Reg v Falan [2003] FMSC 28; 11 FSM Intrm. 393 (Yap 2003) (20 February 2003)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite as Reg v. Falan, [2003] FMSC 28; 11 FSM Intrm. 393 (Yap 2003)

[2003] FMSC 28; [11 FSM Intrm. 393]

FRANCIS REG,
Plaintiff,

vs.

HENRY FALAN, individually and in his capacity
as the Director of Education, Yap State,
Defendant.

CIVIL ACTION NO. 2002-3002

ORDER DENYING MOTION TO DISMISS

Andon L. Amaraich
Chief Justice

Decided: February 20, 2003

APPEARANCES:

For the Plaintiff:
David W. Kirschenheiter, Esq.
Micronesian Legal Services Corporation
P.O. Box 57
Koror, Palau PW 96940

For the Defendant:
Joseph V. Sinisi, Esq.
Assistant Attorney General
Office of the Yap Attorney General
P.O. Box 435
Colonia, Yap FM 96943

* * * *

HEADNOTES

Jurisdiction - National Law
When the plaintiff has alleged that his termination from the Head Start Program violated his rights secured under the FSM Constitution, the FSM Supreme Court has concurrent original jurisdiction over the matter. Reg v. Falan, [2003] FMSC 28; 11 FSM Intrm. 393, 399 (Yap 2003).

Civil Procedure - Service
Service of a summons and complaint shall be made by any person who is not a party and is not less than 18 years of age. Service shall be made upon an individual by delivering a copy of the summons and complaint to the individual or by leaving copies thereof at the individual’s usual place of business with some person employed therein of suitable age and discretion then employed therein. Reg v. Falan, [2003] FMSC 28; 11 FSM Intrm. 393, 399 (Yap 2003).

[11 FSM Intrm. 394]

Civil Procedure - Service
The purpose of the rules addressing process and service of process in civil cases is to assure that a defendant receives sufficient notice of all causes of action that are filed against him and thus has a fair and adequate opportunity to defend. Reg v. Falan, [2003] FMSC 28; 11 FSM Intrm. 393, 399 (Yap 2003).

Civil Procedure - Dismissal; Civil Procedure - Service
When a plaintiff fails to properly serve a defendant, the court does not have jurisdiction over that defendant, and the case may not proceed and can be dismissed without prejudice, but because a dismissal under Rule 12(b)(5), unlike most Rule 12(b) dismissals, is without prejudice and with leave to renew, courts will often quash service instead of dismissing the action. That way only the service need be repeated. Reg v. Falan, [2003] FMSC 28; 11 FSM Intrm. 393, 399 (Yap 2003).

Civil Procedure - Dismissal; Civil Procedure - Service
When a defendant has received sufficient notice of all causes of action and had a fair and adequate opportunity to defend, and when the plaintiff later properly served defendant with a copy of the summons and complaint, the court will not dismiss the case under Rule 12(b)(5). Reg v. Falan, [2003] FMSC 28; 11 FSM Intrm. 393, 399 (Yap 2003).

Civil Procedure - Dismissal
On a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, the court must accept plaintiff’s allegations to be true. Reg v. Falan, [2003] FMSC 28; 11 FSM Intrm. 393, 399 (Yap 2003).

Civil Procedure - Dismissal
A complaint will not be dismissed for failure to state a claim upon which relief may be granted when, if the plaintiff is able to prove his allegations that his termination was wrongful and violated the FSM Constitution since he had no opportunity for a hearing and was not provided sufficient notice of his rights at the time of the termination, the plaintiff would be able to establish a violation of his rights secured under the FSM Constitution. Reg v. Falan, [2003] FMSC 28; 11 FSM Intrm. 393, 400 (Yap 2003).

* * * *

COURT'S OPINION

ANDON L. AMARAICH, Chief Justice:

On July 18, 2002, defendant filed a motion to dismiss plaintiff’s complaint. On September 13, 2002, plaintiff filed an opposition to defendant’s motion to dismiss. For the reasons stated herein, the court will deny defendant’s motion to dismiss.

Background

1. Plaintiff’s Complaint

On June 28, 2002, plaintiff filed a complaint for declaratory judgment and damages. Plaintiff alleges that defendant Falan is the Director of Education for the State of Yap and the grantee for the Yap State Head Start Program (HSP).

Plaintiff further alleges that on September 20, 1993, he was employed as the assistant director for the HSP. Shortly after defendant took over as grantee of HSP, in or around July, 2000, plaintiff and the then director of HSP were placed on administrative leave for the supposed purpose of conducting

[11 FSM Intrm. 395]

an administrative audit of the program. Plaintiff was maintained on administrative leave until the defendant illegally and wrongfully terminated him on April 27, 2001.

Plaintiff claims that the stated reason he was terminated was that he was convicted of a violent felony during the time he was on administrative leave. Plaintiff believes the true reason defendant terminated him was because of a dispute between plaintiff and defendant involving certain lands in the village of Amin, Maap municipality. Prior to plaintiff’s conviction, defendant had expressed his desire not to reinstate plaintiff to his position because he claimed to be unable to work with the plaintiff.

Plaintiff claims defendant failed to follow the HSP personnel policy manual in terminating plaintiff. The HSP is governed by the U.S. Code of Federal Regulations, and is thus subject to and governed by the United States laws and Constitution. The US Constitution is similar to the FSM Constitution with respect to a person’s rights to due process of law. Article IV, section 3 of the FSM Constitution states that no person shall be deprived of life, liberty, or property, without due process of law.

In terminating plaintiff’s employment with the HSP without proper notice and an opportunity to be heard, defendant violated plaintiff’s right to due process of law. Plaintiff performed all duties required of him as the assistant director for the HSP. Plaintiff has held himself out as ready, willing, and able to carry out his duties with the HSP. Plaintiff had a reasonable expectation of continued employment with the HSP and, but for defendant’s conduct in wrongfully terminating plaintiff’s employment, plaintiff would have continued to be employed by HSP.

Plaintiff claims an actual controversy has arisen and seeks a declaration as to the rights, duties, status, and other legal relations between plaintiff and defendant. Plaintiff claims he has suffered economic losses resulting from the termination of his employment from HSP.

2. Answer of Defendant

On July 18, 2002, defendant filed an answer to plaintiff’s complaint.^[1] Defendant first contends that jurisdiction in the FSM Supreme Court is improper since plaintiff is an FSM citizen and a resident of Yap State, while defendant is also an FSM citizen and resident of Yap State. Therefore, there is no diversity of citizenship.

Defendant states plaintiff was placed on administrative leave so an audit could be conducted to determine if any financial improprieties had occurred under plaintiff and the director’s tenure. While on administrative leave, plaintiff received his full pay, benefits, and accrued leave. When plaintiff was terminated he was paid $2,468.50 for all accrued but unused leave.

Defendant denies that he failed to follow the adverse action policy of the HSP Personal Policy Manual (the "manual") in terminating plaintiff. Defendant attaches a copy of the manual as Exhibit B to his answer. Defendant asserts that subsection 3 of section A of the manual lists major offenses which will result in immediate termination. Subsection 3(d) states that conviction of a felony described in Section III(6) is the basis for immediate termination. Section III(6) lists the crimes of embezzlement, violent felonies and child abuse/ molestation convictions as records which bar employment at the HSP.

[11 FSM Intrm. 396]

Defendant states that plaintiff was convicted of Prohibition of Weapons, 11 Y.S.C. § 904, which is considered a violent felony in the State of Yap. Plaintiff plead guilty to illegally possessing and firing a .357 magnum handgun several times in the village of Amin, Maap. By the dictates of the manual and the funding requirements of the HSP, plaintiff was no longer eligible to be employed at the HSP. If plaintiff were not terminated after his violent felony conviction, US funding of the HSP could be canceled for failure to enforce employment restrictions.

In response to plaintiff’s claim he was not given notice nor an opportunity to be heard prior to his termination, defendant states that on April 4, 2000, the HSP Council had a long meeting with plaintiff discussing allegations of his unsatisfactory performance as Assistant Director. After plaintiff was charged criminally with what amounted to a violent felony, the HSP interim director Michael Caldwell met with plaintiff explaining the concerns of the criminal charges and the possible adverse effect is could have on plaintiff’s continued employment. Plaintiff was given the opportunity to resign to avoid possible termination, but chose not to resign.

3. Motion to Dismiss

a. Improper Jurisdiction

On July 18, 2002, defendant filed a motion to dismiss plaintiff’s complaint.^[2] Defendant claims that jurisdiction in the FSM Supreme Court is improper. Defendant argues that the instant case involves a private citizen of the FSM and resident of Yap State bringing an action against another citizen of the FSM and resident of Yap State. Defendant claims there is no diversity of citizenship and the FSM National government is not a party.

Plaintiff asserts that his employment at the HSP was a property right protected by Article IV, section 3 of the FSM Constitution. Defendant notes that the case of Suldan v. FSM, [1983] FMSC 14; 1 FSM Intrm. 339 (Pon. 1983) held that government employment may be a property right and protected by Article IV, section 3 of the FSM Constitution. However, defendant argues that until it has been determined whether plaintiff’s employment was a property right, there is no constitutional issue and the FSM Supreme Court does not have jurisdiction.

b. Improper Service

Defendant next argues that service was improper. Plaintiff sought to have defendant personally served by a young boy. FSM Civil Rule 4(c)(1) states that service of the summons and complaint shall be made by any person who is not a party and is not less than 18 years of age. Defendant refused this service and apparently the boy returned the summons and complaint to plaintiff. Later, plaintiff attempted service of defendant through a secretary/receptionist at defendant’s place of work.

While FSM Civil Rule 4(d)(1) allows service to be made at the usual place of abode or business with some person of suitable age and discretion employed therein, defendant argues that the secretary lacked the discretion to accept service for the director of her employing department. Defendant argues that he was never served properly and the complaint should be dismissed.

c. Failure to State a Claim Upon Which Relief Can be Granted

Plaintiff claims that his due process rights were violated because he had neither notice of, nor

[11FSM Intrm. 397]

an opportunity to be heard regarding, his impending termination. Defendant argues this claim is without merit since plaintiff was terminated for cause – namely, engaging in criminal conduct prohibited by HSP regulations. Further, plaintiff was paid all of his salary and accrued benefits until the time of his termination.

Following the proper procedures, the HSP Policy Council voted to approve plaintiff’s termination. After plaintiff was charged with the violent felony in July, 2000, the interim director of HSP, Mr. Michael Caldwell, met with plaintiff and gave him notice of the gravity of the charge and the potential adverse affect the charge could have on his continued employment. Plaintiff was given the opportunity to resign to avoid possible termination, but plaintiff declined the offer. Plaintiff was not terminated until he plead guilty to the felony charge and the judicial order was entered.

Defendant argues plaintiff had both ample notice and the opportunity to be heard prior to his ultimate termination. Defendant argues there is no genuine issue of material fact preventing the court from dismissing this action.

4. Plaintiff’s Opposition to Motion to Dismiss

On September 13, 2002, a response in opposition to motion to dismiss was filed.^[3] Plaintiff states that it is not clear, but it appears that defendant’s motion was filed under Rule 12(b) of the FSM Rules of Civil Procedure. Plaintiff first argues that such a motion should have been made before filing the answer. Plaintiff believes defendant has waived all but the 12(b)(6) arguments.^[4]

a. FSM Supreme Court Does Have Jurisdiction

Plaintiff argues that since his employment was public employment, he had a reasonable expectation of keeping that job, and that this was a protected interest under the FSM Constitution and that therefore this court can hear this matter. Suldan v. FSM, [1983] FMSC 14; 1 FSM Intrm. 339 (1983).

For jurisdictional purposes, plaintiff has alleged that his employment is protected under the FSM Constitution, that the termination was wrongful, that the felony occurred while plaintiff was on leave (implying defendant had no right to terminate him for it), and that plaintiff was denied due process. Plaintiff posits these allegations are sufficient for FSM Supreme Court jurisdiction. Since plaintiff has a claim concerning his rights secured under the FSM Constitution, clearly the FSM Supreme Court would have jurisdiction.

Article XI, section 6(b) of the FSM Constitution states that this court has concurrent original jurisdiction in cases arising under the Constitution. In the case of Suldan v. FSM, [1983] FMSC 14; 1 FSM Intrm. 339, 352 (Pon. 1983), the court held that the right to employment is property protected under the Constitution if there is a claim of entitlement based upon governmental assurance of continual employment or dismissal for only specified reasons. Plaintiff argues that if his employment meets this protected property test, then the Constitution requires "procedural due process as a condition to its termination." 1 FSM Intrm. at 352.

[11 FSM Intrm. 398]

Plaintiff argues that defendant’s statement that plaintiff’s employment "may" be protected but that this court lacks jurisdiction is inconsistent. For defendant to argue that this court lacks jurisdiction, he must show that plaintiff’s employment is not a protected property right. Since defendant has failed to do so, this court clearly has jurisdiction in this matter.

b. Service Was Sufficient

Plaintiff states that defendant was properly served when defendant’s secretary was given a copy of the summons and complaint. Rule 4(d)(1) of the FSM Rules of Civil Procedure allows a party to be served at a place of business on a person of suitable age and discretion employed there. Plaintiff notes that the term "discretion" is not defined by the court rule. Plaintiff discusses various American authorities wherein children of 14, 15 or 16 years old were considered of suitable age. Plaintiff claims that the American authorities place the burden on the party contesting the service to show that the service was improper.

Plaintiff argues that the case of Berman v. Santos, [1994] FMSC 31; 6 FSM Intrm. 532 (Pon. 1994) held that the purpose of service is to provide a defendant with sufficient notice of the causes of action against him and give him a fair opportunity to defend them. Plaintiff also states that, even though defendant failed to point it out, technically service was improper because plaintiff himself served the summons and complaint, contrary to the rules. Plaintiff argues this still should be insufficient to dismiss the case since defendant has waived his right to contest service by filing an answer in response to the complaint (instead of a motion to dismiss), and defendant was later properly served.

c. Plaintiff Did Not Receive Proper Notice Nor a Proper Hearing

Plaintiff notes that defendant, in arguing that plaintiff did receive proper notice and an opportunity to be heard prior to his termination, submitted an affidavit in support of his arguments. Defendant also submitted plaintiff’s judgment of conviction and the HSP personnel policy manual as exhibits to his answer.

Plaintiff states that the court could consider defendant’s motion, which brings in evidence outside of the pleadings, as a motion for judgment on the pleadings (or summary judgment under FSM Civil Rule 56; see below). Whether the court considers defendant’s motion to be a motion to dismiss (for failure to state a claim upon which relief may be granted) or a motion for judgment on the pleadings, plaintiff states the standard under which both types of motion are reviewed are the same: a court must presume the non-moving party’s factual allegations to be true and view the inferences drawn therefrom in the flight most favorable to the non-moving party.^[5] Plaintiff argues that under either standard, the court should presume that plaintiff’s allegations are true. In this case, plaintiff has alleged that he did not receive an opportunity to have a hearing and was not provided sufficient notice of his rights at the time of his termination.

Plaintiff also argues that if the court decides to consider the additional evidence submitted by defendant (the judgment of conviction against plaintiff and the Head Start personnel policy manual), then it must review the motion under the summary judgment standard. FSM Civil Rule 12(c) provides that if, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and

[11 FSM Intrm. 399]

not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.^[6]

Analysis

1. Jurisdiction

Article XI, Section 6(b) of the FSM Constitution provides that the national courts have concurrent original jurisdiction in cases arising under this Constitution and under national law. As plaintiff has alleged that his termination from the Head Start Program violated his rights secured under the FSM Constitution, the court finds that it has concurrent original jurisdiction over this matter.

2. Improper Service

Rule 4(c)(1) of the FSM Rules of Civil Procedure provides that service of a summons and complaint shall be made by any person who is not a party and is not less than 18 years of age. FSM Civil Rule 4(d)(1) provides, in pertinent part, that service shall be made upon an individual by delivering a copy of the summons and complaint to the individual or by leaving copies thereof at the individual’s usual place of business with some person employed therein of suitable age and discretion then employed therein.

In this case, plaintiff himself delivered copies to a secretary/receptionist at defendant’s place of work. The court believes that a secretary or a receptionist, employed at defendant’s place of work, is a person of suitable age and discretion to accept service on behalf of defendant. The problem here is that plaintiff personally delivered the copies of the summons and complaint. This is not permitted by FSM Civil Rule 4(c). However, plaintiff properly re-served defendant (by someone not a party to the action) with a copy of the summons and complaint on September 13, 2002.

It has been held that the purpose of the rules addressing process and service of process in civil cases is to assure that a defendant receives sufficient notice of all causes of action that are filed against him and thus has a fair and adequate opportunity to defend. Where a plaintiff fails to properly serve a defendant, the court does not have jurisdiction over that defendant, and the case may not proceed, but will be dismissed without prejudice. Berman v. Santos, [1994] FMSC 31; 6 FSM Intrm. 532, 534 (Pon. 1994). However, it has also been held that because a dismissal under Rule 12(b)(5), unlike most Rule 12(b) dismissals, is without prejudice and with leave to renew, courts will often quash service instead of dismissing the action. That way only the service need be repeated. Dorval Tankship Pty, Ltd. v. Department of Finance, [1997] FMSC 24; 8 FSM Intrm. 111, 115 (Chk. 1997).

This court is persuaded by the reasoning in the Dorval Tankship case. This court believes it is safe to conclude that since defendant has answered plaintiff’s complaint and has filed a motion to dismiss, defendant has received sufficient notice of all causes of action that are filed against him and had a fair and adequate opportunity to defend. Since defendant received sufficient notice of all causes of action and had a fair and adequate opportunity to defend, and since plaintiff later properly served defendant with a copy of the summons and complaint, the court will not dismiss the case pursuant to Rule 12(b)(5).

[2003] FMSC 29; [11 FSM Intrm. 400]

3. Failure to State a Claim Upon Which Relief Can Be Granted

As stated above, on a motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6), the court must accept plaintiff’s allegations to be true. In this case, plaintiff has alleged that his termination was wrongful and in violation of the FSM Constitution since he did not receive an opportunity to have a hearing and was not provided sufficient notice of his rights at the time of the termination. If plaintiff is able to prove these allegations, he would be able to establish a violation of his rights secured under the FSM Constitution. Therefore, the court believes that defendant’s motion to dismiss, on the grounds that plaintiff fails to state a claim upon which relief may be granted, should be denied.

Conclusion

For the reasons stated herein, the court HEREBY DENIES defendant’s motion to dismiss. Additionally, the court will schedule a status conference in this matter to determine the parties’ readiness to proceed to trial.

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^[1] Defendant’s answer does not truly comply with FSM Civil Rule 8(b), which requires a party to state in short and plain terms the party’s defenses to each claim asserted and shall admit or deny the averments upon which the adverse party (plaintiff) relies. Defendant’s answer read more like a motion to dismiss for failure to state a claim upon which relief can be granted or a motion for summary judgment.

^[2] Defendant’s motion to dismiss was filed the same day defendant filed his answer to the complaint.

^[3] The brief was filed by David J. Kirschenheiter of Micronesian Legal Service Corporation. On September 10, 2002, Mr. Kirschenheiter filed an ex parte motion to appear on behalf of plaintiff pro hac vice. On October 9, 2002, the court entered an order granting Mr. Kirschenheiter’s motion to appear pro hac vice.

^[4] As the motion to dismiss was filed the same day defendant filed an answer to the complaint, the court disagrees with this assertion.

^[5] For the standard under which a court reviews a motion to dismiss (for failure to state a claim upon which relief can be granted pursuant to FSM Civil Rule 12(b)(6)), see FSM Civ. R. 12(b)(6); Pohnpei v. M/V Miyo Maru No. 11[1998] FMSC 10; , 8 FSM Intrm. 281 (Pon. 1998); Latte Motors, Inc. v. Hainrick, [1995] FMSC 31; 7 FSM Intrm. 190, 192 (Pon. 1995). For a motion for judgment on the pleadings, see Semwen v. Seaward Holdings, Micronesia, [1995] FMSC 17; 7 FSM Intrm. 111 (Chk. 1995).

^[6] The court is not considering the present motion as one for summary judgment.