Saimon v Wainit [2012] FMSC 14; 18 FSM Intrm. 211 (Chk. 2012) (16 March 2012)

FSM SUPREME COURT TRIAL DIVISION

CIVIL ACTION NO. 2008-1044

SALOMON SAIMON,
Plaintiff,

vs.

TADASHI WAINIT,
Defendant.
___________________________

ORDER REGARDING WRIT

Martin G. Yinug
Chief Justice

Decided: March 16, 2012

APPEARANCES:

For the Plaintiff: Salomon M. Saimon, Esq., pro se

P.O. Box 911

Kolonia, Pohnpei FM 96941

For the Defendant: Sabino S. Asor, Esq.

P.O. Box 95

Weno, Chuuk FM 96942

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HEADNOTES

Attachment and Execution
Under a writ of execution's terms and the applicable law, a return is required. The funds executed upon must be accounted for and credited toward the judgment. Saimon v. Wainit, [2012] FMSC 14; 18 FSM Intrm. 211, 213 (Chk. 2012).

Judgments - Relief from Judgment
When all the defenses the defendant now seeks to raise were previously raised on his behalf and then considered and rejected by the court, he has not shown any grounds to revisit these issues or for relief from judgment under Civil Procedure Rule 60(b), which governs the defendant's motion to dismiss prior court judgments, which also was not timely. Saimon v. Wainit, [2012] FMSC 14; 18 FSM Intrm. 211, 214 (Chk. 2012).

Attorney and Client; Civil Procedure - Notice
Notice served on a represented party's attorney of record is notice to the party because clients must be held accountable for their attorneys' acts or omissions. Saimon v. Wainit, [2012] FMSC 14; 18 FSM Intrm. 211, 214 (Chk. 2012).

Attachment and Execution; Property - Personal
When a judgment-creditor has requested a writ and no motion for an order in aid of judgment is pending, he is entitled to a writ of execution against the judgment-debtor's non-exempt personal property. Personal property is property other than land or interests in land. Saimon v. Wainit, [2012] FMSC 14; 18 FSM Intrm. 211, 214 (Chk. 2012).

Attachment and Execution; Debtors' and Creditors' Rights - Orders in Aid of Judgment
Interests in land are not subject to a writ of execution, but any interest in land owned solely by a judgment debtor, in his own right, may be ordered sold or transferred under an order in aid of judgment if the court making the order deems that justice so requires and finds as a fact that after the sale or transfer, the debtor will have sufficient land remaining to support himself and those persons directly dependent on him according to recognized local custom and FSM law. Saimon v. Wainit, [2012] FMSC 14; 18 FSM Intrm. 211, 214 (Chk. 2012).

Attachment and Execution; Debtors' and Creditors' Rights - Orders in Aid of Judgment
Since homes and lands are not personal property, a writ of execution cannot be used to force their sale or rental to satisfy a judgment. A judgment-creditor must proceed through an order in aid of judgment to reach such assets. An evidentiary hearing under 6 F.S.M.C. 1410(1) is a necessary step of that process. Saimon v. Wainit, [2012] FMSC 14; 18 FSM Intrm. 211, 214 (Chk. 2012).

Attachment and Execution
Execution may be had against a judgment debtor's non-exempt personal property, but not against his interests in land. Saimon v. Wainit, [2012] FMSC 14; 18 FSM Intrm. 211, 215 (Chk. 2012).

Attachment and Execution; Constitutional Law - Due Process
Since property may not be taken by the government, even in aid of a judgment, without due process of law, due process of law in executing the writ may be assured by directing the executing officer to strictly comply with the statutory provisions for levying a writ of execution. Saimon v. Wainit, [2012] FMSC 14; 18 FSM Intrm. 211, 215 (Chk. 2012).

Business Organizations - Corporations; Business Organizations - Sole Proprietorship
A corporation is a juridical person distinct from its owner while a trade name under which a person conducts business is a person's personal property. Saimon v. Wainit, [2012] FMSC 14; 18 FSM Intrm. 211, 215 (Chk. 2012).

Attachment and Execution
The court cannot issue a writ of execution to seize a non-party's assets. Saimon v. Wainit, [2012] FMSC 14; 18 FSM Intrm. 211, 215 (Chk. 2012).

Attachment and Execution; Debtors' and Creditors' Rights - Orders in Aid of Judgment
If a judgment creditor seeks to attach and sell any land personally owned by a judgment debtor in his own right, the judgment creditor must seek an order in aid of judgment and at the 6 F.S.M.C. 1410(1) order in aid of judgment hearing must produce sufficient evidence that the court can deem that justice so requires and can find as a fact that after the sale, the judgment debtor will have sufficient land remaining to support himself and any those persons directly dependent on him. Saimon v. Wainit, [2012] FMSC 14; 18 FSM Intrm. 211, 215 (Chk. 2012).

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COURT'S OPINION

MARTIN G. YINUG, Chief Justice:

This comes before the court on: 1) the judgment-creditor's Supplement to Pending Writ of Execution; Request to Modify Writ of Execution to Require Police to Levy on All Defendant's Assets, filed July 11, 2011; 2) the judgment-debtor's Response to Pending Writ of Execution; Request to Modify Writ of Execution Dated July 11, 2011, filed by the defendant pro se on October 11, 2011; 3) the judgment-creditor's Notice of Service on defendant Wainit; Reply to Filing by Wainit, filed October 19, 2011; 4) the judgment-debtor's Motion to Dismiss Pending Writ of Execution Dated July 11, 2011 and All Prior Court Judgments Against Defendant, filed October 26, 2011; 5) the judgment-debtor's Response to Notice of Service by Plaintiff, filed November 3, 2011; 6) Defendant Wainit's Motion to Vacate Writ of Execution and Opposition to Writ, filed by the judgment-debtor's new counsel on December 21, 2011; 7) Opposition to Motion to Vacate Writ of Execution; Reply to Opposition to Writ, filed on February 8, 2012; and 8) Defendant Wainit's Supplement to His Motion to Set Aside Writ of Execution, filed February 28, 2012.

These pending matters can only be partially resolved on the papers without the production of further evidence at an evidentiary hearing. The court's partial resolution follows.

I. Background

On May 25, 2009, the clerk entered a $40,849.22 judgment in Salomon Saimon's favor against Tadashi Wainit. No payment was made on the judgment. Saimon obtained a writ of execution on March 15, 2010. No return on the writ was filed with the court although, apparently, some funds were seized from a bank account. Under the writ's terms and the applicable law, 6 F.S.M.C. 1408(3), a return is required. The funds executed upon must be accounted for and credited toward the judgment.

Saimon asks that the writ of execution issued earlier either be re-issued or that the court order that the writ of execution can be levied on Wainit's vehicles, boats, and money recently paid to T & S Construction Co. by Udot Municipality ($40,000), and land and homes on Weno and Udot that could be sold or rented to produce funds to satisfy his judgment.

Wainit contends that he should not be liable for the judgment since he was acting as a public officer when he did the acts for which he was later charged and convicted and so Udot Municipality, and not he, should be liable for the attorney's fees that were incurred in his defense and that form the basis of the judgment against him. He also demands that the money "sequestered" by the court judgment should be returned to him and the prior judgment against him be "dismissed."

Wainit further contends that Saimon's requested "expansion" of the writ is beyond its allowable scope. He asserts that the $40,000 paid by Udot is an asset receivable by a business, DW Imports Ltd., owned by his son, Drake Wainit, because DW Imports is the successor to T & S Construction Co. He further asserts that he is "retired" with no employment income and that any retirement benefits should "be beyond the scope of a judgment enforcement mechanism." Wainit also contends that the writ should be vacated because of the lack of notice to him.

Saimon responds that the claim that the one-time wealthy Wainit now has no money has the smell of fraud and that "[e]ven without the luxury of a fact-finding of the real sources of the newly transferred wealth to son Drake Wainit," it is clear that Tadashi Wainit has just received $40,000 and chose not to pay anything toward the judgment.

II. Analysis

A. Wainit's Defenses and Oppositions

Wainit unsuccessfully defended this suit through his prior counsel, who raised all the defenses to Saimon's cause of action that Wainit seeks to assert here. The defenses that Udot Municipality and not Wainit was liable for the unpaid attorney's fees and that Saimon should, or had to, sue Udot instead, were previously raised on Wainit's behalf and then considered and rejected by the court. Saimon v. Wainit, [2008] FMSC 61; 16 FSM Intrm. 143, 146-47 (Chk. 2008). Wainit has not shown any grounds to revisit these issues or for relief from judgment under Civil Procedure Rule 60(b). The motion to dismiss prior court judgments, which is governed by Rule 60(b), is not timely and does not state any grounds for relief other than defenses previously considered and rejected by the court.

Wainit cannot claim that he received no notice of the judgment or the writ of execution. The judgment was served on his then attorney of record on May 26, 2009, and the application for a writ of execution was served on his then attorney of record on December 14, 2009, three months before the writ of execution was issued. Notice served on a represented party's attorney of record is notice to the party. "Clients must be held accountable for their attorneys' acts or omissions." Miochy v. Chuuk State Election Comm'n, [2007] FMCSC 47; 15 FSM Intrm. 426, 429 (Chk. S. Ct. App. 2007). See alsoAmayo v. MJ Co., [2001] FMSC 32; 10 FSM Intrm. 371, 382 (Pon. 2001), reversed on other grounds sub nom., Panuelo v. Amayo, [2004] FMSC 13; 12 FSM Intrm. 365 (App. 2004) (reversed because counsel served was not counsel of record); Elymore v. Walter, [2001] FMSC 13; 10 FSM Intrm. 267, 269 (Pon. 2001).

B. Saimon's Writ

"Every court, at the request of the party recovering any civil judgment in that court for the payment of money, shall issue a writ of execution against the personal property of the party against whom the judgment has been rendered, except as provided in section 1415 . . . ." 6 F.S.M.C. 1407.mJudgcret-creditor Saimon, since he requested a writ and no motion for an order in aid of judgment is pending, is entitled to a writ of execution against Tadashi Wainit's non-exempt personal property.

Personal property is property other than land or interests in land. House of Travel v. Neth, [1995] FMSC 38; 7 FSM Intrm. 228, 229 (Pon. 1995). Section 1415 exempts from execution "[a]ll necessary household furniture, cooking and eating utensils, and all necessary wearing apparel, bedding, and provisions for household use sufficient for four months," 6 F.S.M.C. 1415(1), and "[a]ll tools, implements, utensils, two work animals, and equipment necessary to enable the person against whom the . . . eion iued to d to carry orry on his usual occupation," 6 F.S.M.C. 1415(2). Also, interests in land are not subject to a writ of execution,

but any int [in] owned solely by a judgment debtor, in his own rown right,ight, may be ordered sold or transferred under an order in aid of judgment if the court making the order deems that justice so requires and finds as a fact that after the sale or transfer, the debtor will have sufficient land remaining to support himself and those persons directly dependent on him according to recognized local custom and the law of the [FSM].

6 F.S.M.C. 1415(3). Since homes and lands are not personal property, a writ of execution cannot be used to force their sale or rental to satisfy a judgment. A judgment-creditor must proceed through an order in aid of judgment to reach such assets. An evidentiary hearing under 6 F.S.M.C. 1410(1) is a necessary step of that process.
Thus, execution may be had against a judgment debtor's non-exempt personal property, but not against his interests in land. House of Travel, 7 FSM Intrm. at 229. Since property may not be taken by the government, even in aid of a judgment, without due process of law, due process of law in executing the writ may be assured by directing the executing officer to strictly comply with the statutory provisions for levying a writ of execution. Id. at 229-30.

Wainit asserts that the cash and items Saimon wishes to apply the writ of execution to are not his personal property but property of others or another. Saimon disagrees. The court can direct that a new writ issue with the instruction that it be levied on any of Tadashi Wainit's non-exempt personal property that the police may locate. The court, however, is unable, based on what is currently before it, to determine whether certain property falls within that category, for instance, the $40,000 that Udot paid T & S Construction Co. Nothing is before the court from which it can determine whether T & S Construction Co. is, or was, a corporation and thus a juridical person distinct from Tadashi Wainit, Carlos Etscheit Soap Co. v. McVey, [2010] FMSC 16; 17 FSM Intrm. 102, 112 (Pon. 2010) (corporation is a juridical person separate from its owner), or whether it was just a trade name under which Tadashi Wainit conducted business, and thus its property was Wainit's personal property. SeeJackson v. Pacific Pattern, Inc., [2003] FMSC 42; 12 FSM Intrm. 18, 20 (Pon. 2003) (doing business under another name does not create an entity distinct from the person operating the business; the individual who does business as a sole proprietor under one or several names remains one person, personally liable for all his obligations); see alsoHelgenberger v. Mai Xiong Pacific Int'l, Inc., [2011] FMSC 61; 17 FSM Intrm. 326, 329 n.1 (Pon. 2011).

Evidence would be needed to determine the nature of the T & S Construction Co. business organization. And if Saimon wishes to pursue his claim to the assets that Tadashi Wainit asserts are owned by his son Drake, he must take the steps necessary to put his fraudulent transfer allegation properly before the court. The court cannot issue a writ of execution to seize a non-party's assets. Bank of Guam v. O'Sonis, [1998] FMSC 13; 8 FSM Intrm. 301, 304 (Chk. 1998).

III. Future proceedings

Accordingly, Wainit's motion to vacate the writ is denied. Saimon's request to modify the writ of execution to levy on all of Tadashi Wainit's property is denied to the extent it seeks to levy on land or on personal property exempt under 6 F.S.M.C. 1415(1) or (2).

Now therefore it is hereby ordered that a return must be made for the execution of the March 15, 2010 writ of execution; that the current writ of execution may be levied on any of Tadashi Wainit's non-exempt personal property that may be located; and that if the judgment-creditor seeks to attach and sell any land personally owned by Tadashi Wainit in his own right, he must seek an order in aid of judgment and at the 6 F.S.M.C. 1410(1) order in aid of judgment hearing must produce sufficient evidence that the court can deem that justice so requires and can find as a fact that after the sale, Tadashi Wainit will have sufficient land remaining to support himself and any those persons directly dependent on him.

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