Fuji Enterprises v Jacob [2017] FMSC 37; 21 FSM R. 355 (App. 2017) (6 October 2017)

FSM SUPREME COURT APPELLATE DIVISION

APPEAL CASE NO. P8-2015
(consolidated with P6-2015)
(Civil Action No. 2014-044)

FUJI ENTERPRISES, )
)
Appellant/Plaintiff, )
)
vs. )
)
SALVADOR S. JACOB, SIHNA LAWRENCE, )
FSM NATIONAL GOVERNMENT, and BANK )
OF FEDERATED STATES OF MICRONESIA, )
)
Appellees/Defendants. )
__________________________________________ )

OPINION

Argued: August 11, 2017
Decided: October 6, 2017

BEFORE:

Hon. Dennis K. Yamase, Chief Justice, FSM Supreme Court
Hon. Camillo Noket, Temporary Justice*
Hon. Chang B. William, Temporary Justice**

*Chief Justice, Chuuk State Supreme Court, Weno, Chuuk
**Chief Justice, Kosrae State Court, Tofol, Kosrae

APPEARANCES:

For the Appellant: Yoslyn G. Sigrah, Esq.
P.O. Box 3018
Kolonia, Pohnpei FM 96941

For the Appellees: Craig D. Refner, Esq.
(Jacob, Lawrence, Josephine Leben James, Esq. (argued)
& FSM) FSM Department of Justice
P.O. Box PS-105
Palikir, Pohnpei FM 96941

For the Appellee: Stephen V. Finnen, Esq.
(Bank of the FSM) P.O. Box 1450
Kolonia, Pohnpei FM 96941

* * * *

HEADNOTES

Appellate Review Standard Civil Cases De Novo
When the facts are not in dispute and questions of law alone are present, the appellate court reviews these questions de novo. Fuji Enterprises v. Jacob, 21 FSM R. 355, 359 (App. 2017).

Appellate Review Decisions Reviewable
The general rule is that appellate review of a trial court is limited to final orders and judgments. Final orders and judgments are final decisions. Fuji Enterprises v. Jacob, 21 FSM R. 355, 380 (App. 2017).

Civil Procedure; Judgments
A decree nisi is a court’s decree that will become absolute unless the adversely affected party shows the court, within a specified time, why it should be set aside. Fuji Enterprises v. Jacob, 21 FSM R. 355, 360 n.4 (App. 2017).

Appellate Review Decisions Reviewable
An appellate court will not consider an appellant’s arguments against certain defendants when no final adjudication has been made on the appellant’s claims against these particular defendants. Fuji Enterprises v. Jacob, 21 FSM R. 355, 360 (App. 2017).

Attachment and Execution; Statutes Construction; Taxation Tax Liens
When the issue of a bank releasing funds under 54 F.S.M.C. 153 is a matter of first impression, the court may look to case law of other jurisdictions, particularly the United States, for comparison and guidance. Fuji Enterprises v. Jacob, 21 FSM R. 355, 361 (App. 2017).

Attachment and Execution; Taxation Tax Liens
Under 54 F.S.M.C. 153, a delinquent taxpayer will have a lien placed on his property, and the lien will be collected in the similar manner as an execution, meaning it may be seized and sold to satisfy the taxes owed. Fuji Enterprises v. Jacob, 21 FSM R. 355, 361 (App. 2017).

Attachment and Execution
Execution is the judicial enforcement of a money judgment, usually by seizing and selling the judgment debtor’s property. Fuji Enterprises v. Jacob, 21 FSM R. 355, 361 n.6 (App. 2017).

Attachment and Execution; Taxation Tax Liens
The statutory scheme of 54 F.S.M.C. 153, in using the language "in the same manner as a levy of an execution," does not mean that a court-issued writ of execution is required before a levy. Fuji Enterprises v. Jacob, 21 FSM R. 355, 361 (App. 2017).

Statutes Construction
Statutes are to be interpreted as the legislature intended and a statute’s words are the best indication of that intent. Fuji Enterprises v. Jacob, 21 FSM R. 355, 361-62 (App. 2017).

Taxation
Under 54 F.S.M.C. 152(3), the Secretary of Finance’s assessment of taxes is presumed correct unless and until it is proven incorrect. Fuji Enterprises v. Jacob, 21 FSM R. 355, 362 (App. 2017).

Banks and Banking; Taxation Tax Liens
A bank does not have a duty to dispute a depositor’s tax assessment, nor to challenge the constitutionality of 54 F.S.M.C. 153, as these are the account holder’s responsibilities, and the bank is obliged to comply with the statutory levy, or face penalties under the law. Fuji Enterprises v. Jacob, 21 FSM R. 355, 362 (App. 2017).

Taxation Tax Liens
The levy for failure to pay a national tax reaches all non-exempt property of the taxpayer whether in his possession or in the possession of third parties or agencies. Fuji Enterprises v. Jacob, 21 FSM R. 355, 362 (App. 2017).

Torts Negligence Gross Negligence
Gross negligence is the intentional failure to perform a manifest duty in reckless disregard of the consequences as affecting another’s life or property. Fuji Enterprises v. Jacob, 21 FSM R. 355, 362 (App. 2017).

Torts Damages Punitive; Torts Negligence Gross Negligence
For punitive damages to be awarded, there must be evidence of gross negligence. Fuji Enterprises v. Jacob, 21 FSM R. 355, 363 n.8 (App. 2017).

Torts Negligence
When a plaintiff does not submit any evidence about his damages, his negligence claim fails. Fuji Enterprises v. Jacob, 21 FSM R. 355, 363 (App. 2017).

Civil Procedure Dismissal Before Responsive Pleading; Civil Procedure Summary Judgment
When either party, in support or in opposition to a Rule 12(b)(6) motion, submits matters to the court outside of the pleadings, the court has two options. The court may either accept those outside matters and treat the motion as one for summary judgment pursuant to Rule 56 or it may exclude those matters and continue to treat the motion as one for dismissal for failure to state a claim upon which relief can be granted. Fuji Enterprises v. Jacob, 21 FSM R. 355, 363 (App. 2017).

Civil Procedure Dismissal Before Responsive Pleading; Civil Procedure Summary Judgment
A post-answer Rule 12(b)(6) motion is untimely and some other vehicle, such as a motion for judgment on the pleadings or for summary judgment, must be used to challenge the plaintiff’s failure to state a claim for relief Fuji Enterprises v. Jacob, 21 FSM R. 355, 363 (App. 2017).

Civil Procedure Dismissal Before Responsive Pleading
The filing of a Rule 12(b)(6) motion to dismiss before filing an answer is allowed under Rule 12(b). Fuji Enterprises v. Jacob, 21 FSM R. 355, 364 (App. 2017).

Civil Procedure Pleadings

"Pleadings" are defined as the complaint, answer, reply to a counterclaim, answer to a cross-claim, third-party complaint, and third-party answer. Fuji Enterprises v. Jacob, 21 FSM R. 355, 364 n.9 (App. 2017).

Common Law
Before the 1979 initiation of constitutional government in the FSM, it may be said that the common law of the FSM was based on the law of the United States, the Trust Territory, and other nations in the common law tradition. Fuji Enterprises v. Jacob, 21 FSM R. 355, 364-65 (App. 2017).

Common Law
In the absence of Micronesian precedent, the FSM Supreme Court can and should consider the reasoning from the courts of other common law jurisdictions. Fuji Enterprises v. Jacob, 21 FSM R. 355, 365 n.10 (App. 2017).

Constitutional Law Interpretation
When the language of the FSM Constitution has been borrowed from the U.S. Constitution, the court may look to leading U.S. cases for guidance in interpreting that language, especially where the meaning is not self-evident from the words themselves; in particular, U.S. constitutional law at the time of adoption of the FSM Constitution can have special relevance in determining the meaning of similar constitutional language here. Fuji Enterprises v. Jacob, 21 FSM R. 355, 365 n.10 (App. 2017).

Contracts Formation
A contract is a promise between two parties for the future performance of mutual obligations. For the promise to be enforceable there must be an offer, acceptance, consideration, and definite terms. Fuji Enterprises v. Jacob, 21 FSM R. 355, 365 (App. 2017).

Contracts Breach
For a breach of contract action, the claimant must identify the contractual obligations of each party. Fuji Enterprises v. Jacob, 21 FSM R. 355, 365 (App. 2017).

* * * *

COURT’S OPINION

DENNIS K. YAMASE, Chief Justice:

I. BACKGROUND

This appeal arises from the trial division’s Order Dismissing Party [Bank of the Federates States of Micronesia] and Order of Dismissal Nisi [FSM et al.], entered on August 7, 2015, in favor of Appellees/Defendants Salvador S. Jacob, Sihna Lawrence, FSM National Government and Bank of the Federated States of Micronesia (herein "the Bank"), and against Appellant/Plaintiff Fuji Enterprises. [Fuji Enterprises v. Jacob, 20 FSM R. 121 (Pon. 2015).]

On October 25, 2013, a Notice of Demand for Payment of Taxes was issued to the Appellant/Plaintiff Fuji Enterprises (herein "Fuji") by the FSM Division of Customs and Tax Administration (herein "Customs and Tax"). The demand was the direct result of a tax audit performed by Customs and Tax on Fuji, covering taxes owed in the years 2006, 2007, and 2008. The amount owed totaled $7,540.95.

No payments were made by Fuji. On November 25, 2013, Customs and Tax served a Notice of Levy and Order of Execution on the Bank and on the Bank of Guam for funds in their possession owned by Fuji to satisfy the amount owed.

On November 26, 2013, the Bank sent notice to Fuji regarding the levy and order of execution. The Bank also instructed Fuji to take the matter up with Customs and Tax if there were any objections to the levy and order of execution. No such action was taken by Fuji, and on November 28, 2013, the Bank relinquished $6,676.10 to the Customs and Tax office, which is the entire amount in an account in Fuji’s name.

On November 12, 2014 a Complaint was filed by Fuji against the Defendants/Appellees in this matter. On August 7, 2015, the trial court issued an Order Dismissing Party and Order of Dismissal Nisi. The Order dismissed the Bank from the suit, and dismissed the remaining defendants for insufficient service of process of the complaint, unless Fuji executed proper service on the remaining defendants by August 24, 2015.^[1]

Proper service was made on the remaining defendants on August 21, 2015, thus, addressing the insufficiency of service issue. A Notice of Appeal disputing the August 7, 2015 Order was filed on September 7, 2015. A second Notice of Appeal was filed on October 13,2015, which was docketed as P8-2015, which challenges the trial court’s October 1, 2015 Order to Enter Partial Final Judgment, dismissing the Bank on the merits and allowing the recovery of costs against Fuji.^[2]

II. ISSUES PRESENTED

In its opening brief, the Appellant Fuji Enterprises presents three issues on appeal for the Appellate Court’s consideration:

(1) Whether the court Order entered on August 7, 2015, was erroneous, contrary to law, and was not based on substantial evidence?

(2) Whether the court Judgment filed on October 1, 2015, was erroneous, contrary to law, and was not based on substantial evidence?

(3) Whether the court Orders of August 7, 2015 and October 1, 2015 violated Appellant’s constitutional rights and other common law rights?

III. STANDARD OF REVIEW

Issues of law are reviewed de novo on appeal. Pohnpei v. AHPW, Inc., 14 FSM R. 1, 14 (App. 2006); George v. Nena, 12 FSM R. 310, 313 (App. 2004); Tulensru v. Wakuk, 10 FSM R. 128, 132 (App. 2001); Nanpei v. Kihara, 7 FSM R. 319, 323-24 (App. 1995).

When the facts are not in dispute and questions of law alone are present, the appellate court reviews these questions de novo. Damarlane v. Pohnpei Legislature, 15 FSM R. 301, 312 (App. 2007); George, 12 FSM R. at 313; Tulensru, 10 FSM R. at 132; Department of Treasury v. FSM Telecomm. Corp., 9 FSM R. 460, 464 (App. 2000).

IV. ANALYSIS

(a) Claims against Salvador Jacob, Sihna Lawrence, and the FSM National Government.

In its opening brief, Fuji makes several arguments against Defendants/Appellees Salvador Jacob, Sihna Lawrence, and the FSM National Government. Fuji challenges the method in which Fuji was selected for an audit review, the assessment of the audit review, service of Notice of Demand for Payment, service of the Levy and Order of Execution on the Bank, and argues that Fuji does not owe additional taxes to Customs and Tax. Appellant’s Br. at 4-9.

These arguments made by Fuji supra are irrelevant to this appeal because these claims are not made as part of a final order issued by the trial court, pursuant to FSM Appellate Rule 4(a)(1)(A).^[3] The general rule is that appellate review of a trial court is limited to final orders and judgments. Final orders and judgments are final decisions. Chuuk v. Davis, 9 FSM R. 471, 473 (App. 2000); Etscheit v. Adams, 6 FSM R. 608, 610 (App. 1994).

The well-established general rule is that only final judgment decisions may be appealed. Iriarte v. Individual Assurance Co., 17 FSM R. 356, 359 (App. 2011); In re Extradition of Jano, 6 FSM R. 23, 24 (App. 1993).

Here, the August 7, 2015 Order dismissed Salvador Jacob, Sihna Lawrence and the FSM National Government Nisi, which allowed the litigation to move forward if Fuji properly served its Complaint on the defendants.^[4] The Order allowed proper service to be done by August 24, 2015, and Fuji performed adequate service on August 21, 2015. Since proper service was made, the dismissal of Salvador Jacob, Sihna Lawrence, and the FSM National Government is set aside and the matter is allowed to proceed in the trial division.

This Court will not consider the arguments against the named defendants because, as required under FSM Appellate Rule 4(a)(1)(A) and applicable case law, no final adjudication has been made on Fuji’s claims against these particular defendants.

(b) Statutory language of 54 F.S.M.C. 153.

The August 7, 2015 Order dismissed the Bank for failure to state a claim upon which relief may be granted, pursuant to FSM Civil Rule 12(b)(6).^[5] Fuji Enterprises v. Jacob, 20 FSM R. 121, 126 (Pon. 2015). The court below held that the Bank lawfully complied with the notice of levy and execution when it surrendered $6,676.10, which the Bank held in an account in Fuji’s name. Id.

The Bank’s actions were made pursuant to 54 F.S.M.C. 153, which states: "All taxes imposed or authorized under this chapter shall be a lien upon any property of the person or business obligated to pay said taxes and may be collected by levy upon such property in the same manner as the levy of an execution."

Because the issue of the Bank releasing funds under 54 F.S.M.C. 153 may be a matter of first impression, the Court may look to case law of other jurisdictions, particularly the United States, for comparison and guidance. Creditors of Mid-Pac Constr. Co. v. Senda, 4 FSM R. 157, 160 (Pon. 1989); Federated Shipping Co. v. Ponape Transfer & Storage, 4 FSM R. 3, 9 (Pon. 1989); Semens v. Continental Air Lines, 2 FSM R. 131, 137 (Pon. 1985).

Similar to 54 F.S.M.C. 153, the U.S. Internal Revenue Code of 1954, as amended under 26 U.S.C. § 6331(a), authorihe issuanceuance of levies as an administrative means of collecting taxes by seizure and/or sale of property to satisfy delinquent taxes.

The term "levy" as used in the provision of the Internal Revenue Code authorizing a levy upon the property and right to property of a delinquent taxpayer includes the power of distraint and seizure by any means. It has been held that a Treasury Regulation delegating the power to levy to District Directors of Internal Revenue and providing that a levy may be made by serving notice of levy on any person in possession of, or obligated with respect to property, such as a bank in which he has an account, is sufficient even if unaccompanied by a warrant of distraint.

35 AM. JUR. 2D Federal Tax Enforcement § 26 (1967)hasis added).

Fuji’s claim is that the Bank acted improperly when it honored the levy, because a writ of execution was not issued by a court to enforce payment of a judgprior to the levy. Appellapellant’s Br. at 19-21. The court below held that 54 F.S.M.C. 153 does not require a writ of execution, if it did, the statute would say so. Fuji Enterprises, 20 FSM R. at 125.

Under 54 F.S.M.C. 153, a delinquent tax payer shall have a lien placed on his property, and may be collected in the similar manner as an execution, meaning it may be seized and sold to satisfy the taxes owed.^[6] The trial court was justified in finding that the statutory scheme of 54 F.S.M.C. 153, in using the language "in the same manner as a levy of an execution", does not mean that a court-issued writ of execution is required prior to a levy. This is based on a plain reading of the statute. Statutes are to be interpreted as the legislature intended and a statute’s words are the best indication of that intent. Rodriguez v. Bank of the FSM, 11 FSM R. 367, 379 (App. 2003).

The trial court further held, that "The statutory scheme grants the national government the authority to determine the amount of tax due and to collect those taxes." Fuji Enterprises, 20 FSM R. at 125-26. Under 54 F.S.M.C. 152(3), the Secretary of Finance’s assessment of the taxes is presumed correct unless and until it is proven incorrect. Ting Hong Oceanic Enterprises v. Ehsa, 10 FSM R. 24, 31 (Pon. 2001).

The statutory scheme also permits a tax levy on the lien created by 54 F.S.M.C. 153. The Bank thus complied with the FSM’s tax statutes since the nation’s statutes are presumed to be constitutional. Jano v. FSM, 12 FSM R. 569, 572-73 (App. 2004); Rodriguez, 11 FSM R. at 382.

Although the Bank did notify Fuji of the levy, and advised Fuji to address the issue with Customs and Tax, "the bank is not required to challenge 54 F.S.M.C. 153’s constitutionality on a depositor’s behalf and may rely on the statute." Fuji Enterprises, 20 FSM R. at 126.

During oral arguments, the Bank argued that it was required to adhere to the levy because non-compliance would subject the Bank to certain penalties, including a fine or imprisonment, or both, pursuant to 54 F.S.M.C. 901.^[7]

The court below did not err in holding that the Bank does not have a duty to dispute the tax assessment, nor to challenge the constitutionality of 54 F.S.M.C. 153, as these are the responsibilities of the account holder and the Bank is obliged to comply with the statutory levy, or face penalties under the law. Fuji Enterprises, 20 FSM R. at 126.

Also, the facts do not show, and Fuji does not argue, that the funds that were released by the Bank were exempt property. The levy for failure to pay a federal tax reaches all non-exempt property of the taxpayer whether in his possession or in the possession of third parties or agencies. Field v. United States, [1959] USCA5 89; 263 F.2d 758, 763 (5th Cir. 1959).

Accordingly, this Court determines that in the face of possible consequences of non-compliance and violation 54 F.S.M.C. 153, the Bank’s action in releasing Fuji’s funds that it had in its possession was appropriate.

(c) Gross negligence claim.

Fuji also argues that the Bank acted with gross negligence by releasing their funds to the FSM. Appellant’s Br. at 8-9. Gross negligence is "[t]he intentional failure to perform a manifest duty in reckless disregard of the consequences as affecting the life or property of another." Nakamura v. FSM Telecomm. Corp., 17 FSM R. 41, 49 (Chk. 2010) (citing BLACK’S LAW DICTIONARY 931 (5th ed. 1979)).

Assuming that the Bank did owe a duty of care to Fuji to protect its money against a statutory levy, which it did not, the facts to do not show that the Bank acted with intent or reckless disregard. Also, no claim for punitive damages was made by Fuji.^[8] When a plaintiff does not submit any evidence about his damages, his negligence claim fails. Nakamura v. FSM Telecomm. Corp., 17 FSM R. 119, 123 (Chk. 2010).

(d) Trial court’s analysis under FSM Civil Rule 12(b)(6) and FSM Civil Rule 56(c).

Appellants argue that the trial court erred in reviewing the Bank’s Motion to Dismiss under FSM Civil Rule 12(b)(6) and FSM Civil Rule 56(c). Appellant’s Br. at 13. In its August 7, 2017 Order, the trial court states that the Bank moved for dismissal of this matter pursuant to FSM Civil Rule 12(b)(6), and in the alternative, moved for judgment under FSM Civil Rule 12(c) or 56(c). Fuji Enterprises, 20 FSM R. at 124.

The trial court’s review of the Bank’s motion under FSM Civil Rule 56(c) is permissible because it is allowed under the rule itself. FSM Civil Rule 12(b) states, in part,

If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

(emphasis added).

When either party, in support or in opposition to a Rule 12(b)(6) motion, submits matters to the court outside of the pleadings, the court has two options. The court either may accept those outside matters and treat the motion as one for summary judgment pursuant to Rule 56 or exclude those matters and continue to treat the motion as one for dismissal for failure to state a claim upon which relief can be granted. Latte Motors, Inc. v. Hainrick, 7 FSM R. 190, 192 (Pon. 1995).

Here, the trial court applied the Rule 56 standard in granting summary judgment and dismissing the Bank, as a result of a Rule 12(b)(6) for failure to state a claim upon which relief may be granted motion for dismissal, which is permitted under Rule 12(b) supra. Therefore, the Appellant’s argument on this issue is without merit.

On a related matter, during oral arguments, Fuji asserts that after the filing of the Complaint by the plaintiff, the Bank should have filed an Answer instead of a Motion to Dismiss under Rule 12(b)(6).

A motion made under Rule 12(b)(6) that raises the defense of failure to state a claim upon which relief may be granted must be made before the service of a responsive pleading, but according to Rule 12(h)(2) the defense is preserved and may be raised as late as trial. Technically therefore, a post-answer Rule 12(b)(6) motion is untimely and the cases indicate that some other vehicle, such as a motion for judgment on the pleadings or for summary judgment, must be used to challenge the plaintiff’s failure to state a claim for relief.

5B CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE, § 1357, at 408 (3d ed. 2004) (emphasis added).^[9]

The filing of a Rule 12(b)(6) motion by the Bank prior to filing an Answer is allowed Rule 12(b). This sections states, in pertinent part that:that:

Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counter-claim, cross-claim, or third-party claim, shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: . . .failu state a te a claim uaim upon which relief can be granted . .
#160;. A motion making king any of these defenses shalmade fore pleading if a further pleading is permitted.

(emphasis addedadded).

Fuji’s argument that ank should have filed an Anan Answer instead of a motion for dismissal pursuant to Rule 12(b)(6) is without merit because it is permitted under Rule 12(b) and applicable case law.

(e) Applicability of foreign law.

The appellant claims that the Court should apply foreign law, specifically laws of Japan, because of the trial court’s application of U.S. law. Appellant’s Br. at 14. This argument is made pursuant to FSM Civil Rule 44.1, which states:

A party who intends to raise an issue concerning the law of a foreign country shall give notice in his pleadings or other reasonable written notice. The court, in determining foreign law, may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Rules of Evidence. The court's determination shall be treated as a ruling on a question of law.

In the present matter, Fuji argues that the Bank’s actions in releasing funds would not happen in Japan. Appellant’s Br. at 14. Although the trial court used both U.S. and FSM law as authority for its decision, the Appellant does not offer a compelling reason why the law of Japan should apply to this matter, and no specific case law, statute, or rule from Japan is cited as applicable. Many of the laws and the Constitution of the FSM derive from U.S. law and the trial court’s application of U.S. law was not inappropriate. Prior to the 1979 initiation of constitutional government in the FSM, it may be said that the common law of the FSM was based on the law of the United States, the Trust Territory, and other nations in the common law tradition. AHPW, Inc. v. FSM, 10 FSM R. 420, 423 (Pon. 2001).^1[0] Accordingly, the Appellant’s argument under this section is without specific support, is rejected, and borders on being frivolous.

(f) Breach of contract claim.

Finally, Fuji argues that the Bank has a contractual duty to its customers. A contract is a promise between two parties for the future performance of mutual obligations. For the promise to be enforceable there must be an offer, acceptance, consideration and definite terms. Livaie v. Weilbacher, 13 FSM R. 139, 143 (App. 2005).

The Appellant does not identify the contractual obligations of each party, nor, was a copy of any agreement between the parties produced at the trial level. Also, the requirements of an enforceable contract under Livaie are not met based on the facts as presented below.

V. CONCLUSION

Therefore, in consideration of the evidence on the record, the written and oral arguments presented by the parties, the decision of the trial court in dismissing the Bank of the Federated States of Micronesia, is HEREBY AFFIRMED.

* * * *

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^[1] At issue is FSM Civil Rule 4(d), which requires service on the FSM Attorney General in matters where the FSM national government is a party. Initially, only Salvador Jacob, as Assistant Secretary of Customs and Tax and Sihna Lawrence, as Secretary of Finance, were served with the complaint.

^[2] The October 1, 2015 decision being appealed is a one page Order instructing the Clerk of Court to enter judgment in favor of the Bank.
^[3] FSM App. R. 4(a)(1)(A):

In civil cases, by the filing of a notice of appeal as provided in Rule 3 within forty-two (42) days after the date of the entry of the judgment or order appealed from, appeals may be taken:

(A) from all final decisions of the trial divisions of the Federated States of Micronesia Supreme Court and the Kosrae State Court, and of the Chuuk State Supreme Court appellate division; from final decisions of the highest state courts in Yap and Pohnpei if the cases require interpretation of the national Constitution, national law, or a treaty; and in other cases where appeals to this Court from final decisions of the highest state courts are permitted under the Constitution of those states;

(emphasis added).

^[4] A decree nisi is defined as "A court’s decree that will become absolute unless the adversely affected party shows the court, within a specified time, why it should be set aside." BLACK’S LAW DICTIONARY 180 (2d pocket ed. 2001).
^[5] FSM Civil Rule 12(b)(6):

Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counter-claim, cross-claim, or third-party claim, shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: . . . (6) failure to state a claim upon which relief can be granted . . . "

^[6] Execution is defined as "Judicial enforcement of a money judgment, usu. by seizing and selling the judgment debtor’s property." BLACK’S LAW DICTIONARY 258 (2d pocket ed. 2001).
^[7] 54 F.S.M.C. 901:

Except where another penalty is specified for a violation of a provision of this title, any person who willfully violates any of the provisions of this title, or any license, rule, or regulation issued thereunder, shall upon conviction be imprisoned for a period of not more than one year, or fined not more than $500, or both.

^[8] "[F]or punitive damages to be awarded, there must be evidence of gross negligence." Nakamura v. Mori, [2009] FMSC 6; 16 FSM Intrm. 262, 268 (Chk. 2009).
^[9] “Pleadings" are defined by Rule 7(a) as the complaint, answer, reply to a counterclaim, answer to a cross-claim, third-party complaint, and third-party answer. Adams v. Island Homes Constr., Inc., 10 FSM R. 159, 161 (Pon. 2001).

FSM Civil Rule 7(a):

Pleadings. There shall be a complaint and an answer; a reply to a counterclaim denominated as such; an answer to a cross-claim, if the answer contains a cross-claim; a third-party complaint, if a person who was not an original party is summoned under the provisions of rule 14; and a third-party answer, if a third-party complaint is served. No other pleading shall be allowed, except that the court may order a reply to an answer or a third-party answer.
^1[0] In the absence of Micronesian precedent, this court can and should consider the reasoning from the courts of other common law jurisdictions. Rauzi v. FSM, 2 FSM Intrm. 8, 14-15 (Pon. 1985).

When the language of the FSM Constitution has been borrowed from the U.S. Constitution, the court may look to leading U.S. cases for guidance in interpreting that language, especially where the meaning is not self-evident from the words themselves; in particular, U.S. constitutional law at the time of adoption of the FSM Constitution can have special relevance in determining the meaning of similar constitutional language here. Paul v. Celestine, 4 FSM R. 205, 208 (App. 1990): see also Rodriguez v. Bank of the FSM, 11 FSM R. 367, 385 (App. 2003); M/V Hai Hsiang #36 v. Pohnpei, 7 FSM R. 456, 459-60, 463-64 (App. 1996); Luzama v. Ponape Enterprises Co., 7 FSM R. 40, 45 (App. 1995); Federal Business Dev. Bank v. S.S. Thorfinn, 4 FSM R. 367, 371 (App. 1990); Tammow v. FSM, 2 FSM R. 53, 56-57 (App. 1985) (when the FSM Constitution’s framers borrowed phrases from the U.S. Constitution, it may be presumed that those phrases were intended to have the same meaning given to them by the U.S. Supreme Court).