Brown v. Francis
| Decision Date | 07 February 1996 |
| Docket Number | No. 92-,No. 93-,No. 95-7273,92-,93-,95-7273 |
| Citation | 75 F.3d 860 |
| Parties | Barry BROWN; Jolie Stahl, as they are Trustees of the Long Bay Trust v. Leo FRANCIS, as he is the Commissioner of the Department of Public Works; Delma G. Hodge, as she is the Commissioner of the Department of Property and Procurement of the Government of the Virgin Islands; Government of the Virgin Islands of the United States of America (D.C.cv-00081). GOVERNMENT OF the VIRGIN ISLANDS v. 0.459 ACRES OF LAND CONSISTING OF FOLLOWING: PARCEL NO. 6A ESTATE THOMAS KINGS QUARTER AND PARCEL NO. 9A ESTATE THOMAS, VIRGIN ISLANDS; Long Bay Trust (D.C.cv-00059), Leo Francis, as he is the Commissioner of the Department of Public Works; Delma G. Hodge, as she is the Commissioner of the Government of the Virgin Islands; Government of the Virgin Islands of the United States of America, Appellants. |
| Court | U.S. Court of Appeals — Third Circuit |
On Appeal from the District Court of the Virgin Islands (Division of St. Thomas and St. John) (D.C. Civil Action Nos. 92-00081 and 93-00059).
Robert W. Bornholt, Pamela Tepper (argued), Department of Justice, St. Thomas, USVI, for Appellants.
Morris M. Goldings (argued), Ellen S. Shapiro, Mahoney, Hawkes & Goldings, Boston, Massachusetts, for Appellees.
Before: GREENBERG and McKEE, Circuit Judges, and ACKERMAN, District Judge. *
On this appeal, we are faced with several interrelated jurisdictional issues arising out of appellant Long Bay Trust's inverse condemnation action filed in the District Court of the Virgin Islands and the Government of the Virgin Islands' ("government") parallel eminent domain action filed in the Territorial Court of the Virgin Islands. Both cases involved the same parcels of land.
First, we must determine whether the government's eminent domain case was properly removed from Territorial Court to the district court. Second, we must assess the impact, if any, of the district court's order consolidating the eminent domain and inverse condemnation cases following the removal from the Territorial Court, and the parties' subsequent submission of their claims to binding arbitration.
For the following reasons, we conclude that the district court did not have subject matter jurisdiction over the government's eminent domain case and that the case was therefore improperly removed to the district court. Ultimately, this lack of jurisdiction requires us to vacate the district court's order confirming the arbitration award. The eminent domain and inverse condemnation cases will be remanded to the district court with instructions to remand the eminent domain case to the territorial court. Finally, for the reasons we set forth below, the district court is to consider abstaining from deciding the inverse condemnation case.
This appeal involves a dispute that arose out of the Virgin Island Government's plans to condemn a portion of privately-owned commercial property located in the Virgin Islands. Sometime prior to 1988, the government began planning to improve traffic circulation on or about Long Bay Road and Route 313 in the Virgin Islands. The project, which was to be 100% U.S. federally funded, and was known as the "Long Bay Road Highway Improvement Project" required the use of additional land. Accordingly, the Virgin Islands government commenced negotiations for the "taking" of private land that would be needed for the project.
Specifically, the government required approximately 2.64 acres of land known as Parcels No. 6 and No. 9, located in Estate Thomas, Kings Quarter, St. Thomas. The property was commercially zoned and several buildings were situated upon the land. During December 1988 or January 1989, the government commenced negotiations with the owners of the property, Millad Associates, for the acquisition of the property.
Before a deal could be ironed out with the government, Millad Associates sold the property to Jolie Stahl and Barry Brown, as co-trustees ("trustees") of the Long Bay Trust. The purchasers paid $3.25 million for both the property and the buildings situated upon the property. A deed to the property was executed by the parties on May 9, 1989, and the deed was recorded on May 31, 1989. At the time of purchase, the trustees were aware of the government's plans to "take" a portion of the property.
Three years after the trustees purchased the subject property, the trustees filed an inverse condemnation action in the District Court of the Virgin Islands against the government, alleging that the government had unreasonably delayed in taking portions of the trust property. According to the trustees, the government had deprived the trust of the highest and best value of its property by unreasonably delaying in the condemnation of Lots 6 and 9, while at the same time condemning property across the street from the two lots. The trustees contended that this sequence of events allowed a competitor to get a head-start on business, to the detriment of the trust. Moreover, the trustees alleged that they could not secure financing or tenants while the government's proposed taking was pending. 1
The government responded to the trustees' federal court action on August 13, 1992, by filing an eminent domain action, pursuant to V.I.Code Ann. tit. 28, § 411 (1957 & Supp.1994), in the Virgin Islands Territorial Court. The government alleged in its complaint that the property was worth approximately $1.2 million. Furthermore, the government submitted a Declaration of Taking and an Order Vesting Title. The order vesting title was signed by Judge Ive Arlington Swan on September 1, 1992.
On September 14, 1992, the trustees filed a notice of removal seeking to remove the government's territorial court eminent domain action to the District Court of the Virgin Islands. App. 10-13. The government thereafter moved to dismiss the removal petition, arguing that removal was improper because the district court did not have subject matter jurisdiction over the eminent domain claim. 2 The district court denied the motion to dismiss.
According to the court, diversity of citizenship jurisdiction supported removal of the eminent domain case to federal court. The court reasoned that complete diversity of citizenship existed between the Government of the Virgin Islands and the trustees. Furthermore, the court found that the trustees' tenants were merely nominal parties to the action whose citizenship could be disregarded for purposes of establishing diversity jurisdiction. The district court therefore found that it had subject matter jurisdiction over the government's eminent domain case and the court denied the government's motion to dismiss the removal petition.
The government renewed its jurisdictional argument in a motion for reconsideration. According to the government, the trustees erroneously relied upon the citizenship of the Territory of the Virgin Islands in invoking the diversity of citizenship jurisdiction of the district court. The government argued that because the citizenship of the territory could not be relied upon for purposes of establishing diversity jurisdiction, the district court did not have diversity jurisdiction over the eminent domain case. The government argued that removal was therefore improper.
The district court denied the motion for reconsideration, without discussion, in an order dated December 6, 1993.
Following the trustees' successful removal of the eminent domain case, two actions involving lots 6 and 9 were left pending in the District Court of the Virgin Islands. Eventually, the two actions were consolidated for both discovery purposes and for trial without a jury. See Appellee's Brief, at 7. Thereafter, the government and the trustees entered into a joint stipulation to refer their controversies to binding arbitration. App. 125. The stipulation specified that the parties would abide by the award rendered, and that the district court could enter judgement on the arbitration award. App. 126.
An arbitration hearing was held on October 5 and 6, 1994. Alex Gonzalez, Esq., served as the arbitrator. App. 126. The arbitrator issued his findings on October 24, 1994. App. 128. The trustees of the Long Bay Trust were awarded a total of $2,891,158.00. App. 134.
The Government of the Virgin Islands filed a motion to dismiss the arbitration award on December 7, 1994. App. 104. The government claimed that its agents had acted without statutory authority when they had signed the arbitration agreement. Furthermore, the government argued that the district court was without statutory jurisdiction under the Federal Arbitration Act ("FAA") to confirm the arbitration award. App. 104-105. The trustees moved to confirm the arbitration award on February 13, 1995.
The district court denied the government's motion to dismiss and granted the trustees' motion to confirm the arbitration award in a memorandum opinion and order dated March 31, 1995. App. 161-167. According to the court, both the government and the trustees signed the arbitration agreement voluntarily. This in itself constituted an enforceable contract under the FAA, the court reasoned, which the court could enforce. Despite the government's obfuscation, the court noted, the proceeding was governed by the FAA, and the trustees could seek entry of judgment on the arbitration award.
Furthermore, the court noted that the joint stipulation stated that the government would abide by and perform any award rendered by the arbitrator. Even if the parties mistakenly referred to irrelevant statutes in the stipulation (which the government contended deprived the district court of jurisdiction), the court found that the parties' intention to arbitrate their dispute was clearly evidenced by the stipulation. The...
To continue reading
Request your trial
-
In re Jaritz Industries, Ltd.
...ruled that the District Court of the Virgin Islands exercises the judicial authority of a federal court. See also Brown v. Francis, 75 F.3d 860, 864 (3d Cir.1996) (holding that the removal statute, 28 U.S.C. § 1441, which by its terms is strictly limited to district courts of the United Sta......
-
Hudak v. Elmcr T of Sagamore Hills
...should be strictly construed and all doubts resolved in favor of remand.’ " Eastman , 438 F.3d at 549–50 (quoting Brown v. Francis , 75 F.3d 860, 864–65 (3d Cir. 1996) (further citation omitted)).1. Federal Question Jurisdiction Here, the removing defendants do not contend that the Court ha......
-
Financial Software System v. First Union Nat. Bank
...controversies between citizens of different states for a necessary amount in controversy. See 28 U.S.C. § 1332(a)(1); Brown v. Francis, 75 F.3d 860, 865 (3d Cir.1996). The rule means that no plaintiff may be a citizen of the same state as any defendant. See Strawbridge v. Curtiss, 7 U.S. (3......
-
Lauchheimer v. Gulf Oil
...adequate federal subject matter jurisdiction or if the notice of removal was untimely.5 See 28 U.S.C. § 1447(c) (1992); Brown v. Francis, 75 F.3d 860, 864 (3d Cir.1996); Rosebud Holding, L.L.C. v. Burks, 995 F.Supp. 465, 466 (D.N.J. 1998); Independent Mach. Co. v. International Tray Pads & ......