Walter v Chuuk [2001] FMSC 20; 10 FSM Intrm. 312 (Chk. 2001) (12 July 2001)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION

Cite as Walter v. Chuuk,
[2001] FMSC 20; 10 FSM Intrm. 312 (Chk. 2001)

BRUCE WALTER,
Plaintiff,

vs.

CHUUK STATE,
Defendant.

CIVIL ACTION NO. 1992-1023

ORDER AND NOTICE

Richard H. Benson
Associate Justice

Hearing: June 11, 2001
Decided: July 12, 2001

APPEARANCES:

For the Plaintiff:
Dana W. Smith, Esq.
3108 Century Square
1188 Bishop Street
Honolulu, Hawaii 96813

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

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HEADNOTES

Judgments ; Alter or Amend Judgment; Judgments ; Relief from Judgment
A motion that a judgment be amended to include a statement of the statutory interest and that its title be corrected to read "judgment" instead of "proposed order," is not one to amend, but rather more properly one to correct a judgment. As such Rule 60 applies, not Rule 59. Walter v. Chuuk, [2001] FMSC 20; 10 FSM Intrm. 312, 315 (Chk. 2001).

Judgments
Judgments in the Federated States of Micronesia are valid and enforceable for twenty years, and therefore generally do not need to be "revived." Walter v. Chuuk, [2001] FMSC 20; 10 FSM Intrm. 312, 315 (Chk. 2001).

Contracts ; Novation
The term "novation" is used almost exclusively in contract law and denotes the parties' substitution of a new agreement for an old one that involves either a new obligation between the same parties, or a new debtor, or a new creditor. Walter v. Chuuk, [2001] FMSC 20; 10 FSM Intrm. 312, 315 (Chk. 2001).

Judgments
A revived or renewed judgment is not a novation of contract. Walter v. Chuuk, [2001] FMSC 20; 10 FSM Intrm. 312, 315 (Chk. 2001).

Judgments
Under early common law and prior to the creation of the writ of scire facias, it was necessary to sue on the judgment in a new action, affording the defendant an opportunity of proving that he had discharged it, if he had really done so. The purpose of a writ of scire facias or of a revival of the judgment is to give a dormant judgment a new vitality so that it may be executed upon, although it is not a new action or judgment. Walter v. Chuuk, [2001] FMSC 20; 10 FSM Intrm. 312, 315-16 (Chk. 2001).

Judgments; Statutes of Limitation
An action upon a judgment must be commenced within 20 years after the cause of action accrued. Walter v. Chuuk, [2001] FMSC 20; 10 FSM Intrm. 312, 316 (Chk. 2001).

Judgments
Enforcement of a judgment may also be effected, if the court deems justice requires and so orders, by a civil action on the judgment or in any other manner known to American common law or common in courts in the United States. Walter v. Chuuk, [2001] FMSC 20; 10 FSM Intrm. 312, 316 (Chk. 2001).

Attachment and Execution; Judgments
There is no provision in FSM law that makes a judgment dormant or that extinguishes a judgment-creditor's right to execution before the twenty-year statute of limitations has run. A dormant judgment is one upon which the statute of limitations has not yet run but which, because of lapse of time during which no enforcement action has been taken, may not be enforced unless certain steps are taken by the judgment holder to revive the judgment. Walter v. Chuuk, [2001] FMSC 20; 10 FSM Intrm. 312, 316 (Chk. 2001).

Judgments
An eight-year-old judgment not being dormant in the FSM (although some other jurisdiction may consider it dormant), it cannot be revived by an FSM court. The general rule is that a judgment, to be revived, must be dormant; if a judgment is not dormant, revivor is not necessary. An FSM judgment creditor may proceed by bringing a new action on the judgment. Walter v. Chuuk, [2001] FMSC 20; 10 FSM Intrm. 312, 316 (Chk. 2001).

Debtors' and Creditors' Rights
A judgment debtor's request to the court for a hearing, pursuant to 6 F.S.M.C. 1409 to determine its ability to pay the debt and the fastest means to pay and satisfy the judgment constitutes a motion for an order in aid of judgment. Walter v. Chuuk, [2001] FMSC 20; 10 FSM Intrm. 312, 316 (Chk. 2001).

Debtors' and Creditors' Rights
Either party may apply for an order in aid of judgment. Once it has, the court must, after notice to the opposite party, hold a hearing on the question of the debtor's ability to pay and determine the fastest manner in which the debtor can reasonably pay a judgment based on the finding. Walter v. Chuuk, [2001] FMSC 20; 10 FSM Intrm. 312, 316-17 (Chk. 2001).

Attachment and Execution; Debtors' and Creditors' Rights
Although under FSM law once an application for an order in aid of judgment has been filed no writ of execution may issue except under an order in aid of judgment or by special order of the court, it is uncertain what effect, if any, this (or the Chuuk state law prohibiting attachment, execution, or garnishment of Chuuk public property) would have on courts in jurisdictions outside the Federated States of Micronesia. Walter v. Chuuk, [2001] FMSC 20; 10 FSM Intrm. 312, 317 (Chk. 2001).

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COURT'S OPINION

RICHARD H. BENSON, Associate Justice:

In June 1993, the parties in this matter agreed to an entry of judgment against the State of Chuuk in favor of Bruce Walter to be entered in the amount of $30,000.00, payable in 90 days, with costs to be borne by each party. The court approved and entered it on June 10, 1993. That judgment has never been paid, although in the last few years some small payments have been made on the interest. The court assessed penalties on the defendant Chuuk State of $100 a day from June 7, 1994 until July 8, 1994, when they were suspended. Those penalties, totaling $3,000.00 also remain due and unpaid.

I. Plaintiff's Motion

A. Background

On May 30, 2001, the plaintiff Bruce Walter filed his Motion for Amended Judgment; Novation of Judgment; Finding of Civil Contempt and for Imposition of Sanctions, Fees and Costs, and Order in Aid of Judgment. The motion asks the court to amend its original judgment of June 10, 1993 to include a statement of the statutory interest and to include sanctions, attorney's fees and costs as may be ordered by the court. (At oral argument the plaintiff also requested that the title of the June 10, 1993 "judgment" be corrected to read "judgment" instead of "proposed order.") The motion also asks that the amended judgment be a novation of judgment, that the $100 a day penalty that was suspended July 8, 1994 be reinstated, that such other attorney's fees and costs that are permitted by statute be awarded, and that the state provide an accounting of the sums previously paid to judgment creditor Bruce Walter.

Walter, who now resides in Hawaii, intends to attempt to satisfy his judgment by asserting a lien on certain property that the State of Chuuk owns in Hawaii. Walter seeks what he calls a "novation" or a "revival" of the judgment because under the laws of the State of Hawaii, Hawaiian courts will recognize and enforce foreign money judgments, HAW. REV. STAT. §§ 658C-1 e., but only only if the foreign judgment is less than six years old, id. § 657-1 the judgment in this this case is eight years old. Additionally, Walter doubts the enforcety in another court of a ju a judgment miscaptioned "proposed order."

The state filed its opposition on June 8, 2001. The state opposed on the grounds that judgments cannot be paid without a legislative appropriation and that under Civil Procedure Rule 59(e) motions to amend judgments must be brought within 10 days of entry of judgment. The state further contended that the prerequisites for a novation were not satisfied.

The motion came on regularly for oral argument by counsel on June 11, 2001. On June 19, 2001, Walter, pursuant to leave of court confirmed by order of June 20, 2001, filed a supplemental memorandum and authority for his request. On June 22, 2001, the state filed its supplemental memorandum to support its opposition.

B. Analysis

Walter asks that the judgment be amended to include a statement of the statutory interest and that the title of the June 10, 1993 "judgment" be corrected to read "judgment" instead of "proposed order." The state opposes on the ground that under Civil Procedure Rule 59(e) motions to amend judgments must be brought within 10 days of entry of judgment. The nature of Walter's request, however, is not one to amend, but rather more properly one to correct a judgment. As such Rule 60 applies, not Rule 59.

Pursuant to the court's power under Civil Procedure Rule 60(a), the clerk shall enter a corrected judgment, effective today, that is entitled "Judgment" and that states the statutory, 6 F.S.M.C. 1401, interest rate of nine per cent per annum. The judgment will also state that the statutory interest started accruing on September 8, 1993, 90 days after the parties stipulated to the judgment and by which time the $30,000.00 was to have been paid. (The agreement seems to have contemplated that there would be no interest paid on the $30,000 if it was paid within the 90 days.)

Judgments in the Federated States of Micronesia are valid and enforceable for twenty years, 6 F.S.M.C. 801, and therefore generally do not need to be "revived." Walter contends that revival to execute on a judgment is proper as an order in aid of judgment because it would aid his efforts to collect on his judgment. The state opposes on the grounds that it has acknowledged its obligation under the judgment and that it has tried its best within its means to pay the judgment, and will continue to do so, but that it has financial difficulties. It further contends that Walter has not satisfied the requirements for a novation.

The state's contentions that Walter has not met the prerequisites for a novation are a recitation of the elements for the novation of a contract. The term "novation" is used almost exclusively in contract law and denotes the parties' substitution of a new agreement for an old one that involves either a new obligation between the same parties, or a new debtor, or a new creditor. BLACK'S LAW DICTIONARY 1091 (7th ed. 1999) (also called substituted agreement). Walter does not contend that there is a substituted agreement or that Chuuk has agreed to his present proposal. The elements for the novation of a contract just do not apply to this motion because what Walter seeks "novation" of is not the contract between him and the state but rather the judgment that the court approved and entered based upon Walter's acceptance of Chuuk's offer of judgment. The term revival or renewed judgment would more accurately describe what Walter seeks. The use of the term "novation" merely confuses the issue because Walter seeks a remedy not under the law of contracts, but under the law of judgments, and "novation" is a contract law term.

Walter contends that the relief he seeks was formerly granted by the common law writ of scire facias, now generally replaced in the United States by statutes permitting revival of judgments. The state contends that the common law writ of scire facias is not a practice or procedure used in Chuuk and that it has been abolished in many jurisdictions. The U.S. federal, and many state, civil procedure rules do abolish the writ. See, e.g., U.S. FED. R. CIV. P. 81(b). The FSM did not adopt an analogous rule. See FSM Civ. R. 81 ("Vacant").

In U.S. federal courts (and many state courts) the relief formerly obtained by a writ of scire facias is now obtained by motion. U.S. FED. R. CIV. P. 81(b) ("Relief heretofore available by . . . scire facias may be obt bned by appropriate action or by appropriate motion . . .&."); . JUR. 2UR. 2D JuJudgments § rev. 994) (revival oewal ofal of dormant judgments). But "under early common law and pand prior rior to the [creation of the writ of scireas], s necy to suto sue on e on the judgment in a new action, affording the defendant an opportunity nity of proving that he had discharged it, if he had really done so." Continental Nat'l Bank & Trust Co. v. John H. Seely & Sons, 77 P.2d 355, 358 (Utah 1938). The purpose of a writ of scire facias or of a revival of the judgment is to give a dormant judgment a new vitality so that it may be executed upon, although it is not a new action or judgment. State ex rel. Silverman v. Kirkwood, 239 S.W.2d 332, 335 (Mo. 1951); Strunk v. Commercial Plastics Co., 800 S.W.2d 779, 782 (Mo. Ct. App. 1990); John H. Seely & Sons, 77 P.2d at 334-35; 46 AM. JUR. 2D Judgments § 420 (rev. ed. 1994).

The wording of the FSM statute of limitation would appear to indicate that suing on the judgment in a new action is the proper procedure to be followed heThe following actions shall be commenced only within 20 yea0 years after the cause of action accrues: (a) actions upon a judgment." 6 F.S.M.C. 802(1). However, the law also provides that "[e]nforcement of judgment may also be effected, if the Trial Division . . . deems justice requires a d so orders by . . . a civtion e jthe judgmentgment, or in any other manner known to American common law or common in courts in the United States." 6 F.S.M.C. 1404. This statutory provision, in conjunction with 4 F.S.M17 (eivision of the FShe FSM SupM Supreme Court "shall have power to issue all writs and other process . . . and do all acts . .;#160 may be necessary fory for the due administration of justice . .;. ."), has been inte interpreted to allow turt tue wrf garnishment in the absence of a specific statutory authorization to d to do so o so becaubecause garnishment was certainly "'commonourtshe United States'ates' within the meaning of the FSM Code."ode." Bank of Guam v. Elwise, [1988] FMSC 2; 4 FSM Intrm. 150, 152 (Pon. 1988).

The court concludes that both 6 F.S.M.C. 1404 and 6 F.S.M.C. 802(1), which both refer to civil actions on a judgment, indicate a legislative intent that the method to be used to "revive" a judgment in the Federated States of Micronesia was to be by a new action upon the judgment. Furthermore, the court is aware of no provision in FSM law that makes a judgment dormant or that extinguishes a judgment-creditor's right to execution before the twenty-year statute of limitations has run. "A dormant judgment is one upon which the statute of limitations has not yet run but which, because of lapse of time during which no enforcement action has been taken, may not be enforced unless certain steps are taken by the judgment holder to revive the judgment." 46 AM. JUR. 2D Judgments § 415, at 711 (rev. ed. 19The. The judgment not being dormant in the FSM (although some other jurisdiction may consider it dormant), it cannot be revived by an FSM court. "The general rule is that a judgment, to be rev must be dormant; if a judg judgment is not dormant, revivor is not necessary." Id. § 422, at 716. Walter, if he is so advised, may proceed by bringing a new action on the judgment.

The request to reinstate the $100 per day penalty nied (it may be renewed if the circumstances so warrant), but the $3,000 penalty already asdy assessed remains due and payable and may be collected along with the judgment. It shall be added to the corrected judgment.

Walter also asks the court to award attorney fees and costs that are allowed by law. No authority was given or statute identified (and no amounts were provided) for attorney's fees and costs to be awarded. That request is therefore denied.

The state not opposing and good cause shown, the state is hereby ordered to provide Walter, within fifteen days of entry of this order, an accounting of the sums paid on the June 10, 1993 judgment, and the dates they were paid.

II. State's Request for Hearing

The state has asked the court for a hearing, pursuant to 6 F.S.M.C. 1409 to determine its ability to pay the debt and the fastest means to pay and satisfy the judgment. This constitutes a motion for an order in aid of judgment. Under 6 F.S.M.C. 1409 either party may apply for an order in aid of judgment. Once it has, the court must, after notice to the opposite party, "hold a hearing on the question of the debtor's ability to pay and determine the fastest manner in which the debtor can reasonably pay a judgment based on the finding." 6 F.S.M.C. 1409. Although under FSM law once an application for an order in aid of judgment has been filed no writ of execution may issue except under an order in aid of judgment or by special order of the court, 6 F.S.M.C. 1413(1), it is uncertain what effect, if any, this (or the Chuuk state law prohibiting attachment, execution, or garnishment of Chuuk public property, Chk. S.L. No. 190-08, § 4) would have on courts in jurisdictions outside the Federated States of Micronesia. Notice is hereby given that a hearing on the state's motion for an order in aid of judgment is hereby sled for July 23, 2001, at 9:00 a.m. Plaintiff's counsel mayl may appear by telephone, if he initiates the call.

III. Conclusion

The judgment will be corrected so that it is entitled "Judgment" and will include the statutory interest rate of nine per cent and will include the $3,000 penalty imposed in 1994. The plaintiff's motion to revive or renew the June 10, 1993 judgment is denied. The plaintiff's motion to reimpose the penalty and to assess attorney's fees and costs is denied. The state is ordered to provide, within fifteen days of entry of this order, an accounting of the sums paid on the June 10, 1993 judgment, and the dates they were paid. The state's application for an order in aid of judgment will be heard July 23, 2001, at 9:00 a.m.

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