Segal v National Fisheries Corporation [2003] FMSC 6; 11 FSM Intrm. 340 (Kos. 2003) (29 January 2003)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION

Cite as Segal v. National Fisheries Corp.
[2003] FMSC 6; 11 FSM Intrm. 340 (Kos. 2003)

[2003] FMSC 6; [11 FSM Intrm. 340]

CANSTON SEGAL, MORSON WAGUK,
ANDRE WAGUK, and STEVE WAGUK,
Plaintiffs,

vs.

NATIONAL FISHERIES CORPORATION,
Defendant.

CIVIL ACTION NO. 2002-2003

ORDER AND MEMORANDUM

Martin Yinug
Associate Justice

Decided: January 29, 2003

APPEARANCES:

For the Plaintiffs: Canny Palsis, Esq.
Micronesian Legal Services Corporation
P.O. Box 38
Lelu, Kosrae FM 96944

[11 FSM Intrm. 341]

For the Defendant: Wesley Simina, Esq.
P.O. Box 94
Weno, Chuuk FM 96942

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HEADNOTES

Civil Procedure - Dismissal; Civil Procedure - Pleadings; Statutes of Limitation
A statute of limitations defense is not one of the enumerated defenses that may be brought by motion under Rule 12(b), but rather is one of the specific defenses named in Rule 8(c) where a party must set forth affirmatively in the answer, the statute of limitations and any other matter constituting an avoidance or affirmative defense. Segal v. National Fisheries Corp., [2003] FMSC 6; 11 FSM Intrm. 340, 342 (Kos. 2003).

Statutes of Limitation
The statute of limitations begins to run from the time that the cause of action accrues, which is to say from the time that a plaintiff first could have initiated a lawsuit on the cause of action alleged. Segal v. National Fisheries Corp., [2003] FMSC 6; 11 FSM Intrm. 340, 342 (Kos. 2003).

Contracts - Installment Contracts; Statutes of Limitation
In an installment contract setting, the statute of limitations begins to run from the time that each installment is due. Segal v. National Fisheries Corp., [2003] FMSC 6; 11 FSM Intrm. 340, 342 (Kos. 2003).

Employer - Employee; Statutes of Limitation
A cause of action to collect salary or wages accrues when an employee has a right to collect the money allegedly owed to him. Thus the statute of limitations began to run from the time that each plaintiff’s pay for any specific pay period was due. Segal v. National Fisheries Corp., [2003] FMSC 6; 11 FSM Intrm. 340, 342 (Kos. 2003).

Statutes of Limitation
When, if the plaintiffs’ March, 1996 termination of employment was permitted by the terms of their respective contracts, then no wage claims accrued after their; if the terminations violated the contracts, then wage claims would have continued to accrue from then until the contracts ended by their terms on July 5, 1996, but any wage claims that had accrued - i.e., claims for wages that had become due and payable - before the July 4, 1996 complaint was filed, are time barred. Segal v. National Fisheries Corp., [2003] FMSC 6; 11 FSM Intrm. 340, 342-43 (Kos. 2003).

Statutes of Limitation
When claims for food, lodging, and transportation costs could have been first sued upon as of March, 1996, the six year limitations period on those claims expired before the July 4, 2002 complaint was filed. Segal v. National Fisheries Corp., [2003] FMSC 6; 11 FSM Intrm. 340, 343 (Kos. 2003).

Statutes of Limitation
That alleged contracts may have extended from June 5, 1995, to July 5, 1996, does not permit the plaintiffs to pursue all of their alleged claims in a complaint filed on July 4, 2002. The relevant inquiry is when the alleged contract breaches occurred and the consequent causes of action accrued, not when the alleged contracts expired. When all of the claims except those for wages first payable on or after July 4, 1996, accrued more than six years from the filing of the complaint, the complaint will be dismissed, but without prejudice to the filing of an amended complaint for any wage claims that accrued on or after July 4, 1996. Under Civil Rule 15(c), the filing of any such amended complaint will

[11 FSM Intrm. 342]

relate back to July 4, 2002, the original complaint’s filing date. Segal v. National Fisheries Corp., [2003] FMSC 6; 11 FSM Intrm. 340, 343 (Kos. 2003).

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COURT’S OPINION

MARTIN YINUG, Associate Justice:

The defendant National Fisheries Corporation (NFC) has moved to dismiss the complaint under Rule 12(b)(1) and (6) of the FSM Rules of Civil Procedure on the basis that the plaintiffs’ claims are barred by the applicable statute of limitations. A statute of limitations defense is not one of the enumerated defenses that may be brought by motion under Rule 12(b), but rather is one of the specific defenses named in Rule 8(c): "in pleading to a preceding pleading [i.e., in the answer], a party shall set forth affirmatively . . . statute of limons i #160;. . and any other matter ctuttituting an avoidance or affirmative defense." The court will deem the statute of limitations defense to have pres unde corrule, and in light of the disp dispositiosition of NFC’s motion will not reqt require uire the defendant to file an answer to the complaint. As provided further below, NFC will file an answer to the amended complaint, if any is filed, within 20 days from service of the amended complaint.

The complaint alleges that NFC hired plaintiff Canston Segal (Segal) under a one year written employment contract that started on June 5, 1995, and ended on July 5, 1996. Segal was hired as an engineer, while the remaining plaintiffs, who were apparently hired under oral contracts of employment, were hired as seamen. All plaintiffs were allegedly to be paid bi-weekly. The complaint further alleges that the plaintiffs were paid at the agreed upon rates until January, 1996, when all of the plaintiffs’ salaries were unilaterally reduced by fifty percent. Plaintiffs further allege that during March of 1996, the plaintiffs were terminated from their employment and left stranded in Pohnpei without food and lodging. On March 20, 1996, the plaintiffs allege that they returned to Kosrae. Plaintiffs seek compensation for wages, lodging and food costs in Pohnpei, and transportation costs incurred in returning to Kosrae.

NFC asserts a statute of limitations defense. The parties agree that pursuant to Kos. S.C. 6.2506, the applicable limitations period for a contract action is six years. NFC urges that the alleged breaches of contract took place in January, March, and April of 1996, which is more than six years before the filing of the complaint on July 4, 2002. Thus, NFC concludes that all of the plaintiffs’ claims are time barred.

In response, the plaintiffs contend that since the alleged contracts with NFC expired on July 5, 1996, the plaintiffs could sue on July 4, 2002, and still be within the limitations period for all of their claims.

The statute of limitations begins to run from the time that the cause of action accrues, which is to say from the time that a plaintiff first could have initiated a lawsuit on the cause of action alleged. Waguk v. Kosrae Island Credit Union, 6 FSM Intrm. 14, 17 (App. 1993). In an installment contract setting, the statute of limitations begins to run from the time that each installment is due. Id. It follows that a cause of action to collect salary or wages accrues when an employee has a right to collect the money allegedly owed to him. Johnson v. Allied Stores Corp., 679 P.2d 640, 644 (Idaho 1984). Thus in this case the statute of limitations began to run from the time that each plaintiff’s pay for any specific pay period was due.

The complaint does not specify whether the termination of the plaintiffs’ employment in March

[2003] FMSC 7; [11 FSM Intrm. 343]

of 1996 was permitted under the terms of their respective contracts. If the terminations were permissible, then no wage claims accrued after the terminations in March of 1996; if the terminations violated the contracts, then wage claims would have continued to accrue from the time of the March terminations until the contracts ended by their terms on July 5, 1996. In any event, any wage claims that had accrued - i.e., claims for wages that had become due and payable - before July 4, 1996, are time barred. Only claims for wages that became due and payable on or after July 4, 1996, may be pursued in the complaint filed in this action on July 4, 2002. The claims for food, lodging, and transportation costs could have been first sued upon as of March, 1996, and as a result the six year limitations period on those claims has expired.

In sum, the fact that the alleged contracts may have extended from June 5, 1995, to July 5, 1996, does not permit the plaintiffs to pursue all of their alleged claims in a complaint filed on July 4, 2002. The relevant inquiry is when the alleged contract breaches occurred and the consequent causes of action accrued, not when the alleged contracts expired. In this case, all of the claims except those for wages first payable on or after July 4, 1996, accrued more than six years from the filing of the complaint.

Accordingly, the complaint is dismissed, but without prejudice to the filing of an amended complaint for any wage claims that accrued on or after July 4, 1996. Under Rule 15(c) of the FSM Rules of Civil Procedure, the filing of any such amended complaint will relate back to July 4, 2002, which is the filing date of the original complaint.

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