Wolphagen v Ramp [1998] FMSC 4; 8 FSM Intrm. 241 (Pon. 1998) (12 February 1998)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite as Wolphagen v Ramp, [1998] FMSC 4; 8 FSM Intrm. 241 (Pon. 1998)

REYNOLD WOLPHAGEN,
Plaintiff,

vs.

FREDRICK L. RAMP,
Defendant.

CIVIL ACTION NO. 1996-017

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Richard H. Benson
Associate Justice

Trial: November 17-19, 1997, January 26, 1998
Decided: February 12, 1998

APPEARANCES:

For the Plaintiff:
Charles Greenfield, Esq.
Micronesian Legal Services Corporation
P.O. Box 129
Kolonia, Pohnpei FM 96941

For the Defendant:
Ron Moroni, Esq.
P.O. Box 1618
Kolonia, Pohnpei FM 96941

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HEADNOTES

Property
A person, who acquires leased land from the lessees and the houses the lessees built on it, has no rights superior to the rights given the lessees in the lease. Wolphagen v. Ramp, [1998] FMSC 4; 8 FSM Intrm. 241, 244 (Pon. 1998).

Property
When a lease provides that lessees may build "such buildings as they see fit" on the land and that such buildings will become the lessor's property when the lease ended, the lessor has a vested future interest in the buildings if they are built. The interest is executory, resulting from a springing use, the event of which is when and if the lessees built structures. The lessor has a vested future interest in the buildings, once built, which ripens into possession at the lease's termination. Wolphagen v. Ramp, [1998] FMSC 4; 8 FSM Intrm. 241, 244 (Pon. 1998).

Property
A lessor's vested future interest in houses may be protected from an alteration which would change the structures' character. A wrongful eviction counterclaim based on the lessor's refusal to allow the houses to be turned into a bar will therefore be dismissed. Wolphagen v. Ramp, [1998] FMSC 4; 8 FSM Intrm. 241, 244 (Pon. 1998).

Torts - Damages; Torts - Waste
Damages for waste are normally the difference in value of the property before and after the act of waste. Wolphagen v. Ramp, [1998] FMSC 4; 8 FSM Intrm. 241, 244 (Pon. 1998).

Torts - Damages; Torts - Waste
The damages for waste committed are usually measured by the injury actually sustained and if the value of the premises has been improved by the acts complained of, the complainants will only recover nominal damages, if any, at law. Wolphagen v. Ramp, [1998] FMSC 4; 8 FSM Intrm. 241, 244 (Pon. 1998).

Torts - Damages; Torts - Waste
Damages for waste can also be determined by the cost of repairing or replacing what was wasted when the damage is small in comparison to property's total value and the amount is readily ascertainable. Wolphagen v. Ramp, [1998] FMSC 4; 8 FSM Intrm. 241, 245 (Pon. 1998).

Torts - Damages; Torts - Waste
A lessor may not recover damages for waste when the removal of termite-infested lumber from uninhabitable houses while trying to turn the houses into a bar improved the value of the property, and because if the property had been abandoned without trying to turn the houses into a bar, the lessor would still have become the owner of two uninhabitable houses. Wolphagen v. Ramp, [1998] FMSC 4; 8 FSM Intrm. 241, 245 (Pon. 1998).

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COURT'S OPINION

RICHARD H. BENSON, Associate Justice:

The plaintiff-lessor seeks damages for waste for the destruction of personal property. The defendant-sublessee counterclaims for wrongful eviction.

The parties presented evidence on November 17, 18 and 19, 1997. By agreement I viewed the premises with the parties on November 19th following the close of all evidence, except for one witness whose deposition was to be taken and filed later. Closing arguments were heard on January 26, 1998.

At the close of the plaintiff's case, the defendant moved for a dismissal pursuant to Rule 41(b). The motion was denied. The defendant moved for reconsideration before closing argument. The plaintiff did not object to this, and the parties argued and submitted the matter just prior to closing argument.

Findings of Fact

To a remarkable extent the essential facts are without dispute.

The property at issue is located on a portion of land owned by the plaintiff Wolphagen. The land runs between a ridge (or cliff edge) and a principal road in Dolonier, Pohnpei. The view from the cliff edge is exceptionally fine.

In April, 1985, the Hagerstrom family leased the property at issue for ten years, with an option for another ten years. Ten years' rent was paid in advance. The lease contained this provision: "[T]he Lessees have the right to build such structures as they see fit, with the exception that such buildings will not permanently damage the site. Such buildings will become the property of the Lessor upon the termination of this Lease Agreement or the termination of its renewal."

The Hagerstroms built two houses along the ridge with a walkway joining them. They lived in both houses.

The cabin-like houses were constructed of locally-milled, rough, unfinished lumber. The houses took maximum advantage of the ocean view with glass and wood louvers along the entire lengths which faced the sea, and maximum advantage of breezes through extensive glass and wooden louvers on the sides opposite the sea and on the sides of each which faced away from the other house.

In March 1989, the Hagerstroms assigned their leasehold interest to the defendant Ramp and contracted for the sale of the houses to Ramp. The consideration was monthly installments for five years. Title to the houses was to pass when the entire consideration was paid. According to this instrument, Ramp "may alter or renovate the Premises at his discretion." Ramp took possession in May 1989.

Ramp invested $10,000 to $15,000 for improvements and renovations to the property. Ramp and his family vacated the houses in May 1992. Termite damage to the wooden houses and termite swarming at night were principal reasons for Ramp's leaving. A defective sewage disposal system which was a health hazard contributed to the decision. Ramp never paid the Hagerstroms the full consideration.

For several months Ramp attempted to rent the premises to others. A number of persons were interested. Despite Ramp's offer to either credit the cost of any repairs they made to the rental, or to make repairs himself in return for a sublease agreement, no one would rent the premises. The houses were uninhabitable.

Ramp then decided to change the two houses into a bar, and work began on it in October 1992. The work included the following: glass and wooden louvers were removed; a partial wall and the walls of the bath in one house were removed; the exterior walls of the houses which faced each other were removed, as were bath and kitchen fixtures; and termite-damaged wood was removed. Damaged materials were put in one place on the premises, and the undamaged placed elsewhere on the premises. This work continued a week or two. Wolphagen learned of it. Work was stopped and a meeting held on the premises.

Ramp and Wolphagen, and family members of each were at the meeting. Wolphagen objected to a bar on the premises; Ramp explained the houses' uninhabitable condition and his desire to use the premises for some economically useful purpose. Ramp's view did not cause Wolphagen to change his position. Ramp then stated that he was leaving the property, vacating it entirely.

Ramp did not thereafter exercise any dominion over the premises. Wolphagen took possession before the ten-year lease expired. One person, interested in renting, was refused, being told that the houses were damaged. For a period of about one year Wolphagen did rent out one house for use as a warehouse. Three years and five months after Ramp vacated the premises and ten months after the lease would have terminated through the lapse of ten years, this complaint was filed.

Conclusions of Law

1. Plaintiff's Interest in the Houses.

The basic issue presented is whether Wolphagen had the right to forbid Ramp from changing the houses into a bar. I conclude that he did.

Ramp had no rights superior to the rights given to the Hagerstroms in the lease. That lease gave Wolphagen an interest in the buildings once the Hagerstroms had built them. The lease granted the lessees the right to "build such structures as they see fit," that "such buildings will not permanently damage the site," and that "such buildings will become the property of the Lessor upon termination of [the] lease." ("Such," an adjective, means "of the character, quality or extent previously indicated or implied." Webster's Ninth New Collegiate Dictionary 1178 (1986)).

Once built, Wolphagen had a future interest in the houses prior to the termination of the lease, which then ripened into present ownership and possession upon such termination. This interest may be protected from an alteration which would change the structures' character. The interest is executory, resulting from a springing use, the event of which is when and if the Hagerstroms built structures. The interest became vested in the Lessor when, in 1985, the Hagerstroms built the two houses.

Implicit in this conclusion is my conclusion that Ramp was not wrongfully evicted from the premises because he had no right to turn the houses into a bar. Ramp's counterclaim must accordingly be dismissed.

My conclusion on this issue is also the reason I denied Ramp's motion to dismiss under Rule 41(b). I have reconsidered the matter and reach the same result.

2. Damages.

I conclude that Wolphagen failed to prove damages for the steps Ramp had taken to convert the houses to a bar. Damages for waste are normally the difference in value of the property before and after the act of waste. C. Jhong, Annotation, Measure of Damages in Landlord's Action for Waste Against Tenant, 82 A.L.R.2d 1106, 1108 (1962) ("the proper measure of damages recoverable by the landlord in an action for waste is the diminished market value of the leased property"). Cf. Realty Assocs. v. United States, 138 F. Supp. 875, 878 (Ct. Cl. 1956) ("the rule for measurement of damages in an action for waste is the diminution in market value resulting from such waste"). "The damages for waste committed are usually measured by the injury actually sustained . . . and .
#160;. if the vale value of the premises has been improved by the acts complained of, the complainants will only recover nominal damages, if any, at law." 78 Am. Jur. 2d Waste §&#1, at 1975) (footnotes otes omittomitted).

There is no evidence of the houses' value in October 1992 before the work began or of the houses' value one or two weeks later when it stopped. (There was evidence that the value increased after the work, since removing termite-infested lumber from the houses improved the houses. No dollar figure was given in connection with this evidence.)

Damages for waste can also be determined by the cost of repairing or replacing what was wasted. See, e.g., Helton v. City of St. Joseph, 340 S.W.2d 198, 82 A.L.R.2d 1103, 1105-06 (Mo. Ct. App. 1960) (replacement or repair cost, instead of market value difference, may be used when damage small in comparison to property's total value and amount readily ascertainable). Wolphagen's evidence on this consisted of an expert who gave the itemized cost to make the houses "liveable." This is not the issue before me. The question is the cost to return the houses to their (uninhabitable) state in October 1992 before the work began. Further, I am unable to use the figures at all to match against what work was done during that one or two week period. Any damages so awarded would be the result of conjecture and speculation.

Wolphagen did not prove he was worse off after Ramp had left the houses. If Ramp had abandoned the property without trying to turn the houses into a bar, Wolphagen would still have become the owner of two uninhabitable houses.

Accordingly, Wolphagen is entitled to no recovery on his complaint, and the defendant is entitled to no recovery on his counterclaim. Each shall bear his own costs.

The motion to dismiss has been reconsidered and the ruling is unchanged.

Let judgment be entered accordingly.