FSM Development Bank v Abello [2012] FMSC 46; 18 FSM Intrm. 192 (Pon. 2012) (22 February 2012)

FSM SUPREME COURT TRIAL DIVISION

CIVIL ACTION NO. 2003-008

FSM DEVELOPMENT BANK,
PLAINTIFF

V

MILO ABELLO, ERLEEN ABELLO, and LUCIANA SORECH a/k/a LUCY SORECH,
DEFENDANT

ORDER AND MEMORANDUM OF INJUNCTION

Martin G. Yinug
Chief Justice

Hearing: February 17, 2012

APPEARANCES:

For the Plaintiff: Nora E. Sigrah, Esq.
P.O. Box M
Kol PohnM 96941

For the Defendefendants: Milo Abello, Erleen Sorech, Luc, Luciana Sorech, all pro se
P.O. Box 588
Kolonia, Pohnpei FM 96941

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HEADNOTES

Civil Procedure – Motions

When there were at least three power outages and additional unscheduled outages during the first week of February which imposed difficulties on the defendants in producing the required documents and because the power outages were out of the defendants' control and the defendants had no reason or way to know of the unscheduled power outages, the defendants' failure to file their opposition by February 10, 2012, was due to excusable neglect and the court will grant an enlargement since a court may enlarge time to perform an act after the expiration of the period if the failure to do the act within the period was the result of excusable neglect. FSM Dank v. Abello,, [2012] FMSC 46; 18 FSM Intrm. 192, 196 (Pon. 2012).

Civil Procedure – Injunctions

In reviewing a motion for a preliminary injunction, the court wefour factors: 1) the the possibilitirre irreparable harm to the moving party; 2) the balance of injuries between the parties; 3) likelihood of success on the merits; and 4) the public interest. M Dev. Bank v. Abello,, [2012] FMSC 46; 18 FSM Intrm. 192, 196 (Pon. 2012).

Civil Procedure -nctjunctions - Irreparable Harm

Irreparable harm may include the loss of gol, loss of customers and pond potential customers, lost sales, and similar harms because they are not readily compensable by money damages. The court does not need mp compute the exact degree to which the movant will suffer loss of goodwill, customers and potential customers when the other party clearly intends to cause it to suffer these harms. Since turt need only examiexamine the possibility of irreparable harm, not merely the probability, it is enough that the movant has suffered harm and that the party tonjoined intends irreparable harms. FSM Dev. Bank vank v. Abello[2012] FMSC 46; , 18 FSM Intrm. 192, 196 (Pon. 2012).

Civil Prre - Injunctjunctions - Balance of Injuries

When the movant's potential and possible injuries are more immiand lg than any injurynjury to the defendant from an injunction prohibiting, until after the sale sale of the lot, publication of allegedly defamatory statements - the injunction would be a lesser injury than the injury to the movant if it could not conduct the sale or if the bidders lower their bids or decline to attend the auction. FSM Dev. Bank v. o[2012] FMSC 46; ,, 18 FSM Intrm. 192, 196 (Pon. 2012).

Constonal Law - Free Freedom of Expression; Torts – Defamation

Freech is not a limitless right. One limon comes fros from from defamation law. FSM Dev. Bank v. Abeu>,, [2012] FMSC 46; 18 FSM Intrm. 192, 196 (Pon. 2012).

Contempt

Contempt of court is the intentional obstruction of administration of justir the intentional disobedience or resistance to the court'surt's lawful writ, process, order, rule, decree, or command. FSM Bank v. Abello,, [2012] FMSC 46; 18 FSM Intrm. 192, 197 (Pon. 2012).

Civil Procedure - Injunctions - Likelihood of Succes

The bank has therefore shown that it is likely to succeed on the merits of itsf its motion for an order to show cause why the defendant should not be held in contempt when, in continuing publicly to assert, against the evidence, that the bank had engaged in fraudulent conduct in obtaining not just the amended order of assignment, which is a final order, but also the stipulated judgment from which his grievances arise, which is a final judgment, the defendant intends not only to obstruct the administration of justice, but also to disobey or resist the court's lawful writ, process, order, rule or command. FSM Dev. BanAbello[2012] FMSC 46; ,, 18 FSM Intrm. 192, 197 (Pon. 2012).

– Defamation

Libel is a subset famation, and is defined as a false and unprivileged publication by writing or other fixed ixed representation to the eye which exposy person to hatred, contempntempt, ridicule, or obloquy or which causes him to be shunned or avoided or which has a tendency to injure him in his occupation. [2012] FMSC 46; ,, 18 FSM Intrm. 192, 197 (Pon. 2012).

Torts – Defan

A court considers whether the allegedly defamatory statement: exposes thintiff to (publipublic) hatcontempt, ridicule or obloquy (shame or disgrace); causes people to shun or avoid the plainplaintiff; or has a tendency to injure thentiff in his occupation or adversely affect the plaintiff'siff's trade or business. FSM Dev. v. Abello,, [2012] FMSC 46; 18 FSM Intrm. 192, 197 (Pon. 2012).
; Torts – Defamation

FSM Dev. B. Abello,, 18 [2012] FMSC 46; , 18 FSM Intrm. 192, 197 (Pon. 2012).

Civil Procedure - Injunctions - Public Interest

The public interest weighs in favor of issuing an injunction when it is limited in scope otect the public from statements which are more likely to mislead than to inform the publicublic. FSM Dev. Bank v. Abello, [2012] FMSC 46; 18 FSM Intrm. 192, 198 (Pon. 2012).

Civil Procedurnjunctjunctions - Public Interest

The publierest factor weighs in the bank's favor when there has not been any judicial determination tion that the bank has done anything imprond there have been judicialicial determinations against the defendant's claims of fraud against the bank as insufficiently pled, otherwise improper, unsubstantiated, or barred under res judicata and when the defendant's actions show an intent not only to obstruct the administration of justice but also to disobey or resist the court's lawful writ, process, order, rule, or command and continued pursuit of this course of action undermines public trust in the judicial system by undermining court orders and denying finality of judgment. FS. Bank v. Abello,, [2012] FMSC 46; 18 FSM Intrm. 192, 198 (Pon. 2012).

Civil Procedure – Injunctions

When each of the factors for injunctive relief weighs in the bank's favor, the court will grant thk's motion for injunction and order the defendant to remove all statements alleging fraud oaud on the bank's part, whether on the Internet or in hard copy, and refrain from making such statements until the bank's auction has been completed. FSM Dev. Ba Abello[2012] FMSC 46; ,, 18 FSM Intrm. 192, 198 (Pon. 2012).

Contempt

A person accused of committing civntempt has a right to notice of the charges and an opportunity to present a defense and mitd mitigation. FSM Dev. Bank v. Ab/u>,, [2012] FMSC 46; 18 FSM Intrm. 192, 198 (Pon. 2012).

Civil Procedure - Injunctions; Contempt

Whencourt has enjoined the defendant from the activity that is the source of the bank's grievanievance against him, the court will hold the show cause motion in abeyance until such time as the bank either requests a show cause hearing or withdraws the motion. FSM Dev. Bank v. Abello, [2012] FMSC 46; 18 FSM Intrm. 192, 198 (Pon. 2012).

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COURT'S OPINION

MARTIN G. YINUG, Chief Justice:

This matter comes before the court on a motion for injunction and a motion for an order to show cause which plaintiff FSM Development Bank ("the Bank") filed on January 31, 2012. The court held a telephonac hearing on these motions on Friday, February 17, 2012.

I. BACKGROUND

This matter is anon for collection, which the Bank filed on March 26, 2003. On J6, 2006, the part part parties filed a stipulation to entry of judgment and a joint motion for entry of a stipulated order in aid of judgment. Abello and Sorece represenresented by counsnd both signed the stipulatpulated order in aid of judgment. The coutered both the judg judgment and the order in aid thereof oy 6, 2006. On September 10, 2009, thk Bank moved the the court to amend the order in aid; the court agreed, and on June 8, 201sued an order of assignmentnment and an order of sale. On October 181, the Bank, ank, having performed the survey required in the original order of assignment, requested an amendment to accommodate a "concrete slab apron . .&#16.57 meters wide, or apor apmately 1.75 feet" which is h is part of the residence of Luciana Sorech a/k/a Lucy Soret ("Sorech"), most of whose residence is on ancent parcel. Pl.'s Req. Am. Ord 2.&#160 The amee amended orderssigassignment would exclude this concrete apron from assignment and sale under the June 8, 2011 order, as well as "provide . .&. Sorech access to the eahe eastern side of her house .㼠. ." Id.&#i>. The court d the amended ored order on October 27, 2011, which order included the easement in fav Sorech. rder ofer of Assignment atnt at 5. The judgment and orders are final for purposes of appeal.

The Bank set Mar, 2012 as the auction deadline date for sale of the subject leasehold interests and improveprovements. Moder to Show Cause. Inj3.Inj3. IuaJanuary 2012, Milo Abel Abello ("Abello") purchased a domain name, www.fsmdbfradbfraud.tk, and posted statements on that te whhe Bank alleges are false, defamatory and threatereatening. i> at 4. Th0; The; The Bank fouinterinted copies of those statements posted at public locations in Kolonia. Id. Tnk believes that such stah statements "confuse[] potenbiddend] discourages pges potential bidders." . a/i> at 5. Fur; Further, ank believesieves that Abello's actions "if contiwill y reduce the bid bid amounamounts obtained at the . . . auction, or bly deter allr all bidding." Id.

II. ANALYSIS

A. Erleen Abello'son for Lfor Leave to Waive Personal Appearance

Defendant Erleen Abello requested the court to waive her personalarance at the hearing. Because ank's motions were were directed at Milo Abello, ErleeErleen Abello's presence was not necessary to hear the motion. Moreover, se the hearing iing is now past, the motion is moot.

B. Defendants' Motion for Enlargement of Time

A court may in its discretion, and for cause shown, enlarge time to perform an act after the ation of the period, if the failure to do the act within the period was the result of excusexcusable neglect. FSM Civ. R. 6(b).; The defe defendants' opposition to the Bank's motions was due on February 10, 2012. The actuaponse was filed oled on Feb 13, 2012. The defendants cite at lehst three power outages, and additional unschedulheduled outages, during the first week of ary which imposed difficulties on the defendant in producinducing the required documents. Because poutages are out oout of the defendants' control, and the defendants had no reason or way to know of the unscheduled power outages, the court finds that the defen' failure to file their opposition by February 10, 2012 was2 was due to excusable neglect. Goode having been shown, twn, the court grants the motion for enlargement of time.

C. tion njunInjunction

viewing a mofor a prelipreliminary injunction, the court weighs four factorsctors: (1) the possty of irreparaeparable harm to the moving party; he ba of ies betw between teen the parties; (3) likelihood of successccess on the merits; and (4) the public interest. Foods Pacific, v. H.inzHeinz Co. Australiaralia, [2001] FMSC 70; 10 FSM Intrm. 409, 416 (Pon. 2001).

1. Irrble aarm
&#16> he Bank argues Abello's acts actions and statements confuse and discourage potential bidderidders, and if allowed to continue will lireduc amoubtained at the sale, or possibly deter eter all ball bidding. Mnj. at 5-7. #160; Th0; The defen do noto not address this factor. Irreparable harm "may include the loss of goodwill, loss of customers and potential customers, lost sales, and simiarms se they are not rnot readily compensable by money damages .ges . .&#1." Yang v. Wes. Western Sales Trading Co., [2003] FMSC 83; 11 FSM Intrm. 607, 616 (Pon. 2003). The cours not now compute pute the exact degree to which the Bank will suffer loss of goodwilltomer potential customustomers. Abello cl intends to s to s to cause the Bank to suffer these harms. Becunder this factor the cthe court need only examine the possibility of irreparable harm, not merely the probability, it is enough that the Bank has sufferrm, and that Abello intends irreparable harms. This fhis factorhs in favo favor of the Bank.

2. Balance of Inju/i>

The Bank's potential and possible injuries are described above. They are mmminent and last lastian anury to Abello froo from an injunction prohibiting, until after the sale of the lot, publicablication of statements such as those in Et D of the Bank's motion for injunction. Abello has phas proteshat that such an injunction harms his right of free speech. How free speech is not a lt a limitless right. One limitation comem defamdefamation law, and as noted below, although thk hasinitiated a defamdefamation action against Abello, it has alleged enough facts in its motiomotion for injunction that, under the notieading standard in the FSM, FSM, Abello would be on notice that the Bank may have such a cause of action against him. The court not address whet whether Abello's statements constitute "commercial speech" to find that temporarily prohibiting Abello's allegdefamatory statements is a lesser injury than the injury to the Bank if it could not conduconduct the sale. Moreover, if by Abe actionctions bidders lower their bids or decline to attend the auction, he himself suffers, as the sale will fall farther shortatisfying the final judgment of July 6, 2006, which judgment he has not appealed.

3. Likelihood of Success en the Merits

As stated above, the Bank has not initiated a defamation action against Abello; however, the motio injunction was accompanied by a motion for an order to show cause why the defendants-specispecifically Abello-should not be held in contempt of court for obstruction of a court order. Mot. It 2.

a.&p>a. Con. Contempttempt of court isithe intentional obstruction of administration of justice, or the intentional disobedience or resistance to the court'ful wprocerder, rer, rule, decree, or command. 4 F.S. F.S.M.C. 119(1). Tnk asserts trts that Abel Abello's statements to the public constitute intentional obstruction of the administration of justice because they contain "false, misleading and threatening stats".& Mot. Inj. at 7-8t 7-8.&#16. Thtements-the domain name name "www.fsmdbfraud.tk" itself-suggests fraudulent conduct by the Bank. Abello has also brought two separate actions against the Bank as Civil Action Nos. 2009-054 and 2011-019. Both have been dism with pith prejudice: Civil Acto. 2009-054 was dwas dismissed by a Decision and Order of May 19, 2011; Civil Action No. 209 was dismissed by an Order of January 20, 2012. In continuing publio asserassert, agt, against the evidence, that the Bank had engaged in fraudulent conduct in obtaining not just the amended order of assignment, which is a final order, but also the stipulatedment from which Abello's gr's grievances arise, which is a final judgment, Abello intends not only to obstruct the administration of justice, but also to disobey or resist the court's lawful writ, process, order, rule or command. The Bank has therefore shhwn that it is likely to succeed on the merits of its motion for an order to show cause why the defendant should not be held in mpt.

b. Defamati>. Libel ibel is a subset of defamation, and is d is defined as "a false and unprivileged publication by writing . . . or fixeresenresentation tion to the eye which exposes any person to hatred, contempt, ridicul obloquy or which causes hies him to be shunned or avoided or which has a tendency to injure him in his occupation." Pohl v. Chuuk Pubtilityility Corp., [2005] FMSC 53; 13 FSM Intrm. 550, 557 (Chk. 2005) (quoting 50 AM. JUR. 2D Libel and Slander § 7 (rev. ed. 19 A court considers whether the allegedly defamatory statement: "exposes the plae plaintiff to (public) hatred, contempt, ridicule or obloquy (shame or disgrace); causes people to shun or avoid the plaintiff; or has a tendency to injure the plaintiff in hcupation or adversely affect the plaintiff's trade or businbusiness." Smith v. Nimea, 18IFSM Intrm. 36, 46 (Pon. 2011). Abello's public statements asserting that the Bank has engaged in fraud in this matter meets this test.

Considons of constitutional law and free speech sometimes apply, ply, as when the action involves a public official, a public figure, or a matter of substantial public controversy. Pohl, 13 FSM I at 5 at 557. In such cases, bethe otherother elements of defamation, the plaintiff must show that the defendant knew that the defamatory statement was false, or acted with malice or a rss dird for the truth.ruth. Id.see also PRi> PRi> PROSSER AND KEETON ON THE LAW OF TORTS §§ 113-15, at 805-08, 815-16, 820-23 (W. Page Keeton et al. eds., 5th ed. 1984). Thiser does not involve a ve a public official or figure. And althohe sale of the lahe land is a matter of public concern, as evidenced by the requirement for the Bank to give notice to the c of ransfer of title itle and the upcoming auction, it does not rise to the level of substantiaantial public controversy. Even if i, the fact that Ahat Abello has pressed on with his claims of fraud on the Bank's part, despite two courts ruling against him, eces at least a reckless disregard for the truth.

Thus, agh the Bank has has nhas not initiated a defamation action against Abello, it has pleaded sufficient facts that Abello is on notice of the possible cause of action against him. Further,Bank lleged enoughnough fach facts that it would be likely to succeed on the merits.

4. he PuInterInterest#160;#160;
The Bank asserts that the Abello statements confuse the public as to the proper tier title of the land to be sold. Theic int wein favor of isof issuing an injunction when ihen it is t is limited in scope to protect the public from statements which are morely to mislead than to inform the public. Yang, 11 FSM Inat 6 at 618. In ; In that case,court fort found that the public should not be subjected to misleading information regarding the consequences of buying certain goods when there has been nicialrmination that that the vendors have done anything improperroper. Id. Here, not only hare not beot been any judicial determination that the Bank has done anything improper, but there have been judicial determinations against Abello's claims oud ag the Bank as insufficiently pled, otherwise improimproper, per, unsubstantiated, or barred under res judicata. Further, ated before in thin the court's discussion of contempt, Abello's actions evidence an intent not only to obstruct the administratf justice, but also to disobey or resist the court's lawful writ, process, order, rule or c or command. Continued pursuit of thurscourse of action undermines public trust in the judicial system by undermining court orders and denying finality of judgment.; The court therefore finds that this factor weighs in favor of the Bank.

The >The courts that eaat each of the factors for injunctive relief weighs in favor of the bank, and accordingly HEREBY GRANTS the Bank's motion for injunction. Specifi, thet HEREBY ORDERORDERS that Milo Abello remove all statestatements alleging fraud on the part of the Bank, whether on the Internetn hard copy, and refrain from making such statements until the auction has been completed.
D. Motion for an Ord Show Show Cause

The also filed a motionotion for an order to show cause why defendant Milo Abello should e helcontempt. A person accused of committing civil contempt has a right to noti notice ofce of the charges and an opportunity to present a defense and mitigation. 4 F.. 119(2)(a). Abe; Abello was pr for ther the telephonic hearing, and filed a response to the Bank's motion. The court finds thello theo therefore has notice of the motion. Nevertheless, thet's schedschedule willallow it to have a live heae hearing of this charge until after the scheduled auction. Further, the courtnow enjo enjoined Abello fre activity that is the source of the Bank's grievance againagainst him. Therefore, the court will hold the motion in abeyance usuch time as the Bank requests a show cause hearing or with withdraws the motion.

III. CONCLUSION

or the reasons given above, the court HEREBY GRANTS Milo Ablo Abello's motion for enlargement of time, and the Bank's motion for injunction. The court HEREBY O that Abat Abello remove all statements alleging fraud on the part of the Bank, whether on the Internet or in hard copy, and refrain from making such statements until the auction has been completed.

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