Opinion ID: 202705
Heading Depth: 2
Heading Rank: 3

Heading: GVI's Equitable Claim for Possession

Text: 45 GVI argues that the court erred in denying its equitable claim for possession of the unsold timeshare units. Because there appear to be no disputed facts, we review the court's decision de novo. See Villafañe-Neriz v. FDIC, 75 F.3d 727, 730 (1st Cir.1996) (As the essential facts are not in dispute, and all that is before us is a question of law, our review of the district court's decision is de novo. ); Hope Furnace Assocs. v. FDIC, 71 F.3d 39, 42 (1st Cir.1995). 46 We begin by assuming, as the district court appears to have done, that GVI was entitled to terminate the Ground Lease with Fairway and that this would give GVI possession of the unsold timeshare units. However, GVI has entered into the Stipulated Settlement with HOTC, which gives HOTC possession of the units. Thus, if the Stipulated Settlement is valid and enforceable, HOTC, and not GVI, would be entitled to equitable possession of the timeshare units. 7 The district court found that the Stipulated Settlement was valid and enforceable, and thus denied GVI's equitable claim for possession. We agree that GVI is not entitled to possession of the unsold timeshare units. 47 GVI raises two arguments against enforcing the Stipulated Settlement. First, GVI argues that V.I.Code Ann. tit. 31, § 205(c) requires that all dispositions of government property, including each individual lease and subsequent reletting, be approved by the legislature of the Virgin Islands. Section 205(c) states, in relevant part: 48 [N]o sale, exchange, lease or sublease of government real estate, nor any use permit of the same for a term exceeding one year (including the period of any allowable extensions or renewals) nor sublease of government real estate for a term exceeding five years (including the period of any allowable extensions or renewals) shall be deemed binding upon the Government of the United States Virgin Islands, unless and until (1) such proposed sale or exchange or such proposed lease or sublease shall have been submitted to the Legislature, while in regular or special session, (2) shall have been approved by the Legislature. 49 V.I.Code Ann. tit. 31, § 205(c). Although there do not appear to be any Virgin Islands law decisions that interpret Section 205(c), we find GVI's proposed interpretation of the law to be highly improbable. First, neither of the prior amendments to the Ground Lease appear to have received legislative approval. In addition, V.I.Code Ann. tit. 3, § 218(a)(5) appears to give the Department of Property and Procurement of the Virgin Islands the power to manage rental properties owned or controlled by the Government, except as limited by Federal law, hotels, and housing development programs or projects; and make inventory and establish forms and procedures for the sale, rental, or disposition thereof. In addition, Article 8.03(b) of Amendment No. 2 to the Ground Lease, whose validity is not in dispute, plainly states that in the event of a lessee's default, GVI may [e]ither cancel this Lease by notice or without canceling this Lease, relet the Lease premises or any part thereof upon such terms and conditions as shall appear advisable to [GVI]. Thus, while § 205(c) may require some authorizing act for the disposition of government real estate, we do not believe it requires the legislature to engage in the minutiae of defaults and relettings. Because the legislature authorized the initial lease of Protestant Cay in Act No. 1178 (April 2, 1964), we conclude that no additional legislative approval was needed for the Stipulated Settlement, which relet the premises to HOTC. 8 50 GVI's second argument is that the SBA Receiver may not use the Stipulated Settlement to deny GVI's equitable claim because Fairway was neither a party to the agreement nor an intended beneficiary of the agreement. Thus, GVI argues, the only party who may use the Stipulated Settlement to deny GVI's claim is HOTC. The district court found that the Receiver was appointed to receive the claims of all creditors of the Fairway Estate and to recommend the disposition of those claims. Thus, the district court concluded that the SBA Receiver could use the Stipulated Settlement in determining whether GVI was entitled to possession of the unsold timeshare units. 51 Section 687c(b) gives a court the power to put a Small Business Investment Company into receivership; the receiver is charged with the responsibility for obtaining possession of the assets of the corporation prior to its liquidation. Small Business Administration v. Segal, 383 F.Supp. 198, 203 (D.Conn.1974). Receivership is an attempt to provide equitable relief on the road to some form of full and final relief. 13 Moore's Federal Practice § 66.03. Thus, a district court in its discretionary supervision of an equitable receivership may deny remedies like rescission and restitution where the equities of the situation suggest such a denial would be appropriate. United States v. Vanguard Inv. Co., 6 F.3d 222, 227 (4th Cir. 1993). Here, the SBA Receiver was charged with collecting, disentangling, and liquidating the assets of Fairway. The SBA Receiver collected the unsold timeshare units because Fairway was in possession of them at the time the receivership proceedings were brought. GVI then submitted a equitable claim to the Receiver because it believed that it was entitled to possession of the resort. However, the SBA Receiver was not limited to merely determining whether GVI's claim to the unsold timeshare units was superior to that of Fairway. Rather, the SBA Receiver was entitled to determine, based on the evidence submitted, whether GVI had any equitable claim to possession of the unsold timeshare units. While Fairway may or may not have been entitled to possession of the unsold timeshare units, 9 it is clear from the Stipulated Settlement that GVI was not entitled to possession of them. Thus, neither the SBA Receiver nor the district court erred in concluding that, based on the Stipulated Settlement, GVI's possessory claim to the unsold timeshare units should be denied.