Cruz v. St. Croix Financial Center d/b/a Tamarind Reef Hotel

2024 V.I. 11

Opinions

Opinion

For Publication IN THE SUPREME COURT OF THE VIRGIN ISLANDS

NELSON CRUZ ) S Ct Civ No 2019 0060 Appellant/Plaintiff ) Re Super Ct Civ No 209 2018 (STX)

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v )

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ST CROIX FINANCIAL CENTER INC ) d/b/a TAMARIND REEF HOTEL ) Appellee/Defendant )

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On Appeal from the Superior Court of the Virgin Islands Division of St Croix

Superior Court Judge Hon Douglas A Brady

Argued February 9 2021

Filed February 9 2024

Cite as 2024 VI 1]

BEFORE RHYS S HODGE Chief Justice MARIA M CABRET Associate Justice and IVE ARLINGTON SWAN Associate Justice

APPEARANCES

Rhea R Lawrence, Esq Lee J Rohn, Esq Law Offices of Lee J Rohn and Associates LLC St Croix, U S V I Attorneysfor Appellant,

Andrew C Simpson, Esq Andrew C Simpson P C St Croix, U S V I AttorneyfiJr Appellee

OPINION OF THE COURT

CABRET, Associate Justice {[1 Nelson Cruz appeals from the Superior Court’s June 25 2019 and March 2, 2020 orders

Opinion of the Court

Page 2 of 10 which compelled arbitration and dismissed his complaint without prejudice For the reasons

discussed below, we affirm I BACKGROUND

112 St Croix Financial Center, Inc (“SCFC”) owns and operates the Tamarind Reef Resort and Green Cay Marina In November 2016, SCFC hired Cruz as a maintenance worker at the resort As part of the hiring process, Cruz signed an arbitration agreement that read, in its entirety as follows

I agree that I will settle any and all previously asserted claims, disputes or controversies arising out of or relating to my application or candidacy of employment, employment and/or cessation of employment with the Tamarind Reef Hotel, [and] the Deep End Bar , exclusively by final and binding arbitration before a neutral Arbitrator By way of example only, such claims include claims under federal, state and local statutory or common laws, such as Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, including amendment of the Civil Rights Act of 1991, the Americans with Disabilities Act, the law of contract and law of tort

(J A 93) 113 After a series of incidents, SCFC terminated Cruz’s employment on May 8, 2017 On June 7, 2018, Cruz filed a complaint against SCFC in the Superior Court, asserting multiple causes of action, including wrongful discharge SCFC filed an answer to the complaint on July 9, 2018, and the parties then engaged in discovery However, on January 28, 2019, SCFC filed a motion to compel arbitration and to dismiss Cruz’s complaint for lack of subject matter jurisdiction, based on the arbitration agreement he had signed at hiring 114 Cruz filed a timely opposition to SCFC’s motion on February 19, 2019, which opposed arbitration on numerous grounds, including that the agreement was unconscionable On May 7, 2019, Cruz filed a motion, which SCFC later opposed, that requested leave to file a supplemental brief in opposition, to argue that the arbitration agreement did not extend to the causes of action

Page 3 of 10 asserted in his complaint because he had agreed only to arbitrate “previously asserted claims ”

115 In a June 25, 2019 order, the Superior Court denied Cruz’s motion for leave to file a supplemental brief on grounds that the arguments made therein were unpersuasive, and granted SCFC’s motion to compel arbitration The Superior Court, however, did not dismiss Cruz’s complaint, but only ordered the proceeding stayed for 30 days so that the parties could meet and confer to agree upon an arbitrator 1|6 Even though the Superior Court had not dismissed his complaint, Cruz filed a notice of appeal with this Court on July 25 2019 which requested that the appeal be held in abeyance until the Superior Court issued a final judgment dismissing the case In addition, the parties never agreed on an arbitrator or otherwise participated in the arbitration ordered by the Superior Court The Superior Court, in a March 2, 2020 order, sua Sponte dismissed Cruz’s complaint without prej udice in order to permit Cruz to proceed with his appeal of the June 25, 2019 order 11 DISCUSSION

A Jurisdiction and Standard of Review 117 This Court has jurisdiction over “all appeals arising from final judgments, final decrees or final orders of the Superior Court, or as otherwise provided by law ” V I CODE ANN tit 4, § 32(a) Although on July 25, 2019, Cruz filed a notice of appeal with this Court from the Superior Court’s June 25, 2019 order, that order did not dismiss his complaint, but only compelled arbitration and stayed the proceeding for 30 days While courts remain deeply split on the question of whether an order compelling arbitration but declining to dismiss the case constitutes an appealable final judgment,l we need not decide that question because the Superior Court subsequently entered an

WGear Chevrolet C0 , 26 So 3d 1026, 1034 (Miss 2010); Kremer v Rural Cmty Ins Co 788 N W 2d 538 549 (Neb 2010) Wem v Moms 944 A 2d 642 650 (N J

Page 4 of 10 order of dismissal on March 2 2020 See Rohn v People 57 V I 637 642 n 4 (V I 2012)

(observing that “subsequent events may ripen a prematurely filed appeal”) (quoting Harvey v Chrzstopher 55 V I 565 571 (V I 2009)) accord V I R APP P 5(a)(l) (providing that a notice of appeal filed before entry of a judgment or order “is treated as filed on the date of and after the entry ofjudgment”) 1l8 “Our review ofthe Superior Court's application of law is plenary, while findings of fact are reviewed for clear error ” Whyte v Bockmo, 69 V I 749, 754 (V I 2018) (internal quotation marks and citation omitted) Because it constitutes a question of law, we “exercise plenary review [over the Superior Court’s] conclusion that an arbitration clause is enforceable ” Id B Construction of Arbitration Agreement 1|9 On appeal, Cruz renews his argument that the arbitration agreement he executed as part of the hiring process does not encompass the causes of action in his complaint 2 Specifically, Cruz maintains that he had only agreed to arbitrate “previously asserted claims,” I A 93, and that the causes of action asserted in his complaint could not have been “previously asserted” because they

2008) Cabrmz Med Ctr v Desma 479 N E 2d 217 (N Y 1985) (holding that decisions denying or compelling arbitration are final appealable orders) With Andrew v Am Imp Ctr , I 10 A 3d 626, 630 (D C 2015) Powell v Cannon 79 P 3d 799 804 (Utah 2008) McGraw v Am Tobacco Co 681 S E 2d 96 106 (W Va 2009) Dennis v Jack Dennis Sports Inc 253 P 3d 495 496 (Wyo 2011) (holding that such orders are not immediately appealable) 2 In its appellate brief, SCFC contends that this argument is not properly before this Court because it had been made for the first time in Cruz’s motion to file a supplemental brief, which the Superior Court ultimately denied We disagree Pursuant to Rule 4(h) of the Virgin Islands Rules of Appellate Procedure, “[o]nly issues and arguments fairly presented to the Superior Court may be presented for review on appeal ” “To determine whether an issue was fairly presented and preserved for appeal, th[is] court disregards fonn and relies upon substance ” Ubiles v People, 66 V I 572, 583 (V I 2017) (internal quotation marks omitted) While, as a technical matter, the Superior Court denied Cruz’s motion to file a supplemental brief, it expressly did so because “[t]he substantive content” ofthe arguments made therein were “unpersuasive ” (J A 324 n 1) Because the Superior Court had the opportunity to consider, review, and address his argument, Cruz fairly presented this issue to the Superior Court See World Fresh Markets LLC v Henry, 71 V I 1161 , 1172 (VI 2019)

Page 5 of IO involve events that occurred after he signed the agreement in November 2016

1[10 We disagree Because arbitration agreements are contracts, we construe them in accordance with general principles of contract law Whyte, 69 V I at 764 Thus, as with any other contract, we “strive to most appropriately implement the intent of the parties ” Gov’t of the VI Dep’t of Educ v St Thomas/St John Educ Admmzstrators Assn Local 10] 67V] 623 638 (VI 2017) “Where the language of a contract is clear and unambiguous, the parties’ intent must be derived from the plain meaning of its terms ” thlltp v Marsh Monsanto, 66 V I 612, 625 (V I 2017) Importantly, in construing a contract, courts cannot interpret individual words or phrases “in isolation” but rather must do so “in the context of the entire agreement ” Unzted Corp v Tutu Park Ltd , 55 VI 702, 713 (V I 2011) In doing so, it must consider “what the[] words would mean in the mouth of a normal speaker of English, using them in the circumstances in which they were used ” Id at 719 n 14 1111 Here, Cruz places tremendous emphasis on the phrase “previously asserted claims ” (J A 93 ) He ignores, however, the language that occurs immediately after that phrase that he agrees to arbitrate “previously asserted claims, disputes or controversies arising out of or relating to my application or candidacy of employment, employment and/or cessation of employment ” (J A 93 ) Under traditional rules of English grammar, an adjective modifies a noun that immediately follows it See Gzlbert v People 52 V I 350 357 (V I 2009) And as this Court has previously explained pursuant to another traditional rule of English grammar the rule of the last antecedent “a limiting clause or phrase” is typically “read as modifying only the noun or phrase that it immediately follows ’ Carty v People 2022 VI 2, 11 85 1[12 Here, the adjective phrase “previously asserted” immediately precedes the word “claims” and the limiting clause “arising out of or relating to my application candidacy of employment,

Page 6 of 10 employment and/or cessation ofemployment” appears afier the phrase “disputes or controversies ”

As such, under traditional rules of English grammar, Cruz agreed to arbitrate two distinct and independent types of matters with SCFC (1) “previously asserted claims,” and (2) “disputes or controversies arising out ofor relating to my application or candidacy of employment, employment and/or cessation ofemployment ” This construction is consistent not only with the rules of English grammar, but common sense because Cruz executed the arbitration agreement as part of the hiring process and had not yet commenced his employment with SCFC, it is literally impossible for him to have “previously asserted” any “claims, disputes or controversies arising out of or relating to” his “employment and/or cessation of employment ” In other words, were this Court to interpret the arbitration agreement in the manner Cruz proposes, it would render the phrase “employment and/or cessation of employment” completely superfluous See Weary v Long ReefCondo Ass'n, 57 V I 163, 175 (V I 2012) (“Any reading which renders contract provisions pointless superfluous, or ineffective violates basic notions of contract interpretation[] and leads to an absurd result which should not be entertained”) (citations omitted) Because the causes of action asserted in his complaint all relate to his employment and/or cessation of employment” with SCFC, the Superior Court committed no error when it held that those claims are subject to arbitration C Unconscionability

‘13 Cruz flirther argues that the arbitration agreement he signed as part of the hiring process is substantively unconscionable because it was a contract of adhesion “offered by [SCFC] on a take it or leave it basis and “had no waiver of costs provisions where financial hardship is demonstrated ” (Appellant’s Br 21 ) SCFC counters by asserting that the Federal Arbitration Act, 9 U S C § 1 et seq (the “FAA”), governs this dispute and that the Supreme Court of the United States has already held that an arbitration agreement’s silence as to allocation of costs, without

Page 7 of 10 more, “is plainly insufficient to render it unenforceable” under the FAA Green Tree Fm Corp

v Randolph, 531 U S 79, 89 (2000) Cruz, however, maintains that it is the Virgin Islands common law of arbitration, and not the FAA, that governs this issue 1114 We agree with Cruz that the FAA is not applicable to this dispute Both this Court and the United States Court of Appeals for the Third Circuit have held that “because the FAA is premised on Congress’s power to regulate interstate commerce and not Congress's plenary powers under the territorial clause—even in the context of Virgin Islands local courts, ‘a contract comes within the purview of the FAA only when an interstate nexus is shown,’ which ‘coincides with that of the Commerce Clause Allen v HOVENSA LLC 59 V I 430 442 n 2 (V I 2013) (quoting Gov t ofthe VI v Unzted Indus Workers 169 F 3d 172 176 (3d Cir 1999)) It is the party seeking to compel arbitration under the FAA that must “show that the contract evidences an interstate nexus ” Whyte 69 VI at 761 62 {[15 In its June 25, 2019 order the Superior Court determined that “the activities of SCFC affect interstate commerce” because the Tamarind Reef Resort provides lodging and a marina for off island guests’ and because ‘ posted reviews at www tripadvisor com” include reviews “from guests from at least 18 states in the United States and three foreign countries ” (J A 330) But these findings are deficient in one very important respect they are not supported by any evidence in the record 1116 SCFC as the party seeking to apply the FAA to this proceeding, possessed the burden of proving an interstate nexus But while this burden is “relatively low,” Whyte, 69 V I at 761, it “is not so low as to be non existent ” Johnson v Altamtrano 418 F Supp 3d 530, 564 (S D Cal 2019) In its motion to compel arbitration, SCFC stated that

There is more than a sufficient interstate nexus in this case Cruz was a maintenance worker at the Tamarind Reef Resort See Exhibit 2 (Letter, offer for

Page 8 of IO full time employment) The resort provides lodging and a marina for off island resort guests and visitors See www taman'ndreefresort com See also the reviews at tripadvisor com, which frequently include the home location of the persons providing the review The Tamarind Reef Resort’s general business of providing lodging and marina berths for visitors from the Caribbean, the Continental United States, and abroad satisfies the interstate nexus requirement Thus, the FAA applies in this case

(J A 43 44 ) But “unswom representations of an attorney are not evidence ” Henry v Dennery, 55 V I 986 994 (V I 2011) And while SCFC directed the Superior Court to the www tamarindreefresort com and wwwtripadvisor com websites, it failed to provide copies of those websites (or relevant portions thereof), and thus there is no way to ascertain the contents of those websites and whether they provide the minimum evidentiary basis needed to establish those facts This is particularly problematic given the naked citation to www tripadvisor com without even referencing any particular review Importantly, it is well established that the truth or veracity ofthe contents on a party’s own website are not facts amenable to judicial notice See V I R EVID 201(b)(2) (providing that judicial notice may be taken with respect to “a fact that is not subject to reasonable dispute because it can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned ’) see also See Rivera v Marmot! Int'l Inc , 456 F Supp 3d 330 337 39 (D P R 2020) (denying a party 3 request for the court to take judicial notice of a website for the truth of its contents) Judmal Nance ofMaterial on Internet, 29 AM J[JR 2D Evidence § 95 (“A court may take judicial notice of Internet material, including Internet archive documents, as well as the existence of websites and blogs, but it may not accept their contents as true ”) As a result, SCFC failed to meet even the ‘ relatively low” burden of establishing an interstate nexus due to its complete failure to support its motion with any admissible evidence 1H7 Yet although the FAA is inapplicable to this matter due to SCFC’s failure to establish an interstate nexus, we disagree with Cruz that the arbitration agreement is unconscionable under

2024

February 9, 2024