Chen Ho Fu v Salvador [1995] FMSC 47; 7 FSM Intrm. 306 (Pon. 1995) (30 October 1995)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite as Chen Ho Fu v Salvador, [1995] FMSC 47; 7 FSM Intrm. 306 (Pon. 1995)

CHEN HO FU,
Plaintiff,

vs.

SODER SALVADOR,
Defendant.

CIVIL ACTION NO. 1995-092

ORDER

Andon L. Amaraich
Chief Justice

Decided: October 30, 1995

APPEARANCES:

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

For the Defendant:
pro se

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HEADNOTES

Civil Procedure - Filings
A filing by an attorney who has not entered an appearance may be stricken from the record. Chen Ho Fu v. Salvador, [1995] FMSC 47; 7 FSM Intrm. 306, 308 (Pon. 1995).

Civil Procedure - Service
Certificates of service should state whether service was effected personally or by mail. Chen Ho Fu v. Salvador, [1995] FMSC 47; 7 FSM Intrm. 306, 308 n.4 (Pon. 1995).

Civil Procedure - Pleadings; Torts - Fraud
The extent of the particularity required when pleading fraud is guided by FSM Civil Rule 8(a), which requires a "short and plain statement of the claim." Chen Ho Fu v. Salvador, [1995] FMSC 47; 7 FSM Intrm. 306, 309 (Pon. 1995).

Torts - Fraud
The elements of fraud are 1) a misrepresentation, 2) made to induce action by plaintiff, 3) reliance by plaintiff on the misrepresentation, 4) to plaintiff's detriment. Chen Ho Fu v. Salvador, [1995] FMSC 47; 7 FSM Intrm. 306, 309 (Pon. 1995).

Civil Procedure - Pleadings
When a pleading is alleged to be too vague and ambiguous for the adverse party to respond the appropriate motion is one for a more definite statement, not one to strike. Chen Ho Fu v. Salvador, [1995] FMSC 47; 7 FSM Intrm. 306, 309-10 (Pon. 1995).

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COURT'S OPINION

ANDON L. AMARAICH, Chief Justice:

This action is before the Court on plaintiff's Motion to Dismiss Counterclaim, filed on September 22, 1995, and plaintiff's Motion to Strike Answer and Substitution of Answer, filed on October 5, 1995.

DISCUSSION

I. Motion to Strike Answer and Substitution of Answer

On September 22, 1995, Delson Ehmes filed a pleading on behalf of plaintiff in this action, styled Motion to Dismiss Counterclaim. At the time, Mary Berman was counsel of record for plaintiff. Subsequently, on October 5, 1995, Ms. Berman filed her own pleading on behalf of plaintiff, styled "Motion to Strike Answer and Substitution of Answer." Ms. Berman's motion, which is somewhat misnamed,[1] essentially asks that the Court reject Mr. Ehmes's motion, and substitute in its place her own Motion to Strike Mr. Salvador's Counterclaim, which is contained in her Motion to Strike Answer and Substitution of Answer.

Ms. Berman argues that Mr. Ehmes' motion is improper because it was filed on behalf of her client by a lawyer who had not filed a notice of leave to appear before the Court, and who had not communicated with her prior to making the filing. She relies on Model Rule of Professional Conduct 4.2 in arguing that Mr. Ehmes' contact with her client was inappropriate.

The Court first notes that the Model Rule Ms. Berman cites is inapplicable to her complaint.[2] Model Rule 4.2 prohibits communications between a lawyer representing a client and his client's opposing party, if that lawyer is aware that the opposing party is represented by counsel. That was not the situation in this case. Mr. Ehmes was not representing an opposing party when he contacted Ms. Berman's client directly.

However, Ms. Berman is correct that Mr. Ehmes was not authorized to file a pleading in this case on September 22, 1995. The Court directs both Mr. Ehmes and Ms. Berman to FSM Civil Rule 11, which requires that "[e]very paper of a party represented by an attorney or trial counselor shall be signed by at least one attorney or trial counselor of record in that counsel's individual name" (emphasis added). Mr. Ehmes did not originally file the complaint in this action, and did not file a notice of appearance in this action until October 12, 1995. Accordingly, the pleading he filed on September 22, 1995, did not comport with Rule 11. The Court will not grant Ms. Berman's motion to strike Mr. Ehmes's pleading, however, if to do so will cause any prejudice to her client.

The defendant in this action filed his Answer and Counterclaim with the Court on September 12, 1995, and served those pleadings by mail on plaintiff on September 9, 1995.[3] Under FSM Civil Rule 12(a), a plaintiff has 20 days to serve a reply to a counterclaim in defendant's answer. Under FSM Civ. 6(e), a plaintiff is given an additional 6 days to serve its reply if defendant's pleading was served by mail.[4] Therefore the plaintiff in this action had 26 days from September 9, 1995, or until October 5 to serve its reply. Hence both Mr. Ehmes and Ms. Berman's motions to dismiss defendant's counterclaim were timely filed.

Because Ms. Berman's substitute motion was timely filed, and because her Motion to Strike Mr. Salvador's Counterclaim essentially mimics Mr. Ehmes' previously filed Motion to Dismiss Counterclaim, the Court sees no prejudice to plaintiff in granting the requested substitution. Accordingly, the Court grants Ms. Berman's motion to strike Mr. Ehmes' pleading, and substitute her own.

II. Motion to Strike Counterclaim

The Court now will address the substance of plaintiff's motion to strike, which is set out in its entirety as follows:

This motion is made pursuant to FSM Civil Rule 12 (b)(6)(failure to state a claim upon which relief may be granted), 12(e) (vague and ambiguous pleadings) and Rule 9(b) (failure to aver circumstances constituting fraud with sufficient particularity.)

The counterclaim submitted by Mr. Soder Salvador fails to state with particularity the required elements of a claim of fraud, as set out in Pohnpei v. Kailis, [1994] FMSC 12; 6 FSM Intrm. 460, 462 (1994). Therefore the pleading fails to state a claim upon which relief may be granted and should be dismissed under Rule 12(b)(6).

The facts alleged in the counterclaim are too vague and ambiguous for counsel to determine what acts were undertaken by whom, when the acts occurred, how these acts induced action by Mr. Salvador, how Mr. Salvador relied upon the alleged acts, and what detriment, if any, flowed from each act. Therefore the counterclaim should be stricken for failure to meet the requirements of Rules 9(b) and 12(e).

The Court will address each proposed basis for striking defendant's counterclaim separately.

A. FSM Civil Rule 9(b)

FSM Civil Rule 9(b) requires that in making an allegation of fraud, "the circumstances constituting the fraud . . . shall be stated with particularity." See FSM Civ. R. (9)(b); Pohnpei v. Kailis, [1994] FMSC 12; 6 FSM Intrm. 460, 462 (Pon. 1994). As this Court has explained in the Kailis case, the extent of the particularity required is guided by FSM Civil Rule 8(a), which requires a "short and plain statement of the claim." Kailis, 6 FSM Intrm. at 462.

The elements of fraud are (1) a misrepresentation, (2) made to induce action by plaintiff, (3) reliance by plaintiff on the misrepresentation, (4) to plaintiff's detriment. Id. The Court finds that defendant's counterclaim is sufficiently pled to withstand plaintiff's motion to strike under FSM Civil Rule 12(b)(6), for failure to state a cause of action on which relief can be granted.

Defendant's counterclaim alleges that plaintiff defrauded defendant by inducing him to enter into a joint venture business agreement with foreign partners, when in fact, no foreign partners ever existed. As a result of this alleged fraud, defendant further alleges that he was induced to enter a sublease with the plaintiff, when in fact plaintiff had no authority to act on behalf of the foreign joint venture partners. Defendant claims that he is losing money on the sublease, which was signed under the pretext of the existence of a valid joint venture, and he is also losing joint venture profits which should rightfully be his. See Counterclaim paras. 1-6.

Defendant's allegations sufficiently set forth a cause of action for fraud, and the Court accordingly finds that defendant's counterclaim does not fail to state a cause of action upon which relief may be granted under FSM Civil Rule 12(b)(6).

B. FSM Civil Rule 12(e)

Plaintiff contends that defendant's counterclaim does not comport with the requirements of FSM Civil Rule 12(e), because the facts alleged are too vague and ambiguous for counsel to determine "what acts were undertaken by whom, when the acts occurred, how these acts induced action by Mr. Salvador, how Mr. Salvador relied upon the alleged acts, and what detriment, if any, flowed from each act." Therefore, plaintiff argues, defendant's counterclaim must be stricken. See Pl.'s Motion to Strike Answer and Substitution of Answer.

FSM Civil Rule 12(e) states as follows:

If a pleading to which a responsive pleading is permitted is so vague or ambiguous that a party cannot reasonably be required to frame a responsive pleading, the party may move for a more definite statement before interposing a responsive pleading. The motion shall point out the defects complained of and the details desired.

(emphasis added). The appropriate avenue for relief under FSM Civil Rule 12(e) is a motion for more definite statement, which plaintiff's "Motion to Strike and Substitution of Answer" does not contain. However, notwithstanding plaintiff's error in pleading, even if the Court were to treat plaintiff's pleading as a motion for more definite statement, the Court would deny that motion.

The Court finds that defendant's counterclaim is not so vague or ambiguous as to prevent plaintiff from framing a responsive pleading. In fact, contrary to plaintiff's assertions, defendant's counterclaim and its attachments are quite specific. Attached to defendant's Answer and Counterclaim are: (1) a Kolonia Town Business Permit Application for the Soratan Center, dated September 28, 1994; (2) a State of Pohnpei Business License for the Service of Alcoholic Beverages, dated June 30, 1995; (3) a Kolonia Town Business Permit Application for the Soratan Bingo Service, dated October 21, 1994; (4) a Joint Venture Agreement between plaintiff, defendant, and two foreign partners, dated April 6, 1994; (5) an Incorporator's Proxy, in blank, authorizing plaintiff to act on behalf of unnamed persons; (6) a Sublease Agreement between plaintiff and defendant dated April 24, 1994, and an amendment to that sublease agreement, dated October 6, 1994; and (7) a Lease Agreement between the Pohnpei State Public Lands Authority and defendant, dated October 10, 1984. Defendant's Counterclaim further provides dollar amounts for the revenue he alleges that he has or will lose as a result of plaintiff's fraudulent actions.

Defendant's counterclaim is more than sufficiently specific to allow plaintiff to frame a reply. To the extent plaintiff has more detailed questions about the acts underlying the allegations of defendant's counterclaim, these questions are properly posed during the course of future discovery between the parties. Under FSM Civil Rule 12(a), plaintiff now has 10 days to file its substantive reply to defendant's counterclaim.[5]

CONCLUSION

Accordingly, for the reasons set out above, the Court

(1) grants plaintiff's motion to strike the September 22, 1995 Motion to Dismiss Counterclaim filed in this action;

(2) grants plaintiff's motion to substitute the October 5, 1995 Motion to Strike Mr. Salvador's Counterclaim, and

(3) denies plaintiff's Motion to Strike Mr. Salvador's Counterclaim.

Plaintiff has 10 days from notice of this order to file his substantive reply to defendant's counterclaim.

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^[1] The proper response to a counterclaim presented in defendant's answer is a reply. See FSM Civ. R. 7(a), 12(a). To the extent a party wishes to interpose defenses or objections prior to filing a reply to a counterclaim, those defenses and objections may, at the option of the pleader, be made by motion. FSM Civ. R. 12(b).

^[2] Model Rule of Professional Conduct 4.2 is intended to require parties' lawyers to deal with each other directly, to prevent clients from coercive contact by opposing counsel, and to allow clients the benefit of their legal representation.

^[3] The defendant in this action filed his Answer and Counterclaim with the Court on September 12, 1995. FSM Civil Rule 5(d) permits a pleading which is required to be served upon a party to be filed with the Court either before service or within a reasonable time thereafter.

^[4] The Court notes that Ms. Berman's October 5, 1995 filing is accompanied by a certificate of service which fails to state the manner in which service was effected, i.e., whether by personal service or by mail. Ms. Berman is advised that all future certificates of service should contain this information. The Court's calculation of the timeliness of responsive filings will often depend upon the manner of service.

^[5] While plaintiff's most recent pleading is styled "Motion to Strike Answer and Substitution of Answer," the Court will treat this pleading as the posing of defenses and objections by motion under FSM Civil Rule 12(e) and FSM Civil Rule 12(f). If the Court denies a Rule 12 motion, the responsive pleading shall be served within 10 days after notice of the court's action. Accordingly, plaintiff now has 10 days after notice of this order to file its substantive response to defendant's counterclaim. See FSM Civ. R. 12(a).