FSM SUPREME COURT TRIAL DIVISION

CIVIL ACTION NO. 2005-014

MARTIN JANO d/b/a MARTIN JANO LAW OFFICES,
Plaintiff,

vs.

KAZUHIRO FUJITA,
Defendant.

_______________________________

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Andon L. Amaraich
Chief Justice

Trial: July 15, 2008
Decided: February 24, 2009

APPEARANCES:

For the Plaintiff: Joseph S. Phillip, Esq.
P.O. Box 464
Kolonia, Pohnpei FM 96941

For the Defendant: Marstella E. Jack, Esq.
P.O. Box 2210
Kolonia, Pohnpei FM 96941

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HEADNOTES

Civil Procedure
 Once the court, after trial, has reviewed the testimony and other evidence of record in the matter, it must make findings of fact and conclusions of law pursuant to FSM Civil Rule of Civil Procedure 52(a). Jano v. Fujita, 16 FSM Intrm. 323, 325 (Pon. 2009).

Torts  Interference with a Contractual Relationship; Torts  Interference with a Prospective Business Opportunity
 Claims of interference with contractual relations and interference with prospective business advantage, are both causes of action that arise under Pohnpei state law. Jano v. Fujita, 16 FSM Intrm. 323, 326-27 (Pon. 2009).

Torts  Interference with a Contractual Relationship; Torts  Interference with a Prospective Business Opportunity
 It may be sufficient to impose liability that the defendant has acted intentionally to interfere with a known contract or prospect of economic advantage, that he has caused harm in so doing, and that he has acted in pursuit of some purpose considered improper. Jano v. Fujita, 16 FSM Intrm. 323, 327 (Pon. 2009).

Common Law; Torts  Interference with a Contractual Relationship; Torts  Interference with a Prospective Business Opportunity
 When no FSM case has discussed the specific elements of the causes of action for interference with contractual relations or interference with prospective business advantage, the court may consider authorities from other jurisdictions in the common law tradition. Jano v. Fujita, 16 FSM Intrm. 323, 327 (Pon. 2009).

Torts  Interference with a Contractual Relationship
 The individual elements of the cause of action for interference with contract are 1) a valid contract; 2) knowledge by the defendant of the contract; 3) intentional interference by the defendant which induces breach of the contract; 4) absence of justification on the part of the defendant; and 5) resulting damages. Jano v. Fujita, 16 FSM Intrm. 323, 327 (Pon. 2009).

Torts  Interference with a Prospective Business Opportunity
 The elements of a cause of action for interference with prospective business advantage or expectancy are 1) plaintiff's existing or reasonable expectation of economic benefit or advantage; 2) defendant's knowledge of that expectancy; 3) defendant's wrongful intentional interference with that expectancy; 4) reasonable probability that the plaintiff would have received anticipated economic benefit in absence of interference; and 5) damages resulting from interference. Jano v. Fujita, 16 FSM Intrm. 323, 327, 327-28 (Pon. 2009).

Torts  Interference with a Contractual Relationship; Torts  Interference with a Prospective Business Opportunity
 Both the cause of action for interference with contract and the cause of action for interference with prospective business require a showing of damages. Jano v. Fujita, 16 FSM Intrm. 323, 327 (Pon. 2009).

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. Jano v. Fujita, 16 FSM Intrm. 323, 327 (Pon. 2009).

Torts  Interference with a Contractual Relationship
 When the plaintiff did not show by a preponderance of the evidence that the defendant knew of a specific contract or contracts that the plaintiff had with third parties, and that the defendant intentionally interfered with any such contract; when a letter was alleged as the interference with contract, but the plaintiff failed to prove by a preponderance of the evidence that the letter actually served as the means by which the defendant allegedly interfered with a specific contract that he knew the plaintiff had with a third party; when a later letter does not admit that the prior letter contained false statements but is a retraction of the prior letter; and when the retraction does not establish that the prior letter constituted an unjustified interference by the defendant with a specific contract to which the plaintiff was a party, the plaintiff is not entitled to recover damages from the defendant on a claim for interference with contract. Jano v. Fujita, 16 FSM Intrm. 323, 327 (Pon. 2009).

Torts  Interference with a Prospective Business Opportunity
 When a plaintiff did not show that the defendant knew of any reasonable expectancy that the plaintiff had and that the defendant wrongfully interfered with it and when the plaintiff failed to meet his burden of proof with respect to the element of damages, he cannot prevail on a claim for interference with prospective economic advantage. Jano v. Fujita, 16 FSM Intrm. 323, 327-28 (Pon. 2009).

Evidence
 Speculation may not be substituted for competent evidence. Jano v. Fujita, 16 FSM Intrm. 323, 328 (Pon. 2009).

Evidence  Burden of Proof; Torts  Damages
 When the plaintiff's testimony on the element of damages is speculative, conclusory, and lacking in foundation, the plaintiff did not meet his burden of proof on the issue of damages and a judgment in the defendant's favor is therefore appropriate. Jano v. Fujita, 16 FSM Intrm. 323, 328 (Pon. 2009).

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COURT'S OPINION

ANDON L. AMARAICH, Chief Justice:

 Trial in this matter took place on July 15, 2008. Joseph Phillip appeared on behalf of the plaintiff Martin Jano ("Jano"), while Marstella Jack appeared on the behalf of the defendant Kazuhiro Fujita. Jano filed his complaint against both defendants on June 2, 2005, and alleged claims for libel, slander, interference with contract, and interference with prospective economic advantage. On December 14, 2006, defendant Fuji Enterprises was dismissed from the case, leaving Kazuhiro Fujita (hereafter "Fujita") as the sole defendant. Fujita's subsequent motions to dismiss the slander and libel causes of action with prejudice were granted on October 26, 2007 [Jano v. Fujita, 15 FSM Intrm. 405 (Pon. 2007)], and January 31, 2008 [Jano v. Fujita, 15 FSM Intrm. 494 (Pon. 2008)], respectively, leaving the claims for interference with contract and interference with prospective economic advantage for trial on July 15, 2008. At the conclusion of the trial, the court took the matter under advisement.

 Having reviewed the testimony and other evidence of record in this matter, the court makes the following findings of fact and conclusions of law pursuant to FSM Civil Rule of Civil Procedure 52(a). Based on these findings and conclusions, and as set forth further below, the court finds in favor of Fujita and against Jano. Judgment shall enter accordingly.

I. Findings of Fact

 1. Jano and Fujita met in 1995, and at some point thereafter Fujita retained Jano as his attorney.

 2. Fujita retained Jano to obtain a foreign investment permit license for each of Fujita's business ventures. Fujita was starting up businesses involving helicopters, tourism and importing, and used car sales.

 3. A dispute arose between Jano and Fujita regarding certain licensing Fujita needed for his businesses when Fujita determined that Jano had obtained proper licensing for the helicopter business only. According to Fujita, the tourism, importing, and used car sales business licensing was in some manner insufficient or lacking.

 4. Fujita testified that he believed he lost income as a result of the deficient licensing of his used car business.

 5. Fujita blamed the licensing problems and lost income on Jano. These contentions surrounding the parties' attorney-client relationship and the business licensing remain disputed up to the present.

 6. Fujita wrote a letter in October of 2002 to Chief Justice Judah Johnny of the Pohnpei Supreme Court (admitted into evidence as plaintiff's exhibit "A"). The letter was filed with the Pohnpei Supreme Court.

 7. In the October 2002 letter, Fujita expressed his dissatisfaction with the legal services he had received from Jano, as well as from other attorneys he had hired in Pohnpei.

 8. The October 2002 letter requests a "disciplinary/ethical complaint for Mr. Jano." Fujita testified that he filed the letter with the court after paying thousands of dollars in legal fees and not obtaining the results from Jano that Fujita expected. Fujita felt his only hope of redress was to submit his complaints about Jano and other attorneys to the court.

 9. Jano testified that not one statement in the October 2002 letter, which is two-and-a-half pages in length and single-spaced, is true. Fujita disputed this testimony, and testified that the contents were true and that he wrote the letter out of the frustration he felt after learning that Jano had not properly secured all of the business licenses that Fujita hired Jano to obtain.

 10. Jano strongly believes that Fujita distributed copies of the letter to his (Fujita's) friends. It is unclear how or when Jano learned of the October 2002 letter, but at some point Jano wrote a response to Fujita to express his concerns. Neither the response nor testimony about its content was introduced into evidence by either party.

 11. On March 1, 2005, Fujita wrote and signed a brief letter to the Chief Justice of the Pohnpei Supreme Court. The letter was admitted into evidence as plaintiff's exhibit "B." It provides as follows:

 Dear Chief Justice Johnny:

I am writing this letter to retract or take back the letter addressed to you in October of 2002. The letter was written three years ago when I was having many problems and I was angry. I did not really understand English very well. The letter is not the way I feel now. Please I want to take back the letter as everything is okay now.

Thank you,

/s/ Kazuhiro Fujita

II. Conclusions of Law

 1. Jano did not carry his burden of proof of showing by a preponderance of the evidence that Fujita interfered with any contract to which Jano was a party and that Fujita knew about.

 2. Jano did not carry his burden of proof by showing by a preponderance of the evidence that Fujita interfered with any prospective economic advantage that Jano had a reasonable expectation of receiving from any third party.

III. Discussion

 Trial in this matter proceeded against the defendant Kazuhiro Fujita only on Jano's claims of interference with contractual relations and interference with prospective business advantage, both of which are causes of action that arise under Pohnpei state law. Foods Pacific, Ltd. v. H.J. Heinz Co., Australia, 10 FSM Intrm. 200, 203 (Pon. 2001). Federated Shipping Co. v. Ponape Transfer & Storage Co., 4 FSM Intrm. 3, 13-14 (Pon. 1989) discusses generally the torts of interference with contractual relations and prospective economic advantage: "[i]t may be sufficient to impose liability . . . that the defendant has acted intentionally to interfere with a known contract or prospect of economic advantage, that he has caused harm in so doing, and that he has acted in pursuit of some purpose considered improper." Neither Foods Pacific nor Ponape Transfer & Storage discusses the specific elements of the causes of action for interference with contractual relations or interference with prospective business advantage. In such instances, the court may consider authorities from other jurisdictions in the common law tradition. Rauzi v. FSM, 2 FSM Intrm. 8, 14-15 (Pon. 1985).

 In Saey v. Xerox Corp., 31 F. Supp. 2d 692, 700 (E.D. Mo. 1998), the court noted that the individual elements of the cause of action for interference with contract are 1) a valid contract; 2) knowledge by the defendant of the contract; 3) intentional interference by the defendant which induces breach of the contract; 4) absence of justification on the part of the defendant; and 5) resulting damages. The elements of a cause of action for interference with prospective business advantage or expectancy are 1) plaintiff's existing or reasonable expectation of economic benefit or advantage; 2) defendant's knowledge of that expectancy; 3) defendant's wrongful intentional interference with that expectancy; 4) reasonable probability that the plaintiff would have received anticipated economic benefit in absence of interference; and 5) damages resulting from interference. Herbert v. Newton Memorial Hosp., 933 F. Supp. 1222, 1229 (D.N.J. 1996), aff'd, 116 F. Ed 468 (3d Cir. 1997). Both the cause of action for interference with contract and the cause of action for interference with prospective business require a showing of damages.

 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 Intrm. 128, 132 (App. 2001). With respect to the claim for interference with contract, Jano did not show by a preponderance of the evidence that Fujita knew of a specific contract or contracts that Jano had with third parties, and that Fujita intentionally interfered with any such contract. Jano also contended that the October 2002 constituted the alleged interference with contract. Jano testified that not one single statement in the two-and-a-half-page, single-spaced letter was true. But this testimony is conclusory, and lacks the foundational support of specific testimony about the numerous statements made in the letter. More importantly, Jano failed to prove by a preponderance of the evidence that the letter actually served as the means by which Fujita allegedly interfered with a specific contract that Fujita knew Jano had with a third party.

 Jano characterized the subsequent March 2005 letter as a retraction, and also characterized that letter as Fujita's admission that the October 2002 letter contained false statements. However, the March 2005 letter does not say that the content of the prior October 2002 letter was not true. What it does say is that Fujita wants "to retract or take back" the prior letter, and that the prior letter "is not the way I feel now." Fujita testified that the October 2002 letter reflected his frustration in his dealings with Jano. Thus the March 2005 "retraction" does not establish that the October 2002 letter constituted an unjustified interference by Fujita with a specific contract to which Jano was a party such that Jano is entitled to recover damages from Fujita.

 With regard to the claim for interference with prospective economic advantage, Jano must show by a preponderance of the evidence 1) the plaintiff's existing or reasonable expectation of economic benefit or advantage; 2) the defendant's knowledge of that expectancy; 3) the defendant's wrongful, intentional interference with that expectancy; 4) the reasonable probability that the plaintiff would have received anticipated economic benefit in the absence of interference; and 5) damages resulting from interference. Herbert, 933 F. Supp. at 1222. Jano did not show that Fujita knew of any reasonable expectancy that Jano had, and that Fujita wrongfully interfered with it.

 With regard to both claims, Jano failed to meet his burden of proof with respect to the element of damages. Jano testified that four clients left him as a result of the untruthful statements in the letter, and that he failed to obtain one prospective client. However, Jano alone testified. Jano did not put on one client or prospective client who claimed to have left him because of the letter. Jano also testified that he estimated lost revenue to be $500 to $1000 per client. Jano offered no documentary evidence in the form of past billing statements for the clients he allegedly lost or other documents to substantiate this claim. Thus his testimony on the element of damages as it relates to both claims is speculative, conclusory, and lacking in foundation. Speculation may not be substituted for competent evidence. William v. Mobil Oil Micronesia, 10 FSM Intrm. 584, 587 (Pon. 2002).

 In the face of the lack of competent evidence on the damages element on both the claim for intentional interference with contract and the claim for interference with prospective business advantage, the court finds that Jano did not meet his burden of proof on the issue of damages. Given this consideration, and in light of Jano's failure to establish the other elements of his causes of action as discussed above, judgment in favor of Fujita is therefore appropriate. Tulensru, 10 FSM Intrm. at 132.

IV. Conclusion

 The court finds in favor of the defendant Fujita and against the plaintiff Jano. A judgment consistent with these findings of fact and conclusions of law will issue herewith.