Western Sales Trading Co (Phils) v B & J Corp [2006] FMSC 29; 14 FSM Intrm. 423 (Chk. 2006) (29 September 2006)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite as Western Sales Trading Co. (Phils) v. B & J Corp., [2006] FMSC 29; 14 FSM Intrm. 423 (Chk. 2006)

WESTERN SALES TRADING CO. (PHILS), INC.,
Plaintiff,

vs.

B & J CORPORATION and JOSEFINA ESTEPA,
Defendants.

CIVIL ACTION NO. 2006-1010

ORDER GRANTING PLAINTIFF SUMMARY JUDGMENT IN PART AND THE DEFENDANTS IN PART

Dennis K. Yamase
Associate Justice

Decided: September 29, 2006

APPEARANCES:

For the Plaintiff:
Stephen V. Finnen, Esq.
P.O. Box 1450
Kolonia, Pohnpei FM 96941

For the Defendants:
Johnny Meippen, Esq.
P.O. Box 705
Weno, Chuuk FM 96942

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HEADNOTES

Civil Procedure - Motions
The failure to oppose a motion is generally deemed a consent to the motion, but even if there is no opposition, the court still needs good grounds before it can grant a motion. Western Sales Trading Co. (Phils) v. B & J Corp., [2006] FMSC 29; 14 FSM Intrm. 423, 425 (Chk. 2006).

Civil Procedure - Summary Judgment
Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to a 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. The moving party has the burden of showing a lack of triable issues of fact. Western Sales Trading Co. (Phils) v. B & J Corp., [2006] FMSC 29; 14 FSM Intrm. 423, 425 (Chk. 2006).

[2006] FMSC 54; [14 FSM Intrm. 426]

Civil Procedure - Summary Judgment
Once the party moving for summary judgment presents a prima facie case of its entitlement to summary judgment, the burden shifts to the non-moving party to produce evidence showing that a genuine issue of material fact remains for resolution. A nonmovant’s failure to respond to a summary judgment motion, is a failure to meet his burden to overcome the plaintiff’s prima facie case. Western Sales Trading Co. (Phils) v. B & J Corp., [2006] FMSC 29; 14 FSM Intrm. 423, 425 (Chk. 2006).

Civil Procedure - Summary Judgment
When the plaintiff has presented a prima facie case that it is entitled to summary judgment for its costs (including shipping, fees and taxes) for the goods it provided the defendant and for 50% of the profit from the sale of those goods after the costs were paid because those terms are found in the parties’ written memorandum, the same cannot be said for the plaintiff’s 1½% interest per month claim when that term is not included in the parties’ written memorandum. Western Sales Trading Co. (Phils) v. B & J Corp., [2006] FMSC 29; 14 FSM Intrm. 423, 425 (Chk. 2006).

Contracts - Parol Evidence
The parol evidence rule bars evidence of a contemporaneous or prior oral agreement that contradicts or alters the terms of the written agreement, but parol evidence of a collateral agreement that does not alter or contradict the written agreement is not barred by the parol evidence rule if the collateral agreement is one that in the circumstances might naturally be omitted from the writing. Western Sales Trading Co. (Phils) v. B & J Corp., [2006] FMSC 29; 14 FSM Intrm. 423, 425 (Chk. 2006).

Contracts - Parol Evidence
Since interest on unpaid amounts is not a collateral agreement that in the circumstances might naturally be omitted from the writing but is a term that would naturally be expected to be part of an agreement about payment for goods provided on an open account or on credit because it alters the written agreement between the parties, therefore evidence of a contract term that 1½% interest per month was due on unpaid amounts is inadmissible under the parol evidence rule. Western Sales Trading Co. (Phils) v. B & J Corp., [2006] FMSC 29; 14 FSM Intrm. 423, 425 (Chk. 2006).

Civil Procedure - Summary Judgment
When a party’s motion for summary judgment has been denied as a matter of law and it appears that the nonmoving party is entitled to judgment as a matter of law, the 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. Western Sales Trading Co. (Phils) v. B & J Corp., [2006] FMSC 29; 14 FSM Intrm. 423, 425 (Chk. 2006).

Civil Procedure - Summary Judgment
When the plaintiff movant has been denied summary judgment on its 1½% interest per month claim and when the defendants are entitled to judgment on that claim as a matter of law since no evidence is admissible to support that claim and since the plaintiff had an adequate opportunity to show that the defendants are not entitled to judgment as a matter of law on the interest claim because the plaintiffs knew the interest claim was a problem when its earlier motion for judgment on the pleadings was denied, the defendants are therefore granted summary judgment on the plaintiff’s 1½% interest per month claim. Western Sales Trading Co. (Phils) v. B & J Corp., [2006] FMSC 29; 14 FSM Intrm. 423, 426 (Chk. 2006).

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COURT’S OPINION

[14 FSM Intrm. 427]

DENNIS K. YAMASE, Associate Justice:

On September 12, 2006, the plaintiff served, and on September 19, it filed its Motion for Summary Judgment, with supporting affidavit and exhibits. The motion seeks summary judgment for goods the plaintiff provided the defendant and for which the plaintiff paid the cost of the goods and the expense of shipping the goods to Chuuk and the applicable fees and taxes. The defendants were to sell the merchandise in Chuuk and use the proceeds to reimburse the plaintiff for all of its costs and expenses and then, once that was done, to pay the plaintiff 50% of the profits from the goods’ sale within the month following the sale. This agreement was made at a meeting in Manila on June 2, 2004 and a written memorandum was executed at that time to memorialize the agreement. The affidavit of the plaintiff’s chief executive officer states that at that same June 2, 2004 meeting, the parties also orally agreed that unpaid sums that were past due would accrue interest at the rate of 1½% per month (18% per annum).

No response to the plaintiff’s motion has been filed. The failure to oppose a motion is generally deemed a consent to the motion, FSM Civ. R. 6(d); Naoro v. Walter, [2003] FMSC 17; 11 FSM Intrm. 619, 621 (Chk. 2003), but even if there is no opposition, the court still needs good grounds before it can grant a motion. Senda v. Mid-Pacific Constr. Co., [1994] FMSC 20; 6 FSM Intrm. 440, 442 (App. 1994).

Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. FSM Civ. R. 56(c). The court must view the facts presented and inferences made in the light most favorable to the nonmoving party. The moving party has the burden of showing a lack of triable issues of fact. Adams v. Etscheit, [1994] FMSC 52; 6 FSM Intrm. 580, 582 (App. 1994). Once the party moving for summary judgment presents a prima facie case of its entitlement to summary judgment, the burden shifts to the non-moving party to produce evidence showing that a genuine issue of material fact remains for resolution. FSM Dev. Bank v. Ifraim, [2001] FMSC 26; 10 FSM Intrm. 342, 345 (Chk. 2001); Marar v. Chuuk, [2000] FMSC 27; 9 FSM Intrm. 313, 314-15 (Chk. 2000). A nonmovant’s failure to respond to a summary judgment motion, is a failure to meet his burden to overcome the plaintiff’s prima facie case. Lee v. Lee, [2004] FMSC 31; 13 FSM Intrm. 68, 71 (Chk. 2004).

The plaintiff has presented a prima facie case that it is entitled to summary judgment for its costs (including shipping, fees and taxes) for the goods it provided the defendant and for 50% of the profit from the sale of those goods after the costs were paid. These terms are found in the parties’ written memorandum.

The same cannot be said for the plaintiff’s 1½% interest per month claim. That term is not included in the parties’ written memorandum. The parol evidence rule bars evidence of a contemporaneous or prior oral agreement that contradicts or alters the terms of the written agreement, but parol evidence of a collateral agreement that does not alter or contradict the written agreement is not barred by the parol evidence rule if the collateral agreement is one that in the circumstances might naturally be omitted from the writing. FSM Dev. Bank v. Bruton, [1995] FMSC 42; 7 FSM Intrm. 246, 250 (Chk. 1995).

Interest on unpaid amounts is not a collateral agreement that in the circumstances might naturally be omitted from the writing. It is a term that would naturally be expected to be part of an agreement about payment for goods provided on an open account or on credit. It alters the written agreement between the parties. Therefore evidence of a contract term that 1½% interest per month was due on unpaid amounts is inadmissible.

[14 FSM Intrm. 428]

When a party’s motion for summary judgment has been denied as a matter of law and it appears that the nonmoving party is entitled to judgment as a matter of law, the 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).

That is the situation here. The plaintiff movant has been denied summary judgment on its 1½% interest per month claim and the defendants are entitled to judgment on that claim as a matter of law since no evidence is admissible to support that claim. The plaintiff has had an adequate opportunity to show that the defendants are not entitled to judgment as a matter of law on the interest claim since the plaintiffs knew the interest claim was a problem when its earlier motion for judgment on the pleadings was denied. The defendants are therefore granted summary judgment on the plaintiff’s 1½% interest per month claim.

The plaintiff’s complaint seeks, in part, "$54,779.36 for principal and interest through February 6, 2006." Since the court will grant the plaintiff judgment for the principal but not for the interest and since the court has no way of determining how much of the $54,779.36 is attributable to interest, the plaintiff shall therefore submit, within thirty days, an accounting of the sums due it that do not include any interest charges.

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