Court Opinion

ID: 9910586
Source: CourtListenerOpinion
Date Created: 2023-12-15 21:12:56.998865+00
Date Added: 2024-06-11T12:53:12.878775
License: Public Domain

IN THE SUPERIOR COURT
OF THE VIRGIN ISLANDS

FILED

May 95, 2923 91:39 eM
8T-2012-c¥-00273
TAMARA CHARLES
CLERK OF THE COURT

IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS
DIVISION OF ST. THOMAS AND ST. JOHN
FIRSTBANK PUERTO RICO, Case No. ST-2012-CV-00273
Plaintiff,
ACTION FOR DECLARATORY
JUDGMENT, BREACH OF
CONTRACT, IMPAIRMENT OF

SECURITY INTEREST, AND
UNJUST ENRICHMENT

HARTHMAN LEASING III, LLLP,

Defendant.

Fs

Cite as 2023 VI Super 23U

MEMORANDUM OPINION
THIS MATTER is before the Court on Harthman Leasing III, LLLP’s (“Harthman” or

“Defendant”) Praecipe,! FirstBank Puerto Rico’s (“FirstBank” or “Plaintiff’) Response to
Praecipe filed by Harthman, and FirstBank’s Emergency Motion to Quash Amended Writ of
Execution, which is fully briefed.? For the reasons set forth herein, the Court will deny FirstBank’s
motion to quash and allow the Marshal to enforce the Judgment.

BACKGROUND FACTS AND PROCEDURAL POSTURE

This dispute dates back to a 2003 lease agreement, entered into by Harthman and East End

Plaza (“EEP”), wherein EEP agreed to rent Parcel 17-B, Estate Smith Bay, St. Thomas, Virgin

' Harthman filed its original Praecipe and a proposed Writ of Execution on January 13, 2023, and an Amended
Praecipe and a proposed Amended Writ of Execution on January 23, 2023. Harthman filed a Notice of Second
Amended Writ of Execution on January 26, 2023.

* FirstBank’s Motion to Quash was filed on January 26, 2023, Harthman’s Combined Opposition to FirstBank’s
Response to Praecipe and Emergency Motion to Quash was filed February 12, 2023, and FirstBank’s Reply to
Harthman’s Combined Opposition was filed on February 27, 2023.
FirstBank Puerto Rico v. Harthman Leasing HI. LLLP

Case No. ST-2012-CV-00273 Cite as 2023 VI Super 23U
Memorandum Opinion

Page 2 of 9

Islands. The parties later added Parcels 17-C and 17-D to the agreement. EEP obtained a
construction loan from FirstBank, which granted FirstBank priority assignment of the lease as
security for repayment. Harthman consented to the arrangement in an agreement which stated, in
part, that in the event of EEP’s default, FirstBank would become liable for EEP’s obligations under
the lease. EEP ultimately defaulted on repayment, and FirstBank and EEP entered a Multi-Credit
Settlement Agreement and Assignment of Lease in Lieu of Foreclosure, such that FirstBank
assumes the rights, obligations, and interest of EEP. FirstBank initiated the instant suit in 2012,
seeking a declaratory judgment on the parties’ rights and obligations under the lease and a finding
that FirstBank was either not in default or had timely cured EEP’s default. Harthman filed a
counterclaim, claiming FirstBank failed to timely cure EEP’s default under the lease.

The matter went to trial in 2019, where some issues were tried to the Court and some to
the jury. The jury returned a verdict on July 29, 2019, awarding Harthman Six Million, Two
Hundred Fifty-Seven Thousand, Two Hundred Seventy Five dollars and Thirty-Nine cents
($6,257,275.39) in damages.’ The Court issued findings of fact and conclusions of law and entered
judgment on June 4, 2021 (“Judgment”), finding that Harthman was entitled to possession of
Parcels 17-B, 17-C, and 17-D, finding that Parcel 17-E never became part of the lease, and

upholding the jury’s damages award.*

> The jury’s damages award included the following breakdown of $6,257,275.39 due to Harthman:

Base Rent for Parcels 17-B, 17-C, and 17-D (9/2014 — 7/2019): $3,680,755.34
12% interest from 9/2014 to 7/2019: $1,028 409.23
5% late charges accumulated from 9/2014 go 7/2019: $ 184,037.77
Rent for Parcel 17-E untit May 2012: $1,364,073.05

4 See Findings of Fact and Conclusions of Law, entered June 4, 2021; see also Judgment, entered June 4, 2021, nunc
pro tune July 29, 2019.
FirstBank Puerto Rico v. Harthman Leasing [ff, LLLP

Case No. ST-2012-CV-00273 Cite as 2023 VI Super 23U
Memorandum Opinion

Page 3 of 9

Following the Court’s Judgment and the jury’s verdict, FirstBank timely filed an appeal
with the Virgin Islands Supreme Court on July 6, 2021,° which remains pending as of the date of
this opinion. FirstBank also filed several motions with this Court.* This Court ruled on them in
November 2021, upholding a portion of the jury’s damages award, finding FirstBank owed
Harthman Four Million, Eight Hundred Ninety-Three Thousand, Two Hundred Two dollars and
Thirty-Four cents ($4,893,202.34) (‘$4.89 million”) for unpaid rent, and declining to stay
execution on the Judgment pending appeal, with respect to the $4.89 million due to Harthman.’
On December 1, 2021, FirstBank requested the Virgin Islands Supreme Court stay Harthman’s

execution on the $4.89 million verdict, which remains pending.® In the interim, the Supreme Court

5 Harthman also filed a Cross-Appeal on July 20, 2021.

6 Following this Court’s June 4, 2021, entry of Judgment, FirstBank filed a Motion for New Trial and to Amend
Judgment, a Motion to Stay June 4, 2021 Order, a Renewed Motion for Judgment as a Matter of Law, and a Motion
to Stay Execution & Enforcement of Judgment.

” See Memorandum Opinion — Motion to Stay Enforcement of Judgment, entered on November 2, 2021. Therein, the
Court performed the four-part test for a motion to stay, “(1) whether the litigant has made a strong showing that he is
likely to succeed on the merits (2) whether the litigant will be irreparably injured absent a stay, (3) whether issuance
of the stay will substantially injure the other parties interested in the proceedings and (4) where the public interest
lies.” Suid v. Law Office of Karin A. Bentz, No. 2020-0017, 2021 WL 915928, at *1 (V.L Feb. 19, 2021). In that
analysis, the Court found that (1) FirstBank was unlikely to prevail on the merits because Harthman presented
sufficient evidence to sustain the jury award in the amounts awarded and the Court saw no reason to disrupt such
verdict; (2) FirstBank was unlikely to suffer irreparable harm with respect to the $4.89 million due, because the funds
owed are already in escrow; (3) Harthman was likely to suffer as it has not been paid rent for a number of years while
also not being in possession of the property; and (4) the dispute involves private commercial litigation and therefore
will have little impact on the public interest. As such, the Court denied FirstBank’s request for a stay of execution and
enforcement of Judgment with respect to the jury’s damages award for Parcel Nos. 17-B, 17-C, and 17-D, in the
amount of $4.89 million. However, the Court did ultimately stay execution and enforcement of the damages award
with respect to Parcel No. 17-E since its involvement in the lease was found to be immaterial and it is possible
FirstBank may not ultimately owe such money. As such, the Court denied FirstBank’s motion to stay with respect to
the $4.89 million and ordered FirstBank to pay Harthman the $4.89 million within thirty (30) days of the entry of the
opinion and granted FirstBank’s motion to stay with the remaining amount due, specific to Parcel 17-E, and ordered
FirstBank to deposit One Million, Five Hundred Thousand dollars ($1,500,00.00) into the registry of the Court pending
appeal.

® The Motion to Stay pending in the Supreme Court is fully briefed. Harthman filed an Opposition on December 15,
2021, and FirstBank filed a reply on December 29, 2621.
FirstBank Puerto Rico vy. Harthman Leasing Il, LLLP

Case No. ST-2012-CV-00273 Cite as 2023 VI Super 23U
Memorandum Opinion

Page 4 of 9

has acted on several other pending issues associated with the appeal to the instant matter.”
FirstBank has not paid Harthman the ordered $4.89 million.

On January 13, 2023, Harthman filed a Praecipe and Writ of Execution with this Court.
Harthman then amended its praecipe and filed an amended writ of execution, and Clerk of the
Court, through her Court Clerk, executed the Amended Writ of Execution (“Writ”) on January 24,
2023. That Writ permits the Office of the V.I. Marshal (“OVIM”) to execute on FirstBank’s assets
to collect the sum of the $4.89 million judgment from FirstBank, all in accordance with this Court’s
November 2021 rulings.'®

The parties learned of the Writ’s execution on January 26, 2023, at which point FirstBank
filed the instant Emergency Motion to Quash as well as an emergency motion with the Supreme
Court, requesting ruling on the outstanding motion to stay. FirstBank also filed the instant
Response to Praecipe, noting it would be improper to allow the executed Writ to stand, as there is
a pending motion to stay at the Supreme Court. On January 30, 2023, this Court reserved ruling
on FirstBank’s Emergency Motion to Quash, but temporarily barred OVIM from acting upon or
taking any steps to execute on the Amended Writ of Execution that was issued on January 25,
2023, pending further order of this Court.!!

On April 4, 2023, Harthman filed an Informational Motion informing the Court that the
Supreme Court still had not ruled on FirstBank’s December 1, 2021, motion to stay nor its January

26, 2023, emergency motion.

° Harthman notes that the Supreme Court has been active in this case in other respects, specifically stating the Supreme
Court has responded to “‘several motions to exceed page limits, a motion to extend response times, and a motion to
continue oral argument, [and] [o]n October 11, 2022, the Parties actually argued the case before the [Supreme Court].”
See Harthman’s Opposition, at pg. 3, 95.

'0 Specifically, the Writ of Execution requires FirstBank to pay Harthman $4,893,202.34 in accordance with the
Judgment and $682,635.24 in Post-Judgment Interest calculated at 4% through January 23, 2023.

"l See Order, filed January 30, 2023.
FirstBank Puerto Rico v. Harthman Leasing if], LLLP

Case No. ST-2012-CV-00273 Cite as 2023 VI Super 23U
Memorandum Opinion

Page 5 of 9

DISCUSSION

The parties both make various arguments with respect to the status of the Writ. The Court
will address each argument in turn.

I. The Clerk of the Court Properly Executed the Writ.

FirstBank argues that it was never served with the Writ that was executed by the Clerk of
the Court, and that the lack of service is in violation of Rule 5 of the Virgin Islands Rules of Civil
Procedure,'? and it only learned the Writ had been issued by looking at the docket on the Court’s
online filing system. Harthman counters that the Clerk of the Court acted properly and even though
FirstBank was not personally served with the executed Writ, the Writ was immediately available
on the Court’s public docket and FirstBank learned of the Writ soon was after it was uploaded on
the public docket on January 26, 2023. Harthman cites V.I. R. Civ. P. 69, which states that “A
money judgment is enforced by a writ of execution, unless the court directs otherwise. All requests
for issuance of writs of execution and other process for the enforcement of judgments shall be
made in writing, by praecipe, to the clerk of the court for the judicial division in which the
judgment was entered.” As such, because no court order has “directed otherwise,” Harthman
claims the Clerk of the Court, through the Court Clerk, performed as required in issuing the Writ.
The Court agrees.

The Court notes that V.I. R. Civ. P. 5 requires that all papers filed with the court, after the
complaint, must be served on every party. The record shows that Harthman served copies of its

praecipes and proposed writs of execution on FirstBank. Thus, Harthman complied with V.I. R.

"2 VI. R, Civ. P. 5 states, in pertinent part, “all papers after the complaint that are filed with the court must be served
on every party” unless subject to certain exceptions.
FirstBank Puerto Rico v. Harthman Leasing II, LLLP

Case No. $T-2012-C V-00273 Cite as 2023 VI Super 23U
Memorandum Opinion

Page 6 of 9

Civ. P. 5. However, V.L R. Civ, P. 5 does not require the Clerk of the Court, or her designee, to
send a copy any document for service of, e.g., a writ or a summons, to the parties. The process
only requires the Clerk to execute the Writ and forward it to OVIM for service. Furthermore, there
was ultimately no harm to FirstBank as it had been properly served with the praecipes and proposed
writ and knew approval of the writ by the Clerk of the Court was a ministerial act. FirstBank
learned of the Writ within a day of its execution and FirstBank lost no opportunity to timely oppose
the execution of the Writ. As such, the Court finds no reason to invalidate the Writ on these
grounds.

II. The Court Previously Denied FirstBank’s Motion to Stay Execution, and

Therefore Declines to Revisit or Reverse its Decision.

FirstBank next highlights its pending Motion to Stay Enforcement of Judgment with the
Virgin Islands Supreme Court, which endeavors to stay enforcement of the Judgment for which
the Writ was issued. As such, FirstBank claims it was improper for the Clerk to execute a writ
which would divest the Supreme Court of its jurisdiction. FirstBank likens the instant matter to
Diamond Crest, Limited v. FNA Service Station, inc., in which the Clerk of the Superior Court
prepared but did not execute a writ of restitution because Defendants’ motions were pending.
Diamond Crest, Ltd. v. FNA Serv. Station, Inc., No. ST-01-CV-591, 2006 WL 8418818, at *1 (VI.
Super. Ct. June 14, 2006). However, this Court cannot rely upon that case, as it does not quote the
then existing rule regarding motions to stay enforcement of a judgment, and it was decided before
the establishment of the V.I. Supreme Court in November 2006, and many years before the

adoption of the Virgin Islands Rules of Appellate Procedure in 2017.
FirstBank Puerto Rico v. Harthman Leasing I, LLLP

Case No. ST-2012-CV-00273 Cite as 2023 VI Super 23U
Memorandum Opinion

Page 7 of 9

The Court notes that FirstBank claims Rule 8 of the Virgin Islands Rules of Appellate
Procedure specifically addresses motions to stay filed directly with the Supreme Court, such that
this Court must quash the executed Writ. Harthman counters that FirstBank failed to support its
claim that this Court has jurisdiction to halt execution of the Writ. Indeed, Harthman claims, if
writs of execution were to be automatically stayed during appeal, as FirstBank contends pursuant
to Diamond Crest, Ltd., then there would be no reason for V.I. R. App. P. 8.

FirstBank also notes that V.I. R. App. P. 8 “specifically contemplates the filing of motions
to stay the enforcement of a judgment directly with the Supreme Court,” so FirstBank should be
afforded a ruling on the pending motion to stay, which requires this Court immediately quash the
Writ. Harthman counters that V.I. R. App. P. 8 states that this Court should be the first Court to
consider requests for stays of judgment and posting bonds. Harthman notes this has already
happened in this case, when the Court declined to issue a stay of enforcement of the $4.89 billion,
so FirstBank then moved on to present the motion to stay to the Supreme Court. Harthman argues
that because the Supreme Court has not yet granted FirstBank the relief it has requested, FirstBank
is effectively asking this Court to sua sponte reverse itself from the November 2, 2021 Opinion
denying the stay and “usurp the authority” of the Supreme Court to quash the Writ. Harthman
argues that if the Supreme Court wanted to stay execution, it would have done so.

V.I.R. App. P. 8(b) reads as follows:

Requests for a stay of the judgment or order of the Superior Court pending appeal, for

approval of a supersedeas bond, or for an order suspending, modifying, restoring, or

granting an injunction during the pendency of an appeal in a civil case must ordinarily be
made in the first instance to the Superior Court. When a matter is before the Superior Court,
its rules respecting time periods, practices, and procedures apply. A motion for such relief
may be made to the Supreme Court, but the motion shall show that application to the
Superior Court for the relief sought is not practicable, or that the Superior Court has denied

an application, or has failed to afford the relief which the applicant requested, with the
reasons given by the Superior Court for its action. The motion shall also show the reasons
FirstBank Puerto Rico v. Harthman Leasing Hi, LLLP

Case No. ST-2012-CV-00273 Cite as 2023 VI Super 23U
Memorandum Opinion

Page 8 of 9

for the relief requested and the facts relied upon, and, if the facts are subject to dispute, the
motion shall be supported by affidavits, other sworn statements or copies thereof, and
documentation demonstrating ownership, liens or other encumbrances, and availability of
resources offered as security. With the motion shall be filed such parts of the record as are
relevant. An original and three copies of the motion and any accompanying documents
shall be filed with the Supreme Court. Reasonable notice of the motion shall be given to
all parties. The motion shall be filed with the Clerk of the Supreme Court and normally
will be considered by a three Justice panel, but in exceptional cases where such procedure

would be impracticable due to the requirements of time, the application will be decided by
the Chief Justice of the Supreme Court.

The Court agrees with Harthman that it has already considered FirstBank’s arguments to
stay execution and enforcement of the Judgment pending appeal, and the Court performed the
appropriate analysis and ultimately declined to issue the stay with respect to the $4.89 million
Judgment entered in favor of Harthman."? As such, this Court has ruled and FirstBank has taken
the appropriate procedural step, pursuant to V.I. R. APP. P. 8, in now requesting the stay from the
Supreme Court.'* Although FirstBank’s instant motion is requesting the Court quash the executed
Writ, the effect of quashing the Writ would be to stay the execution and enforcement of the
Judgment, something this Court has already considered. Just because the Supreme Court has not
acted upon FirstBank’s pending motion to stay enforcement of the Judgment does not mean it will
not act, but it is not for this Court speculate how or when that may occur. Additionally, as

Harthman mentions, if the Court were to quash the Writ, it would effectively be sua sponte

'’ To recap, the Court reasoned that the $1,364,073.05 in damages that the jury awarded for Parcel 17-E could
ultimately be found to be excessive, so the Court opted to stay execution and enforcement on that portion of the
Judgment. However, the Court determined that FirstBank was unlikely to succeed on its claims calling for overturning
the damages awarded with respect to Parcel Nos. 17-B, 17-C, and 17-D because Harthman has already presented
sufficient evidence to prove to the jury and the Court that it has not been in possession of the premises nor receiving
rent payments. As such, the Court found that Harthman is due the $4.89 billion and declined to stay execution and
enforcement of that portion of the Judgment.

‘4 In an unpublished opinion on April 4, 2023, the V.I. Supreme Court stated, “Ordinarily, a motion for stay pending
appeal must be considered by the Superior Court in the first instance. See V.I. R. APP. P. 8(b). Although the Executive
Branch filed such a motion, it has not yet been adjudicated by the Superior Court, Nevertheless, given the urgency of
the matter, we consider the Executive Branch’s motion notwithstanding the pendency of the stay motion in the
Superior Court.” Bryan, Jr., et. Al. v. Water and Power Auth., S. Ct. Civ. No. 2023-0014 (Re: Super. Ct, No. ST-21-
CV-361), at 2 n.2 (V.I. April 4, 2023).
FirstBank Puerto Rico v. Harthman Leasing IH, LLLP

Case No. ST-2012-CV-00273 Cite as 2023 VI Super 23U
Memorandum Opinion

Page 9 of 9

reversing its decision from the November 2, 2021, Memorandum Opinion, an action that it finds
no reason to take. Having previously ruled on the issue, the Court will deny FirstBank’s motion to
quash and order the OVIM to act upon the Writ, which was duly executed by the Clerk of the
Court on January 24, 2023.

CONCLUSION

The Court will deny FirstBank’s motion to quash the executed writ of execution. The Court
finds that it has already denied FirstBank’s request for a stay execution of the Judgment with
respect to the $4.89 million, and there exists no good grounds to reverse itself. Accordingly, the
Court will vacate the portion of the January 30, 2023, Order that prohibited OVIM from serving
and enforcing the Writ and otherwise permit OVIM to fulfill its duties.

An order consistent herewith will immediately follow.

pn OP ra ras
DATED: May S , 2023 Lee Ap aiers

Kathleen Mackay
Judge of the Superior Court
of the Virgin Islands

ATTEST:
TAMARA CHARLES
Clerk of the Court

BY: it

far LATOYA CAMACHO
Court Clerk Supervisor 05 /O5 / aS

'S Harthman makes additional arguments, which the Court finds unnecessary to consider given the Court has decided
to deny FirstBank's motion to quash.