2025 V.I. 19
Supreme Court of The Virgin Is...2025Background
- In May 2008 Banco Popular de Puerto Rico (BPPR) issued a $4,000,000 commercial loan commitment letter to Roy Development, LLC (RD) that required a non-refundable $80,000 commitment fee and a closing on or before June 30, 2008.
- RD returned the signed commitment; BPPR’s obligation to disburse funds was expressly conditioned on payment of the full fee and timely closing.
- RD paid $50,000 by company check. Roy alleges BPPR employee Terryl Diggs de Jongh personally promised to cover $30,000 to repay a separate personal debt to Roy; de Jongh did not pay.
- Because the full fee was not paid and closing did not occur, BPPR refused to fund the loan; Roy and RD sued BPPR and de Jongh for breach of contract and promissory estoppel.
- The Superior Court granted summary judgment to BPPR (Aug. 29, 2018); default judgment against de Jongh was entered later (Aug. 3, 2021). The Supreme Court of the Virgin Islands affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1) Whether Roy (individually) has standing to sue BPPR | Roy (sole managing member of RD) claims personal losses (~$7M) independent of RD | BPPR: Roy is not a party to the loan; injuries are derivative of RD and thus belong to the LLC | Court: Applied and adopted shareholder/LLC-member standing rule; Roy lacks individual standing because he showed no distinct personal injury |
| 2) Whether promissory estoppel can be asserted against BPPR | Roy argues de Jongh’s promise (to pay $30,000) created reliance and injustice if not enforced | BPPR: A valid written contract (the commitment letter) governs; promissory estoppel cannot supplant an existing contract; BPPR not party to de Jongh’s personal promise | Court: Promissory estoppel fails as to BPPR—either promisor was de Jongh individually or, even if BPPR, the express contract governs and precludes estoppel relief |
| 3) Whether BPPR breached the loan commitment by refusing to fund | RD/Roy contend BPPR is bound (directly or via employee) and that factual disputes preclude summary judgment | BPPR: Its performance was conditioned on full payment and timely closing; RD failed that condition; no evidence BPPR was bound by de Jongh’s separate promise | Court: Commitment letter unambiguously made payment/closing conditions precedent; RD failed to satisfy them; BPPR’s duty was discharged; no breach |
| 4) Whether de Jongh’s personal promise binds BPPR (agency/apparent authority) | Roy/RD assert de Jongh was an executive who made collateral promises that should bind BPPR | BPPR: No evidence of actual, implied, or apparent authority; arrangement was personal and unrelated to BPPR; plaintiffs failed to press or develop agency arguments | Court: Issue deemed waived for lack of developed argument; on the merits plaintiffs produced no evidence de Jongh could bind BPPR, so BPPR is not liable |
Key Cases Cited
- Franchise Tax Bd. v. Alcan Aluminum, Ltd., 493 U.S. 331 (U.S. 1989) (recognizes the longstanding rule limiting shareholder standing to bring individual suits for injuries that belong to the corporation)
- Banks v. Int’l Rental & Leasing Corp., 55 V.I. 967 (V.I. 2011) (sets out the three-part approach for selecting the soundest rule for the Virgin Islands)
- Mosler v. Gerace, 78 V.I. 649 (V.I. 2024) (articulates elements of promissory estoppel under Virgin Islands law)
- PricewaterhouseCoopers, LLP v. Massey, 860 N.E.2d 1252 (Ind. Ct. App. 2007) (discusses derivative actions and distinction between individual and corporate claims)
- Wells Fargo Ag Credit Corp. v. Batterman, 424 N.W.2d 870 (Neb. 1988) (reiterates that shareholders cannot sue individually for harms to the corporation)