FSM v Mikel [2018] FMSC 34; 22 FSM R. 33 (Chk. 2018) (24 August 2018)

FSM SUPREME COURT TRIAL DIVISION
CIVIL ACTION NO. 2014-1000

FEDERATED STATES OF MICRONESIA,
Plaintiff,

vs.

ISMAEL MIKEL,
Defendant.
__________________________________________

ORDER OF DISMISSAL

Beauleen Carl-Worswick
Associate Justice

Trial: December 4, 2017, July 23, August 4, 2018
Decided: August 24, 2018

APPEARANCES:

For the Plaintiff: Josephine Leben James, Esq.
Assistant Attorney General
FSM Department of Justice
P.O. Box PS-105
Palikir, Pohnpei FM 96941

For the Defendant: Johnny Meippen, Esq.
P.O. Box 705
Weno, Chuuk FM 96942

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HEADNOTES

Evidence - Burden of Proof
In a civil case, the plaintiff has the burden of proving each element of his cause of action by a preponderance of the evidence, and if he fails to do so, judgment will be entered against him. FSM v. Mikel, 22 FSM R. 33, 36 (Chk. 2018).

Evidence - Burden of Proof
Preponderance of the evidence is not evidence to a "moral certainty" or "clear and convincing evidence." As a standard of proof, "preponderance of the evidence" means that the facts asserted by the plaintiff are more probably true than false. FSM v. Mikel, 22 FSM R. 33, 36 (Chk. 2018).

Torts - Conversion
The elements of an action for conversion are the plaintiffs’ ownership and right to possession of the personalty, the defendant’s wrongful or unauthorized act of dominion over the plaintiff’s property inconsistent with or hostile to the owner’s right, and resulting damages. FSM v. Mikel, 22 FSM R. 33, 36 (Chk. 2018).

Torts - Conversion
The national government, through Compact of Free Association funding, has an ownership right and a right to possess access to the Chuuk EPA overseas account, the account itself, and the minutes used to make these calls, but when it is unable to show that the calls were non-official, it has not met its burden of proof on its conversion claim that the defendant’s actions were wrongful or that his action resulted in an unauthorized act of dominion over the government’s right or control. FSM v. Mikel, 22 FSM R. 33, 36 (Chk. 2018).

Civil Procedure - Pleading - With Particularity; Torts - Fraud
In a claim for fraud, the pleader must state the time, place, and content of the false misrepresentation, the fact misrepresented, and what was obtained or given up as a consequence of the fraud. FSM v. Mikel, 22 FSM R. 33, 37 (Chk. 2018).

Remedies - Quantum Meruit; Remedies - Restitution
The "unjust enrichment" doctrine generally refers to the situation where someone takes part performance under contract that is void for impossibility, illegality, mistake, fraud, or some other reason. The, even though there is no enforceable contract, the doctrine requires the individual to either return what has been received under the contract or pay the other party for it. FSM v. Mikel, 22 FSM R. 33, 37 (Chk. 2018).

Remedies - Quantum Meruit; Remedies - Restitution
To maintain an action for unjust enrichment or for money had and received or for restitution, the recipient of the money had and received must be shown to be unjustly enriched. FSM v. Mikel, 22 FSM R. 33, 37 (Chk. 2018).

Remedies - Quantum Meruit; Remedies - Restitution
When there is no proof of a contract or part performance based on impossibility, illegality, mistake, fraud, or some other reason, an unjust enrichment or restitution claim is without merit. FSM v. Mikel, 22 FSM R. 33, 37 (Chk. 2018).

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COURT’S OPINION

BEAULEEN CARL-WORSWICK, Associate Justice:

I. BACKGROUND

The Summons and Complaint in this matter were filed on January 10, 2014 by the plaintiff, Federated States of Micronesia (herein the "Government"), against the defendant, Ismael Mikel (herein "Mikel"). The plaintiff sets forth claims against the defendant for Conversion, Fraud, and Restitution/Unjust Enrichment.

Trial in this matter commenced on December 4, 2017 and July 23, 2018, with the conclusion of trial on August 6, 2018. During the trial, the court received the testimony of Kind Kanto, current member of the Environmental Protection Agency (EPA) Board, Curtis Sos, former EPA Board member, Elina Rayphand, Administrative Officer of the EPA office, Rinderose Mizard, Manager of the FSM Finance Office in Chuuk, and the defendant himself.

At the closing of the plaintiff’s case in chief on August 6, 2018, the defendant moved for dismissal, pursuant to FSM Civil Rule 41, which was opposed by the Government.^[1] The court instructed the defendant to reduce his motion into writing, and allowed the Government to respond to the defendant’s filing. On August 8, 2018, Mikel filed his Rule 41(b) Motion to Dismiss. The Government entered an opposition on August 13, 2018.

After considering the testimony of the witnesses and the evidence on the record, the court finds that the plaintiff has not met its burden of proof to prove by a preponderance of the evidence that it is entitled to judgment against the defendant pursuant to the causes of action as set forth in the Complaint. Therefore, the court finds judgment for the defendant, and dismisses this matter.

II. FACTS

Defendant Ismael Mikel was employed as the Director of the EPA office in Chuuk from August 5, 2008 to the present day. However, there was a period of approximately one (1) month in 2012 where defendant was laid off. As part of his duties, Mikel was in charge of overseeing the day to day operation of the Chuuk EPA office.

The EPA is required to make regular calls outside of the State of Chuuk, for official purposes. Both Elina Rayphand and Ismael Mikel testified as to an overseas account that is used to make long-distance calls. The use of this account is limited to official calls only, but, as stated by the defendant, may also be used for personal calls on a limited basis. Testimony during trial also showed that other government offices also used the overseas account to make long distance calls.

Testimony at trial also shows that a code is used to access the overseas account. This code is only known by three (3) individuals, the Director (Mikel), the Deputy Director, and the Administrative Officer (Rayphand). The Government’s Complaint alleges that Mikel made personal calls on the overseas account, in the amount of $4,795.35.

III. STANDARD OF REVIEW

In a civil case, the plaintiff has the burden of proving each element of his cause of action by a preponderance of the evidence, and if he fails to do so, judgment will be entered against him. Tulensru v. Wakuk, 10 FSM R. 128, 132 (App. 2001); Ehsa v. Kinkatsukyo, 16 FSM R. 450, 456 (Pon. 2009).

Preponderance of the evidence is not evidence to a "moral certainty" or "clear and convincing evidence." As a standard of proof, "preponderance of the evidence" has been held to mean that "the facts asserted by the plaintiff are more probably true than false." FSM Telecomm. Corp. v. Worswick, 9 FSM R. 6, 12 (Yap 1999). See also Burch v. Reading Co., 240 F.2d 547, 579 (3rd Cir. 1957).

IV. DISCUSSION

The court will consider each cause of action pursuant to the Complaint as filed by the plaintiff. The plaintiff alleges causes of action based on Conversion, Fraud, and Restitution/Unjust Enrichment.

Conversion

The elements of an action for conversion are the plaintiffs’ ownership and right to possession of the personalty, the defendant’s wrongful or unauthorized act of dominion over the plaintiff’s property inconsistent with or hostile to the owner’s right, and resulting damages. Bank of Hawaii v. Air Nauru, 7 FSM R. 651, 653 (Chk. 1996) (citing Gebhardt v. D.A. Davidson & Co., 661 P.2d 855, 858 (Mont. 1983)).

Here, the court finds that the Government, through funding as provided for under the Compact of Free Association, has an ownership right and a right to possess access to the overseas account, the overseas account itself, and the minutes used to make these calls. However, the evidence on the record, as well as the testimony adduced at trial, does not show any nexus between the defendant and any non-official phone calls made by the defendant through the overseas account.

"Exhibit A" as admitted by the Government at trial is a listing of telephone calls made from the Chuuk EPA office to various locations outside of the State of Chuuk, including Guam, Hawaii, and the continental United States. Although the exhibit does list the date, time, the number called, the destination of the call, and the duration, the Government failed to prove that the calls were made by the defendant, and that the receiver of the call was connected to the defendant in some personal or non-official capacity.

In the Government’s response to the defendant’s Motion to Dismiss, a copy of an audit conducted by Office of the National Public Auditor for fiscal year 2010-2011 was submitted. Pl.’s Opp’n to Def.’s Mot. to Dismiss, Exs. 1 & 2. Nevertheless, the report does not mention the issues as presented in this matter, or that the defendant made any non-official calls outside of the State of Chuuk.

Testimony by the defendant during trial indicated that several calls were made to the defendant’s wife in Guam for office related matters.^[2] Although Mikel admitted that his wife was not an employee of the EPA office, no proof was offered as to when these calls were made, to what extent, or the total amount of funds expended during these calls.

The plaintiff’s Complaint also alleges that the defendant unlawfully authorized phone charges in the amount of $4,795.35. Pl.’s Compl. at 2. The plaintiff did not submit any evidence at trial or on the record, to show to whom or how authorization was given.

Because the plaintiff was unable to show that the calls were non-official, the court does not find that the defendant’s actions were wrongful, or that his action resulted in an unauthorized act of dominion over the Government’s right or control. Accordingly, the plaintiff has not met its burden of proof on its conversion claim.

Fraud and Restitution/Unjust Enrichment

In a claim for fraud, the pleader must state the time, place and content of the false misrepresentation, the fact misrepresented and what was obtained or given up as a consequence of the fraud. Pacific Agri-Products, Inc. v. Kolonia Consumer Coop. Ass’n, 7 FSM R. 291, 293 (Pon. 1995). See 2A JAMES W. MOORE ET AL., MOORE'S FEDERAL PRACTICE 9.03, at 1925-28 (2d ed. 1981).

The doctrine of "unjust enrichment" is widely recognized in the United States. Generally, the doctrine refers to the situation where someone taart performance under contract that is void for impossibiliibility, illegality, mistake, fraud, or some other reason. In those circumstances even though there is no enforceable contract the doctrine requires the individual to either return what has been received under the contract or pay the other party for it. Etscheit v. Adams, 6 FSM R. 365, 392 (Pon. 1994).

To maintain an action for unjust enrichment or for money had and received or for restitution, the recipient of the money had and received must be shown to be unjustly enriched. AHPW, Inc. v. Pohnpei, 18 FSM R. 1, 7 (Pon. 2011).

In the present matter, similar to the finding under the conversion claim supra, because the court cannot draw a correlation between Mikel and the alleged non-official calls, the evidence dos not show that there was a false misrepresentation on the defendant’s behalf, which is required under the plaintiff’s cause of action for fraud.

Pursuant to the claim for unjust enrichment/restitution, in Etscheit v. Adams, 6 FSM R. 365 (Pon. 1994), as cited above and as applied here, there is no proof of a contract or part performance based on "impossibility, illegality, mistake, fraud, or some other reason." Id. at 392. Therefore, the Government’s claim for unjust enrichment/restitution is without merit.

Source of Funding

In his Motion to Dismiss, Mikel claims that because the funds used to pay for the telephone bills for the EPA Chuuk office are derived from the budget of Chuuk State, the Federated States of Micronesia is not the rightful owner of the funds, which would invalidate the plaintiff’s conversion claim.^[3] Def.’s Mot. to Dismiss at 3.

As stated under the conversion claim, the court finds that the source of the funding of the EPA is derived from the Compact of Free Association. This conclusion, however, will not alter the court’s decision to dismiss this matter as the plaintiff’s causes of action have not been proven.

V. CONCLUSION

THEREFORE, the defendant’s Motion to Dismiss is HEREBY GRANTED. This matter is HEREBY DISMISSED.

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^[1] FSM Civil Rule 41(b):

(b) Involuntary Dismissal: Effect Thereof. For failure of the plaintiff to prosecute or to comply with these rules or any order of court, a defendant may move for dismissal of an action or of any claim against him. After the plaintiff has completed the presentation of plaintiff’s evidence, the defendant, without waiving defendant’s right to offer evidence in the event the motion is not granted, may move for a dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. The court as trier of the facts may then determine them and render judgment against the plaintiff or may decline to render any judgment until the close of all the evidence. If the court renders judgment on the merits against the plaintiff, the court shall make findings as provided in Rule 52(a). Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an adjudication upon the merits.

^[2] The defendant testified that his wife, while in Guam, would assist in making certain purchases for the Chuuk EPA office.

^[3] Chuuk State Law No. 11-12-11 is attached with the Motion to Dismiss, which is the budget which appropriates the funds at issue.