Estate of Thomas Mall, Inc. v. Territorial Court of Virgin Islands

• Decision Date: 11 January 1991
• Docket Number: Nos. 90-3649,No. 90-3649,No. 90-3691,90-3691,90-3649,s. 90-3649
• Citation: 923 F.2d 258
• Parties: ESTATE OF THOMAS MALL, INC., Appellant in, v. TERRITORIAL COURT OF the VIRGIN ISLANDS, Appellant in
• Court: U.S. Court of Appeals — Third Circuit

Page 258

923 F.2d 258

ESTATE OF THOMAS MALL, INC., Appellant in No. 90-3691, v. TERRITORIAL COURT OF the VIRGIN ISLANDS, Appellant in No. 90-3649.

Nos. 90-3649, 90-3691.

United States Court of Appeals, Third Circuit.

Argued Dec. 5, 1990.

Decided Jan. 11, 1991.

John H. Benham, III (argued), Watts & Streibich, Charlotte Amalie, Saint Thomas, Virgin Islands, for appellant Estate of Thomas Mall, Inc.

Leon A. Kendall (argued), Territorial Court of Virgin Islands, Office of General Counsel, Charlotte Amalie, Saint Thomas, Virgin Islands, for appellant Territorial Court of Virgin Islands.

Before HIGGINBOTHAM, Chief Judge, and GREENBERG and COWEN Circuit Judges.

OPINION OF THE COURT

COWEN, Circuit Judge.

This case arises from a dispute between the Territorial Court of the Virgin Islands (the "Territorial Court") as the tenant under a lease and Estate of Thomas Mall Inc., ("Estate Thomas") the landlord. Since November 29, 1982, the Territorial Court has leased commercial space from Estate Thomas and its predecessor in title. ¹ The Territorial Court uses the space to house a youth program known as the "Rising Stars Youth Steel Orchestra." The Territorial Court created the youth group in 1980 as part of a School Drop-out and Delinquency Prevention Program in order to stem the tide of high school drop-outs who went on to become criminal defendants before the Territorial Court. The Rising Stars Youth Steel Orchestra is a magnet to attract youths into the court's Delinquency Prevention Program.

The Territorial Court's lease with Estate Thomas contains a provision which reads: "Landlord shall supply water to the bathrooms." Appellant/Cross-Appellee's App. at 139. The bathrooms have showers, sinks, and toilets. From 1982 when the Territorial Court began leasing the premises until 1985 when Estate Thomas purchased the property, Estate Thomas' predecessor in title supplied the premises with potable water. Soon after it purchased the property, Estate Thomas began supplying well water. This arrangement was satisfactory until July, 1989. For reasons not entirely clear from the record, the water Estate Thomas was pumping from the well became contaminated in 1989. After the water became contaminated, it emitted a foul odor and could not be used even to flush toilets, much less for showers.

After testing the water and determining that it was indeed contaminated, the Territorial Court apprised Estate Thomas of the water's condition. Estate Thomas responded in writing that it was unable to correct the problem. In August 1989, the Territorial Court began withholding rent, contending that Estate Thomas was required by the lease to supply useable water.

On January 24, 1990, Estate Thomas filed Civil Action No. 1990-00019 in the District Court seeking collection for back rent and possession of the premises. The Territorial Court filed a Motion to Dismiss on February 13, 1990. That action and the Territorial Court's Motion to Dismiss are currently pending in the District Court.

On June 14, 1990, while the first action was still pending, Estate Thomas filed this case (Civil Action No. 1990-00145) in the District Court. In this action, Estate Thomas seeks possession of the premises under the summary proceedings provided for by the Virgin Islands Forcible Entry and Detainer ("FED") statute, V.I.Code Ann. tit. 28, Sec. 782 (1976). ² After conducting the summary FED hearing, the District Court entered its Memorandum Opinion and Final Order.

In its Final Order the District Court denied Estate Thomas' application for the FED relief, on the condition that the Territorial Court pay Estate Thomas all rent due through August, 1990. In addition, the District Court ordered Estate Thomas to supply the premises with potable water by September 17, 1990. In the event that the Territorial Court failed to pay rent by September 14, 1990, Estate Thomas had the right to take possession of the premises on October 1, 1990.

The Territorial Court appeals from this order on the grounds that: (1) the District Court lacks subject matter jurisdiction over FED actions because Congress withdrew concurrent jurisdiction from the District Court over local actions; (2) the FED action was barred as a matter of law because the Territorial Court had three years of quiet possession prior to the FED action; (3) the District Court exceeded its authority in awarding Estate Thomas back rent, since (i) that relief was not requested and (ii) such relief is inappropriate in an FED action; and (4) the District Court erred in not dismissing the FED action after it found that Estate Thomas was in breach of the lease agreement.

For its part, Estate Thomas has cross-appealed, contending that: (1) there was insufficient evidence for the District Court to find that Estate Thomas was in breach of the lease by failing to supply the premises with potable water; (2) the District Court erred when it admitted written water test results into evidence; and (3) the District Court erred in failing to award Estate Thomas interest on the rent due.

We have jurisdiction to hear this appeal under 28 U.S.C. Sec. 1291. Although we conclude that Congress did not withdraw subject matter jurisdiction from the District Court to hear FED actions, we nevertheless reverse the District Court because Estate Thomas has failed to state a cause of action that is cognizable in forcible entry and detainer. Our decision is based on the conclusion that the Territorial Court is occupying the premises pursuant to a facially bona fide and good faith claim of right. We will therefore remand this case to the District Court with instructions to dismiss.

I.

In 1984, Congress passed an amendment to the Revised Organic Act of the Virgin Islands, 48 U.S.C. Sec. 1541, et. seq. (1954). The 1984 amendment, P.L. 98-454, eliminates concurrent jurisdiction in the District Court when jurisdiction is vested in the local courts of the Virgin Islands. The amendment has been codified at 48 U.S.C. Sec. 1612(b) and reads in relevant part:

In addition to the jurisdiction described in subsection (a) of this section [essentially federal question jurisdiction] the District Court of the Virgin Islands shall have general original jurisdiction in all causes in the Virgin Islands the jurisdiction over which is not then vested by local law in the local courts of the Virgin Islands.

48 U.S.C. Sec. 1612(b) (1987). The threshold question on this appeal is the meaning of the language "not then vested by local law in the local courts." The Territorial Court argues that this language means "not already vested," while Estate Thomas argues that it means "not hereafter vested." We must first resolve this question before we can address the other issues raised by this appeal.

The Territorial Court argues that the language "not then vested by local law in the local courts" eliminates jurisdiction over civil actions where the amount in controversy is between $500 and $200,000. Under this argument, jurisdiction in the District Court would be eliminated because V.I.Code Ann. tit. 4, Sec. 76(a) (Supp.1987) grants the Territorial Court "[o]riginal jurisdiction concurrent with the District Court of all civil actions wherein the matter in controversy exceeds the sum of $500 but does not exceed the sum of $200,000." Id. Since 48 U.S.C. Sec. 1612(b) limits the general jurisdiction of the District Court to "all causes ... the jurisdiction over which is not then vested by local law in the local courts," and V.I.Code Ann. tit. 4, Sec. 76(a) vests jurisdiction over civil actions in a local court, the Territorial Court concludes that the District Court lacks jurisdiction over civil actions within the specified range of the amount in controversy.

In addition to eliminating jurisdiction over civil actions where the amount in controversy is between $500 and $200,000, the Territorial Court also asserts that the 1984 amendment to the Revised Organic Act eliminated jurisdiction over FED actions. The argument here is the same as before. The Territorial Court urges that because V.I.Code Ann. tit. 28, Sec. 782 (1976) vests jurisdiction over FED actions in the Territorial Court of the Virgin Islands, ³ jurisdiction over FED actions is vested in a local court. Since 48 U.S.C. Sec. 1612(b) limits the general jurisdiction of the District Court to "all causes ... the jurisdiction over which is not then vested by local law in the local courts," and V.I.Code Ann. tit. 28, Sec. 782 vests jurisdiction over FED actions in a local court, the Territorial Court concludes that the District Court lacks jurisdiction over FED actions.

Lest we be swayed by the fact that the Virgin Islands statutory provisions purport to grant jurisdiction in the District Court, the Territorial Court points out correctly that the Virgin Islands legislature has no power to do that. Only Congress has the power to determine the jurisdiction of the District Court of the Virgin Islands under Article IV of the United States Constitution. Accordingly, we must look only to the language of the Revised Organic Act to determine the scope of the District Court's jurisdiction.

In support of its argument that 28 U.S.C. Sec. 1612(b) eliminates the District Court's concurrent jurisdiction over civil actions generally and FED actions in particular, the Territorial Court points to the "plain language" of section 1612. Section 1612(b) states that there shall be no jurisdiction over actions "the jurisdiction over which is not then vested by local law in the local courts...." Apparently, the Territorial Court would have us read "not then vested" as "not already vested" because according to the Territorial Court, that is what section 1612(b) plainly says.

To bolster the interpretation of section 1612(b) that "not then vested" means "not already vested," the Territorial Court points to section 1612(b)'s legislative history. In its discussion of P.L. 98-454, the Senate stated:

The purpose of section 22(b) [section 1612...