Robert Addie v. Christian Kjaer, 60 V.I. 881

Background

Buyers (Addie, Perez, Taylor) contracted in 2004 to buy two Virgin Islands properties from Sellers (Kjaer and relatives) for $23.5 million and deposited $1,000,000; Taylor later funded a $500,000 extension deposit. Premier Title (owned by D’Amour) acted as escrow agent; D’Amour also served as Sellers’ attorney.
Sellers were required to deliver Clear and Marketable title and assignments of permits/leases; escrow agreement required delivery of specified escrow documents and permitted escrow release upon buyer written satisfaction.
Sellers delivered escrow documents that included expired coastal permits and title-commitment exceptions; Buyers questioned sufficiency and later demanded return of deposits after closing did not occur by the contract deadline.
Trial jury found Sellers breached and awarded Taylor $1,546,000 (reduced by the district court to $1.5M), found Buyers (Addie/Perez) breached, found D’Amour liable for certain misrepresentations and awarded Buyers $46,000, and found Premier liable for conversion of the $500,000 deposit pre-trial.
District Court later (1) denied restitution/unjust enrichment to Buyers, (2) held concurrent conditions discharged performance so no contract recovery, (3) vacated Sellers’ fraud award against Buyers under gist-of-the-action, and (4) sustained some findings against D’Amour; parties appealed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are the contracts governed by concurrent conditions and who breached?	Sellers: Buyers failed to pay; Buyers breached and forfeited deposits.	Buyers: Contracts imposed concurrent conditions; both parties failed so duties discharged.	Contracts contained concurrent conditions; both parties failed to perform by closing date, discharging duties; no contract recovery.
Is Taylor entitled to restitution of the $1.5M deposit?	Taylor: Even though contract duties discharged, he conferred a benefit and is entitled to restitution.	Sellers: Deposit is liquidated damages for Buyer breach; unjust enrichment barred by existence of contract.	Restitution allowed under Restatement rule; Taylor entitled to return of $1.5M.
Do tort claims (fraud, misrepresentation, conversion) survive the gist-of-the-action doctrine?	Sellers/Buyers: torts are independent (fraudulent inducement, misrepresentation, conversion) and not barred.	Opposing parties: tort claims arise from contractual relationship and are barred by gist-of-the-action.	Gist-of-the-action applies under Virgin Islands law; tort claims grounded in contracts are barred. All tort claims against D’Amour and Sellers’ fraud claims barred; Sellers’ fraudulent inducement waived for lack of pleading.
Is D’Amour individually liable for fraud/conversion despite not being a contract signatory?	Buyers: D’Amour acted as escrow principal and Sellers’ agent; his duties were independent and support tort claims.	D’Amour: duties flowed from contracts; gist-of-the-action bars torts and he cannot be separated from corporate/agent role.	Gist-of-the-action bars tort claims against D’Amour because his alleged misconduct was inextricably tied to contractual duties; judgment for D’Amour.

Key Cases Cited

Flemming v. Air Sunshine, Inc., 311 F.3d 282 (3d Cir. 2002) (choice-of-law and diversity principles governing application of local law)
McKenna v. City of Philadelphia, 649 F.3d 171 (3d Cir. 2011) (standard of review for Rule 50(b) motions)
eToll, Inc. v. Elias/Savion Adver., Inc., 811 A.2d 10 (Pa. Super. Ct. 2002) (articulation and tests for the gist-of-the-action doctrine)
Pediatrix Screening, Inc. v. TeleChem Int’l, Inc., 602 F.3d 541 (3d Cir. 2010) (recasting contract claims into tort claims and gist-of-the-action discussion)
St. Surin v. Virgin Islands Daily News, Inc., 21 F.3d 1309 (3d Cir. 1994) (standard for reviewing summary judgment)
United States v. O’Dell, 247 F.3d 644 (6th Cir. 2001) (discussing that delivery into escrow does not necessarily convey title)