Pohnpei Port Authority v Ehsa [2008] FMSC 43; 16 FSM Intrm. 11 (Pon.2008) (19 June 2008)

FSM SUPREME COURT TRIAL DIVISION

CIVIL ACTION NO. 2007-038

POHNPEI PORT AUTHORITY,
Plaintiff,

vs.

TIMAKIO EHSA d/b/a POHNPEI MARINE
SERVICES et al.,
Defendants

ORDER AND MEMORANDUM

Dennis K. Yamase
Associate Justice

Hearing: June 17, 2008
Decided: June 19, 2008

APPEARANCES:

For the Plaintiff: Michael J. Sipos, Esq.
Sipos & Berman
P.O. Box 2069
Kolonia, Pohnpei FM 96941

For the Defendant: Marstella E. Jack, Esq.
(Ehsa) P.O. Box 2210
Kolonia, Pohnpei FM 96941

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HEADNOTES

Civil Procedure  Parties
A dba is not a party. Pohnpei Port Auth. v. Ehsa, [2008] FMSC 43; 16 FSM Intrm. 11, 12 n.1 (Pon. 2008).

Civil Procedure  Injunctions
The familiar factors that a court will consider in deciding whether to issue a temporary restraining order are: 1) the requesting party's likelihood of success on the merits; 2) the possibility of irreparable injury to the moving party; 3) the balance of possible injury or inconvenience to the parties that would result from injunctive relief; and 4) any impact on the public interest. Pohnpei Port Auth. v. Ehsa, [2008] FMSC 43; 16 FSM Intrm. 11, 13 (Pon. 2008).

Admiralty  Ships
The Pohnpei Port Authority has the express statutory authority to set as a condition of a vessel's use of port facilities that a vessel's account for port charges is kept current. Pohnpei Port Auth. v. Ehsa, [2008] FMSC 43; 16 FSM Intrm. 11, 13 (Pon. 2008).

Civil Procedure  Injunctions
Even though when delinquent vessels are not permitted port entry means that the movant is deprived of the potential revenue that would result from the vessels' continued use of the port facilities, which results in reduced cash flow to him, and impairs his ability to pay the arrearages that he owes on behalf of the delinquent vessels, that financial hardship may result to the movant is immaterial because if financial hardship alone were the determining factor, then every financially strapped debtor could ask a court to enjoin an opposing party from engaging in actions which the opposing party has the right to undertake to pursue claims against the debtor. The factor of success on the merits thus weighs in the non-movant's favor. Pohnpei Port Auth. v. Ehsa, [2008] FMSC 43; 16 FSM Intrm. 11, 14 (Pon. 2008).

Civil Procedure  Injunctions
When the port authority's actions reflect its valid efforts to regulate the use of port facilities, and to collect fees imposed for that use, any financial loss resulting to the movant is a type fundamentally different from the sort necessary to a showing of irreparable harm under FSM Civil Rule 65(b). Pohnpei Port Auth. v. Ehsa, [2008] FMSC 43; 16 FSM Intrm. 11, 14 (Pon. 2008).

Civil Procedure  Injunctions
When the movant's alleged harm is that which flows from his inability to meet one of his creditor's valid demands, it is not the sort of harm, standing alone, for which injunctive relief is intended as a remedy; and when if the port authority is enjoined from its enforcement efforts, it will suffer harm by being enjoined from carrying out its legal obligations under state law to manage Pohnpei's port facility, the balance-of-the-injuries factor favors the port authority. Pohnpei Port Auth. v. Ehsa, [2008] FMSC 43; 16 FSM Intrm. 11, 14 (Pon. 2008).

Civil Procedure  Injunctions
When, even if the movant has met his legal obligations to the port authority in the past, that does not change the fact that he presently owes substantial sums to it and when the port authority is a public corporation organized to promote the public's interest in the effective administration of Pohnpei's port facilities, it is in the public interest that the port authority seek to enforce its regulations and to recover sums owed to it in an efficient and fiscally responsible manner, and the public interest factor will favor the non-movant port authority. Pohnpei Port Auth. v. Ehsa, [2008] FMSC 43; 16 FSM Intrm. 11, 15 (Pon. 2008).

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COURT'S OPINION

DENNIS K. YAMASE, Associate Justice:

On June 17, 2008, the court held a hearing on the defendant Timakio Ehsa's motion for a temporary restraining order ("TRO") and preliminary and permanent injunction that was filed on June 6, 2008. Present at the hearing was Mike Sipos on behalf of Pohnpei Port Authority ("PPA"). Marstella Jack was present on behalf of Timakio Ehsa dba Pohnpei Marine Services ("Ehsa").

For the reason that follows, Ehsa's application for a TRO is denied.

Along with the defendant Ehsa,[1] the complaint in this case names numerous individual vessels as parties. A vessel entering Pohnpei harbor incurs port fees and charges, and the complaint alleges that Ehsa acts as the vessels' agent for purposes of collecting the fees from the vessels and remitting those fees to PPA. The complaint further alleges that Ehsa has failed to remit the fees as required, and that the arrearages have resulted in substantial penalties and interest. PPA seeks to recover the entire amount owed from Ehsa, and further seeks to recover the amounts owed individually by each vessel from each vessel itself by means of maritime liens against the vessels. The instant TRO application involves the relief sought against Ehsa.

Ehsa's application for a temporary restraining order rests on one main contention. He asserts in his motion that PPA is denying port entry to the defendant vessels who have delinquent accounts with PPA. Ehsa asserts that this practice is placing a financial hardship on him. He contends that because the individual liability of the vessels is the subject of this lawsuit, PPA "should no longer be allowed to prevent entry because these accounts are now subject to determination of this suit by the Court." Mot. for TRO & Prelim. & Perm. Inj. at 3. Thus he is asking PPA to be enjoined from prohibiting those vessels that have allegedly delinquent accounts with PPA from entering port at Pohnpei.

The familiar factors that a court will consider in deciding whether to issue a TRO are: 1) the requesting party's likelihood of success on the merits; 2) the possibility of irreparable injury to the moving party; 3) the balance of possible injury or inconvenience to the parties that would result from requesting injunctive relief; and 4) any impact on the public interest. Carlos Etscheit Soap Co. v. Epina, [1997] FMSC 5; 8 FSM Intrm. 155, 161 (Pon. 1997); Ponape Enterprises Co. v. Bergen, [1993] FMSC 52; 6 FSM Intrm. 286, 288 (Pon. 1993).

A. Ehsa's likelihood of success on the merits

PPA's complaint seeks a money judgment against Ehsa for the amounts due on the open account that Ehsa maintains with PPA. The complaint alleges that as of November 19, 2007, the balance of the open account was $580,076.37. In response to this allegation, Ehsa alleges that he is without sufficient knowledge to admit or deny this allegation, and accordingly denies it. However, in his TRO application, Ehsa asserts that in the event the TRO is not granted, he "will suffer immediate loss of income as well as the current ability to invoice [Ehsa's] services to the vessels to pay the delinquent accounts so stated in the instant action." Mot. for TRO at 2. To this extent Ehsa admits his liability. It follows that, allowing for a calculation of an updated figure of the amount currently owed by Ehsa, PPA will prevail on the merits of this action. Thus the factor of success on the merits favors PPA.

Ehsa, however, contends that likelihood of success on the merits favors him. He argues as follows:

A denial of this injunctive relief application would allow Plaintiff to continue to prevent entry of delinquent vessels which would in turn completely impede the current ability of PMS to meet that judgment and eventually cripple the agency services of PMS and close down the business. Plaintiff would end up never receiving its accounts receivables from PMS. Surely PMS should be allowed to stay in business so it can continue to make the payments and clear its debt.

Mot. for TRO at 7. As PPA points out, PPA has the authority pursuant to 32 Pon. C. § 1-101( set charges for use use of the port property under its management and control. Furthermore, PPA "shall determine . .&#1the terms and conditionitions under which the property may be used." Id. (emphasis added). Thus PPA has the express statutory authority to set as a condition of a vessel's use of port facilities that a vessel's account for port charges is kept current. From Ehsa's perspective, the fact that vessels are not permitted port entry means that he is deprived of the potential revenue that would result from the vessels' continued use of the port facilities. Presumably this results in reduced cash flow to him, and impairs his ability to pay the arrearages that he owes on behalf of the delinquent vessels. Nothing about this state of affairs, however, changes the fact that PPA has the statutorily conferred right to deny entry to the delinquent vessels. That financial hardship may result to Ehsa is immaterial. If financial hardship alone were the determining factor, then every financially strapped debtor could ask a court to enjoin an opposing party from engaging in actions which the opposing party has the right to undertake to pursue claims against the debtor. Ehsa is effectively urging that the court afford him a type of debt relief. His contentions in this regard are unpersuasive.

Thus the factor of success on the merits weighs in favor of PPA.

B. Irreparable injury to Ehsa

Ehsa urges that if PPA continues to deny entry to the vessels with delinquent accounts, Ehsa "will continue to suffer serious financial loss and irreparable harm as its debt would increase as a result of loss of business coupled with the 12% interest and the $1,000 penalty that PPA applies to each individual delinquent invoice." Mot. for TRO at 5. Ehsa asserts that he may have to close down his business. This is the same argument  that financial hardship will result to Ehsa in the absence of injunctive relief  that Ehsa makes in connection with his likelihood of success on the merits contentions. Again, the point Ehsa misses is that PPA is required by regulation pursue the course of action it has chosen. Seaport Rules & Regs., ch. 10 § 1001.

Presumably every hard-pressed debtor could argue that he will suffer economic loss if his creditors pursue their legal remedies against him sufficient vigor. PPA's actions reflect its valid efforts to regulate the use of port facilfacilities, and to collect fees imposed for that use. Any loss resulting to Ehsa is a type fundamentally different from the sort necessary to a showing of irreparable harm under FSM Civil Rule 65(b). Compare In re FSM Telecomm. Corp. Cellular Tower[2003] FMSC 58; , 12 FSM Intrm. 243, 247 (Chk. 2003) (injunctive relief granted to prevent removal of cellular telephone tower from disputed lot when all four factors favored the applicant); Sigrah v. Kosrae, [2004] FMKSC 17; 12 FSM Intrm. 513, 518 (Kos. S. Ct. Tr. 2004) (injunctive relief granted to prevent clearing, grading, and quarrying activities on disputed land where the claimant state had show no harm to the state resulting from a delay of a few weeks in the preparation of a quarry site).

Accordingly, the irreparable injury factor favors PPA.

C. The balance of the harm to the parties

Ehsa contends that if the court does not issue the TRO, the harm to him will be substantial, since he will suffer immediate financial loss. He further contends that his ability to look for financing to pay his outstanding debt to PPA will be weakened. On the other hand, he contends that the injury to PPA is "nothing, as [PPA] will still be able to maintain its operations and may even seek other businesses to provide the type of agency service that [Ehsa] is currently [providing]." Mot. for TRO at 6.

Ehsa's alleged harm is that which flows from his inability to meet the valid demands of one of his creditors. It is not the sort of harm, standing alone, for which injunctive relief is intended as a remedy. On the other hand, if PPA is enjoined from its enforcement efforts, it will suffer harm by being enjoined from carrying out its legal obligations under state law to manage Pohnpei's port facility. Thus this factor favors PPA.

D. Impact on the public interest

Ehsa contends that the public interest favors issuance of the TRO. He claims that he has paid over three million dollars to PPA over the course of the years, and that the public interest favors his staying in business. In answer to this contention, PPA asserts that it is in the public interest that port users pay for the privilege of using the port facilities and that PPA "adhere to fiscally responsible payment collection techniques." Opp'n to Mot. for TRO at 7.

Even assuming that Ehsa has met his legal obligations to PPA in the past, that does not change the fact that Ehsa presently owes substantial sums to PPA. PPA is a public corporation organized to promote the public's interest in the effective administration of Pohnpei's port facilities. It is in the public interest that PPA seek to enforce its regulations and to recover sums owed to it in an efficient and fiscally responsible manner. Accordingly, this factor favors PPA as well.

E. Conclusion

All four factors that the court may consider in determining whether to issue a TRO favor PPA. Accordingly, Ehsa's application for a TRO is denied.

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^[1]The caption also contains the name of Ehsa’s dba, Pohnpei Marine Services. A dba is not a party. Jackson v. Pacific Pattern, Inc., [2003] FMSC 42; 12 FSM Intrm. 18, 20 (Pon. 2003).