998 F.2d 145 (3rd Cir. 1993), 92-7335, Isidor Paiewonsky Associates, Inc. v. Sharp Properties, Inc.

Docket Nº:92-7335.
Citation:998 F.2d 145
Party Name:ISIDOR PAIEWONSKY ASSOCIATES, INC.; Sharp Properties, Inc., Third Party Plaintiff, v. SHARP PROPERTIES, INC.; Bared Jewelers of the Virgin Islands, Inc.; ARI Corp.; West Indies Corp. (successor to General Trading Corp.), Third Party Defendant, ARI Corp. Third Party Defendant, Bared Jewelers of the Virgin Islands, Inc., Appellant.
Case Date:June 24, 1993
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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998 F.2d 145 (3rd Cir. 1993)

ISIDOR PAIEWONSKY ASSOCIATES, INC.; Sharp Properties, Inc.,

Third Party Plaintiff,

v.

SHARP PROPERTIES, INC.; Bared Jewelers of the Virgin

Islands, Inc.; ARI Corp.;

West Indies Corp. (successor to General Trading Corp.),

Third Party Defendant,

ARI Corp. Third Party Defendant,

Bared Jewelers of the Virgin Islands, Inc., Appellant.

No. 92-7335.

United States Court of Appeals, Third Circuit

June 24, 1993

Argued Dec. 7, 1992.

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[Copyrighted Material Omitted]

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John H. Benham, III (argued), Watts, Streibich & Benham, Charlotte Amalie, St. Thomas, VI, for appellee Sharp Properties.

Maria T. Hodge (argued), Denise Francois, Hodge & Francois, Charlotte Amalie, St. Thomas, VI, for appellant Bared Jewelers.

Before BECKER, COWEN and ROTH, Circuit Judges.

OPINION

BECKER, Circuit Judge.

This appeal from an order of the District Court of the Virgin Islands raises a number of interesting jurisdictional and statutory issues. This case, which has a long and complicated procedural history, began as a dispute over the scope of an easement between two adjoining property owners in the main shopping district of downtown Charlotte Amalie. Ultimately, however, it evolved into a dispute over the enforcement of an arbitration award between the property owner, Sharp Properties, Incorporated ("Sharp"), and its head tenant, ARI Corporation ("ARI"). Based on the arbitration award, which was subsequently confirmed by the district court, Sharp obtained a writ of assistance to have the U.S. Marshal's Service evict the subtenant, Bared Jewelers ("Bared"), from the property, even though Bared had not been a party to the arbitration. It is the grant of this writ of assistance that Bared now challenges on appeal.

Sharp has raised a number of challenges to our jurisdiction. Most significantly, it argues that we lack appellate jurisdiction over the appeal from the grant of the writ of assistance, which it claims merely executed a previously entered order. We conclude that we have jurisdiction, and therefore address Bared's arguments that both the Virgin Islands'

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statute governing actions for the recovery of possession of real property and the federal Due Process Clause prohibit the eviction of Bared since it did not participate in the arbitration proceeding which ultimately provided the basis for its eviction. We reject these arguments, and accordingly will affirm the district court's order.

I. Facts & Procedural History

This lawsuit began in 1983 as a dispute between two adjacent property owners, Sharp and Isador Paiewonsky Associates, Inc. ("Paiewonsky"), over an alleged prescriptive easement. Included in Sharp's holdings is the Bolero Building, which was occupied by a long-term subtenant, Bared Jewelers. Paiewonsky originally brought suit requesting declaratory and injunctive relief against Sharp and ARI in the Territorial Court of the Virgin Islands, based on the alleged existence of a prescriptive easement benefitting Paiewonsky.

In 1987, the case was transferred to the District Court of the Virgin Islands. There Sharp asserted a cross-claim against its co-defendant, ARI, and brought the subtenant, Bared, into the suit as a third-party defendant. Sharp alleged that any prescriptive easement that had been created was the result of the actions of ARI and Bared in violation of their leases as tenant and subtenant, respectively.

At one point, Sharp and Bared tried unsuccessfully to negotiate a direct lease through which, presumably, they would have been able to resolve this dispute. Upon the failure of those efforts, and pursuant to an arbitration clause in the master lease between Sharp and ARI, Sharp made upon ARI a demand for arbitration to adjudicate ARI's alleged liability for the creation of the prescriptive easement, among other issues. In response to a motion by ARI, the district court stayed the arbitration proceedings pending resolution of the easement dispute between Sharp and Paiewonsky. Subsequently, Paiewonsky and Sharp reached a settlement agreement creating mutual easements over their adjoining properties. The district court approved the settlement without the assent of either ARI or Bared, which disagreed with several terms of the agreement. The court reasoned that the assent of the owners of the property was sufficient to validate the settlement. Accordingly, in 1990 the district court entered an order approving the settlement agreement.

The arbitration between Sharp and ARI thereupon resumed. The arbitration encompassed a number of issues, including, most importantly for this appeal: 1) the alleged responsibility of ARI and/or its subtenant, Bared, for the creation of the easement that benefitted Paiewonsky; and (2) ARI's alleged violation of the master lease by allowing Bared's violation of the non-competition clause of that lease. On these two issues, the panel of arbitrators found that, although neither ARI nor Bared was responsible for the establishment of the easement, Bared was bound by the non-competition clause which it had violated by operating a competing business, a liquor store, within the non-competition area. The arbitration panel ruled that Bared would have six months to come into compliance with the non-competition clause by ceasing its operation of the liquor store, but that after that time, if Bared was still non-compliant, the lease between Sharp and ARI would terminate and possession of the property would be returned to Sharp.

Following the termination of the arbitration, Sharp returned to the district court and initiated procedures seeking confirmation of the arbitration award, pursuant to the Federal Arbitration Act, 9 U.S.C. § 1 et seq. Sharp moved for confirmation of the arbitration award in two separate actions. First, Sharp moved for confirmation of the award in the lawsuit originally begun by Paiewonsky, in which Sharp, ARI, and Bared were by then parties. Bared opposed the confirmation of the arbitration award, arguing that it was improper because Bared had not been a party to the arbitration proceedings. The district court rejected this argument. In its memorandum opinion, the court explained:

Bared's claims that it would be prejudiced by the award because it was not a party to the arbitration [are] not persuasive. Since Bared was not a party to the arbitration, it is not bound by the arbitration rulings. If this series of rulings has a negative impact

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upon its rights under its lease with ARI, Bared has other remedies at law to redress such grievances, which are beyond the scope of the present matter.

On February 18, 1992, the district court confirmed the arbitration award as part of the Paiewonsky litigation.

In addition, Sharp filed a separate lawsuit in the District Court of the Virgin Islands to confirm the award. However, upon resolution of the Paiewonsky suit, the court dismissed this separate action as moot. See Sharp Properties, Inc. v. ARI Corp., No. 92-736 (D.V.I. June 3, 1992). Bared did not appeal either of the district court's decisions.

Subsequently, Sharp moved for a writ of assistance, pursuant to Fed.R.Civ.P. 70, to effectuate the court's judgment confirming the arbitration award. Over Bared's opposition, the district court granted the writ of assistance, which authorized U.S. Marshals to evict Bared from the Bolero Building so that Sharp could regain possession. Sharp has subsequently leased the property to Columbian Emeralds, which is not a party to this lawsuit. 1

This appeal--of the order issuing the writ of assistance--followed. The heart of Bared's argument on appeal is that the writ of assistance, which stemmed from the arbitration proceeding to which Bared was not a party and which resulted in Bared's eviction, violates V.I.Stat.Ann. tit. 28, § 281, which requires that the party in possession of property be joined in an action for recovery of possession. Bared also submits that the issuance of the writ of assistance violated its due process rights. As the propriety of the issuance of the writ of assistance presents questions of law, we exercise plenary review.

II. Jurisdiction and Mootness

We must first address Sharp's motion to dismiss this appeal for lack of appellate jurisdiction. Sharp contends that, inasmuch as the writ of assistance is not a judgment on the merits, but is an order enforcing a judgment, it cannot be appealed. In addition, Sharp argues that Bared's appeal is moot because the property in question has been relet to a non-party to this suit, Columbian Emeralds. 2

  1. Appellate Jurisdiction

    Sharp contends that an order granting a writ of assistance is not appealable under 28 U.S.C. § 1291 and that Bared is merely trying to circumvent the timeliness requirements of Fed.R.App.P. 4 by attempting to appeal that order rather than the underlying judgment on the merits, i.e., the District Court's order confirming the arbitration award. We disagree. Although we acknowledge that as a general matter parties should appeal from the judgment on the merits rather than from post-judgment execution orders, post-judgment orders are often appealable, and the circumstances presented in this case illustrate why. Indeed, to deny Bared the right to appeal the issuance of the writ of assistance that resulted in its eviction from the Bolero Building would, in our view, require an unnecessarily formalistic construction of 28 U.S.C. § 1291.

    Congress has granted the courts of appeals jurisdiction over appeals "from all final decisions of the district courts of the United States ... and the District Court of the Virgin Islands." 28 U.S.C. § 1291. In Catlin v. United States, 324 U.S. 229, 65 S.Ct. 631, 89 L.Ed. 911 (1945), the Supreme Court defined a "final decision" for...

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