Supreme Court of Palau

Finally, a litigant must remainised of the distinction betn between relief from judgment and reversal or modification on direct appeal.[7] Whereas reversal on appeal means that the underlying decision was incorrect from the start, relief from judgment does not affect the judgment's validity during the period prior to relief. See Balark v. City of Chi., [1996] USCA7 388; 81 F.3d 658 (7th Cir. 1996). As the Seventh Circuit put it, "the fact that a court may exercise an extraordinary power to relieve the parties of a judgment's consequences . . . does not make the judgmnyt any less final." Id. at 663. "An order under Rule 60(b) does not in any way call into question the validity of the judgment or decree from the time of its entry up unhe ti the order. The The 60(b)60(b) order operates prospectively only, as the language of the rule itselitself makes clear." Id.

In comparing a Rule 60(b) order with an order to revise a judgment after a direct appeal, the court also stated:

If a district court judgment is reversed on appeal, the effect of the appellate court ruling is that the judgment was never correct to begin with. If a judgment has been paid immediately, it must be refunded. This is why devices such as supersedeas bonds and injunctions or stays pending appeal exist: so that the parties can protect their respective positions while the fate of the district court judgment is still uncertain. In the case of final judgments embodying injunctive relief, the injunction governs the parties' behavior unless and until it either expires of its own force or relief under Rule 60(b) is granted. . .&#160 fact thet the decreeecree may eventually expire or may be modified or terminated pursuant to Rule 60(b) does not mean that it wt valile it lasted.

Id.[8] The distidistinctionction is important because "relief" from a judgment is just as it sounds—it simply relieves a party from the obligations under the existing judgment and typically operates prospectively; indeed, a court is not entitled to grant any affirmative obligations in such a proceeding. See 12 Moore's Federal Practice, § 60.25 ("Rule 60(b)vailable able only to set aside a prior order or judgment; a court may not use Rule 60 to grant affirmative relief in addition to the relief contained in the prior order or judgment."). Furthe, it is clear that when a cn a court is considering limited relief from a judgment, it is typically within its discretion to impose such terms as will place the parties in the status quo. 11 Wright & Miller, Federal Practice & Procedure: Civil 2d § 2864 ("[T]he court xercise cise its power under clause (6) on conditions that will place the parties in status quo.").
B.

With these principles in mind, we turn to the circumstances of this case. As the above law suggests, the true goal of fashioning relief from judgment is to balance, as fairly as possible, the obvious interest in reaching the correct, true, or just result against the judicial system's interest in finality of its judgments—and a litigant's reliance thereon. This is not an easy feat. Our court system is an adversarial one, and justice therefore operates solely against those parties who appear before it in any given proceeding, on the terms and within the bounds of their pleadings, evidence, and arguments. The best a trial court can do is to hear and thoughtfully consider each party's case and, in the end, reach what it believes to be the fairest, most just result under the applicable law.

In this case, the various trial courts performed these duties to the best of their abilities. That the first trial court determined that the mahogany trees were located on Siksei's property, whereas the second trial court found that Aimeliik State owned them, does not render either result "right" or "wrong" in the eyes of the law. Different parties appeared in each case and presented different evidence, witnesses, and arguments. And putting aside the question of which outcome was factually "correct," the subsequent judgment in favor of Aimeliik State certainly does not render the first any less valid or final. Siksei fully litigated his claims against Tmetuchl, prevailed, and obtained a binding judgment from a court of law (which was affirmed on appeal). Siksei had every right to rely on that judgment's finality, and this is precisely what both he and the Estate did for many years—the Estate paid, and Siksei received, a substantial sum of money under the judgment.

Under the law cited above, the trial court did not abuse its discretion in refusing to order Siksei to reimburse the $94,500 which the Estate has already paid under the original judgment in Civil Action No. 68-96. First, the starting line is that relief from judgment is typically just that—relief—and does not wholly invalidate a prior judgment as reversal on direct appeal would. Moving to the factors from the Restatement, the trial court was within its discretion in crafting the appropriate relief. The "relative clarity with which it appears that the judgment was unjust" in the present case is minimal, at best. Although this Court ultimately found that enforcing the first judgment against the Estate would in fact be unjust, that result was far from clear. This was not a case, for example, in which a "flaming gun" piece of evidence came to light to reveal a clear answer; it just so happened that subsequent trial courts found to the contrary of the ruling in Civil Action No. 68-96. As for the relative fault of the parties, the Estate is in the present position through its own litigation mishaps—particularly its failure to join Aimeliik State as a party to the initial proceeding in Civil Action No. 68-96. No one knows what the outcome would have been had Aimeliik State been joined initially, but the Estate certainly would not be faced with conflicting judgments. As it now stands, the Estate has already been permitted to seek enforcement of the trial court ruling more favorable to it. Furthermore, had the Estate filed its initial Rule 60(b) motion for relief in the proper court, it could have sped things along and avoided several payments under the original judgment. Last is the most important factor—Siksei's reliance on the prior judgment. The Estate's Rule 60(b) motion did not swiftly follow the first judgment in this case. The Estate paid its obligation under the judgment for more than ten years before seeking relief. Siksei had every right to spend that money, as it had contested and won its lawsuit against the Estate. To order repayment at this point would inequitably undermine the reliance interest in this matter.

One last argument by the Estate merits brief mention. The Estate contends that the previous appellate panel passed on the issue of reimbursement and therefore foreclosed the trial court's discretion to limit relief on remand. Specifically, the Estate argues that the Appellate Division's opinion implicitly considered the relevant factors in § 74(3) of the Restatemeecondecond) of Judgments, ordered the trial court to grant relief from judgment, and imposed only one condition on that relief—that there be a third trial over the ownership of the mahogrees. Thus, according to thto the argument, the Appellate Division supposedly explored the possibility of limited relief but declined to impose it, stripping the Trial Division of its discretion to condition the relief. In our prior opinion, however, we merely held that relief from judgment was warranted. As a result of such relief, there would be no binding judgment as between the Estate and Siksei concerning ownership of the mahogany trees, necessitating a third trial on that factual issue. This Court's only order was that "the Estate should have been granted relief from the final judgment." Estate of Tmetuchl, 14 ROP at 131. In that same opinion, however, we also noted that the unfairness in the conflicting judgments "warrants revisiting the ownership of the trees to settle this matter fairly." Id. In conclusion, we only vacated the Trial Division's denial of the Estate's Rule 60(b)(6) motion and remanded for further proceedings. The Trial Division was within its discretion to consider the appropriate equitable factors and fashion a conditional or limited relief from the prior judgment, if it believed that this was the just result. It did not exceed its authority on remand, and the sole issue in this appeal is whether it exercised such discretion soundly and reasonably.

The Court is sympathetic to the Estate's plight. If the "true" facts were that Aimeliik State owned the land upon which the disputed mahogany trees were located (as two trial courts have now found), then the Estate has paid a substantial sum over the years under an incorrect judgment. But simply because that judgment might have been factually incorrect does not make it invalid. The Estate and Siksei fully litigated this matter, and the first trial court simply reached a different conclusion than the second. Furthermore, a substantial amount of the original judgment in Civil Action No. 68-96 remains outstanding and owed by the Estate (by this Court's most conservative estimate, at least $50,000, and likely much more). By fashioning the relief as it did, the trial court still relieved the Estate of paying that substantial remaining obligation. "[T]he test on abuse of discretion review is not whether the district court might have decided differently, but whether the court's denial [or limitation] of the [moving party's] Rule 60(b) motion was unreasonable." Eskridge v. Cook County, 577 F.3d 806, 810 (7th Cir. 2009). We find nothing unreasonable about the trial court's limitation on the Estate's relief from judgment in Civil Action No. 68-96, and we therefore

Affirm.

SO ORDERED this 8th day of October, 2010.

___________________________
ARTHUR NGIRAKLSONG
Chief Justice

___________________________
KATHLEEN M. SALII
Associate Justice

___________________________
RICHARD H. BENSON
Part-time Associate Justice

^[1] The Court finds this case appropriate for submission without oral argument. See ROP R. App. P. 34(a).

^[2] Justice R. Barrie Michelson presided over the first case, Civil Action No. 68-96. Justice Larry Miller presided over the second case, Civil Action No. 99-226.

^[3] Justice Alexandra F. Foster presided over this matter after the Appellate Division’s latest remand.

^[4] On that date, the parties agreed to suspend further payments until this matter is resolved.

^[5] The trial court cited Siksei’s brief opposing the Estate’s most recent Rule 60(b) motion, filed February 2, 2009, as well as Siksei’s brief opposing the Estate’s first Rule 60(b) motion, filed on October 18, 2006. (Tr. Div. Decision, at 13-14.)

^[6] The total amount that the Estate still would owe under the original judgment is substantial, although unclear. In his June 7, 2000, Complaint to open Tmetuchl’s estate, Masaziro claimed that the amount owed was more than $135,000. Civ. Act. No. 00-103, Complaint at 3. On December 31, 2001, the Estate purportedly owed $141,883.07 ($65,000.00 of principal and $76,883.07 in interest). See Appellee’s Br. at 4. Even using the number provided in 2001—a truly conservative calculation—and subtracting the $94,500 already paid, the Estate was relieved of paying Siksei at least $50,000, without factoring interest.

^[7] The Estate appears to blur this line in its brief, in which it cites § 74 of the Restatement (Second) of Restitution to support the proposition that restitution should have been ordered as a matter of course. First, that section and its accompanying comments speak almost solely of a judgmenth has been reversed, vacateacated, or set aside following a direct appeal. Second, even if § 74 applied to relief from a judgment, it expressly states that restitution should not be ordered if it “would be inequitable or the parties contract thyment is to be final,” and the commentary goes on to explain that even a reversingrsing tribunal (such as an appellate court) “can itself direct restitution either with or without conditions.” Restatement (First) of Restitution § 74 and cmt. a (emphadded). ed). These provisions, therefore, merely beg the question of whether the trial court reasonably found that ordering Siksei to reimburse the Estate would be inequitable. The Court finds § 74 inapplicable and notgethogether helpful in resolving the issue before it.

^[8] Although the Balar court was addressing relief from an injunction, the Court finds that the same principle aple applies to a monetary judgment such as that involved in this case.