Government of the Virgin Islands v. 0.459 Acres of Land

286 F. Supp. 2d 501, 2003 WL 22327189, 2003 U.S. Dist. LEXIS 18845
CourtDistrict Court, Virgin Islands
DecidedSeptember 24, 2003
DocketCIV.A.1999/064, CIV. 855/1992
StatusPublished
Cited by1 cases

This text of 286 F. Supp. 2d 501 (Government of the Virgin Islands v. 0.459 Acres of Land) is published on Counsel Stack Legal Research, covering District Court, Virgin Islands primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Government of the Virgin Islands v. 0.459 Acres of Land, 286 F. Supp. 2d 501, 2003 WL 22327189, 2003 U.S. Dist. LEXIS 18845 (vid 2003).

Opinion

OPINION OF THE COURT

PER CURIAM.

The Government of the Virgin islands (“appellant”, “Government”) appeals the Territorial Court’s confirmation of an arbitration award in this condemnation action. Appellant raises a singular issue on appeal: Whether an assistant attorney general has the legal authority to agree to and engage in binding arbitration to determine the amount of compensation to be awarded a property owner. Answering that question requires consideration of several submis-sues, which the parties present, including: 1) whether estoppel applies to bar the Government from questioning the validity of the arbitration process here; 2) whether arbitration is permissible to resolve disputes under the eminent domain statute, during the course of litigation, and; 3) whether the arbitration agreement in advance of a specific legislative appropriation to pay the award was statutorily barred, in light of the statutory requirements for the formation of government contracts.

For the reasons which follow, this Court will affirm the Territorial Court’s confirmation of the arbitration award, there be *504 ing no statutory impediment to enforcement of the agreement to arbitrate.

1. STATEMENT OF FACTS AND PROCEDURAL POSTURE

The statement of facts are adopted largely from the Third Circuit’s memorandum opinion in Brown v. Francis, 75 F.3d 860 (3d Cir.1996), [Appendix (“App.”) at 121-29], and from the current record.

Sometime prior to 1989, Milead Associates owned commercial property at Parcels 6 and 9, in Estate Thomas, Kings Quarter, St. Thomas consisting of 2.64 U.S. acres. During that time, the Government commenced negotiations in an attempt to acquire the property by eminent domain to develop a federally-funded highway project in Long Bay (“the Long Bay project”). However, before completion of those negotiations, the property was sold to Jolie Stahl and Barry Brown (“appellees”, “co-trustees”), as co-trustees of the Long Bay Trust, for $3.25 million.

The co-trustees subsequently filed an action for inverse condemnation in the District Court of the Virgin Islands, pursuant to title 28 section 436 of the V.I.Code, claiming the government had effected a de facto taking of their property through its approval of plans for a highway affecting that property. The Government filed a motion to dismiss below based on lack of jurisdiction. That motion was denied with prejudice. Subsequently, the Government filed an eminent domain action in the Territorial Court, pursuant to title 28, section 411 et.seq. of the Virgin Islands Code. That complaint included a declaration of taking, filed by the governor of the Virgin Islands, estimating the amount anticipated to be paid for the property at $1.2 million. [App. at 3-6]. The estimated amount was deposited with the Territorial Court. [Id.]. An order vesting title in the property to the government was entered by the Territorial Court on September 1, 1992. [App. at 18-20]. Thereafter, the co-trustees sought removal of the condemnation claim to the District Court, based on diversity of citizenship, and removal was granted over the government’s objections. The District Court denied a motion to dismiss by the government, in which it asserted the court lacked subject matter jurisdiction. Just prior to a scheduled trial, the parties entered into a written joint stipulation to refer the dispute to binding arbitration, and also agreed that a court judgment would be entered on any award issued. [App. at 80]. 2 That agreement was approved by the Court. Pursuant to that agreement, an arbitration hearing was held on October 5-6, 1994. The Government participated in those proceedings. The arbitrator issued an award of $2.89 million on October 24,1994. [App. at 83-89].

By letter dated December 6, 1994, almost two months following that award, the then-Public Works commissioner wrote to the Attorney General of the Virgin Islands, apparently in response to an earlier inquiry, advising her that the federal government would not contribute to the arbitration award for any amounts in excess of $1.6 million. [App. at 98]. On December 7, 1994, the Government filed its motion to dismiss the award, asserting mistake, lack of authority to enter into such an agreement, and inapplicability of the Federal Arbitration Act (“FAA”). [App. at 90-93]. The co-trustees opposed the government’s motion and filed a Motion to Confirm the award. The District Court (Moore, J.) subsequently confirmed the arbitrator’s award on the co-trustees’ motion, rejecting *505 the Government’s argument that the contract should be voided based on mutual mistake.

The government filed an appeal to the Third Circuit Court of Appeals, in Brown v. Francis, cited supra, challenging the court’s confirmation of the arbitration award and removal to federal court based on diversity of citizenship. The Third Circuit concluded that removal was improper, holding the Territorial Court was the proper forum to consider that claim, as the Government was not deemed a “citizen” for the purpose of establishing diversity of citizenship. See, Brown, 75 F.3d at 865. Accordingly, that court vacated the District Court’s order confirming the arbitration award and remanded the case to the District Court for a determination of the inverse condemnation claim, while remanding the eminent domain claim to the Territorial Court. Id.

Following remand, the Territorial Court, after a hearing on the matter, entered a memorandum opinion and order confirming the arbitration award, thereby rejecting the Government’s argument that its attorney general lacked authority to agree to arbitration. (App. at 234-54). The Government now appeals from that order.

II. DISCUSSION

A. Jurisdiction and Standard of Review

This Court has jurisdiction to review final judgments and orders of the Territorial Court in civil cases. See, Virgin Islands Code Ann. tit. 4, § 33(1997). Because the issues on appeal present questions of law and statutory interpretation, our review is plenary. See, Steven A. Childress and Martha S. Davis, Federal Standards of Review § 4.8-4.12 (3d ed.1999); see, also, Coastal Gen. Const. Services, Inc. v. Virgin Islands Housing Auth., 238 F.Supp.2d 707, 708-09 (D.Virgin Islands 2002); Bowen v. Amoco Pipeline Co., 254 F.3d 925, 931 (10th Cir.2001) (reviewing motion to vacate arbitration award).

B. Enforceability of the Arbitration Agreement

The Government argues generally that the arbitration award is unenforceable as a matter of law and cites three primary grounds in support of that result: 1) the attorney general who signed the arbitration agreement lacked contracting authority; 2) the stipulation entered into by the government to submit the issue to arbitration is void ab initio

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286 F. Supp. 2d 501, 2003 WL 22327189, 2003 U.S. Dist. LEXIS 18845, Counsel Stack Legal Research, https://law.counselstack.com/opinion/government-of-the-virgin-islands-v-0459-acres-of-land-vid-2003.