Opinion
Supreme Court Appeal No. 05-0008GA
September 29, 2005, Argued and Submitted . July 13, 2006, Decided
For Plaintiff-Appellant: Douglas F. Cushnie, Esq., Saipan, MP.
For Defendant-Appellee: Steven J. Nutting, Esq., White, Mailman & Nutting, Saipan, MP.
MANGLONA, Justice:
Plaintiff Roman S. Demapan ("Demapan") appeals the decision of the trial court which granted the Bank of Guam's ("Bank") motion for summary judgment. A grant of summary judgment is subject to de novo review. Cabrera v. Heirs of De Castro, 1 N.M.I. 172, 175 (1990). We affirm the decision of the trial court.
I.
On May 19, 2000, Demapan went to the Bank to negotiate a CNMI government payroll check drawn on a Bank account. Demapan was not an account holder nor did he have any other special relationship to the Bank. After he presented the check and his identification card, the teller told Demapan that the Bank would have to confiscate the check because the computer showed a delinquent loan. Demapan denied having a loan and demanded the check be returned. The teller spoke with a supervisor for five to ten minutes who then asked Demapan to wait in the lobby.
. Demapan waited over an hour in the lobby. He then went to his brother Juan S. Demapan's house. He asked if Juan had any outstanding loans and then went back with Juan to the Bank. They met with Bank manager Marcy Tomokane who spoke on the phone with an individual in Guam identified as "Bill." Ms. Tomokane related that she was not authorized to pay any part of the proceeds of the check to Demapan. At that time, Demapan and his brother left the Bank. Later that evening, Demapan returned home and was informed by his housekeeper that someone from the Bank had left a cashier's check for the full amount of the payroll check.
Demapan was deprived of the funds for approximately four and a half hours. The record indicates that he did not suffer financial harm, nor did he become physically ill. Demapan did suffer shock, humiliation, anger, embarrassment, outrage and frustration. He was particularly upset that he was in essence being accused of being a "deadbeat" and that he was forced to wait over an hour in the lobby as if he had done something wrong.
Demapan sued the Bank for conversion, negligent misrepresentation, intentional infliction of emotional distress, breach of fiduciary duty and breach of the covenant of good faith and fair dealing.
In its decision, the trial court granted the motion for summary judgment on each of the five causes of action plead by Demapan. Demapan only appeals one cause of action: the grant of summary judgment as to the first count of conversion. In his complaint, Demapan's first cause of action is for conversion with a claim for general and punitive damages. E.R. 22-24. Nowhere in the complaint did Demapan plead or mention 5 CMC § 4103 which provides for damages when a bank fails to exercise ordinary care in handling an item. On appeal he now argues for the first time that under 5 CMC § 4103 he is entitled to damages and on this basis the trial court's decision to grant summary judgment on the conversion claim should be reversed.
II.
Under the common law, conversion is an intentional tort which requires an intentional exercise of dominion and control over property of another. RESTATEMENT (SECOND) OF TORTS § 222A. The trial court found that although most of the elements of conversion had been established, Demapan did not "show that he suffered any legally recognized harm." The damages for conversion Demapan could have recovered were an amount equal to the full value of the converted property which was already satisfied by the receipt of the cashiers' check. Demapan was unable to allege sufficient facts to support a claim for intentional infliction of emotional distress, and therefore would not be eligible for corresponding punitive damages. Demapan was also "ineligible for punitive damages because he [was] unable to show any harm qualifying for compensatory damages and punitive damages and punitive damages may not be awarded absent compensatory damages." As a result, the lower court dismissed this cause of action and we find no error in the dismissal.
Demapan now argues for the first time on appeal that his claim for damages should existnot under the common law, but under section 5 CMC § 4103 which establishes standards of care for a bank. Under subsection (5) of § 4103,
The measure of damages for failure to exercise ordinary care in handling an item is the amount of the item reduced by an amount which could not have been realized by the use of ordinary care, and where there is bad faith it includes other damages, if any, suffered by the party as a proximate consequence.
Appellate courts as a matter of general practice do not consider arguments raised for the first time on appeal. Camacho v. Northern Marianas Retirement Fund, 1 N. Mar. I. 362, 372 (1990). We have, however, recognized there are exceptions to the rule precluding appellate review of newly raised issues.
There are three narrow exceptions to this rule: (1) a new theory or issue arises because of a change in the law while the appeal was pending; (2) the issue is only one of law not relying on any factual record; or (3) plain error occurred and an injustice might otherwise result if the appellate court does not consider the issue. Brown v. Civil Service Commission, 818 F.2d 706 (9th Cir. 1987).
Id. See Castro v. Hotel Nikko Saipan, Inc. 4 N.M.I. 268 (N. Mariana Islands, 1995).
Here, Demapan did not seek any damages pursuant to 5 CMC § 4103. Instead, in his complaint, his first cause of action is for conversion with a claim for general and punitive damages. There is nothing in the record to show that he requested the trial court permit him to amend the pleadings to include a claim for damages under 5 CMC § 4103 or that he argued below the Bank's lack of good faith or failure to exercise ordinary care in handling the instrument in violation of 5 CMC § 4103. See Castro, 4 N.M.I. 268 (N. Mariana Islands, 1995). Clearly, 5 CMC § 4103 is not a new theory or issue which arose because of any change in the law while this appeal was pending. In addition, the issue, while legal, does rely on a factual record. Where a purely legal issue is being raised for the first time on appeal, this Court will not review it if it is necessary to refer to the record, even if the facts already exist in the record. Falcon v. McCue, 2005 MP 7, 7 N. Mar. I. 149. Lastly, there is no evidence of a plain error which would result in injustice if the issue was not considered. See Camacho, 1 N.M.I. at 372.
Demapan contends that the 5 CMC § 4103 argument does not constitute a new issue which would preclude consideration on appeal. He cites to two cases in support. First, he cites I.G.I. Gen. Contr. & Dev., Inc. v. P.S.S., 5 NMI 250, 1999 MP 12 (1999). In I.G.I., the trial court dismissed I.G.I.'s tort claim for failure to state a claim. We agreed that there was no CNMI law which recognized the tort claim, but examined whether there would be a claim under the common law of the United States. We found there was no claim and affirmed the dismissal.
It is unclear how Demapan is attempting to support his argument with I.G.I.. First of all, it is not clear in I.G.I. whether the trial court considered United States common law in its decision. Second, the argument and the issue were raised before the trial court. Third, we have a statute which directs us to look in the absence of written or local law toward "the common law as expressed in the restatement of law approved by the American Law Institute and to the extent not so expressed as generally understood and applied in the United States." 7 CMC § 3401. Therefore, any litigant, in the absence of local law, would know to look toward the United States common law. In the instant case, however, Demapan is attempting to have this court consider a separate local statute not plead initially.
Next, Demapan cites Manglona v. Tenorio, 2004 MP 17, 7 N. Mar. I. 77. In Manglona, the issue was whether the trial court erred in granting leave to amend the complaint to allege unjust enrichment in a second trial. The problem in that case was that evidence raised at the first trial by appellant was then used against appellant in the second trial as a direct result of the amendment. We found that the trial court improperly granted leave to amend because the appellant was prejudiced, as she would have employed a much different defense or even had a different approach to possible resolution of the case had she known the amended argument would be made. Manglona at PP18 and 19. While no case was specifically cited in Manglona, this reasoning echoes the Brown case, which holds that new legal arguments can be made on appeal only if they do not prejudice a party. Brown, 818 F.2d 706. In our case, Demapan did not make any effort to amend his complaint before the trial court. Instead, he raises a new cause of action which was never argued below. Accordingly, we decline to review the issue of whether 5 CMC § 4103 supports a finding of damages for conversion of a negotiable instrument by a bank and the trial court's grant of summary judgment on the issue of conversion is affirmed.
III.
Although we decline to consider whether the Bank failed to exercise ordinary care in handling the instrument entitling Demapan to damages under 5 CMC § 4103(5), the issue was not devoid of merit. The record reflects egregious behavior by the Bank in this case which might have supported a claim for damages under 5 CMC § 4103(5) were it properly plead. Accordingly, we find that under the American Rule, the Bank is not entitled to legal fees for defending the Superior Court action and this appeal. See Reyes v. Reyes, 2004 MP 1, 19-21, 7 N. Mar. I. 1
For the foregoing reasons, the grant of summary judgment by the trial court is hereby AFFIRMED.
SO ORDERED this 13TH day of July, 2006.
/s/ John A. Manglona
Associate Justice
/s/ Robert J. Torres
Justice Pro Tempore
/s/ Frances Tydingco-Gatewood
Justice Pro Tempore