Federated States of Micronesia v National Offshore Tuna Fisheries Association of Japan [2001] FMSC 2; 10 FSM Intrm. 169 (Chk. 2001) (8 May 2001)

FEDERATED STATES OF MICRONESIA
SUPREME COURT

Cite as FSM v. National Offshore Tuna Fisheries Association of Japan,
[2001] FMSC 2; 10 FSM Intrm. 169 (Chk. 2001)

FEDERATED STATES OF MICRONESIA
Plaintiff,

vs.

NATIONAL OFFSHORE TUNA FISHERIES
ASSOCIATION OF JAPAN,
Defendant.

CIVIL ACTION NO. 2000-1003

ORDER

Richard H. Benson
Associate Justice

Decided: May 8, 2001

APPEARANCE:

For the Plaintiff:
R. Anthony Welch, Esq.
Assistant Attorney General
FSM Department of Justice
P.O. Box PS-105
Palikir, Pohnpei FM 96941

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HEADNOTES

Civil Procedure; Pleadings
The FSM Supreme Court's practice has been to consider any written response from an unrepresented defendant as an answer or a pleading. FSM v. National Offshore Tuna Fisheries Ass'n, [2001] FMSC 2; 10 FSM Intrm. 169, 172 (Chk. 2001).

Civil Procedure; Motions
Even though failure to timely oppose a motion is deemed a consent to that motion, a court still needs proper grounds before it can grant the motion. FSM v. National Offshore Tuna Fisheries Ass'n, [2001] FMSC 2; 10 FSM Intrm. 169, 172 (Chk. 2001).

Civil Procedure; Summary Judgment
A court must deny a summary judgment motion unless it finds there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. The court must view the facts presented and inferences made in the light most favorable to the nonmoving party, and the burden of showing a lack of triable issues of fact belongs to the moving party. FSM v. National Offshore Tuna Fisheries Ass'n, [2001] FMSC 2; 10 FSM Intrm. 169, 172 (Chk. 2001).

Contracts; Interpretation
When contractual provisions differ significantly from similar ones in another contract they therefore must be interpreted differently, and a party's liability must be based on the language in the agreement it signed, not on the language in the agreement that another signed. FSM v. National Offshore Tuna Fisheries Ass'n, [2001] FMSC 2; 10 FSM Intrm. 169, 173 (Chk. 2001).

Contracts; Interpretation
Interpretations of contract terms are matters of law to be determined by the court. FSM v. National Offshore Tuna Fisheries Ass'n, [2001] FMSC 2; 10 FSM Intrm. 169, 173 (Chk. 2001).

Civil Procedure; Summary Judgment; Contracts ; Interpretation; Fishing
When a fishing agreement requires that the signatory organizations must only take "necessary steps to ensure" that their members comply with the laws, regulations, and their permits and the government has made no allegation and introduced no evidence that the signatory has failed to take any of these "necessary steps," the government cannot seek to impose some sort of strict liability on the signatory for the actions of its members' employees because the fishing agreement's terms, without more, do not create liability for the signatory organizations for each and every violation of FSM fishery law or the foreign fishing agreement that their members commit. The government is therefore not entitled to summary judgment because, as a matter of law, the foreign fishing agreement's contractual terms do not impose vicarious liability on the signatory. FSM v. National Offshore Tuna Fisheries Ass'n, [2001] FMSC 2; 10 FSM Intrm. 169, 173-74 (Chk. 2001).

Agency
Generally, a principal is bound by, and liable for, the acts of its agent done with or within the actual or apparent authority from the principal and within the scope of the agent's employment. FSM v. National Offshore Tuna Fisheries Ass'n, [2001] FMSC 2; 10 FSM Intrm. 169, 174 (Chk. 2001).

Agency
Agency relationships are based upon one person's consent that another shall act on his behalf and be subject to his control. FSM v. National Offshore Tuna Fisheries Ass'n, [2001] FMSC 2; 10 FSM Intrm. 169, 174 (Chk. 2001).

Agency
Acting for another is the act of an agent. FSM v. National Offshore Tuna Fisheries Ass'n, [2001] FMSC 2; 10 FSM Intrm. 169, 174 (Chk. 2001).

Agency
Someone acting on another's behalf is someone who is acting as an agent for that other. FSM v. National Offshore Tuna Fisheries Ass'n, [2001] FMSC 2; 10 FSM Intrm. 169, 174 (Chk. 2001).

Agency
There is no authority by which an agent may be held liable to a third party for its principal's actions when they are not also the agent's own actions or when the agent has not expressly agreed to be liable for those actions. FSM v. National Offshore Tuna Fisheries Ass'n, [2001] FMSC 2; 10 FSM Intrm. 169, 174 (Chk. 2001).

Civil Procedure; Summary Judgment
When a party's summary judgment motion has been denied as a matter of law and it appears the nonmoving party is entitled to judgment as a matter of law, a court may grant summary judgment to the nonmoving party in the absence of a cross motion for summary judgment if the original movant has had an adequate opportunity to show that there is a genuine issue and that his nonmoving opponent is not entitled to judgment as a matter of law. FSM v. National Offshore Tuna Fisheries Ass'n, [2001] FMSC 2; 10 FSM Intrm. 169, 174-75 (Chk. 2001).

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COURT'S OPINION

RICHARD H. BENSON, Associate Justice:

The government has moved for summary judgment against the one remaining defendant in this case. That motion is denied and the defendant is granted summary judgment.

I. Background

This case arises from an incident on the night of February 18-19, 2000 involving the fishing vessel Kaien Maru 23. The fishing vessel was stopped in the FSM Exclusive Economic Zone by the FSS Palikir for a routine check. When the FSS Palikir did not find the vessel's name on its updated list of licensed fishing vessels, the decision was made to board the Kaien Maru 23. Allegedly, once the FSS Palikir signaled the fishing vessel to prepare to be boarded, the Kaien Maru 23 started her engines and left the scene. The FSS Palikir pursued and, after having fired a couple of warning shots, succeeded in stopping and boarding the Kaien Maru 23.

The vessel and its captain were arrested and escorted to Weno Anchorage in Chuuk Lagoon. No current license was found aboard the vessel. A criminal information (Criminal Case No. 2000-1501) was filed against the fishing boat captain, Shinya Kuranaga, the vessel's owner, Tosayo Company, Ltd., and the National Offshore Tuna Fisheries Association of Japan. Additionally, this civil action for the vessel's forfeiture and for civil penalties was filed against the fishing vessel Kaien Maru 23, Captain Shinya Kuranaga, Tosayo Company, Ltd., and the National Offshore Tuna Fisheries Association of Japan.

Defendants Kaien Maru 23, Captain Shinya Kuranaga, and the Tosayo Company, Ltd. engaged counsel. At the probable cause hearing and the hearing on release conditions for the captain and the vessel, the government took the very unusual position of refusing to either allege that the Kaien Maru 23 was fishing in the FSM Exclusive Economic Zone without a license and or to concede that the vessel was indeed licensed. No defendant was charged, either criminally or civilly, with unlicensed fishing.

The National Offshore Tuna Fisheries Association of Japan (the "Association"), one of three organizations that had negotiated and signed the FSM foreign fishing agreement under which the Kaien Maru 23 claimed it had obtained a current, valid license to fish in the FSM Exclusive Economic Zone, did not engage counsel. Nor did the Association appear in court. But it did submit a letter (dated March 13, 2000 and filed March 31, 2000), which it entitled "Written answer to the Civil Summons: Civil Action No. 2000-1003," that denied any liability for the incident. Our court's practice has been to consider any written response from an unrepresented defendant as an answer or a pleading. The letter's contents, however, might more properly be characterized as a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief may be granted (or a Rule 56 summary judgment motion since it introduced matter, some provisions of the foreign fishing agreement, outside the pleadings), rather than a Rule 7(a) pleading. It states that the government's allegations only mention that the Association had agreed to and was a signatory to a foreign fishing agreement between Japanese fishing associations and the Micronesian Maritime Authority. The Association asserted that, under the agreement's terms, it had complied with all of the agreement's provisions that applied to it and that the agreement made the Association's members, not it, responsible for their own alleged actions.

The represented defendants (that is all defendants except the Association) were granted leave to, and did file and serve a third-party complaint against the Micronesian Maritime Authority and an amended answer that included affirmative defenses and a counterclaim. The defenses, counterclaim, and third-party complaint were based on the represented defendants' contention that, since the Kaien Maru 23 was properly licensed at the time of the initial routine stop, none of the ensuing events would have occurred (and neither the criminal nor this civil action brought) if the Micronesian Maritime Authority had not negligently omitted the Kaien Maru 23's name from the FSS Palikir's updated list of currently licensed vessels. They contended that, if the Kaien Maru 23's name had been on that list, the FSS Palikir would have checked its identity against the licensed vessel list and then let it proceed without attempting to board it, as the FSS Palikir had done on other routine vessel stops that night.

As part of comprehensive negotiations and settlement the Captain pled guilty in the criminal case, paid a $100,000 fine and received a two-year suspended sentence. Defendant Tosayo Company, Ltd. was dismissed from that case. Also, the government's forfeiture claim and defendants Kaien Maru 23, Captain Shinya Kuranaga, Tosayo Company, Ltd., and their counterclaims and third-party complaint, were all dismissed from this civil action. That left the National Offshore Tuna Fisheries Association of Japan as the sole remaining defendant in both actions.

II. The Government's Summary Judgment Motion

On March 15, 2001, the government served and on March 19, 2001, the government filed its motion for summary judgment against defendant National Offshore Tuna Fisheries Association of Japan. No opposition has been filed. Even though failure to timely oppose a motion is deemed a consent to that motion, Actouka v. Etpison, [1983] FMSC 3; 1 FSM Intrm. 275, 276 (Pon. 1983) (relying on FSM Civ. R. 6(d)), a court still needs proper grounds before it can grant the motion, Senda v. Mid-Pacific Constr. Co., [1994] FMSC 20; 6 FSM Intrm. 440, 442 (App. 1994).

A court must deny a motion for summary judgment unless it finds there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. The court must view the facts presented and inferences made in the light most favorable to the nonmoving party, and the burden of showing a lack of triable issues of fact belongs to the moving party.

Nanpei v. Kihara, [1995] FMSC 49; 7 FSM Intrm. 319, 323 (App. 1995) (citing Adams v. Etscheit, [1994] FMSC 52; 6 FSM Intrm. 580, 582 (App. 1994)).

The government bases its claim of the Association's liability on two legal theories: 1) the Association agreed to this liability as a signatory to the fishing agreement under which the Kaien Maru 23 was licensed, and 2) the Association is liable under general agency law principles. It bases its argument on FSM v. Ting Hong Oceanic Enterprises, 8 FSM Intrm. 79 (Pon. 1997) where the fishing agreement signatory was held liable for a vessel's violation of its fishing permit.

A. Association's Liability as a Fishing Agreement Signatory

The government contends that the Association is liable for the Kaien Maru 23's actions on that night because it was a signatory to the foreign fishing agreement under which that vessel was licensed. The government further contends that it must be granted summary judgment because it was granted summary judgment against the signatory in FSM v. Ting Hong Oceanic Enterprises, 8 FSM Intrm. 79 (Pon. 1997) which involved similar language in a foreign fishing agreement.

In Ting Hong, the pertinent foreign fishing agreement language stated that "[t]he Company [Ting Hong] shall ensure that its Authorized Vessels comply with the provisions of this Agreement and all applicable laws and regulations." Id. at 85, 92 (quoting Ting Hong Foreign Fishing Agreement para. 23). The Ting Hong court concluded that this language (the word "ensure") made Ting Hong liable for any of its authorized vessel's violations. Id. at 86. It further concluded that under the agreement that Ting Hong's "authorized vessels" were Ting Hong's agents for which it was liable under agency law principles. Id. at 91-92. The Ting Hong court's reasoning is tenuous, but, as will be described below, its reasoning does not apply to this case.

The Association's foreign fishing agreement is worded differently. It reads:

The Organizations, on behalf of their Members . . . shall take necessary steps to ensure that their Members shall comply with the Act, the terms of this Agreement, the laws of the Federated States of Micronesia in respect of fisheries and other related activities including customs law and immigration. Copies of all relevant laws and regulations not previously transmitted to the Organizations will be transmitted to [them]. The Members fishing within the FSM Zone shall comply with the Act, the terms of this Agreement, and the laws of the Federated States of Micronesia in respect of fisheries and other related activities including customs law and immigration.

Foreign Fishing Agreement para. 8. The other foreign fishing agreement provision that the government relies upon to hold the Association liable reads: "The Organizations shall take necessary steps to ensure that no fishing in the FSM Zone will be performed by the Members, except in accordance with permits and all the conditions and restrictions of the permits issued pursuant to the Act, regulations issued thereunder and this Agreement." Id. para. 12.

These provisions differ significantly from that in Ting Hong and therefore must be interpreted differently. The Association's liability must be based on the language in the agreement it signed, not on the language in the agreement that Ting Hong signed. Interpretations of contract terms are matters of law to be determined by the court. Pohnpei v. Ponape Constr. Co., [1996] FMSC 13; 7 FSM Intrm. 613, 621 (App. 1996); Nanpei v. Kihara, [1995] FMSC 49; 7 FSM Intrm. 319, 323 (App. 1995). In Ting Hong, Ting Hong had to "ensure that its Authorized Vessels" complied with the laws, regulations, and their permits. In this case, the organizations, of which the Association is one, must only take "necessary steps to ensure" that their members comply with the laws, regulations, and their permits.

The government has made no allegation that the Association failed to take any of the "necessary steps," whatever they may be. No evidence was introduced that the Association did not take these "necessary steps." The government apparently wants to court to infer, without the government having to allege and prove, that, because the captain of one of its members' vessels committed a violation, the Association must have failed to take these necessary steps. The government seeks to impose some sort of strict liability on the Association for the actions of its members' employees without the Association having agreed to it or without that strict liability having been explicitly spelled out in the agreement.

The fishing agreement's terms, without more, do not create liability for the signatory organizations for each and every violation of FSM fishery law or the foreign fishing agreement that their members commit. It only requires the organizations to take the steps necessary to ensure their members' compliance. It does create liability for the organizations' members who fail to comply with the FSM fishery laws, regulations, and their vessels' permits. The government is therefore not entitled to summary judgment on this theory because, as a matter of law, the foreign fishing agreement's contractual terms do not impose vicarious liability on the Association.

B. Association's Liability under an Agency Theory

The government also contends that the Association is liable under agency law principles. Generally, a principal is bound by, and liable for, the acts of its agent done with or within the actual or apparent authority from the principal and within the scope of the agent's employment. Bank of the FSM v. O'Sonis, 8 FSM Intrm. 67, 69 (Chk. 1997) (citing Black Micro Corp. v. Santos, [1995] FMSC 46; 7 FSM Intrm. 311, 315-16 (Pon. 1995)). Agency relationships are based upon one person's consent that another shall act on his behalf and be subject to his control. O'Sonis, 8 FSM Intrm. at 69.

As evidence of this alleged agency relationship, the government recites that the Association "acted for the KM23 when it signed the agreement giving the KM23 access to the FSM EEZ." Acting for another is the act of an agent. Therefore the only example of an agency relationship that the government cites is one where the Association has acted as an agent for the Kaien Maru 23's owner. Furthermore, the foreign fishing agreement itself indicates that the organizations are acting as agents. Paragraph eight of the agreement starts out: "The Organizations, on behalf of their Members." Someone acting on another's behalf is someone who is acting as an agent for that other.

The government (the third party) is thus trying to hold an agent (the Association) liable for the acts of its principal (the Tosayo Co. or the Kaien Maru 23). The government has not cited any authority, and the court is aware of none, by which an agent may be held liable to a third party for its principal's actions when they are not also the agent's own actions or when the agent has not expressly agreed to be liable for those actions. The Association is therefore not liable to the government on general agency principles for the Kaien Maru 23's actions on the night of February 18-19, 2000.

C. Summary

Accordingly, the government, as a matter of law, is not entitled to judgment on either of its legal theories. The reasoning of Ting Hong does not reach this case. The Association's contractual obligations are different, and the Kaien Maru 23's captain is not the Association's agent. To the contrary, by all indications, the Association is its members' agent. The government's summary judgment motion is therefore denied.

III. Judgment for the Defendant

The Association has neither opposed the government's summary judgment motion nor made a formal cross motion for summary judgment. But when a party's motion for summary judgment has been denied as a matter of law and it appears the nonmoving party is entitled to judgment as a matter of law, a court may grant summary judgment to the nonmoving party in the absence of a cross motion for summary judgment if the original movant has had an adequate opportunity to show that there is a genuine issue and that his nonmoving opponent is not entitled to judgment as a matter of law. Truk Continental Hotel, Inc. v. Chuuk, [1994] FMSC 35; 6 FSM Intrm. 310, 311 (Chk. 1994), rev'd on other grounds[1995] FMSC 19; , 7 FSM Intrm. 117 (App. 1995).

As mentioned above, the government is not entitled to judgment as a matter of law because the foreign fishing agreement and general agency law do not impose on the Association the vicarious liability the government seeks to impose. The government has had ample opportunity to show that there is a genuine issue of material fact. It submitted 268 pages of attachments to its summary judgment motion. No genuine issue is apparent. The Association is therefore entitled to judgment that it is not liable, as a matter of law, either contractually or under agency law for the Kaien Maru 23's actions that night. The Association is therefore granted summary judgment.

Alternatively, if the government's summary judgment motion were considered an opposition to the Association's "answer" that was either a Rule 12(b)(6) defense of failure to state a claim upon which relief may be granted or a Rule 56 summary judgment motion, the Association's "motion" would have been granted.

IV. Conclusion

The government's summary judgment is denied. The defendant is granted summary judgment and the government's complaint is thereby dismissed.

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