Porwek v American International Company Micronesia Inc [1998] FMSC 28; 8 FSM Intrm. 463 (Chk. 1998) (16 October 1998)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite as Porwek v American International Company Micronesia Inc, [1998] FMSC 28; 8 FSM Intrm. 463 (Chk. 1998)

ASAKO PORWEK,
Plaintiff,

vs.

AMERICAN INTERNATIONAL
COMPANY MICRONESIA, INC.
and CHUUK STATE,
Defendants.

CIVIL ACTION NO. 1998-1017

ORDER OF REMAND

Richard H. Benson
Associate Justice

Decided: October 16, 1998

APPEARANCES:

For the Plaintiff/Respondent:
Midasy O. Aisek, Esq.
Micronesian Legal Services Corporation
P.O. Box D
Weno, Chuuk FM 96942

For the Defendant/Petitioner (American Int'l Co.):
Andrew Clayton, Esq.
Law Offices of Saimon & Associates
P.O. Box 1450
Kolonia, Pohnpei FM 96941

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HEADNOTES

Jurisdiction - Removal
The FSM Supreme Court may require a petition for removal of an action to be accompanied by a bond, but the bond requirement is discretionary with the court. Porwek v. American Int'l Co. Micronesia, [1998] FMSC 28; 8 FSM Intrm. 463, 465 (Chk. 1998).

Jurisdiction - Removal
Actions taken by a state court prior to removal remain in effect when the case is removed until dissolved or modified by the FSM Supreme Court trial division. Porwek v. American Int'l Co. Micronesia, [1998] FMSC 28; 8 FSM Intrm. 463, 465-66 (Chk. 1998).

Civil Procedure; Jurisdiction - Removal
When an FSM court rule, such as General Court Order 1992-2 governing removal, has not be construed by the FSM Supreme Court and is similar or nearly identical to a U.S. counterpart, the court may look to U.S. practice for guidance. Porwek v. American Int'l Co. Micronesia, [1998] FMSC 28; 8 FSM Intrm. 463, 466 n.1 (Chk. 1998).

Civil Procedure
Any decision made before a final judgment adjudicating all parties' claims and rights is subject to revision. Porwek v. American Int'l Co. Micronesia, [1998] FMSC 28; 8 FSM Intrm. 463, 466 (Chk. 1998).

Jurisdiction - Removal
A removal petition must be filed within sixty days after the receipt by any party, through service or otherwise, of a copy of an initial or amended pleading, motion, order or other paper from which it may first be ascertained that the case is removable. Proper service is not required for the sixty-day period to start running - only receipt, which may be through service or otherwise. Porwek v. American Int'l Co. Micronesia, [1998] FMSC 28; 8 FSM Intrm. 463, 466 (Chk. 1998).

Judgments - Default Judgments; Jurisdiction - Removal
There is no obstacle to the removal of a defaulted case so long as it is done within the time limit set by the General Court Order 1992-2. Porwek v. American Int'l Co. Micronesia, [1998] FMSC 28; 8 FSM Intrm. 463, 466 (Chk. 1998).

Judgments - Default Judgments; Jurisdiction - Removal
Although removal after a default judgment is proper if done within time, it cannot be taken to supersede the default judgment which must be regarded as valid until set aside. Porwek v. American Int'l Co. Micronesia, [1998] FMSC 28; 8 FSM Intrm. 463, 466-67 (Chk. 1998).

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COURT'S OPINION

RICHARD H. BENSON, Associate Justice:

This case was removed from the Chuuk State Supreme Court by the defendant American International Company Micronesia, Inc. (AIC). The plaintiff, Asako Porwek, has moved that it be remanded to the Chuuk State Supreme Court because it was improvidently removed. I conclude that she is correct and therefore grant the motion. My reasoning follows.

I. Background

On March 7, 1991, Porwek, a citizen of Chuuk, filed a complaint in the Chuuk State Supreme Court against AIC, a foreign corporation, and the State of Chuuk. Because of the diversity of citizenship that complaint could have been filed in the FSM Supreme Court. See FSM Const. art. XI, § 6It was not. The complaint aint sought money damages from the defendants for trespass and breach of contract. The complaint and sses were served on the State of Chuuk and on Gary Lane, an employee of AIC, on the same daye day they were filed. The state filed its answer later the same month. AIC did not file an answer.

On April 29, 1994, Porwek applied for an entry of default against defendant AIC. It is unclear whether a separate entry of default was entered by the state court clerk or whether just the application was entered. [According to AIC's memorandum on its opposition to Porwek's current motion, the Chuuk State Supreme Court filed an Entry of Default for Failure to Answer on November 14, 1996.] At any rate, on August 30, 1994, some papers were delivered to AIC's Chuuk office that AIC took to be a default judgment entered against it. AIC's president, Henry Stewart, contacted all of his then management employees, none of whom were aware of the original service of the complaint and summons. He then contacted the Chuuk State Supreme Court and obtained copies of the Summons, Complaint and Return of Service.

On February 2, 1995, AIC's attorney filed a Motion to Set Aside Default Judgment with points and authorities. One ground for the motion was that the service of process was insufficient because Gary Lane was not an officer of the corporation or a manager or an agent that could accept service for AIC under Chuuk State Supreme Court Rule of Civil Procedure 4(c)(3), but was instead a temporary employee brought from the U.S. to assist in re-paving the airport runway. On September 26, 1995, Porwek opposed the motion on the ground that Gary Lane's Labor Department records showed him as a superintendent and that this was a management position which made service upon him proper service upon AIC. AIC replied on October 5.

In the meantime, the Chuuk State Supreme Court justice who had been assigned the case resigned. The next judge assigned the case had to recuse himself. It appears the case was reassigned once or twice before it came to a judge who ruled on AIC's pending motion. On June 17, 1998, that judge found that Gary Lane was a foreman or superintendent of AIC and thus was a "manager or general agent of AIC Micronesia, Inc. within the meaning of Rule 4(d)(3)." Order at 6 (CSSC CA No. 48-91 June 17, 1998). The judge concluded that the service of process was not insufficient, but did grant AIC's motion for relief on the ground of excusable neglect and set aside the entry of default. Id. at 7.

On July 21, 1998, AIC filed in this court, pursuant to General Court Order 1992-2, a petition for removal of this case from the Chuuk State Supreme Court. On July 24, 1998, Porwek filed the Plaintiff's Response to Defendant's (AIC) Petition for Removal along with points and authorities. It asked the court "to deny the petition for removal" and asserted that the case was improperly removed. I treated that response as a motion to remand and on August 21, 1998 ordered AIC to file whatever opposition it thought appropriate and allowed Porwek to reply to that opposition. Porwek v. American Int'l Co. Micronesia, [1998] FMSC 25; 8 FSM Intrm. 436 (Chk. 1998). Those papers have now been filed.

II. Analysis of the Merits

Porwek contends that removal was improper because it was effected much later than the sixty days allowed for in General Court Order 1992-2, which governs removal, and because no bond was supplied. AIC contends that removal is timely because it never received actual notice of the lawsuit until after a default judgment had been entered and because it could not remove the case until that judgment had been set aside. AIC contends that therefore the sixty-day period started in June, 1998, after the state court judge granted its motion.

A. Bond

The court "may require a petition for removal of an action to be accompanied by a bond." FSM GCO 1992-2, § II(C). The use of thd "may""may" usually connotes choice or discretion. Black's Law Dictionary 883 (5th ed. 1979). The bond requirement is thus discretionary with the court. No ords been issued requiring AIC to post a bond. Thus failure tore to do so will not necessitate a remand.

B. Sixty-Day Time Limit

Before this case was removed, the current state court trial judge ruled that the March 7, 1991 service upon Gary Lane was valid service upon AIC. Actions taken by a state court prior to removal remain in effect when the case is removed. FSM GCO 1992-2, § VII ("All injunctions, o anrs and other proceedings had in such action prior to its removal shall remain in full force and effect until dissolved or modified by the trial division of the FSM Supreme Court."). Cf.Butner v. Neustader, /u>[1963] USCA9 457; , 324 F.2d 783, 785 (9th Cir. 1963) ("The federal court takes the case as it finds it on removal and treats everything that occurred in the state court as if it had taken place in federal court."); Savell v. Southern Ry., 93 F.2d 377, 379 (5th Cir. 1937) ("When a case is removed the federal court takes it as though everything done in the state court had in fact been done in the federal court.").[1] Although any decision made before a final judgment adjudicating all parties' claims and rights is subject to revision, FSM Civ. R. 54(b), AIC does not now contest or seek revision of the ruling on service. I therefore must follow the ruling that service was valid. That being so, the time within which AIC could remove this case would have run out sixty days after March 7, 1991. See FSM GCO 1992-2, § II(B).

Even if I werI were to consider the service on Gary Lane to be invalid service on AIC, the sixty-day time period has still exp According to AIC, it had obtained a copy of the complaint from the Chuuk State Supreme Coue Court sometime after it received on August 30, 1994, what it took to be a default judgment and sometime before it filed its February 2, 1995 motion to set aside that default. General Court Order 1992-2 provides that a removal petition "shall be filed within sixty days after the receipt by any party, through service or otherwise, of a copy of an initial or amended pleading, motion, order or other paper from which it may first be ascertained that the case is removable." FSM GCO 1992-2, § II(B). In this caseendant Aant AIC received, not through service, but otherwise, a copy of an initial pleading - the complaint - showing that the case was removable. Proper servicnot required for the sixty-day period to start running - on - only receipt, which may be through service or otherwise. Michetti Pipe Stringing, Inc. v. Murphy Bros., 125 F.3d 1396, 1397-98 (11th Cir. 1997) (receipt of faxed copy of filed complaint started time for removal running even though proper service not made until two weeks later); Roe v. O'Donohue, [1994] USCA7 1197; 38 F.3d 298, 302-03 (7th Cir. 1994) (delivery of complaint to defendant although defective service under state law was receipt that started clock running for time to remove case from state court); Tech Hills II v. Phoenix Home Life Mut. Ins. Co., [1993] USCA6 1690; 5 F.3d 963, 968 (9th Cir. 1993) (complaint received on a Saturday by security guard at defendant's closed building not received by defendant until received by defendant's in-house counsel following Monday when time period for removal started to run) (cases construing 28 U.S.C. § 1446(b)[2]). Therefore sometime in late 1994 or early 1995 the sixty-day time period would have started running. It has long since expired.

AIC maintains that it was unable to remove the case then because it first had to have the default judgment set aside. It appears that there never was a default judgment entered only an entry of default, and even that may not have been entered until after AIC's motion to set aside was filed. At any rate, I see no obstacle to the removal of a defaulted case so long as it is within the time limit set by the General Court Order. See, e.g., Butner, 324 F.2d at 785-86 (case removed after entry of default judgment; federal trial court then denied motion to vacate default judgment; reversed on appeal, trial court ordered to vacate default judgment); Munsey v. Testworth Labs., Inc., [1955] USCA6 199; 227 F.2d 902, 903 (6th Cir. 1955) (appeal court affirms federal trial court's setting aside default judgment entered before removal from state court). "[A]lthough the removal after the default judgment is proper [if done within time], it cannot be taken to supersede the default judgment which must be regarded as valid until set aside." Butner, 324 F.2d at 785. I therefore conclude that if service on Gary Lane did not constitute receipt of the complaint by AIC then AIC could have petitioned for removal within the sixty days of the date in late 1994 or early 1995 when it actually received the complaint. The case would have been removed in whatever status it was at the time and AIC could have proceeded from there to have the default vacated if one had actually been entered. It did not do so. It cannot remove the case now. It is simply too late.

III. Conclusion

Accordingly, this matter is hereby remanded to the Chuuk State Supreme Court which may proceed with this case in accordance with its rules and procedures. The clerk shall serve a certified copy of this order on the Chuuk State Supreme Court. FSM GCO 1992-2, § III(C). Porwek may suto thio this court a bill of all costs and disbursements, if any, incurred by reason of the removal proceedings that, if just, the FSM Supreme Court will tax against AIC. Id.

^[1] When an FSM court rule has not be construed by the FSM Supreme Court and is similar or nearly identical to a U.S. counterpart, the court may look to U.S. practice for guidance. See, e.g., Iriarte v. Etscheit, [1998] FMSC 3; 8 FSM Intrm. 231, 235 (App. 1998) (using decisions concerning 28 U.S.C. § 1292( to construe FSM App. App. R. 4(a)(1)(B)); Jano v. King, [1992] FMSC 11; 5 FSM Intrm. 326, 329 (App. 1992) (using decisions concerning 28 U.S.C. § 1292(b) to construeApp. a))5(a)). General Court 1992-2 is similar to 28 U.S.C..S.C. §§ 1446(a), (b),&#160 144,(a), (b)0;(b), (c48, 1449, 1450. The preamble of General Court 1992-2 and sections I, II(C), III(D) and III( III(E) are not similar to any U.S. Code pion.

[2] Fup> FSM GCO 1992-2, § II(B) is s is simila28 U.S. U.S.C. § 1446(b).