Davis v Kutta [2000] FMSC 40; 9 FSM Intrm. 565 (Chk. 2000) (7 November 2000)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite case as Davis v Kutta, [2000] FMSC 40; 9 FSM Intrm. 565 (Chk. 2000)

MENRY DAVIS,
Plaintiff,

vs.

JIM KUTTA, HALVERSON NIMEISA, RESAUO
MARTIN, ERADIO WILLIAM, FRANCIS RUBEN,
JOHNSON SILANDER and the STATE OF CHUUK,
Defendants.

_______________________________________________

CIVIL ACTION NO. 1992-1039

ORDER IN AID OF JUDGMENT AND MEMORANDUM

Martin Yinug
Associate Justice

Decided: November 7, 2000

APPEARANCES:

For the Plaintiff:
Stephen V. Finnen, Esq.
Law Offices of Saimon & Associates
P.O. Box 1450
Kolonia, Pohnpei FM 96941

For the Defendants:
Ready Johnny, Esq.
Chief of Litigation
Office of the Chuuk Attorney General
P.O. Box 189
Weno, Chuuk FM 96942

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HEADNOTES

Civil Rights
Civil rights are guaranteed to all FSM citizens under the Declaration of Rights, which is Article IV of the FSM Constitution. Congress conferred a cause of action for violation of civil rights by enacting 11 F.S.M.C. 701 et seq., pursuant to subsection (3). Davis v. Kutta, [2000] FMSC 40; 9 FSM Intrm. 565, 568 (Chk. 2000).

Debtors' and Creditors' Rights
When Chuuk has ultimate access to money on a monthly basis that greatly exceeds the amount of the civil rights judgment, Chuuk must pay the judgment. Davis v. Kutta, [2000] FMSC 40; 9 FSM Intrm. 565, 568 (Chk. 2000).

Debtors' and Creditors' Rights
A court shall determine the fastest manner in which the debtor can reasonably pay a judgment. Davis v. Kutta, [2000] FMSC 40; 9 FSM Intrm. 565, 568 (Chk. 2000).

Debtors' and Creditors' Rights
When a judgment was entered over four years ago, and the bulk of it remains outstanding and the debtor has the means to pay, the judgment should be paid forthwith. Davis v. Kutta, [2000] FMSC 40; 9 FSM Intrm. 565, 568 (Chk. 2000).

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COURT'S OPINION

MARTIN G. YINUG, Associate Justice:

This is a continuation of plaintiff's motion for order in aid of judgment filed December 15, 1997.

On May 15, 1998, the court held the evidentiary hearing required by 6 F.S.M.C. 1409, and on July 13, 1998, entered an order in aid of judgment, which was appealed by notice filed on August 17, 1998. On August 14, 2000, the appellate division dismissed the appeal on the basis that the July 13, 1998, order was not a final decision, noting that the order "did not make any specific order concerning how the state was to satisfy the judgment." Chuuk v. Davis, [2000] FMSC 17; 9 FSM Intrm. 471, 473 (App. 2000). On August 23, 2000, the plaintiff Menry Davis ("Davis") filed a request for further proceedings. After the mandate issued on September 22, 2000, this court on September 25, 2000, directed the defendant state of Chuuk ("Chuuk") to provide an update of its present financial circumstances, which Chuuk did by memoranda filed on October 13, and October 25, 2000. On November 1, 2000, Davis filed a second request for further proceedings which responds to the October 13, 2000, memorandum, and in which Davis points to the fact that no provision in the memorandum speaks to how Chuuk is to pay the instant judgment in the fastest possible manner, which is the criterion set out in 6 F.S.M.C. 1409.^[1] Davis also contends that Chuuk's memorandum is misleading, because the Chuuk state legislature has authorized the governor to borrow $10,000,000 for deficit reduction, and that the judgment in this case, which is just over two percent of that amount, should be paid from that money. While this may or may not be the case, the court expressly does not rely on this potential borrowing for the purposes of this order.

Per its memoranda, Chuuk recites that it has nearly fifteen million dollars invested in the investment pool maintained by the four states, while Chuuk's present liabilities amount to approximately fifteen and a half million dollars, including a 3.8 million dollar loan for airport renovation. Mr. Tiser Lippwe, Acting Director of Chuuk's Treasury Department, states in the memorandum filed on October 25, 2000, that Chuuk's "local and national revenue cash drawdown" is approximately $300,000 per month. Chuuk's biweekly payroll is approximately $600,000 and Chuuk evidently has sufficient revenues to meet this obligation twice a month, and occasionally three times monthly. According to Mr. Lippwe, most of the monthly drawdown goes towards the payroll, with the remainder going for travel advances, rental, supplies, and municipal salaries not covered by the state payroll.

Judgment against Chuuk in the amount of $130,000 was entered in this case on August 9, 1996, while an award of attorney fees and costs totalling $43,237.05 was entered on December 5, 1997. Taking into account the fact that Chuuk has made three payments of $5,000, $800, and $480 on the judgment thus far, the total due in interest and principal as of November 7, 2000, is $226,412.83, with daily interest accruing at $41.17 for each day thereafter.^[2] Thus, the amount of money that Chuuk has available to it on a monthly basis to meet its obligations greatly exceeds the amount of the judgment. Pursuant to 6 F.S.M.C. 1409, the court finds that Chuuk has the ability to pay the judgment.

Chuuk emphasizes that it cannot spend money without legislative appropriation, and also asserts that the money that it does have available to it is earmarked for specific purposes. The Chuuk legislature has evidently already appropriated money toward the judgment, since three payments have been made. Certainly, there is nothing to prevent Chuuk from appropriating the full amount to pay the judgment and fees in full. Notwithstanding any such appropriation, however, it remains incumbent upon Chuuk to discharge this obligation. This is due to the special circumstances of this case. The judgment and fees were awarded based on Chuuk's violation of the civil rights of one of its citizen. Those rights are guaranteed to all FSM citizens under the Declaration of Rights, which is Article IV of the FSM Constitution. Congress conferred a cause of action for violation of civil rights by enacting 11 F.S.M.C. § 701 et seq., pursuant to subsection (3) of which this case was brought. That subsection also permits recovery of attorney's fees. For the reasons this court discussed in another case brought under 11 F.S.M.C. 701 et seq., Louis v. Kutta, [1997] FMSC 36; 8 FSM Intrm. 208, 211-14 (Chk. 1997), and where as here Chuuk has ultimate access to money on a monthly basis that greatly exceeds the amount of the judgment, Chuuk must pay the judgment.

Section 1409 of 6 F.S.M.C. mandates that the court "shall . . . determine the fastest manner in which the debtor can reasonably pay a judgment." The judgment in this case was entered over four years ago, but the bulk of the judgment remains outstanding. This fact militates against installment payments on the judgment. The judgment should be paid forthwith.

Accordingly, Mr. Tiser Lippwe, in his official capacity as Acting Director of the Department of Treasury of the State of Chuuk, shall no later than December 29, 2000, issue a check to Menry Davis drawn on state funds. The amount of the check will be the full amount of the judgment and attorney's fees, which is $226,412.83, plus daily interest accruing at $41.17 for every day after November 7, 2000, that the judgment remains unpaid. Mr. Lippwe is further ordered to take all necessary steps to insure that the check is drawn on sufficient funds.

Upon the receipt of payment, plaintiff's counsel will promptly file a satisfaction of judgment with the court.

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^[1] As part of her request, Davis asks for a further hearing to "to compel Mr. Lippwe to testify concerning this oversight [i.e., the fact that his memoranda does not address how the judgment will be paid]." The court has already held the hearing mandated under 6 F.S.M.C. 1409. In light of the information provided in Chuuk's submissions, no further hearing is necessary.
^[2] The calculation is as follows:

Three payments have been made on the judgment: $5,000, by check dated December 1, 1997; $800, by check dated March 1, 1998; and $480 on July 15, 1998. There is no information in the file as to how this last payment was made, but the court will assume it was by check. As to the date of receipt for each payment, the court will use the FSM Civil Rule 6(e) time period of 6 days.

The judgment was entered on August 9, 1996. The interest on the balance of $130,000 from that date until the first payment of $5,000, credited on December 7, 1997, is $15,546.58 (.09 X $130,000 + 120/365 X .09 X $130,000). Interest on the balance of $125,000 from December 7, 1997, until the second payment credited on March 7, 1998, is $2,773.97 (90/365 X .09 X $125,000). Interest on the balance of $124,200 from March 7, 1998, until the third payment credited on July 21, 1998 is $4,164.95 (136/365 X .09 X $124,200). Interest on the balance of $123,720 from July 21, 1998, until November 7, 2000, is $25,594.79 (2 X .09 X $123,720 + 109/365 X .09 X $123,720). Total interest on the judgment from entry on August 9, 1996, until November 12, 2000, is therefore $48,080.29.

Interest on the fee award from December 5, 1997, the date of entry, until November 7, 2000, is $11,375.49 (2 X .09 X $43,237.05 + 337/365 X .09 X $43,237.05)). Daily interest on the current judgment balance of $123,720 and fees is $41.17 (($123,720 + $43,237.05) X .09/365 = $41.17). The attorney's fee award generates interest at the statutory rate based on the rationale set out in this court's order of July 13, 1998, at note 2. [Davis v. Kutta[1998] FMSC 18; , 8 FSM Intrm. 338, 341 n.2 (Chk. 1998).]

The total of interest and principal on the judgment and fees as of November 12, 2000, is therefore $226,412.83.