Ira Frank v. John Enrietto , 597 F. App'x 696 ( 2015 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 13-4537
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IRA FRANK; RICHARD CORNELL; KENNETH DREW;
NICHOLAS GOODPASTER; PETER DAVITT,
Appellant
v.
JOHN ENRIETTO; MARK FARRELL
On Appeal from the District Court of the Virgin Islands
Appellate Division, Division of St. Thomas & St. John
(D.C. No. 3-06-cv-00212)
District Judges: Hon. Curtis v. Gomez and Hon. Raymond Finch
Submitted Pursuant to Third Circuit LAR 34.1(a)
December 8, 2014
Before: CHAGARES, JORDAN, and SHWARTZ, Circuit Judges.
(Filed: January 7, 2015)
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OPINION*
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CHAGARES, Circuit Judge.
This case arises out of an October 8, 2005 Board of Directors election at
Bluebeard’s Castle Hilltop Villas (“Bluebeard”). The losing candidates in that election
filed a complaint against Ira Frank, Kenneth Drew, Richard Cornell, Nicholas
*
This disposition is not an opinion of the full court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
Goodpaster, and Peter Davit in that group’s capacity as Bluebeard’s Condominium
Association (collectively, “the defendants”) in the Superior Court of the Virgin Islands
arguing that the method of vote counting violated Bluebeard’s bylaws. The defendants
moved for summary judgment on the ground that the vote counting method complied
with the Virgin Islands Condominium Act (“VICA”), which superseded the bylaws. The
Superior Court denied summary judgment, held that the bylaws controlled, ruled that the
votes had been incorrectly counted, and denied plaintiffs’ motion for discovery to see the
votes. After the Superior Court denied both sides’ motions for reconsideration, the
defendants appealed to the Appellate Division of the District Court of the Virgin Islands,
which found that the VICA does not mandate percentage voting and affirmed the
Superior Court’s judgment. The defendants now appeal, and for the reasons that follow,
we will affirm.
I.
We write exclusively for the parties and therefore set forth only those facts that are
necessary to our disposition. John Enrietto and Mark Farrell each sought election to
Bluebeard’s Condominium Association (“the Association”), and both lost. They later
learned that the votes had been calculated on a percentage basis — whereby votes were
counted based on each unit’s or weekly interval’s respective interest in the common area
of the condominium — rather than one the “one-unit, one-vote” basis prescribed in the
bylaws, whereby each unit received one vote and each owner of a weekly time-share unit
received 1/52 of a vote. See Joint Appendix (“JA”) 98; 155-56. Enrietto and Farrell later
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discovered that they would have won under the one-unit, one-vote system. See Plaintiffs’
Br. 4 n.1.
Section 2 of the bylaws, which concerns voting, provides that:
One (1) vote shall be assigned to each Condominium Villa
Unit, regardless of whether or not such Condominium Villa
Unit is committed to interval ownership. The vote assigned
to Condominium Villa Units committed to interval ownership
is divisible so that each Condominium Interval Unit shall be
assigned 1/52 of the vote of the Condominium Villa Unit in
which such Condominium Interval Unit is located.
JA 98. The “Declaration of Condominium Establishing Bluebeard’s Castle Hilltop Villas
A Condominium” (“the Declaration”) provides that “Bluebeard’s Castle, Inc. . . . does
hereby make, declare and establish on behalf of itself, its successors and assigns, this
Master Declaration . . . as and for a horizontal property regime and plan of condominium
ownership . . . .” JA 77.
The VICA, 28 V.I.C. § 901, et seq., governs the formation and operation of
condominiums in the Virgin Islands, and it contains several provisions relevant to our
determination here. The defendants rely on 28 V.I.C. § 910, which requires a declaration
to include, inter alia, the “[v]alue of the property and of each apartment, and the
percentage of undivided interest in the common areas and facilities appertaining to each
apartment and its owner for all purposes, including voting.” Id. at § 910(6).
The VICA also requires that “[e]ach apartment owner . . . comply strictly with the
bylaws and the administrative rules and regulations adopted pursuant thereto . . . and with
the covenants, conditions and restrictions set forth in the declaration or in the deed to his
apartment.” Id. at § 906. The VICA also describes the contents of the bylaws, noting
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that they may provide for “[t]he election from among the apartment owners of a Board of
Directors, the number of persons constituting the same, and that the terms of at least one-
third of the directors shall expire annually . . . .” Id. at § 918(a). The bylaws may also
provide for the election of a president, secretary, and treasurer. Id. at § 918(c) – (e).
II.
The Superior Court of the Virgin Islands exercised jurisdiction pursuant to 4
V.I.C. § 76. This case comes to us from the District Court of the Virgin Islands Division
of St. Thomas and St. John Appellate Division, which has appellate jurisdiction over final
judgments from the territorial courts of the Virgin Islands where the appeals were filed
before January of 2007. See 48 U.S.C. § 1613a(d) (“Upon the establishment of [a
territorial appellate court] all appeals from the decisions of the courts of the Virgin
Islands established by local law not previously taken must be taken to that appellate
court,” and “[t]he establishment of the appellate court shall not result in the loss of
jurisdiction of the district court over any appeal then pending in it.”); Simon v. Gov’t of
the Virgin Islands, 679 F.3d 109, 113 (3d Cir. 2012) (“After the Virgin Islands Supreme
Court was created on January 29, 2007, it assumed jurisdiction over all appeals from the
Superior Court, except for those ‘then pending’ before the District Court.”). The appeal
was filed in November of 2006, and so the District Court had jurisdiction pursuant to 48
U.S.C. § 1613a. We have jurisdiction pursuant to 28 U.S.C. § 1291 and 48 U.S.C. §
1613a(c). See also Gov’t of Virgin Islands v. Rivera, 333 F.3d 143, 146 (3d Cir. 2003).
In its July 19, 2006 Order, the Superior Court denied the defendants’ motion for
summary judgment and granted declaratory relief pursuant to the Virgin Islands Uniform
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Declaratory Judgments Act, 5 V.I.C. § 1261 et seq., see JA 176-89, and in its October 17,
2006 Order, it denied the parties’ motions for reconsideration. See id. at 222-29. The
District Court reviewed the grant of declaratory relief under the abuse of discretion
standard we set forth for the federal Declaratory Judgment Act, 28 U.S.C. § 2201 et seq.
See JA 25 (citing Exxon Corp. v. FTC, 588 F.2d 895, 900 (3d Cir. 1978)).
We have not addressed whether the same standard of review applies to an award
of declaratory relief under 28 U.S.C. § 2201 and 5 V.I.C. § 1261. We review an award of
declaratory relief under the federal statute for abuse of discretion, see Interdynamics, Inc.
v. Firma Wolf, 698 F.2d 157, 167 (3d Cir. 1982), and we consider de novo the legal
conclusions essential to that determination. See Silverman v. Eastrich Multiple Investor
Fund, L.P., 51 F.3d 28, 30 (3d Cir. 1995). Nothing in the statutory texts suggest that we
should not likewise consider the legal conclusions de novo where a Virgin Islands court
exercises its authority under 5 V.I.C. § 1261. With regard to the denial of summary
judgment, we exercise plenary review, Curley v. Klem, 298 F.3d 271, 276 (3d Cir. 2002),
and we grant summary judgment if, “view[ing] all evidence in the light most favorable to
the non-moving party,” Kurns v. A.W. Chesterton Inc., 620 F.3d 392, 395 (3d Cir. 2010),
“the movant shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). In reviewing a denial
of a motion for reconsideration, we consider the underlying legal determinations de novo.
See Howard Hess Dental Labs. Inc. v. Dentsply Int’l, Inc., 602 F.3d 237, 246 (3d Cir.
2010). The Superior Court’s and the District Court’s determinations as to the summary
judgment motion, the request for declaratory relief, and the motions for reconsideration
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turned on the legal determination that the bylaws did not conflict with the VICA, and we
exercise plenary review over that question. See Gov’t of the Virgin Islands v. Marsham,
293 F.3d 114, 117 (3d Cir. 2002) (applying de novo review to Appellate Division’s
interpretation of Virgin Islands law).
In reviewing determinations of Virgin Islands law, we apply the doctrine set forth
in Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938). See Edwards v. HOVENSA, LLC,
497 F.3d 355, 359-60 (3d Cir. 2007). We thus follow Virgin Islands law as announced
by the highest local court, and “‘[i]f the highest court has not spoken to the issue, we can
garner assistance from the decisions of the state’s intermediate appellate courts in
predicting how the state’s highest court would rule.’” Id. at 361 (quoting Mosley v.
Wilson, 102 F.3d 85, 92 (3d Cir. 1996)).
III.
We conclude, as did the District Court and the Superior Court, that the VICA
controls here. The Association recorded the Declaration with the St. Thomas and St.
John recorder of deeds on January 17, 1986, JA 76, and thereby submitted itself to the
VICA. See JA 26.1
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In their reply brief, Enrietto and Farrell argue for the first time that “the time-share
regime created by the declaration is not a ‘condominium’ as contemplated and defined by
the Virgin Islands Condominium Act . . . .” Plaintiffs’ Br. 7. The defendants contend
that we should not consider this argument, because Enrietto and Farrell did not raise it in
a cross-appeal. We agree. Though a party on appeal may advance alternative arguments
in support of the District Court’s finding, it may not “attack the decree with a view either
to enlarging [its] own rights thereunder or of lessening the rights of [its] adversary.”
United States v. Tabor Court Realty Corp., 943 F.2d 335, 342 (3d Cir. 1991) (quotation
marks omitted). The Virgin Islands Superior Court assumed that the VICA controlled,
and neither party challenged that assumption, and the District Court found that the VICA
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The defendants argue that the statutory language resolves the question of what
method of vote counting the law requires. They point to 28 V.I.C. § 910, which requires
a declaration to include the “[v]alue of the property and of each apartment, and the
percentage of undivided interest in the common areas and facilities appertaining to each
apartment and its owner for all purposes, including voting.” Id. at § 910. The defendants
contend that “the legislature specifically added the plain and unambiguous words
‘including voting’ to subsection (6) of section 910. Those two very important words
‘including voting’ clarify the intent of the legislature . . . .” Defendants’ Br. 8. Enrietto
and Farrell counter that “[t]he VICA does not mandate that each unit’s percentage
interest of the common areas be used as the exclusive method for tabulating votes at a
condominium” because “[t]he isolated statement [in 28 V.I.C. § 910]. . . does not
expressly state that the percentage interest of the common elements is the exclusive
method for tabulating votes of the condominium association.” Plaintiffs’ Br. 11.
Enrietto and Farrell are correct that the VICA does not mandate percentage voting,
and so the bylaws, which call for one-unit, one-vote voting, do not conflict with the
statute.
First, the plain language of the statute does not mandate percentage voting.
Section 910(6) can be read plainly to mean that the declaration must contain the
percentage interest in the common areas appertaining to each apartment for any purpose
controlled by virtue of the Declaration. Both courts found that the bylaws did not conflict
with the VICA. By arguing that the Association is not bound by the VICA at all, Enrietto
and Farrell seek to enlarge the Association’s rights by unencumbering it from the
statute’s restrictions – they may not do so without filing a cross-appeal, and we will not
consider this argument here.
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for which the percentage is relevant, including voting, but also including purposes such
as delineating an owner’s rights in a deed. See 28 V.I.C. § 911(4). Under this reading, if
a condominium association uses another method of voting, such as one-unit, one-vote,
then an association would simply not use the percentage for that purpose.
The VICA also emphasizes the importance of the bylaws in condominium
governance: Section 906 provides that “[e]ach apartment owner shall comply strictly
with the bylaws and the administrative rules and regulations adopted pursuant thereto . . .
.” 28 V.I.C. § 906. The Territorial Court of the Virgin Islands explained that “[t]he
underlying assumption of § 906, and indeed of the entire Condominium Act, is that the
board will comply with the declaration and bylaws of the condominium association.”
Board of Directors of Shibui v. McGuire, 16 V.I. 300, 309 (V.I. Terr. Ct. 1979). That
court reasoned that adherence to the bylaws was important in part because it “must be
presumed that all apartment owners purchase units in reliance on the covenants and
conditions contained in the declaration and bylaws of record and on the assumption that
they will be enforced.” Id.
As discussed above, the VICA contemplates that the bylaws “may provide” for
“[t]he election from among the apartment owners of a Board of Directors,” 28 V.I.C. §
918, but the section does not direct condominium associations to adopt a particular
method of voting. We agree with the Superior Court and the District Court that nothing
in the VICA proscribes the one-unit, one-vote system for which Bluebeard’s bylaws
provide.
IV.
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For the foregoing reasons, we will affirm the judgment of the District Court.
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