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Debkar Lineage v Gibbons [2017] PWSC 19; Civil Appeal 15-020 (15 June 2017)

IN THE
SUPREME COURT OF THE REPUBLIC OF PALAU
APPELLATE DIVISION

Decided: June 15, 2017

Counsel for Appellant Debkar Lineage: Ebil Y. Matsutaro

Counsel for Appellant Gloria Salii: Salvador Remoket

Counsel for Appellant/Appellee Florencio Gibbons: Tamara D. Hutzler

Counsel for Appellee Francisco Gibbons: Raynold B. Oilouch

Counsel for Appellee Sandra Pierantozzi: Ernestine K. Rengiil

BEFORE: JOHN K. RECHUCHER, Associate Justice
DENNIS K. YAMASE, Associate Justice
ALEXANDRO C. CASTRO, Associate Justice

Appeal from the Land Court, the Honorable C. Quay Polloi, Senior Judge, presiding.

PER CURIAM:
This appeal arises from the Land Court’s award of a collection of worksheet lots in Airai State commonly referred to as Oltebadelkaeb^[1] to Florencio Gibbons, Francisco Gibbons, and Sandra Pierantozzi. Appellant Debkar Clan^[2] disputes the Land Court’s finding that it failed to prove that it has owned Oltebadelkaeb since time immemorial. Appellant/Appellee Florencio Gibbons argues that the Land Court erred by awarding portions of Oltebadelkaeb to Francisco Gibbons and Sandra Pierantozzi, and that the Land Court should have awarded all of Oltebadelkaeb to him. Appellant Bilung Gloria Gibbons Salii joins Francisco Gibbon’s arguments that the Land Court erred in awarding a portion of Oltebadelkaeb to Sandra Pierantozzi and argues that the Land Court also erred by not awarding her the property she had received under the 1997 stipulated judgment approved by the court in In re: Estate of Charlie Gibbons, Civ. Action No. 12-89. For the reasons that follow, we AFFIRM IN PART, REVERSE IN PART, VACATE IN PART and REMAND to the Land Court with instructions to effectuate the holdings of this Opinion.

BACKGROUND

The Land Court found that William Gibbons came to own Oltebadelkaeb at some point during the German era, although it acknowledged there was uncertainty as to how William Gibbons came to own the land. Appellant Debkar Clan claims that William Gibbons and his descendants were given permission by Debkar Clan to use the land, but never acquired ownership. All other parties derive their ownership claims from William Gibbons. The Land Court discusses William Gibbons’s family tree along with the transactions involving his descendants that various parties claim are relevant to determining ownership of Oltebadelkaeb. We will only recount those relationships and transactions that are relevant to this appeal.
William Gibbons’s oldest son, Charlie Gibbons, exercised exclusive authority over Oltebadelkaeb from William’s death in 1941 until his own death in 1988, and the Land Court found that Charlie Gibbons was the exclusive owner of the land. Charlie Gibbons’s estate was probated by his adopted son, Appellant/Appellee Florencio Gibbons, in 1989. Various individuals filed claims in Charlie Gibbons’s estate, including Appellee Francisco Gibbons (the son of William Gibbons’s second son) and Appellant Bilung Gloria Gibbons Salii (the daughter of William Gibbons’s adopted daughter). After extensive litigation which is not relevant to this appeal, these three claimants agreed to a Stipulation, Judgment, and Decree of Distribution which, among other things, divided Oltebadelkaeb among them. In re: Estate of Charlie Gibbons, Civ. No. 12-89 (Tr. Div. Feb. 21, 1997) at 2 (hereinafter the “Estate Stipulation” entered in the “Gibbons Estate Case”). This estate judgment was presented to the Land Court, which issued certificates of title to Florencio Gibbons, Francisco Gibbons, and Bilung Gloria Gibbons Salii (collectively the “Gibbons Estate Heirs”) for their respective lots in 1997.
In 2002, Appellee Sandra Pierantozzi asked the Land Court to vacate the certificates of title which had been issued to the Gibbons Estate Heirs and filed her claim to a portion of Oltebadelkaeb, specifically lots 023 N 03B and 023 N 02B. Ms. Pierantozzi’s claim was based on a Security Agreement with the late Blacheos Kemaitelong who in turn had acquired the same lot from Charlie Gibbons. The Land Court found that Mr. Kemaitelong had been given a portion of Oltebadelkaeb by Charlie Gibbons in 1976 as payment for survey services he provided to Mr. Gibbons. In 1986, Mr. Kemaitelong borrowed $1,500 from Ms. Pierantozzi and entered into a Security Agreement providing that legal title would automatically transfer to Ms. Pierantozzi in the event of a default.
Ms. Pierantozzi registered the Security Agreement with the Clerk of Courts the day it was signed. The Land Court credited Ms. Pierantozzi’s testimony that Blacheos Kemaitelong defaulted on the $1,500 loan. However, Ms. Pierantozzi testified that she and Mr. Kemaitelong did not execute any additional legal documents regarding this purported land transfer, nor did she keep any written records of the default. When Mr. Kemaitelong died in 1993, Ms. Pierantozzi did not make any claim for the $1,500 debt or for lots 023 N 03B and 023 N 02B in his probate proceedings. Ms. Pierantozzi took no action to assert her ownership over lots 023 N 03B and 023 N 02B until she asked the Land Court to vacate the certificates of title in 2002, roughly 16 years after Mr. Kemaitelong had defaulted on the loan.
In 2004, the Land Court canceled the certificates of title it had issued to the Gibbons Estate Heirs, holding that they had been issued in error because at least one of the individuals who had filed a claim to Oltebadelkaeb prior to 1997 was not claiming through Charlie Gibbons and was not a party to the Gibbons Estate Case. The Gibbons Estate Heirs each filed new claims to Oltebadelkaeb between 2003 and 2005. Francisco Gibbons and Gloria Salii claimed those portions of land which they had been awarded by the Estate Stipulation. Florencio Gibbons claimed the entirety of Oltebadelkaeb. Appellant Debkar Clan filed its claim to the entirety of Oltebadelkaeb in 2005, after the certificates of title had been canceled.

STANDARD OF REVIEW

“We review the Land Court’s conclusions of law de novo and its findings of fact for clear error.” Kebekol v. Koror State Pub. Lands Auth., 22 ROP 38, 40 (2015). Under clear error review, “[t]he factual determinations of the lower court will be set aside only if they lack evidentiary support in the record such that no reasonable trier of fact could have reached the same conclusion.” Id. (quoting Rengiil v. Debkar Clan, 16 ROP 185, 188 (2009)). Interpretation of a contract is a conclusion of law, which we review de novo. Uchelkumer Clan v. Sowei Clan, 15 ROP 11, 13 (2008).

DISCUSSION

I. Debkar Clan’s Claim

Debkar Clan claims to have owned Oltebadelkaeb from time immemorial, having received it as spoils of war before the Spanish times. The Clan acknowledges that Charlie Gibbons was using the land since at least the 1950s, but argue that neither he nor his father William acquired title to Oltebadelkaeb and that Charlie was using the land only with Debkar Clan approval. The Land Court rejected Debkar Clan’s claim because it had submitted little evidence to show that Debkar Clan had either authorized or objected to the Gibbons family’s presence and use of Oltebadelkaeb prior to 2005, at which point the Gibbons family had made exclusive use of the land for “several decades, arguably a century.” The Land Court also noted that Debkar Clan filed its claim only recently on March 18, 2005, but that it had filed much earlier claims to other lands near and even adjacent to Oltebadelkaeb. Furthermore, the holder of the chiefly title Obak-ra-Debkar had also filed personal claims to adjacent lands which included “sketches indicating the name of Charlie Gibbons in the area now corresponding to Oltebadelkaeb” along with his claim. Debkar Clan argues on appeal that the Land Court erred by failing to credit the testimony of its witnesses and by concluding that William Gibbons acquired Oltebadelkaeb during German times, without clear evidence as to how William Gibbons acquired ownership.
Debkar Clan’s arguments on appeal are primarily attacks on the Land Court’s factual determinations, which are reviewed only for clear error. Because of this, “an appeal that merely re-states the facts in the light most favorable to the appellant and contends that the Land Court weighed the evidence incorrectly borders on frivolous.” Ngiraked v. Koror State Pub. Lands Auth., Civ. App. No. 14-029, slip op. at 6 (Jan. 5, 2016) (quoting Koror State Pub. Land Auth. v. Giraked, 20 ROP 248, 250 (2013)). Such borderline frivolous challenges “provid[e] no meaningful opportunity to develop the law,” and we have indicated that “an appellate court should not hesitate to conserve its resources by disposing of [these] appeal[s] in a summary fashion.” Ngarameketii/Rubekul Kldeu v. Koror State Pub. Lands Auth., Civ. App. No. 15-010, slip op. at 20 (July 26, 2016). Having reviewed the record, we hold that the Land Court did not clearly err by failing to credit the testimony of Debkar Clan’s witnesses, and also did not err in rejecting Debkar Clan’s argument that this testimony shows that the Clan’s 1976 claim for Ngerchemel should be understood to include Oltebadelkaeb.
Debkar Clan also fails to successfully challenge the Land Court’s legal conclusion that “ownership determinations . .&#16an turn on other evideevidence without resolving what actually happened about a hundred years ago.” As we have previously, “an uninterrupted chain of title is unnecessary to prove ownership of property, so , so long as the ownership is supported by other adequate evidence,” such as extended uninterrupted use and possession of the property. Koror State Public Lands Authority v. Ngirngebedangel, 20 ROP 210, 214 (2013). “[A] court may infer a valid transfer of land to a claimant when that claimant has occupied the land without objection for a significant period of time.” See Obak v. Joseph, 11 ROP 124, 128 (2004). Additionally, Debkar Clan’s failure to present any evidence that it challenged William or Charlie Gibbons’s use of the land may be circumstantial evidence that Debkar Clan does not and did not in fact own the land in question. Tucherur v. Rudimch, 21 ROP 84, 87 (2014). Having reviewed the record, we hold that the Land Court’s determination that William Gibbons acquired ownership of Oltebadelkaeb during German times was not unreasonable.

II. The Gibbons Estate Heirs’ Claims

In February 1997, Florencio Gibbons, Francisco Gibbons and Gloria Salii entered into the Estate Stipulation in the Gibbons Estate Case, dividing various properties between them, including Oltebadelkaeb. After the Land Court requested the Gibbons Estate Heirs to return their certificates of titles so they could be revoked, Francisco Gibbons and Gloria Salii filed claims to those lots which they had been awarded by the Estate Stipulation. Florencio Gibbons filed a claim to all seven lots and argued that the Estate Stipulation should be disregarded. The Land Court held that the Estate Stipulation “divided nothing” and proceeded to vest legal ownership and title in Florencio Gibbons, Francisco Gibbons, and Sandra Pierantozzi “for factual reasons independent of and predating” the Estate Stipulation. Gloria Salii and Francisco Gibbons both allege that the Land Court erred by disregarding the Estate Stipulation, which they argue is res judicata and binding on Florencio Gibbons.
The Land Court reasoned that “until ownership of a particular land is registered through an in rem proceeding . . .ceden17;s unad unadjudicatdicated claim of interest to land cannot be converted to one of ownership through a stipulated judgment in an estate proceeding and thsted heir. Consequently, the [Estate Stipulation] .&n] . #160;.&#16s not binding upog upon other claimants to Oltebadelkaeb who were not parties to the estate proceeding.” The Land Court is correct that an estate case judgment “only addres the inheritance of [decedeecedent’s] interest in the disputed lands, without determining whether [decedent] had any interest at all.” Saka v. Rubasch, 11 ROP 137, 140 n.2 (2004). The Estate Stipulation has no preclusive effect on claims which are not derived from Charlie Gibbons ownership of Oltebadelkaeb at the time of his death.
However, the Land Court took this reasoning too far when it held that the Estate Stipulation “divided nothing” because “[l]egal ownership and title to Oltebadelkaeb has never been adjudicated and registered in the name of Charlie Gibbons.” To the contrary, “the Land Court is required to accept prior determinations of ownership [made by the Trial Division in estate cases] under 35 PNC § 131and Rule 18 of the Land Land Court Rules and Regulations.”^[3] Baules v. Toribiong, Civ. App. No. 14-033, slip op. at 15 (January 28, 2016). Giving preclusive effect to estate judgments is also consistent with Palau’s interest in ensuring that “estates are . . . distributed concelsivnd eand efficiently, in a single court and within a set time period.” Id. at 16. We therefore hold that the Courtd by not giving the Estate Stipulation preclusive effect, and therefore REVERSEVERSEE the Land Court’s award of lots 023 N 03A and 023 N 05 to Florencio Gibbons.
Having held that the Estate Stipulation is preclusive, we need not and do not address Florencio Gibbon’s arguments regarding the legal effect of Charlie Gibbon’s attempt to orally bequeath lot 023 N 01 to Francisco Gibbons, nor do we address Gloria Salii’s arguments as to the effectiveness of the 1986 Division of Property agreement that she and Charlie Gibbons executed prior to his death.

III. Sandra Pierantozzi’s Claim

Appellee Sandra Pierantozzi claims that lots 023 N 03B and 023 N 02B were transferred to her in 1986 by Blacheos Kemaitelong through the operation of a Security Agreement, which provided that if Blacheos defaulted on the loan, title and ownership of these lots would automatically transfer to her. The Land Court held that the Security Agreement between Ms. Pierantozzi and Mr. Kemaitelong was covered by the broad definition of “mortgage” in 39 PNC § 6: “a contract in whin which real property is made the security for . . . the payment debt.” 221; See ai> Roman Tmetuchl Family Trust v. Whipps, 8 ROP Intrm. 317, 319 (2001) (enumerating ting elements to be considered when determ whet document purporting to transfer title to land isnd is, in , in fact, a mortgage). The Land Court also held that Ms. Pierantozzi had not complied with various requirements of the Mortgage Act of 1981, including 39 PNC § 642, which requires the lender to give written notice of default at least 30 days before it pursues its remedies. We hold that the Security Agreement is a moe, is subject to the requirements of the Mortgage Act, and that any oral notice of default ault given to Mr. Kemaitelong was ineffective because it did not comply with 39 PNC § 642.
De the lack of comp compliance with the Mortgage Act, the Land Court held that Ms. Pierantozzi had gained title to lots 023 N 03B and 023 N 02B through paragraph 4 of their Security Agreement, wprovided that in the event vent of default: