Barrett v Chuuk [2004] FMSC 42; 12 FSM Intrm. 558 (Chk. 2004) (20 July 2004)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite as Barret v Chuuk, [2004] FMSC 42; 12 FSM Intrm 558 (Chk. 2004)

DANNY P. BARRETT
Plaintiff

vs.

STATE OF CHUUK,
Defendant.

CIVIL ACTION NO 1993- 1009

ORDER AND MEMORANDUM

Martin G. Yinug
Associate Justice

Hearing: June 2, 2004
Decided: July 20, 2004

APPEARANCES:

For the Plaintiff:
R. Barrie Michelsen, Esq.
P.O. Box 248
Koror, Palau PW 96940

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

For the Potential Garnishee:
Marstella E. Jack, Esq.
Assistant Attorney General
FSM Department of Justice
P.O. Box PS-105
Palikir, Pohnpei FM 96941

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HEADNOTES

Attachment and Execution - Garnishment; Civil Rights
The court has granted writs of garnishment against funds held by the national government for the benefit of the State of Chuuk only in one instance, and that is where a judgment was entered against the state for violations of 11 F.S.M.C. 701 et seq., the national civil rights statute. Barrett v. Chuuk, [2004] FMSC 42; 12 FSM Intrm. 558, 560 (Chk. 2004).

Attachment and Execution; Judgments
Process to enforce a judgment for the payment of money will be a writ of execution, unless the court directs otherwise. The procedure on execution will be in accordance with the practice and procedure of the state in which the court is held, existing at the time the remedy is sought, except that any FSM statute governs to the extent that it is applicable. Barrett v. Chuuk, [2004] FMSC 42; 12 FSM Intrm. 558, 560 (Chk. 2004).

Attachment and Execution - Garnishment; Civil Rights
The FSM Congress has specifically acted to confer a cause of action for violation of civil rights, 11 F.S.M.C. 701 et seq., and it is for judgments based on such claims that the court has issued writs of garnishment against the state. Barrett v. Chuuk, [2004] FMSC 42; 12 FSM Intrm. 558, 561 (Chk. 2004).

Constitutional Law - Due Process; Contracts
When a plaintiff has a judgment based on a common law contract, and there is no FSM statute that affects ordinary contracts in a way that shows a substantial national interest in such matters, the law of contracts is generally one in which state law controls. A governmental entity’s breach of a contract, without more, does not constitute a due process violation. Barrett v. Chuuk, [2004] FMSC 42; 12 FSM Intrm. 558, 561 (Chk. 2004).

Contempt; Judgments
Failure to pay a judgment in accordance with a court order may in the appropriate case constitute conduct that is sanctionable by an order of contempt under 4 F.S.M.C. 119. For such an order to issue, it must be shown that the putative contemnor had knowledge of the order and the ability to obey, and that he did not do so. Barrett v. Chuuk, [2004] FMSC 42; 12 FSM Intrm. 558, 561 (Chk. 2004).

Constitutional Law - Due Process; Contracts; Judgments
Repeated, intentional instances of failure of a state to pay a judgment does not constitute a separate, constitutional claim for deprivation of property without due process where the original underlying claim is not constitutional in character, but is based on common law contract and when there is no constitutional claim that supports the judgment itself, nor a national statute applicable that implicates a "clear and substantial" national interest. Barrett v. Chuuk, [2004] FMSC 42; 12 FSM Intrm. 558, 561-62 (Chk. 2004).

Judgments
In the usual case, payment of a money judgment against a state must abide a legislative appropriation. A state will have the ability to pay a judgment as contemplated by 6 F.S.M.C. 1409 when its legislature appropriates money for that purpose. Barrett v. Chuuk, [2004] FMSC 42; 12 FSM Intrm. 558, 562 (Chk. 2004).

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COURT’S OPINION

MARTIN G. YINUG, Associate Justice:

This 1993 case is in a post judgment posture, and has been since entry of judgment on November 24, 1993. The judgment recites that it was entered pursuant to the acceptance of an offer of judgment. The complaint upon which judgment was entered was filed on July 9, 1993, and alleges a common law, contract cause of action. No violation of the FSM civil rights statute, 11 F.S.M.C. 701 et seq., or any other violation of national statute is alleged in the complaint. On March 23, 2004, plaintiff Danny Barrett ("Barrett") filed a motion for writ of garnishment, which the court deems a motion for an order in aid of judgment under 6 F.S.M.C. 1409. The March 23, 2004, motion urges that Chuuk’s post-judgment conduct in failing to pay the judgment in the instant case amounts to a violation of Barrett’s due process rights. Chuuk did not respond to Barrett’s motion, but at the oral argument held on June 2, 2004, Chuuk, without providing a reason, stated that it would not oppose the motion. The FSM, as the potential garnishee defendant, did not appear at the hearing on the motion, but did file a submission on May 7, 2004, in which it opposed Barrett’s motion for issuance of a writ of garnishment on the basis that Barrett’s breach of contract claim is not a claim for violation of civil rights entitling him to issuance of a writ of garnishment of funds held by the national government to effect payment.

The FSM’s objection is well-taken. For the following reasons, the motion for issuance of a writ of garnishment is denied.

This court has issued writs of garnishment against funds held by the national government for the benefit of the State of Chuuk only in one instance, and that is where a judgment was entered against the State of Chuuk for violations of 11 F.S.M.C. 701 et seq., the national civil rights statute. See, e.g., Louis v. Kutta, [1998] FMSC 16; 8 FSM. Intrm. 312 (Chk. 1998); Davis v. Kutta, [2003] FMSC 25; 11 FSM Intrm. 545 (Chk. 2003); Estate of Mori v. Chuuk, [2003] FMSC 22; 11 FSM Intrm. 535 (Chk. 2003). In such cases, the court has relied on Article II - the Supremacy Article - of the FSM Constitution to hold that a judgment for a violation of the civil rights guaranteed to all FSM citizens under the Declaration of rights must be paid, notwithstanding Article VIII, Section 2 of the Chuuk Constitution, which provides that no expenditure of public funds may be made in the absence of legislative appropriation. Louis v. Kutta, [1997] FMSC 36; 8 FSM Intrm. 208, 211-214. This court further held in Mori that 6 F.S.M.C. 707, which proscribes garnishment of funds held by the national government and which was enacted into law after the garnishment order had issued in Louis, was unconstitutional as applied to enforcement of a civil rights judgment against the State of Chuuk. Mori, 11 FSM Intrm. at 540-42. At the same time, in Mori the court also held that "[i]n the usual case payment of a money judgment against the state of Chuuk must abide a legislative appropriation." Id. at 541.

At issue here is whether a writ of garnishment is the appropriate mechanism to execute, not on a judgment based upon a civil rights claim under the FSM Constitution, but a judgment based on an ordinary contract claim. Rule 69 of the FSM Rules of Civil Procedure provides in pertinent part that

Process to enforce a judgment for the payment of money shall be a writ of execution, unless the court directs otherwise. The procedure on execution . . . shall be in accordance with the practice and procedure of the state in which the court is held, existing at the time the remedy is sought, except that any statute of the Federated States of Micronesia governs to the extent that it is applicable.

FSM Civ. R. 69 (emphasis added). Thus state procedure governs the execution of judgments in cases where there is no significant federal interest in the remedy. Gary W. v. Louisiana, 441 F. Supp. 1121, 1127 (E.D. La. 1977), aff’d[1980] USCA5 1578; , 622 F.2d 804 (5th Cir. 1980). Gary W. involved a judgment for an award of attorney’s fees under the U.S. civil rights statute against the state of Louisiana. 441 F. Supp. at 1123. Louisiana argued that the award was uncollectible until the state decided to pay it, since Louisiana’s constitution contained a proscription against the seizure of public funds. Id. at 1124-25. "Because the statute of the Congress that controls this action, adopted conformably to the Constitution, is the supreme law of the land, it is the duty of this court to enforce that law and to order the judgment satisfied." Id. at 1123. Gary W. is accord with Gates v. Collier, [1980] USCA5 1009; 616 F.2d 1268 (5th Cir. 1980), on which this court has previously relied in issuing writs of garnishment directed against funds held by the national government for the benefit of the state of Chuuk. However, in noting that state judgment execution procedure applies in the absence of a federal interest, the Gary W. court drew a distinction between a civil rights claim and an ordinary contact claim, and discussed Yazell v. United States, [1966] USSC 12; 382 U.S. 341, 86 S. Ct. 500, 15 L. Ed. 2d 404 (1966). In Yazell, the Small Business Administration entered into a loan agreement to finance repairs required by flood damage to a business enterprise that was the community property under Texas law of the husband and wife who owned it. Id. at 344, 86 S. Ct. at 502, 15 L. Ed. 2d at 406. Both signed the promissory note, and when the loan went into default and a judgment in favor of the SBA was obtained, the SBA sought to execute on the separate property of the wife even though at that time Texas had the "peculiar institution" of coverture, under which a woman could not bind her separate property without first obtaining a court decree removing her disability. Id. at 342, 345, 348, 86 S. Ct. at 502-04, 15 L. Ed. 2d at 405-06, 408. The court held that "in the absence of specific congressional action, [the court] should not decree in this situation that implementation of federal interests requires overriding the particular state rule involved here." Id. at 352, 86 S. Ct. at 507, 15 L. Ed. 2d at 410. The court noted that coverture, outmoded and "obsolete" as it was, nevertheless involved an important area of state law, that of family and family property arrangements. Id. at 351-52, 86 S. Ct. at 506-07, 15 L. Ed. 2d at 409-10.

The FSM Congress has specifically acted to confer a cause of action for violation of civil rights, 11 F.S.M.C. 701 et seq., and it is for judgments based on such claims that the court has issued writs of garnishment against the State of Chuuk. Here, however, Barrett has sued upon a common law contract, just as the SBA had done in Yazell. Barrett points to no FSM statute that affects ordinary contracts in a way that shows a substantial national interest in such matters. Like the family law issue present in Yazell, the law of contracts is generally one in which state law controls. Pohnpei v. M/V Miyo Maru No. 11[1998] FMSC 10; , 8 FSM Intrm. 281, 294-95 (Pon. 1998); Edwards v. Pohnpei, [1988] FMSC 6; 3 FSM Intrm. 350, 360 n.22 (Pon. 1988). A governmental entity’s breach of a contract, without more, does not constitute a due process violation. Talley v. Lelu Town Council, [2001] FMKSC 4; 10 FSM Intrm. 226, 237 (Kos. S. Ct. Tr. 2001).

Barrett does contend, however, that the post-judgment record in his case supports his contention that Chuuk has no intention to pay the judgment in this case. He points to a November 24, 1993, order that required Chuuk to pay the judgment from the first available funds appropriated by the legislature for the payment of judgments, and to a subsequent April 7, 2000, order in which Chuuk consented to an order requiring the governor of Chuuk to make provision for payment of the judgment that he was then preparing to submit to the legislature. Notwithstanding legislative appropriations for judgments, the judgment has not been not paid. There is no indication on the record that the Chuuk legislature made a specific appropriation to pay the judgment at issue. Barrett urged at oral argument on June 2, 2004, that the post-judgment conduct on Chuuk’s part serves as the basis for a claim for deprivation of property without due process of law; that no interest is served by litigating this question in a new lawsuit; and that the court should fashion a remedy for the new claim by issuing a writ of garnishment in this case just as it has in cases involving a violation of the FSM civil rights statute, 11 F.S.M.C. 701 et seq.

Failure to pay a judgment in accordance with a court order may in the appropriate case constitute conduct that is sanctionable by an order of contempt under 4 F.S.M.C. 119. In order for such an order to issue, it must be shown that the putative contemnor had knowledge of the order and the ability to obey, and that he did not do so. Rodriguez v. Bank of the FSM, [2003] FMSC 12; 11 FSM Intrm. 367, 373 (App. 2003). But contempt for failure to obey an order directing a judgment debtor to pay the judgment is a different question from that of the fundamental, intrinsic nature of the claim upon which Barrett sued in the first instance. Chuuk’s post-judgment conduct cannot change the nature of Barrett’s claim. In the absence of any authority - and Barrett has not cited any - this court cannot say, as Barrett urges, that even repeated, intentional instances of failure to pay a judgment constitutes a separate, constitutional claim for deprivation of property without due process where the original underlying claim is not constitutional in character, but is based on common law contract. The court does not comment on whether a post-judgment proceeding is the appropriate forum in which to raise a new claim of constitutional proportions based on the judgment debtor’s post-judgment conduct. But here, there is no constitutional claim that supports the judgment itself, nor a national statute applicable that implicates a "clear and substantial" national interest, Yazell, 382 U.S. at 352, 86 S. Ct. at 507, 15 L. Ed. 2d at 410. The Yazell court noted that "[w]e should not invent [such a statute] and impose it upon the States, despite our personal distaste for coverture provisions such as those involved in this case." Id. at 353, 86 S. Ct. at 507, 15 L. Ed. 2d at 410. Similarly, this court cannot in the absence of any authority create such a national law by judicial fiat and thereby override the Chuuk constitutional provision that no public money may be expended without legislative approval. Chk. Const. art. VIII, § 2. Thus on the facts now before it, the court cannot issue a writ of garnishment against funds held by the FSM for the benefit of the state of Chuuk notwithstanding any inclination to the contrary. The court cannot approve the manner in which Chuuk has chosen to deal with - or more precisely, failed to deal with - the judgment in question as well as the many other judgments now outstanding against it.

In Yazell, the United States Supreme Court noted that the United States was credited with the knowledge of the applicable Texas statute at the time that it entered into the contract. 382 U.S. at 346, 86 S. Ct. at 503, 15 L. Ed. 2d at 407. A contractual relationship is a voluntary one, and in entering into that voluntary relationship Barrett is to be credited with the knowledge of applicable practice and procedure that would govern execution proceedings in the event that the contract was breached and litigation resulted, just as the United States in Yazell was. Reading FSM Civil Rule 69 and Article VIII, Section 2 of the Chuuk Constitution together means that "[i]n the usual case payment of a money judgment against the state of Chuuk must abide a legislative appropriation," Mori, 11 FSM Intrm. at 541. Chuuk will have the ability to pay the judgment at issue as contemplated by 6 F.S.M.C. 1409 when the Chuuk legislature appropriates money for that purpose.

For the foregoing reasons, Barrett’s motion is denied.