Bank of Hawaii v Helgenberger [1999] FMSC 15; 9 FSM Intrm. 260 (Pon. 1999) (16 November 1999)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite case as Bank of Hawaii v Helgenberger, [1999] FMSC 15; 9 FSM Intrm 260 (Pon. 1999)

BANK OF HAWAII,
Plaintiff,

vs.

BERNARD HELGENBERGER and THE STATE OF
POHNPEI by and through its DEPARTMENT OF
TREASURY AND ADMINISTRATION,
Defendants.

_______________________________________________

CIVIL ACTION NO. 1998-073

ORDERS

Andon L. Amaraich
Chief Justice

Decided: November 16, 1999

APPEARANCES:

For the Plaintiff:
Douglas Parkinson, Esq.
P.O. Box 2069
Kolonia, Pohnpei FM 96941

For the Defendant (Helgenberger):
Bellarmine Helgenberger
P.O. Box 491
Kolonia, Pohnpei FM 96941

For the Defendant (Pohnpei):
James Woodruff, Esq.
Attorney General
Pohnpei Department of Justice
P.O. Box 1555
Kolonia, Pohnpei FM 96941

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HEADNOTES

Contracts
An enforceable contract requires an offer, an acceptance, definite terms, and consideration. Bank of Hawaii v. Helgenberger, [1999] FMSC 15; 9 FSM Intrm. 260, 262 (Pon. 1999).

Contracts; Settlement
The court will not enforce a written settlement agreement as a verbal contract against a defendant who has not signed it when because of conflicting affidavits the court finds that the settlement terms were not sufficiently definite to constitute an enforceable contract and when there are questions as to whether the settlement was freely and fairly negotiated by the parties thereto. Bank of Hawaii v. Helgenberger, [1999] FMSC 15; 9 FSM Intrm. 260, 262 (Pon. 1999).

Attorney, Trial Counselor and Client - Disqualification of Counsel
Allegations of foul language and intimidation in a settlement conference are alone insufficient grounds for removing an attorney from a case at a late stage of the litigation. Bank of Hawaii v. Helgenberger, [1999] FMSC 15; 9 FSM Intrm. 260, 262 (Pon. 1999).

Civil Procedure
For cause shown, the court may, within its discretion, order the enlargement of a period of time, but when the movant does not specify why it needs additional time, no cause has been shown. Bank of Hawaii v. Helgenberger, [1999] FMSC 15; 9 FSM Intrm. 260, 262 (Pon. 1999).

Civil Procedure - Interpleader
One purpose of the rule regarding interpleader is to protect stakeholders from being forced to determine the validity of competing claims against a fund. When a stakeholder has no interest in the fund, the purpose of the interpleader rule is to force competing claimants to contest a controversy between them without involving the stakeholder in litigation and subjecting the stakeholder to multiple liability. Bank of Hawaii v. Helgenberger, [1999] FMSC 15; 9 FSM Intrm. 260, 263 (Pon. 1999).

Civil Procedure - Dismissal; Civil Procedure - Interpleader
When the stakeholder can demonstrate that it is disinterested, it is appropriate for the court to dismiss the stakeholder from the action following the deposit of the funds at issue or the posting of a bond. Bank of Hawaii v. Helgenberger, [1999] FMSC 15; 9 FSM Intrm. 260, 263 (Pon. 1999).

* * * *

COURT'S OPINION

ANDON L. AMARAICH, Chief Justice:

A Settlement Conference in this case was held in chambers on September 27, 1999. Appearing on behalf of plaintiff was Douglas Parkinson, Esq., appearing on behalf of defendant State of Pohnpei was James Woodruff, Esq., and Bellarmine Helgenberger appeared on behalf of his father, defendant Bernard Helgenberger. Also present were Pohnpei State Assistant Attorney Generals Catherine Wiehe and Marianne Woloschuk, Pohnpei Tax Consultant Dave C. Jennings, and Bank of Hawaii Vice President Aren Palik. At that Settlement Conference, both defendants represented that a stipulated settlement agreement had been reached by the defendants, and indicated that it would be filed the following day. The Bank of Hawaii, as the holder of funds at issue, did not participate in this agreement.

Based upon the representations of the defendants during the Settlement Conference, the Court adjourned the conference to allow the defendants to discuss the terms of the proposed settlement agreement. What transpired during these discussions is in dispute, and is the basis for motions presently before the Court.

Following the Settlement Conference, on October 5, 1999, defendant Bernard Helgenberger filed a motion seeking to disqualify Pohnpei State Attorney General James Woodruff from the instant case. In that motion, defendant Helgenberger alleges that Mr. Woodruff was abusive, and that Mr. Woodruff used his position as Attorney General as well as foul language to improperly intimidate Bellarmine Helgenberger into agreeing to a settlement during the settlement discussion on September 27, 1999. Def. Helgenberger's Motion to Disqualify James Woodruff at 2 (Oct. 5, 1999). In support of this motion, defendant Helgenberger attaches an affidavit executed by his son Bellarmine. Bellarmine Helgenberger states that Mr. Woodruff's conduct during the settlement discussion, including alleged use of foul language, intimidated Bellarmine into agreeing with certain terms of settlement.

Then, on October 6, 1999, defendant Pohnpei State filed a Motion to Enforce Settlement Agreement. Pohnpei State alleges that a binding, verbal settlement agreement was reached between Pohnpei State and Bernard Helgenberger. Pohnpei State alleges that Bellarmine Helgenberger verbally offered to settle the instant case on behalf of Bernard Helgenberger for $150,000, and that James Woodruff verbally accepted this offer on behalf of Pohnpei State, after consultation with Anna Mendiola, Pohnpei State Director of Treasury and Administration. See Def. Pohnpei State's Motion to Enforce Settlement Agreement at 2 (Oct. 6, 1999); Exh. A at 2 (Aff. of Catherine Wiehe). With its Motion to Enforce Settlement, Pohnpei State submitted a written settlement agreement which it asks the Court to enforce against Bernard Helgenberger. Pohnpei State represents that Bernard Helgenberger has refused to sign this agreement.

Under these circumstances, the Court will not enforce the written settlement agreement submitted by Pohnpei State. An enforceable contract requires an offer, an acceptance, definite terms, and consideration. Ponape Constr. Co. v. Pohnpei, [1993] FMSC 23; 6 FSM Intrm. 114, 123 (Pon. 1993). Based upon the conflicting affidavits submitted by the defendants, the Court finds that the terms of settlement were not sufficiently definite to constitute an enforceable contract. Additionally, the Court will not approve any settlement when there are questions as to whether the settlement was freely and fairly negotiated by the parties thereto. Thus, the Court rejects Pohnpei State's written settlement agreement, which has not been signed by defendant Helgenberger.

The Court also declines to disqualify James Woodruff from this case. The Court certainly does not approve of Mr. Woodruff's behavior if the allegations in Bellarmine Helgenberger's affidavit are accurate; however, the Court does not find that these allegations alone are sufficient grounds for removing Mr. Woodruff from this case at such a late stage of the litigation.

The Court also denies Pohnpei State's motion to "strike or continue deadlines" in this case. Pohnpei State asserts that "further legal proceedings will become necessary" if the Court does not enforce the settlement agreement allegedly reached by the defendants. The Court for cause shown may, within its discretion, order the enlargement of a period of time. FSM Civ. R. 6(b)(1). Pohnpei State does not specify why it needs additional time to prepare for a pre-trial conference or trial in this case, and the Court finds no cause shown for an enlargement of time.

A pre-trial conference currently is scheduled for this Thursday, November 18, 1999, at which time the parties again may explore the possibility of reaching a mutually agreeable settlement of the claims and cross-claims asserted herein. If a settlement is not reached, trial remains scheduled for December 14, 1999.

Finally, plaintiff, the Bank of Hawaii, has requested that the Court accept payment of the funds in dispute in this case, $289,883.45 from Bernard Helgenberger's deposit account at the Bank, dismiss plaintiff from this action, and discharge plaintiff from liability to defendants. Pl. Mot. (Oct. 20, 1999). In this case, the Bank of Hawaii is the holder of funds which are the subject of a dispute between defendant Bernard Helgenberger and defendant Pohnpei State. Neither defendant has asserted any claims against plaintiff, and neither defendant objected or responded to plaintiff's motion. Notably, plaintiff has asserted no interest in the funds at issue in this case: it claims no attorney fees, costs, bank charges, or any other charges, out of the fund.

One purpose of Rule 22 of the FSM Rules of Civil Procedure regarding interpleader is to protect stakeholders from being forced to determine the validity of competing claims against a fund. FSM Civ. R. 22. When a stakeholder has no interest in the fund, the purpose of the interpleader rule is to force competing claimants to contest a controversy between them without involving the stakeholder in litigation and subjecting the stakeholder to multiple liability. See 7 Charles Alan Wright et al., Federal Practice and Procedure § 1702 (2d ed. 1986). the stae stakeholder can demonstrate that it is disinterested, it is appropriate for the court to dismiss the stakeholder from the action following the deposit of the funds at issue or the posting of a bond. Id. § 1716; 45 Am. Jur. 2d Interpleader § 50 (rev. ed. .

>

Plaintiff has demonstrated that it is a disinterested stakeholder in the funds held by plaintiff on deposit for Bernard Helgenberger in the amount of $289,883.45. Under thescumstances the Court will iill issue an order dismissing plaintiff from the suit, after plaintiff submits payment to the Court of $289,883.45 from Bernard Helgenberger's deposit account at the Bank of Hawaii.

Conclusion

Accordingly, defendant Pohnpei State's Motion for Enforcement of Settlement Agreement is hereby denied; defendant Pohnpei State's Motion to Strike or Continue Deadlines is hereby denied; defendant Bernard Helgenberger's Motion to Disqualify James Woodruff is hereby denied; and plaintiff's Motion to Deposit Fund in Court is hereby granted. Plaintiff's Motion to Dismiss Plaintiff and Motion to Discharge Plaintiff from Liability to Defendants are taken under advisement until such time as the funds at issue are deposited with the Court.