Walter v Meippen [1996] FMSC 5; 7 FSM Intrm. 515 (Chk. 1996) (19 July 1996)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite case as Walter v Meippen, [1996] FMSC 5; 7 FSM Intrm. 515 (Chk. 1996)

PEDRONIO WALTER d/b/a PENNY RENT A CAR,
Plaintiff,

vs.

JOHNNY MEIPPEN,
Defendant.

_________________________________________________

CIVIL ACTION NO. 1995-1002

MEMORANDUM

Richard H. Benson
Associate Justice

Decided: July 19, 1996

APPEARANCES:

For the Plaintiff:
Douglas Parkinson, Esq.
Law Offices of R. Barrie Michelsen
P.O. Box 1450
Kolonia, Pohnpei FM 96941

For the Defendant:
Johnny Meippen, Esq.
P.O. Box 705
Weno, Chuuk FM 96942

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HEADNOTES

Civil Procedure - New Trial
A motion for a new trial may be filed before the entry of judgment. Walter v. Meippen, [1996] FMSC 5; 7 FSM Intrm. 515, 517 (Chk. 1996).

Appeal and Certiorari
A properly filed notice of appeal transfers jurisdiction from the trial court to the appellate court. The trial court is then divested of jurisdiction, except to take action in aid of the appeal, until the case is remanded to it. Walter v. Meippen, [1996] FMSC 5; 7 FSM Intrm. 515, 517 (Chk. 1996).

Appeal and Certiorari; Judgments - Relief from Judgment
After a judgment has been appealed, a trial court, without appellate court permission, has the power to both consider, and deny Rule 60(b) relief from judgment motions. A trial court, however, cannot grant a Rule 60(b) motion while an appeal is pending. If the trial court is inclined to grant the motion, it should issue a brief memorandum so indicating. Armed with this, movant may then request the appellate court to remand the action so that the trial court can vacate judgment and proceed with the action accordingly. Walter v. Meippen, [1996] FMSC 5; 7 FSM Intrm. 515, 517-18 (Chk. 1996).

Judgments - Relief from Judgment
When a motion for relief from judgment is made pursuant to Civil Rule 60(b)(1), a court must first consider whether it was made within a reasonable time even when it is made within the one year time limit. To determine if the time was reasonable it considers whether the nonmoving party was prejudiced and whether the moving party had some good reason for his failure to take appropriate action sooner. Walter v. Meippen, [1996] FMSC 5; 7 FSM Intrm. 515, 518 (Chk. 1996).

Appeal and Certiorari; Judgments - Relief from Judgment
The time for making a motion for relief from judgment continues to run even while the case is on appeal. Walter v. Meippen, [1996] FMSC 5; 7 FSM Intrm. 515, 518 (Chk. 1996).

Judgments - Relief from Judgment
Because relief from judgment may be granted upon such terms as are just, a court may order as relief that the trial be resumed at some point other than the beginning. Walter v. Meippen, [1996] FMSC 5; 7 FSM Intrm. 515, 518 (Chk. 1996).

Judgments - Relief from Judgment
Relief from judgment is addressed to the discretion of the court, which must balance the policy in favor of hearing a litigant's claims on the merits against the policy in favor of finality. Walter v. Meippen, [1996] FMSC 5; 7 FSM Intrm. 515, 518 (Chk. 1996).

Judgments - Relief from Judgment
Relief from judgment may be granted to a party who failed to appear at trial when he was unaware that trial had been scheduled. Walter v. Meippen, [1996] FMSC 5; 7 FSM Intrm. 515, 519 (Chk. 1996).

Judgments - Relief from Judgment
Courts considering a Rule 60(b) motion also require that the moving party show a good claim or defense before relief from judgment may be granted. Walter v. Meippen, [1996] FMSC 5; 7 FSM Intrm. 515, 519 (Chk. 1996).

Appeal and Certiorari - Stay
A stay of judgment by a trial court is an action in aid of the appeal. Walter v. Meippen, [1996] FMSC 5; 7 FSM Intrm. 515, 519 (Chk. 1996).

Appeal and Certiorari - Stay
A stay of a money judgment pending appeal is effective when the appellant's supersedeas bond is approved by the court. Walter v. Meippen, [1996] FMSC 5; 7 FSM Intrm. 515, 519 (Chk. 1996).

Appeal and Certiorari - Stay; Judgments - Relief from Judgment
A stay of judgment may be granted while a motion for relief from judgment is pending. Walter v. Meippen, [1996] FMSC 5; 7 FSM Intrm. 515, 519 (Chk. 1996).

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COURT'S OPINION

RICHARD H. BENSON, Associate Justice:

I have before me the defendant's Motion for Relief from Judgment brought pursuant to Civil Rule 60(b)(1), the defendant's Motion for Stay of Judgment, and the plaintiff's Motion (to be considered if defendant's motions are denied) for Attorney's Fees. The Motion for Relief from Judgment is considered, but it is neither denied nor granted. Instead I indicate on the record that I am inclined to grant the motion should the appellate division remand this case for that purpose. My reasons follow. The defendant is granted a stay of judgment. Plaintiff's Motion for Attorney's Fees and his Motion for an Order in Aid of Judgment are denied as unripe.

I.

Trial was had in this matter at 9:00 a.m., June 8, 1995. The defendant, an attorney admitted to this court, did not appear, although he had been served notice of the date and time by mail on May 12, 1995. The plaintiff presented the testimony of a witness who had traveled from Pohnpei for the sole purpose of testifying. Trial concluded that morning. I granted judgment for the plaintiff from the bench.

Later, on the same morning, the defendant contacted the court to inform it that although notice may have been properly served by mail, he had never received it. Anticipating that the defendant might move for a new trial, I reconvened court at 8:30 a.m. the next day for the purpose of allowing the defendant to cross-examine the plaintiff's witness (in the meantime the defendant had listened to the tape recordings of the trial) and thus preserve the witness's testimony, so that the expense of another trip from Pohnpei would not be necessary. (These travel costs would eventually have to be borne by whoever was ultimately the non-prevailing party.)

No motion for a new trial was filed, although such a motion may be filed before the entry of judgment. FSM Civ. R. 59(a) ("On a motion for a new trial the court may open the judgment if one has been entered . .&. ."); cf. 11i> 11 Charles A. Wright et al., Federal Practice and Procedure § 2812, 5 (1995) ("there thin thing to prevent making a motion for a new trial before judgment has been entered").^[1] My and my Findings of Fact and Conclusions of Law were enterentered August 17, 1995. The Clerk then entered judgment for the plaintiff on August 31, 1995. No motion for a new trial was served within ten days of that entry. The time for such a motion has thus expired. FSM Civ. R. 59(b).

II.

The defendant filed a notice of appeal on October 12, 1995, thus removing jurisdiction over this matter from the trial division and lodging it in the appellate division. "A properly filed notice of appeal transfers jurisdiction from the trial court to the appellate court." Election Commissioner v. Petewon, [1994] FMCSC 2; 6 FSM Intrm. 491, 498, 1 CSR 5, 10 (Chk. S. Ct. App. 1994) (citing Ruby v. Secretary of United States Navy, [1966] USCA9 244; 365 F.2d 385, 388 (9th Cir. 1966)). "Generally, when an appeal is taken, the trial court is divested of jurisdiction except to take action in aid of the appeal until the case is remanded to it . . . ." Travelers Ins. Co. v. Liljeberg Enterprises, Inc., [1994] USCA5 2934; 38 F.3d 1404, 1407 n.3 (5th Cir. 1994). On December 29, 1995, the plaintiff filed a Motion for an Order in Aid of Jud. On ry 196, the defendant filed a Motion for Relr Relief fief from Jrom Judgment and an accompanying Motion for Stay of Judgment.

While the traditional view has been that once a notice of appeal has been properly filed a trial court has no jurisdiction to entertain a Rule 60(b) motion, the more modern view is that a trial court "without appellate court permission, has the power to both consider, and deny Rule 60(b) motions." 7 James W. Moore et al., Moore's Federal Practice 60.30[2], at 60(2d ed. 1990 1990) (emphasis in original). A trial court, however, cannot grant a Rule 60(b) motion while an appeal is pending. y instead indicate that it is inclined to grant the motion, but cannot grant it until remanremand is sought and obtained from the appellate court. Id. at 60-334 to -335; 11 Wright et al., supra, § 2873, at "Only if the [tria[trial] court is inclined to grant the motion need a remand be sought and obtained; until a remand is obtained, the [trial] court may not act grant 60(b) relief." Puerto Rico v. S.S. Zoe Colocotronotroni, [1979] USCA1 189; 601 F.2d 39, 41 (1st Cir. 1979) (procedure to follow detailed), cert. denied, 450 U.S. 912 (1981). I conclude that the modern view is the better view. Therefore, I may consider the defendant's Motion for Relief from Judgment, and I may deny it. But if I consider the motion and am inclined to grant it, I may only indicate on the record that I am so inclined. If I do so indicate, the defendant may then apply to the appellate court for an order of remand, and only once it has been remanded can I grant the motion. "If the [trial] court is inclined to grant the motion, it should issue a brief memorandum so indicating. Armed with this, movant may then request [the appellate] court to remand the action so that the [trial] court can vacate judgment and proceed with the action accordingly." Id. at 42.

I come therefore to the defendant's Rule 60(b) motion itself. The plaintiff opposes the motion on the ground that it was not brought within a reasonable time. The defendant contends that the plaintiff's opposition should be rejected because it failed to show any prejudice or disadvantage stemming from the delay in bringing the motion. When a motion for relief from judgment is made pursuant to Civil Rule 60(b)(1), the court must first consider whether it was made within a reasonable time even when it is made within the one year time limit. Senda v. Mid-Pacific Constr. Co., [1994] FMSC 20; 6 FSM Intrm. 440, 445-46 (App. 1994) (construing FSM Civ. R. 60(b)). The time for making this motion continues to run even while the case is on appeal. Transit Casualty Co. v. Security Trust Co., [1971] USCA5 505; 441 F.2d 788, 791 (5th Cir.) (an "appeal does not toll the time for making a 60(b) motion"), cert. denied, 404 U.S. 883 (1971). In order to determine if the time was reasonable I consider whether the nonmoving party was prejudiced and whether the moving party had some good reason for his failure to take appropriate action sooner. 11 Wright et al., supra, § 2866, at 382/p>

Thep>The defendant made his Rule 60(b)(1) motion within one year of the date of entry of judgment, and I conclude that it was made within a reasonable time. I base this conclusion upon there being no prejudice to the plaintiff. The plaintiff's case-in-chief has been preserved for the record as has been the defendant's cross-examination of the plaintiff's sole witness. Therefore, if judgment is vacated and the trial resumed at a point just prior to the plaintiff's resting his case-in-chief, the return of the plaintiff's witness may be unnecessary, thus minimizing the chance of additional travel expenses. The trial could then take its course and the case proceed to judgment. To further minimize the possible expense, the resumption of the trial would be scheduled for a time when the plaintiff's attorney would otherwise be present on Chuuk. This arrangement is within my power to grant relief from judgment "upon such terms as are just." FSM Civ. 60(b). Such an arrangement would not preclude the plaintiff, if it should prevail at trial, from moving for additional costs and fees if it seems proper.

The defendant knew, no later than the afternoon of the trial day that judgment had been granted against him and he knew the ground upon which he would seek relief. He, however, made no motion to seek relief before judgment was entered almost three months later, apparently the result of his mistaken belief that a motion for new trial could not be made until judgment was entered. He was absent from Chuuk during the ten days after entry of judgment during which a motion for a new trial may be sought.

Rule 60(b) relief is addressed to the discretion of the court. See Senda, 6 FSM Intrm. at 445; 11 Wright et al., supra, § 2857, at 254. I "must balance the policy in favor of hearing a litigant's claims on the merits against the policy in favor of finality." Kotlicky v. United States Fidelity & Guar. Co., [1987] USCA2 356; 817 F.2d 6, 9 (2d Cir. 1 Some courts have granted rted relief when a party has failed to appear at trial. See, e.g., Peterson v. Term Taxi, Inc., [1970] USCA2 499; 429 F.2d 888, 891 (2d Cir. 1970) (relief granted to plaintiff who did not appear at trial believing trial date had not been set, but was available for trial that afternoon); Denman v. Shubow, [1969] USCA1 82; 413 F.2d 258, 259 (1st Cir. 1969) (relief granted plaintiff who failed to appear when overslept after taking prescribed medicine, and promptly acted to remedy situation by motion the same day). In this case the defendant did not appear for trial because he did not believe that a trial date had been set. The plaintiff is not prejudiced because of the preservation of his witness's testimony. Although the defendant did not act to remedy the situation promptly, I am still inclined to exercise my discretion in favor of granting relief from judgment. Kotlicky, 817 F.2d at 9; Universal Film Exchanges, Inc. v. Lust, [1973] USCA4 476; 479 F.2d 573, 576 (4th Cir. 1973) (any doubt should be resolved in favor of setting aside judgment, but relief not automatic).

Courts considering a Rule 60(b) motion also require that the moving party show a good claim or defense before relief from judgment may be granted. See, e.g., Lust, 479 F.2d at 576 (must demonstrate meritorious defense); 11 Wright et al., supra, § 2857, at 260. The defendant's defense and counterclaims are all based on the contention (as gleaned from his answer and counterclaim) that the actual car rentatract terms he agreed to orally prior to signing the contract differed materially from the the terms in the written agreement, that the agreement was blank when he signed it, and that the terms in dispute filled in later were not in accordance with the agreement of the parties. I make no decision whether this defense would prevail at trial. I only note that it is a colorable defense which deserves to be decided upon its merits.

The defendant's Motion for Relief from Judgment is accordingly neither granted nor denied. Instead, I hereby indicate upon the record that I am inclined to grant it, and would do so if the matter is remanded by the appellate division. The defendant may therefore apply to the appellate division for an order of remand.

III.

The defendant's Motion for Stay of Judgment is thus properly before me, FSM App. R. 8(a) (stay of judgment should first be sought in the court appealed from), as is the plaintiff's motion for an order in aid of judgment if no stay is in effect. A stay of a money judgment pending appeal is effective when the appellant's supersedeas bond is approved by the court. FSM Civ. R. 62(d). No supersedeas bond was given or offered by the defendant. His motion for a stay was instead brought pursuant to Civil Rule 62(b), which allows the court to grant a stay while a motion for relief from judgment is pending. With this order, such a motion is still pending. The motion for a stay may thus be granted. I hereby grant the stay to be effective until such time as the appellate division should act. If the matter is remanded by the appellate division so that I may grant the motion for relief from, the stay of judgment will be dissolved as moot when I grant relief from judgment. In such a circumstance the plaintiff's Motion for an Order in Aid of Judgment will become moot as well.

IV.

The plaintiff has also moved for attorney's fees for his attorney's work on the post-judgment motions in this case on the ground that the judgment debtor is using the judicial process to either delay paying a just debt or to oppressively increase the cost of collection. I do not need to rule on this motion as the defendant's motion for relief from judgment has not been denied. I do note that no authority is offered for the plaintiff's proposition. And even though no opposition was filed to the motion, which is deemed a consent to the motion, FSM Civ. R. 6(d), I could not grant the motion without good grounds to do so. Senda, 6 FSM Intrm. at 442. The motion would therefore have been denied. Furthermore, if relief from judgment is granted there will then be no judgment upon which to base an award of attorney's fees.

V.

The defendant's Motion for Relief from Judgment is neither granted nor denied. I only note upon the record that I am inclined to grant it should the appellate division remand the matter for that purpose. The defendant's motion for Stay of Judgment is granted. The plaintiff's Motion for an Order in Aid of Judgment is held in abeyance until the appellate division acts. The plaintiff's motion for attorney's fees is denied.

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^[1] When an FSM Rule of Civil Procedure, nearly identical to a U.S. Federal Rule of Civil Procedure, has not been previously construed by an FSM court, I may look to U.S. authorities for guidance in interpreting the rule. Jano v. King, [1992] FMSC 11; 5 FSM Intrm. 326, 329 (App. 1992); Andohn v. FSM, [1984] FMSC 4; 1 FSM Intrm. 433, 441 (App. 1984).