DEVELOPMENT BANK OF AMERICAN SAMOA, Plaintiff,

 

v.

 

TUIKA TUIKA and MAFA TUIKA, Defendants.

 

High

Court of American Samoa

Trial

Division

 

CA

No. 106-01

 

April

11, 2003

 

 

[1] A debtor is

not excused from repayment of a loan, even if a creditor mishandled, but later

corrected, interest adjustments.

 

[2]

Neither alleged misconduct by a lending bank’s personnel, nor a stormy

relationship between the debtor and such personnel, excuses a debtor from

repaying a loan, if there is no relevant relationship between such problems and

the loan’s collection.

 

[3] All civil

cases in American Samoa are bench trials, and there is no mechanism or rule

that envisions a motion for a mistrial; thus, a motion for mistrial in a civil

action in American Samoa will be treated as a motion for a new trial. 

 

[4] A motion

for a new trial shall be filed within

10 days after the announcement of the judgment or sentence.   In this context, the word ‘within’ is

interpreted to include only the final limit and not the starting point. 

 

[5] A motion

for a new trial may be made no later

than 10 days after the

judgment, and it may also be made before

the judgment. 

 

[6] A trial

court in American Samoa should explicitly state its disposition of a

prejudgment new trial motion, even if it does not explain its reasons. 

 

Before

RICHMOND, Associate Justice, LOGOAI, Chief Associate Judge, and MAMEA,

Associate Judge.

Counsel:          For Plaintiff, David P. Vargas

 For Defendants, David Wagner 

 

OPINION

AND ORDER

 

Plaintiff Development Bank of American

Samoa (“DBAS”) filed this action to collect on the promissory note executed by

defendants Tuika Tuika and Mafa Tuika (together “the Tuikas”) and to foreclose

on the real estate mortgage securing the note. 

Trial was held on July 18, 2002. 

DBAS’s collection supervisor, the Tuikas and both counsel were

present. 

 

The

Tuikas vigorously contested the amount owed, and the parties presented

relatively complex and voluminous accounting evidence on the issue.  Accordingly, we scheduled written closing

arguments, directing counsel to include schedules of the parties’ respective

analysis of the loan disbursements, interest calculations, and repayments to

assist the Court’s evaluation of the evidence. 

This process was completed on August 30, 2002.  Meanwhile, on August 15, 2002, the Tuikas

filed a motion to declare a mistrial and afford them more time to engage

another attorney to represent them.  They

claimed that their present counsel misplaced or failed to present material

evidence supporting their contentions. 

This motion was heard and taken under advisement on September 16,

2002.  Three days later, on September 19,

2002, the Tuikas terminated their counsel’s representation.  We advised counsel at the September 19

hearing that we would consider the post-trial documentation the Tuikas attached

to their motion, along with the schedules counsel attached to their written

arguments, as part of our effort to correctly determine the amount, if any, the

Tuikas owed to DBAS.

 

We have taken a

seemingly inordinate period of time to decide this case.  So much time has passed that, on February 7,

2003, with the Court’s permission, DBAS’s new in-house counsel, Fainu`ulelei F.

Ala`ilima-Utu, took over DBAS’s representation. 

However, we purposely took this considerable time period to

painstakingly analyze the accounting evidence and fully evaluate the Tuikas’

request for a mistrial.

 

Discussion

 

I.  Amount Owed

 

On

November 13, 1990, the parties entered a loan agreement, under which the Tuikas

borrowed $100,000 from DBAS for the purpose of “improving existing

business.”  The agreement provided for

repayment installments of $1,377.96 for a period of 120 months or until the

principal and interest was paid in full. 

The loan interest, calculated daily on the unpaid principal balance on

the basis of a 360-day year, was the lesser of the lawful maximum rate (18% for

business loans under A.S.C.A. § 28.1503) or the prime rate as published from

time to time in the Wall Street Journal, plus one percent.  The installments were payable on the first

day of each month, beginning on December 1, 1990. 

 

On

the same date, November 13, 1990, the Tuikas executed a promissory note to DBAS

reflecting the terms of the loan agreement. 

Collection of the amount owed under this note is DBAS’s principal goal

by this action.  The Tuikas also

executed, to secure the loan, a real estate mortgage on approximately 0.6596 of

an acre of land in Ili`ili, American Samoa, and a chattel mortgage on specified

furniture, fixtures, and equipment.  The

loan was made for the Tuikas’ business operations on or from the mortgaged

land.  Foreclosure of the mortgage is

DBAS’s second objective.

 

We

are persuaded by a preponderance of the evidence that the schedule Exhibit “B”

attached to DBAS’s closing argument is the correct calculation of the amount

the Tuikas owe on the note as of July 1, 2002. 

That amount is $38,043.68. 

 

The

Exhibit “B” schedule accounts for all disbursements of the loan proceeds, and

all payments by the Tuikas up to and including their last payment on November

7, 1997.  The payments embrace the

Tuikas’ first six payments of $1,500, shown only by the copies of the Tuikas’

Loan Payment Book, which were attached to their post-trial motion of August 11,

2002.  DBAS’s records do not show these

payments, but the Court accepted the late submission of the Loan Payment Book

to fully and fairly assessed all evidence pertaining to the full history of the

loan. 

 

For

the interest calculations, the formula based on the prime rate plus one per

cent has been applicable throughout the existence of the loan.  The Exhibit “B” schedule also correctly

reflects the prime rate in effect at the beginning of the loan on November 13,

1990, and all changes in the prime rate in effect after that date up to July 1,

2002.  The total amount due as of July 1,

2002, as shown in the schedule, includes accurate interest calculations based

on the prime rate applicable from time to time.

 

II.  Defenses

 

Apart

from their accounting calculations, which the Court has determined to be

incorrect, the Tuikas presented defenses without substance.

 

[1] First,

and foremost, the Tuikas argue that DBAS was in wholesale and deliberate breach

of the loan agreement by not timely adjusting the interest rate with each

change in the prime rate, thus excusing them from further repayment of the

loan.  DBAS can certainly be faulted with

poor loan administration.  Clearly, DBAS

had no adequate system in place to monitor the prime rate changes and routinely

adjust the interest rate with each change. 

DBAS’s failure to properly administer the loan was not deliberate.  Lack of trained personnel to adequately

attend to this kind of loan program was at the root of the problem.  It was not a matter of intentional conduct,

but one of simple oversight.  The Tuikas,

however, are not excused from repaying the loan based on DBAS’s mishandling of

the now-corrected interest adjustments. 

 

[2] Next,

Tuika Tuika raised the ogre of misconduct by DBAS personnel and improper

motivations based on his personal conflicts with DBAS staff members.  These problems apparently date from the era

when Tuika Tuika himself was a member of the DBAS staff, the same time during

which the Tuikas obtained the loan. 

Since then, problems have surfaced from time to time and underscored his

stormy relationship with DBAS personnel. 

In any event, the Tuikas have not shown any relevant relationship

between these problems and the present loan collection issue.  Again, they are not excused from repaying the

loan by this state of affairs.

 

Finally,

in order to either reduce the Tuikas’ liability or excuse further payment,

Tuika Tuika, while testifying, alluded to a U.S. Government policy limiting the

loan interest to 4% per annum.  His

reference, however, was vague, without citation to any concrete authority for

the existence of the federal policy or its applicability to this loan.

 

The

bottom line is simply that the Tuikas entered a binding loan agreement with DBAS

and must fulfill their obligations under that agreement.

 

III. 

Mistrial Motion

 

[3-4] The Tuikas’ motion for

a mistrial is a misnomer.  Mistrials

typically apply to jury trials, and are granted when something has occurred

that seriously infringes on a party’s rights or when the jury is

deadlocked.  Because all civil cases in

American Samoa are bench trials, we have no mechanism or rule that envisions a

motion for a mistrial.  Therefore, we

will treat the motion as one for a new trial. 

See A.S.C.A. § 43.0802; T.C.R.C.P. 59.  Logically, since this is the judgment, the

motion was filed before a judgment was ever entered.  This sequence, however, is of no moment.  “A motion for a new trial shall be filed within

10 days after the announcement of the judgment or sentence.”  A.S.C.A. § 43.0802 (emphasis added).  In this context, we interpret the word

“within” to include “only the final limit and not the starting point.”  Young v. Waldrop, 109 P.2d 59, 60

(Mont. 1941).[1]

 

[5] Such a result is

consistent with the language of T.C.R.C.P. 59(a), which, upon a motion for a

new trial, allows the court to “open the judgment if one has been entered.”

(Emphasis added).[2]  If prejudgment motions for new trials were

not allowed, the rule would not need to address specifically situations where a

judgment had been entered.  Therefore,

though a motion for a new trial may be made no later than 10 days after

the judgment, see, e.g., Fetalaiga v. Fuimaono, 21 A.S.R.2d 12,

13 (App. Div. 1992), it may also be made before the judgment.  See Dunn v. Truck World, Inc., 929

F.2d 311 (7th Cir. 1991) (allowing motion for new trial before judgment entered

under Fed. R. Civ. P. 59).

 

[6] The real consequence

of prejudgment motions for a new trial is that they might create ambiguities as

to whether or not the motions have been granted or denied.  The Seventh Circuit, for example, has held

that under the Federal Rules of Civil Procedure, “When a party files a

prejudgment motion for a new trial, the judgment itself is the order ‘denying a

new trial.’”  Dunn, 929 F.2d at

313.   On the other hand, the Fourth

Circuit has held that a district court must be explicit in granting or denying

a prejudgment motion for new trial.  Havird

Oil Co., Inc. v. Marathon Oil Co., Inc., 149 F.3d 283, 289 (4th Cir. 1998)

(rejecting Dunn and basing its decision on Fed. R. Civ. P. 50, which is

not applicable in American Samoa).  We

think the Fourth Circuit’s approach is wise. 

At the very least, when issuing a judgment, a trial court in American

Samoa should explicitly state its disposition of a prejudgment new trial

motion, even if it does not explain its reasons. 

 

We have complied with A.S.C.A. § 43.0802

and accepted the Tuikas’ prejudgment motion as one for new trial.  In so doing, we have allowed additional

evidence into the record.  See

T.C.R.C.P. 59 (court may “take additional testimony”).  Thus, the Tuikas’ motion was not in

vain.  However, for the reasons stated,

this judgment should be taken as denying their motion for a (mistrial) new

trial.

 

Order

 

1.  The Tuikas motion for a (mistrial) new trial

is denied.

 

2.  DBAS shall recover from the Tuikas, and the

Tuikas shall pay to DBAS, the sum of $38,043.68, plus interest on the balance

of the unpaid principal amount as of July 1, 2002, from that date to the entry

date of this judgment, using the prime rate in effect from time to time plus

one per cent per annum as the basis of the interest calculations (or the

maximum lawful interest rate if the prime rate plus one per cent ever exceeds

the maximum rate),[3]

reasonable attorney’s fees,[4] and court costs.  The Tuikas shall also pay interest at the rate

of 6% per annum on the total amount of the judgment, including interest

accruing from the July 1, 2002, to the entry date of this judgment and court

costs, from the entry date of this judgment until the judgment is paid in full.

 

3.  The mortgage is foreclosed.  The premises shall be sold according to

applicable law.   

 

It is so

ordered.

 

**********