.S.M.C. 802 in contending that there is a twenty year statute of limitations for this action. Title 6 F.S.M.C. 802 provides in pertinent part that "(1) [t]he following actions shall be commenced only within twenty years after the cause of action accrues: (b) actions for the recovery of land or any interest therein."

^[15] The Nett District Court issued a final opinion in Iso Nahnken of Nett v. Pohnpei Public Lands Board of Trustees, Civil No. 94-01, on March 9, 1994. However, this Court has not reviewed or made reference to that opinion because the Nett District Court is without subject matter jurisdiction over this matter, and, accordingly, its opinion is without precedential value.