In re Contempt of Fujita [2018] FMSC 26; 21 FSM R. 634 (Pon. 2018) (9 July 2018)

FSM SUPREME COURT TRIAL DIVISION

CIVIL ACTION NO. 1996-060

IN RE CONTEMPT OF KAZUHIRO FUJITA, )
)
Garnishee. )
)
FSM DEVELOPMENT BANK, )
)
Plaintiff, )
)
vs. )
)
YOSILYN CARL, Interim Administrator of the Estate )
of Linda Carl, and the ESTATE OF YOSHIRO CARL, )
)
Defendants. )
_______________________________________________ )

FINDING OF KAZUHIRO FUJITA IN CONTEMPT OF COURT

Dennis K. Yamase
Chief Justice

Hearing: January 18, 2018
Decided: July 9, 2018

APPEARANCES:

For the Plaintiff: Nora E. Sigrah, Esq.
P.O. Box M
Kolonia, Pohnpei FM 96941

For the Defendant: Yoslyn G. Sigrah, Esq.
(Yosilyn Carl) P.O. Box 3018
Kolonia, Pohnpei FM 96941

For the Defendant: Vincent Kallop, Esq.
(Estate of Y. Carl) Micronesian Legal Services Corporation
P.O. Box 129
Kolonia, Pohnpei FM 96941

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

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HEADNOTES

Contempt Acts Constituting

The FSM Supreme Court has the power to punish for contempt of court based on any intentional disobedience or resistance to the court’s lawful writ, process, order, rule, decree, or command. In re Contempt of Fujita, 21 FSM R. 634, 637 (Pon. 2018).

Contempt
Before imposing a sentence for contempt, a court must determine that the person who is potentially liable for contempt knew of the order, and had the ability to obey it. In re Contempt of Fujita, 21 FSM R. 634, 637 (Pon. 2018).

Contempt Acts Constituting
Contempt of court is any intentional obstruction of the administration of justice, including action by an officer of the court, or any intentional disobedience or resistance to the court’s lawful writ. In re Contempt of Fujita, 21 FSM R. 634, 638 (Pon. 2018).

Attachment and Execution Garnishment; Debtors’ and Creditors’ Rights Orders in Aid of Judgment
Upon application of either party and notice to the other, the court may modify an order in aid of judgment at any time, but the debtor’s attorney cannot simply direct her other client, the garnishee, to stop payments in violation of a lawful court order and writ of garnishment, without going through the proper legal process of having the order and writ modified. In re Contempt of Fujita, 21 FSM R. 634, 638 (Pon. 2018).

Contempt Acts Constituting
An attorney’s instruction to a garnishee to disobey a lawful writ of garnishment requiring payment to the creditor and to remit the monthly rent to her clients instead constitutes contempt of court. In re Contempt of Fujita, 21 FSM R. 634, 638 (Pon. 2018).

Attachment and Execution Garnishment; Attorney and Client; Contempt Acts Constituting
A garnishee’s payment of the monthly rent to the debtor or to his attorney does not excuse his non-compliance with the writ of garnishment, because clients are held accountable for their attorney’s acts or omissions. In re Contempt of Fujita, 21 FSM R. 634, 638-39 (Pon. 2018).

Attachment and Execution Garnishment; Attorney and Client; Contempt Acts Constituting
A garnishee’s attorney, as an officer of the court, is obligated to advise her garnishee client to comply with the writ of garnishment, and to transmit the garnishee’s monthly payments to the creditor and not to her other clients, who were not entitled to receive those funds. In re Contempt of Fujita, 21 FSM R. 634, 639 (Pon. 2018).

Attachment and Execution Garnishment; Contempt Acts Constituting
Any intentional disobedience or resistance to the court’s lawful order is contempt of court, and a non-party may be in contempt of a court order. Thus, a garnishee who deliberately disobeys a court order may be held in contempt of court. In re Contempt of Fujita, 21 FSM R. 634, 639 (Pon. 2018).

Contempt Civil
Civil contempt is a prospective remedial measure designed to coerce compliance with a lawful court order when the contemnor has been found to have the ability to comply with that order. In re Contempt of Fujita, 21 FSM R. 634, 639 (Pon. 2018).

Contempt Civil

A person found in civil contempt may be imprisoned until such time as he complies with the order or pays an amount necessary to compensate the injured party or both. The FSM contempt statute expressly provides that one who violates a court order may be put in jail until such time as he or she conforms his or her conduct the court’s lawful order. In re Contempt of Fujita, 21 FSM R. 634, 639 (Pon. 2018).

Contempt Civil
A person found in contempt in a case may also be subject to payments to compensate the opposing party for any additional attorney’s fees and costs. In re Contempt of Fujita, 21 FSM R. 634, 639 (Pon. 2018).

Contempt Civil
A contemnor may purge himself of civil contempt by paying the arrears. Upon adjudication of civil contempt, the court may order the contemnor imprisoned until such time as he complies with the orders issued to date and/or pays an amount necessary to compensate the court and plaintiff for the wasted time and expense. In re Contempt of Fujita, 21 FSM R. 634, 639 (Pon. 2018).

Attachment and Execution Garnishment; Contempt Acts Constituting
A garnishee is in contempt of court for intentional disobedience of the writ of garnishment when he had assistance of counsel, had notice and knowledge of the writ of garnishment requiring payments to the creditor, and had the ability to comply with the writ because he gave the full amount of the monthly rent payments to other persons. In re Contempt of Fujita, 21 FSM R. 634, 639 (Pon. 2018).

Contempt Civil
For a civil contempt finding, it is not enough to find that noncompliance was willful, as shown by knowledge of the order; there still must also be a recital a finding in the record that there was an ability to comply. In re Contempt of Fujita, 21 FSM R. 634, 639 n.3 (Pon. 2018).

Contempt Acts Constituting
When the matter concerned an order to show cause why a garnishee should not be held in contempt and evidence was obtained during the contempt hearing that the garnishee’s attorney may also have been in violation of the court’s writ of garnishment, the court may set an order to show cause hearing for attorney. In re Contempt of Fujita, 21 FSM R. 634, 640 (Pon. 2018).

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COURT’S OPINION

DENNIS K. YAMASE, Chief Justice:

I. BACKGROUND

A hearing in this matter was held on January 18, 2018 for the Court to consider the Plaintiff’s, FSM Development Bank (herein "FSMDB"), motion for an order to show cause filed on July, 5 2017. The motion was directed at garnishee Kazuhiro Fujita, who failed to comply with a Writ of Garnishment entered by the Court on March 13, 2017.

At the hearing, Nora E. Sigrah Esq., represented the FSMDB. Yoslyn Sigrah, appeared on behalf of the defendant, Yosilyn Carl, Interim Administrator for the Estate of Linda Carl. Vincent Kallop represented Fred Carl, Administrator for defendant Estate of Yoshiro Carl. Yoslyn Sigrah also represented the garnishee Kazuhiro Fujita, who appeared and was a witness at the hearing.

At the conclusion of the January 18, 2018 hearing, the Court instructed FSMDB to file a proposed order within two (2) weeks. On February 1, 2018, the FSMDB sought an enlargement of time to February 6, 2018 due to late receipt of the transcript, which was granted on February 5, 2018. The Court having received the Defendants’ responses, the filings of the parties, and after considering the evidence and testimony submitted during the hearing, hereby finds the garnishee, Kazuhiro Fujita, in contempt of court for failing to make the $500.00 monthly payments required by the Writ of Garnishment to the FSMDB from May, 2017 through January, 2018.

II. DISCUSSION

On March 13, 2017, an Order in Aid of Judgment was entered requiring Fujita Enterprises to make monthly rent payments of $500.00 to the FSMDB.^[1] A Writ of Garnishment directed at Fujita Enterprises was also entered on March 13, 2017 in regards to the required monthly payments.

The record shows that the Writ of Garnishment was served on counsels Nora Sigrah and Yoslyn Sigrah on March 14, 2017. Kazuhiro Fujita was served with the Writ of Garnishment on March 17, 2017. Kazuhiro Fujita made one payment of $500.00 to the FSMDB on April 3, 2017. No further payments were made to the FSMDB. The Writ of Garnishment has never been modified or vacated.

Pursuant to 4 F.S.M.C. 119(1)(b), the Court has the power to punish for contempt of court based on any intentional disobedience or resistance to the Court’s lawful writ, process, order, rule, decree, or command. Atenson v. Kukkun, 11 FSM R. 400, 402 (Chk. 2003); Johnny v. FSM, 8 FSM R. 203, 206 (App. 1997).

Before imposing a sentence for contempt, the Court must determine that the person who is potentially liable for contempt knew of the order, and had the ability to obey it. Mobil Oil Micronesia Inc v. Benjamin, 10 FSM R. 100, 102 (Kos. 2001); Hadley v. Bank of Hawaii, 7 FSM R. 449, 452 (App. 1996).

Kazuhiro Fujita testified that he had received the Writ of Garnishment and had made the April 2017 payment to FSMDB as ordered. Tr. at 4-5. Fujita further testified that he stopped paying FSMDB after April, 2017 at the direction of his attorney, Yoslyn Sigrah. Tr. at 5. Fujita gave the May and June, 2017 rent payments to Linda Carl, and after Linda Carl passed away in July, 2017, Fujita gave the $800.00 monthly rent payments to attorney Yoslyn Sigrah.^[2] Tr. at 6-7.

Fujita testified that he also gave the $800.00 monthly rent payment for January, 2018 to attorney Yoslyn Sigrah. Tr. at 15. Yoslyn Sigrah admitted to receiving the monthly rent payments from Fujita, and admitted that she did not give FSMDB the $800.00 monthly payment ordered by the Writ of Garnishment.

Instead, Sigrah stated that she gave the monthly rent payments she received from Fujita to her other clients, the surviving daughters of Linda Carl, Laylani and McLinda Carl. Sigrah submitted into evidence a commercial lease agreement for parcel no. 20-A-59 between Pohnpei State Government and Laylani Carl, registered in September, 2017, which lease covers the parking lot area rented to Fujita.

Nora Sigrah submitted copies of the residential lease agreement and addendum for parcel no. 020-A-55 between Pohnpei State Government and Yoshiro Carl registered in December 1976. Also submitted were the assignment of lease and consent and the real property mortgage signed by Yoshiro Carl for parcel no. 020-A-55, upon which Fujita’s building rental premises is constructed, and copies of the certificate of title for parcel no.020-A-55 and plat map 020-A-01. Defendant Fred Carl, Administrator for the Estate of Yoshiro Carl, agreed that the rent payments due from Kazuhiro Fujita should be paid to FSMDB.

Based upon testimony, presentations, and documents presented at the hearing, this Court concludes that Kazuhiro Fujita knew that the Writ of Garnishment required him to pay $500.00 of his monthly rent payments to FSMDB, and that he made his first and only payment to FSMDB on April 3, 2017. Kazuhiro Fujita’s attorney, Yoslyn Sigrah, also knew of the Writ of Garnishment, having been served the Writ of Garnishment on March 14, 2017. Fujita had the ability to comply with the Writ as he made every monthly rent payment after April, 2017 to either the late Linda Carl, or to his attorney, Yoslyn Sigrah.

Yoslyn Sigrah, who also represented Defendant Linda Carl, and now represents defendant Yosilyn Carl, Interim Administrator for the Estate of Linda Carl, directed her client Kazuhiro Fujita to violate the Writ by paying the rent directly to Linda Carl, and after Linda Carl’s death, to herself. Fujita’s counsel failed to transmit any of the rental payments in her custody to FSMDB.

Contempt of court is defined as any intentional obstruction of the administration of justice, including action by an officer of the court, or any intentional disobedience or resistance to the court’s lawful writ, pursuant to 4 F.S.M.C. 119(1)(b). Kazuhiro Fujita was under a lawful Writ of Garnishment to make payments of $500.00 per month directly to the FSMDB.

The late Linda Carl and Administrator Yosilyn Carl are represented by the same counsel, who could have motioned the Court to modify the Order in Aid of Judgment and Writ of Garnishment. No such motion or modification was ever filed by the defendants.

Davis v. Kutta, 10 FSM R. 224, 225 (Chk. 2001) and 6 F.S.M.C. 1411, provide that an Order in Aid of Judgment may be modified by the court at any time, upon application of either party and notice to the other. No such action was ever taken. The attorney for the debtor cannot simply direct her other client, the garnishee, to stop payments in violation of a lawful court order and writ of garnishment, without going through the proper legal process of having the order and writ modified.

An attorney’s instruction to a garnishee to disobey a lawful writ of garnishment requiring payment to FSMDB and to remit the monthly rent to her clients instead constitutes contempt of court. FSM Dev. Bank v. Christopher Corp., 20 FSM R. 98, 105 (Chk. 2015).

Here, the garnishee’s attorney, Yoslyn Sigrah, directed the payment to be made to her other clients, Linda Carl and the daughters of Linda Carl. She also accepted the monthly rent payments from the garnishee, and in disobedience to the Court’s lawful writ, gave those funds to her other clients instead of to the FSMDB. Due to attorney Yoslyn Sigrah’s actions, FSMDB suffered damages for the loss of nine (9) monthly $500.00 payments due from May, 2017 through January, 2018 in the total amount of $4,500.00.

Kazuhiro Fujita’s payment of the monthly rent to Linda Carl or to his attorney does not excuse his non-compliance with the Writ of Garnishment, because clients are held accountable for their attorney’s acts or omissions. Christopher Corp., 20 FSM R. at 103; Elymore v. Walter, 10 FSM R. 267, 269 (Pon. 2001); Miochy v. Chuuk State Election Comm’n, 15 FSM R. 426, 429 (Chk. S. Ct. App. 2007).

Attorney Yoslyn Sigrah, as Fujita’s attorney and as an officer of this Court, was obligated to advise her client, Fujita, to comply with the Writ of Garnishment, and to transmit the $500.00 monthly payments to FSMDB. Instead, she directed Fujita’s rent payments, and gave rent payments received by her from her client Fujita to benefit her other clients, the Carls, who were not entitled to receive those funds.

Any intentional disobedience or resistance to the court’s lawful order is contempt of court. Adams v. Island Homes Constr., Inc., 10 FSM R. 466, 475 (Pon. 2001). A non-party may be in contempt of a court order. Carlos Etscheit Soap Co. v. Gilmete, 15 FSM R. 285, 289 (Pon. 2007). A garnishee who deliberately disobeys a court order may be held in contempt of court. Mid-Pac Constr. Co. v. Senda, 6 FSM R. 135, 136 (Pon. 1993).

Civil contempt is a prospective remedial measure designed to coerce compliance with a lawful court order when the contemnor has been found to have the ability to comply with that order. Berman v. Pohnpei Legislature, 17 FSM R. 339, 352 (App. 2011); Rodriguez v. Bank of the FSM, 11 FSM R. 367, 382 (App. 2003).

4 F.S.M.C. 119(2)(a) and (c) provide that a person found in civil contempt may be imprisoned until such time as he complies with the order or pays an amount necessary to compensate the injured party or both. The FSM contempt statute expressly provides that one who is in violation of a court order may be put in jail until such time as he or she conforms his or her conduct the court’s lawful order. Carlos Etscheit Soap Co. v. Gilmete, 15 FSM R. 285, 289 (Pon. 2007). A person found in contempt in a case may also be subject to payments to compensate the opposing party for any additional attorney’s fees and costs. In re Contempt of Jack, 20 FSM R. 452, 467 (Pon. 2016).

A contemnor may purge himself of civil contempt by paying the arrears. Chieda v. FSM, 9 FSM R. 183, 186 (App 1999). Upon adjudication of civil contempt, the court may order the contemnor imprisoned until such time as he complies with the orders issued to date and/or pays an amount necessary to compensate the court and plaintiff for the wasted time and expense. FSM v. Ladore, 12 FSM R. 169, 171-72 (Pon. 2003).

In consideration of the evidence and presentations at the January 18, 2018 hearing, the Court finds Kazuhiro Fujita in contempt of court for intentional disobedience of the Writ of Garnishment. Kazuhiro Fujita had assistance of counsel, had notice and knowledge of the Writ of Garnishment requiring payments to FSMDB, and had the ability to comply with the Writ because he gave the full amount of the monthly rent payments to other persons. Berman v. Pohnpei Legislature, 17 FSM R. 339, 354 (App. 2011).^[3]

The Court notes that a disciplinary matter involving attorney Yoslyn Sigrah based on the facts in this case has been filed. The Court will allow the disciplinary matter against the attorney to proceed and the Court will turn its attention to the contempt of Kazuhiro Fujita.

Kazuhiro Fujita may purge himself of the civil contempt by payment of all arrears due under the Writ of Garnishment from May, 2017 through January, 2018, in the sum of $4,500.00 to the FSMDB within 60 days, and by Kazuhiro Fujita’s immediate compliance with the Writ of Garnishment by monthly payment of $500.00 of the rent due to FSMDB, no later than August 1, 2018. If Kazuhiro Fujita fails to purge himself of the civil contempt, he may be ordered imprisoned at the Pohnpei State jail until he complies with this order.

This matter concerned an order to show cause against the garnishee Fujita. Since evidence was obtained during the contempt hearing that attorney Yoslyn Sigrah may also have been in violation of the Court’s Writ of Garnishment of March 13, 2017, the Court HEREBY sets an order to show cause hearing for attorney Yoslyn Sigrah for Thursday, July 19, 2018 at 9:30 a.m. at the FSM Supreme Court in Palikir, Pohnpei.

III. CONCLUSION

Kazuhiro Fujita is hereby found IN CONTEMPT OF COURT. The FSMDB shall submit its costs and fees incurred for the motion for an Order to Show Cause, and shall do so within twenty (20) days of being served with this Order. The FSMDB shall also file and serve a status report on the payment of the $4,500.00 arrears and compliance with the Writ of Garnishment within sixty (60) days of the issuance of this Order.

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^[1] The $500.00 amount is for rental space being used by Fujita Enterprises, and owned by the deceased, Linda Carl.

^[2] The amount of rent owed by Kazuhiro Fujita may have increased from $500.00 to $800.00 per month. An Order entered on May 13, 2017 instructed Fujita Enterprises to notify the court and the parties once a loan on a vehicle, provided to the late Linda Carl by Fujita Enterprises, was paid off. The vehicle loan is in the amount of $300.00 per month, which in addition to the $500.00 already owed, would increase the monthly payments to the FSMDB to $800.00 per month. The court has not received notice on whether or not the loan has been paid off.

^[3] "For a civil contempt finding, it is not enough to find that noncompliance was willful, as shown by knowledge of the order; there still must also be a recital a finding in the record that there was an ability to comply." Berman, 17 FSM R. at 354 (citing Hadley v. Bank of Hawaii, 7 FSM R. 449, 453 (App. 1996)).