2025 V.I. 18
Supreme Court of The Virgin Is...2025Background
- FirstBank Puerto Rico (“FirstBank”) took over a ground lease from East End Plaza (EEP), relating to several parcels of land on St. Thomas owned by Harthman Leasing III, LLLP (“Harthman”).
- The original lease expressly incorporated only Parcels 17-B, and by amendment, 17-C and 17-D, and included a merger clause requiring amendments to be in writing.
- Disputes arose after EEP defaulted on its obligations and the lease was assigned to FirstBank in lieu of foreclosure. Central to the dispute was whether Parcel 17-E had ever become part of the lease.
- Harthman claimed it was owed rent and other damages for all parcels, including Parcel 17-E, for which EEP had made rent and tax payments and undertaken preparatory work.
- The jury awarded Harthman $6.2 million in damages, including over $1.3 million attributed to rent and fees on Parcel 17-E, and the Superior Court subsequently awarded Harthman possession of Parcels 17-B, 17-C, and 17-D due to FirstBank’s failure to cure EEP’s defaults.
- Both parties appealed—FirstBank challenged the inclusion of Parcel 17-E and the damages calculation, while Harthman argued the lease was effectively modified to include Parcel 17-E.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Parcel 17-E was part of the lease | Not included in lease; no written amendment | Included via payments, admissions, and conduct | Not part of lease; merger clause and no writing |
| Jury damages award for Parcel 17-E | Award excessive; not responsible for 17-E | Sufficient evidence based on conduct and payments | Award excessive; no basis for 17-E damages |
| Right to possession of 17-B, 17-C, 17-D | Improperly dispossessed based on 17-E issue | Entitled due to uncured defaults and non-payment | Affirmed; based on failure to cure defaults |
| Sufficiency of Harthman’s pleadings | Pleadings too narrow, only referenced 17-E | Counterclaim included all parcels/potential damages | Pleadings sufficient under notice pleading standard |
Key Cases Cited
- Phillip v. Marsh-Monsanto, 66 V.I. 612 (V.I. 2017) (Merger clause prevents use of extrinsic evidence to vary contract terms)
- Antilles Sch., Inc. v. Lembach, 64 V.I. 400 (V.I. 2016) (Test for when to overturn a jury’s damages award)
- Alexander v. Alexander, 65 V.I. 372 (V.I. 2016) (Standard of review for factual and legal findings)
- Brathwaite v. Xavier, 71 V.I. 1089 (V.I. 2019) (Defines final, appealable orders)