Wolphagen v Ramp [1999] FMSC 9; 9 FSM Intrm. 191 (App. 1999) (11 August 1999)

FEDERATED STATES OF MICRONESIA
SUPREME COURT APPELLATE DIVISION
Cite case as Wolphagen v Ramp, [1999] FMSC 9; 9 FSM Intrm 191 (App. 1999)

REYNOLD WOLPHAGEN,
Appellant,

vs.

FREDRICK L. RAMP,
Appellee.

___________________________________

FREDRICK L. RAMP,

Cross-Appellant,

vs.

REYNOLD WOLPHAGEN,

Cross-Appellee.

___________________________________

APPEAL CASE NO. P1-1998

BEFORE:

Hon. Martin G. Yinug, Associate Justice, FSM Supreme Court
Hon. Judah C. Johnny, Temporary Justice, FSM Supreme Court*
Hon. Camillo Noket, Temporary Justice, FSM Supreme Court**

*Chief Justice, Pohnpei Supreme Court, Kolonia, Pohnpei
**Associate Justice, Chuuk State Supreme Court, Weno, Chuuk

OPINION

Argued: January 15, 1999
Decided: August 11, 1999

APPEARANCES:

For the Appellant/Cross-Appellee:
Andrew Sprenger, Esq. (brief)
Micronesian Legal Services Corporation
P.O. Box 129
Kolonia, Pohnpei FM 96941

David W. Kirschenheiter, Esq. (argued)
Micronesian Legal Services Corporation
P.O. Box 57
Koror, Palau PW 96940

For the Appellee/Cross-Appellant:
Ron Moroni, Esq.
P.O. Box 1618
Kolonia, Pohnpei FM 96941

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HEADNOTES

Appeal and Certiorari - Standard of Review; Torts - Damages
When a plaintiff has not been awarded damages, the question is not whether he made his case for damages with the requisite specificity, but whether he has shown entitlement to damages in the first instance. Wolphagen v. Ramp, [1999] FMSC 9; 9 FSM Intrm. 191, 193 (App. 1999).

Torts - Waste
It does not automatically follow that because the lessor could prevent a change in the use of the premises, he should also be compensated as a result of the changes made to the structures when the trial court found that the structures were uninhabitable before the alterations were begun, and when the trial court noted evidence that the changes made had actually improved the structures. Wolphagen v. Ramp, [1999] FMSC 9; 9 FSM Intrm. 191, 194 (App. 1999).

Appeal and Certiorari - Standard of Review
The standard of review on a question of the sufficiency of the evidence is whether the trial court's finding is clearly erroneous. When the trial court's finding that damages were not proved at trial is not clearly erroneous the appellate court will not remand to the trial court for further presentation of evidence on that issue. Wolphagen v. Ramp, [1999] FMSC 9; 9 FSM Intrm. 191, 194 (App. 1999).

Torts - Waste
When the trial court found that houses were uninhabitable before the lessee made alterations, the question is the cost to return the houses to their (uninhabitable) state before the work was done. The trial court holding that the lessor is not entitled to houses in livable condition, made so at the lessee's expense, when he would have been left with uninhabitable houses had the lessee taken no steps to alter the premises will thus be affirmed. Wolphagen v. Ramp, [1999] FMSC 9; 9 FSM Intrm. 191, 194 (App. 1999).

Torts - Damages; Torts - Waste
Nominal damages, or none at all, are awarded for ameliorating waste. Wolphagen v. Ramp, [1999] FMSC 9; 9 FSM Intrm. 191, 194 (App. 1999).

Appeal and Certiorari - Standard of Review; Contracts - Interpretation
Contractual interpretation is a question of law to be reviewed de novo on appeal. Wolphagen v. Ramp, [1999] FMSC 9; 9 FSM Intrm. 191, 194 (App. 1999).

Contracts - Interpretation; Property
When a lease provides that the lessees have the right to build such structures as they see fit with the buildings to become the lessor's property upon the lease termination and the lessees built two houses, they built such structures as they saw fit, and in doing so defined the nature of those structures. Once built, those structures became the lessor's property, although not until the lease's termination. At that time, the lessor was entitled to find himself the owner of dwellings, not a bar. He was within his rights to prevent the houses from being renovated for use in that manner. Wolphagen v. Ramp, [1999] FMSC 9; 9 FSM Intrm. 191, 195 (App. 1999).

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COURT'S OPINION

MARTIN YINUG, Associate Justice:

This is an appeal and cross appeal from a judgment entered after trial on the merits. Appellant/cross-appellee ("Wolphagen") appeals the trial court's finding that he was not entitled to an award of damages as a result of alterations by appellee/cross-appellant ("Ramp") to buildings located on property owned by Wolphagen. Wolphagen had leased the property to third parties, the Hagerstroms, who in turn assigned their interest to Ramp. Ramp, on cross-appeal, urges error below when the trial court found that Wolphagen, although he was not entitled to damages, had the right to prevent Ramp from changing the use of the buildings located on the property from dwelling houses to a bar. For the reasons discussed below, we affirm the trial court on both points.

I. Factual Background

As the trial court noted in its decision reported as Wolphagen v. Ramp, [1998] FMSC 4; 8 FSM Intrm. 241, 243 (Pon. 1998), "[t]o a remarkable extent the essential facts are without dispute." The facts are set out in full in that opinion. In brief, Ramp took an assignment of a land lease from a family named the Hagerstroms under the terms of which Wolphagen, the owner of the land, had leased the land to the Hagerstroms, who had in turn assigned the lease to Ramp. The Hagerstroms thereafter built two homes on the land connected by a walkway. Ramp moved onto the property and lived in the houses. The houses subsequently became uninhabitable as a result of termite infestation, and Ramp attempted to renovate the houses to make them into a bar. After Wolphagen objected to the proposed use, Ramp ceased work on the renovation and vacated the premises. Wolphagen then took possession. Three years and five months after Ramp had left and ten months after the lease would have expired, Wolphagen filed suit against Ramp for damages to the property. Ramp then counterclaimed for wrongful eviction.

II. Discussion

A. Wolphagen's Issue

Wolphagen states his issue on appeal as follows: "Whether the trial court clearly erred by finding insufficient evidence to award damages to lessor despite the court's conclusion that tenant committed waste on the leasehold property." Wolphagen proceeds on the assumption that he successfully demonstrated below that he had suffered compensable damage as a result of the changes which Ramp made to the buildings located on the leased premises. According to Wolphagen, the issue goes to the sufficiency of the evidence necessary to establish damages, and he maintains that he carried his burden. He urges that "[w]hen right [sic] to damages exists, the mere difficulty or uncertainty in assessment of damages is an insufficient reason for refusing them." Brief of Appellant at 6.

We disagree with the way Wolphagen frames the issue. The question is not whether Wolphagen made his case for damages with the requisite specificity, but whether he has shown entitlement to damages in the first instance.

The trial court found in its conclusions of law that Wolphagen's interest in the property "may be protected from an alteration which would change the structures' character." 8 FSM Intrm. at 244. Wolphagen appears to read this finding to mean that the trial court "held that appellee's actions in converting the leasehold's two residential houses into a tavern was destructive to Wolphagen's protected future interests in the residential dwellings," Brief of Appellant at 6, and concludes that the trial court erred when it made no award of damages in the face of this finding as he characterizes it. It does not automatically follow, however, that because Wolphagen could prevent a change in the use of the premises, he should also be compensated as a result of the changes made to the structures where the trial court found that the structures were uninhabitable before Ramp began his alterations, and where the trial court noted evidence that Ramp had actually improved the structures by the changes that he made.

Wolphagen contends that his evidence below was sufficient to sustain an award of damages. The standard of review on a question of the sufficiency of the evidence is whether the trial court's finding is clearly erroneous. Senda v. Mid-Pac Constr. Co., [1991] FMSC 26; 5 FSM Intrm. 277, 280 (App. 1992). Where the trial court's finding that damages were not proved at trial is not clearly erroneous the appellate court will not remand to the trial court for further presentation of evidence on that issue. Wito Clan v. United Church of Christ, [1993] FMSC 42; 6 FSM Intrm 291, 292 (App. 1993).

Wolphagen presented expert testimony that the cost of repairs to make the houses habitable would be nearly $31,000. However, the trial court found that the dwellings located on the leased premises were uninhabitable due to termite infestation at the time that Ramp began to make alterations to the buildings to convert them into a bar. The houses also were served by a defective sewer system. That the buildings were uninhabitable was the reason that Ramp decided to make the alterations. The trial court further noted evidence that by removing termite infested lumber from the structures on the property, Ramp actually increased the value of the structures.

The record amply supports these findings of fact, and based on these findings, the trial court concluded that "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 still would have become the owner of two uninhabitable houses." Wolphagen, 8 FSM Intrm. at 245. The court further correctly observed that "[t]he question is the cost to return the houses to their (uninhabitable) state in October 1992 before the work was done." Id.

Wolphagen's damages evidence went to the cost necessary to make the houses livable. We agree with the trial court that Wolphagen is not entitled to houses in livable condition, made so at the expense of Ramp, when he would have been left with uninhabitable houses had Ramp taken no steps to alter the premises. As the trial court noted, citing 78 Am. Jur. 2d Waste § 3 421 (1975), Wolphagen is n is entitled to nominal damages, or none at all, for the sort of ameliorating waste which occurred here. We find no error in the triart's denial of an award of damages and affirm. We do not reot remand this case for a determination of the cost to return the houses to their pre-alteration, uninhabitable condition. Wito Clan, 6 FSM Intrm. at 292.

B. Ramp's Issue

Ramp, in his cross appeal, urges that the trial court erred when it found that Wolphagen could prohibit him from changing the use of the two houses located on the property from dwellings to a bar. The resolution of this issue depends upon an interpretation of the contract between the parties. Contractual interpretation is a question of law to be reviewed de novo on appeal. Pohnpei v. Ponape Constr. Co., [1996] FMSC 13; 7 FSM Intrm. 613, 621 (App. 1996).

In this instance the controlling agreement is the original lease agreement, under which the Hagerstroms assigned their interest to Ramp. The original lease agreement provided in pertinent part as follows:

It is further agreed, that the 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 termination of this lease agreement or the termination of its renewal.

When the Hagerstroms built the two houses, they built such structures as they "saw fit." They built residential houses, and in doing so defined the nature of those structures. Once built, those structures became Wolphagen's property, although not until the termination of the lease. At that time, Wolphagen was entitled to find himself the owner of dwellings, not a bar. We conclude that Wolphagen was within his rights to prevent Ramp from renovating the houses for use in that manner.

Accordingly, we affirm the trial court's conclusion that Wolphagen could prohibit Ramp from converting the buildings from residential homes to a bar.

III. Conclusion

For these reasons, we affirm the judgment of the trial court in its entirety. We affirm the trial court's denial of an award of damages to Wolphagen. We affirm the trial court's finding that Wolphagen properly prohibited Ramp from converting the houses to use as a bar.