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IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS DIVISION OF ST. THOMAS AND ST. JOHN EMME sts PE TERSSEN Se Plaintiff CASE NO. ST-08-CV-0000577 Ws. WATER AND POWER AUTHORITY. ACTION FOR: DAMAGES - CIVIL ET AL Se ee ee se gee Defendant NOTICE OF ENTRY OF MEMORANDUM OPINION AND ORDER TO: ESZART WYNTER, ESQUIRE DENISE RHYMER, ESQUIRE JUDGES OF THE SUPERIOR COURT MAGISTRATES OF THE SUPERIOR COURT LIBRARIAN DIVISION ORDER BOOK Please take notice that on October 19, 2009 a(n) MEMORANDUM OPINION AND ORDER dated October 16,2008 was entered by the Clerk in the above-entitled matter, Dated: October 19, 2009 Venetia H. Velazquez, Esq. Clerk of the Gourt DIANE MATTHEW-TURNBULL COURT CLERK II IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS DIVISION OF ST. THOMAS AND ST. JOHN EMMET A, PETERSEN, SR. Plaintiff, YS. VL WATER AND POWER AUTHORITY and EIGEL L. LENHARDT CASE NO. ST-08-CV-577 Defendants. a a ed MEMORANDUM OPINION AND ORDER This matter comes before the Court on Defendants V.J. Water and Power Authority (“WAPA”) and Eigel L. Lenhardt’s (“Lenhardt”) September 3, 2009, Motion to Vacate this Court’s June 17, 2009, Order. For the following reasons, Defendants’ motion will be denied. FACTUAL AND PROCEDURAL HISTORY On November 25, 2008, Plaintiff Emmet A. Petersen, Sr. (“Plaintiff”) filed a Complaint alleging that Defendant Lenhardt, while in the employ of Defendant WAPA, negligently operated a motor vehicle owned by WAPA and inflicted injury upon Plaintiff. On December 22, 2008, Defendants filed a motion to dismiss on the grounds that the Court lacked subject matter jurisdiction because Plaintiff had not complied with the provisions of the Virgin Islands Tort Claims Act (“TCA”), V.I. Code Ann. tit. 33 § 3401, Emmett A. Petersen, Sr. v. VJ. Water and Power Authority & Eigel Lenhardt Case No. ST-08-CV-577 Memorandum Opinion and Order, October 16, 2007 2af8 et seq. On March 2, 2009, the Court denied Defendants’ motion to dismiss and denied Defendants’ March 19, 2009, motion for reconsideration on June 17, 2009. On August 19, 2009, Senior Superior Court Judge Edward D. Ross decided Theodore Cryprian v. WAPA et al, SX-08-CV-515 (T. Ct. 2009), in which he ruled that WAPA is a government instrumentality that enjoys sovereign immunity. Defendants timely filed a motion to vacate this Court’s June 17, 2009, Order in response. ANALYSIS Pursuant to Fed, R. Civ. P. 60(b), a court may relieve a party from an order for several reasons, including: (1) mistake, inadvertence, surprise or excusable neglect .... (5) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable, or (6) any other reason that justifies relief. A motion to vacate must be made within a year after the date of entry of an order. Fed. R. Civ. P. 60(c)(1). As a Superior Court ruling, Cryprian is not controlling in this matter. Nevertheless, this Court will review Cryprian to ascertain if the case is persuasive in the instant matter and whether justice requires that the June 17, 2009, Order should be vacated. In Cryprian, the court determined that because the plaintiff in that case did not comply with the notice provisions’ of the TCA, WAPA did not waive its sovereign ' 93 VLC. §3408(a) states: “the Government of the Virgin Islands hereby waives its immunity from liability and action and hereby assumes liability with respect to injury or loss of property or personal injury or death caused by the negligent or wrongful act or omission of an employee of the Government of the Virgin Islands while acting within the scope of this office or employment, under circumstances where the Emmett A. Petersen, Sr. vy, VI. Water and Power Authority & Eigel Lenhardt Case No. ST-08-CV-577 Memorandum Opinion and Order, October 16, 2007 3of8 immunity. The court’s basis for this ruling was in light of the TCA’s broad definition of the Government of the Virgin Islands (the “Government™). Pursuant to 33 V_LLC. § 3401, the Government includes “the executive, legislative, and judicial branches of the Government of the Virgin Islands, agencies and instrumentalities of the Government of the Virgin Islands.” The Cryprian court reasoned that if the Legislature intended the TCA to apply to government instrumentalities but not to “autonomous government instrumentalities” like WAPA (see 30 V.LC. § 103(b)), it would have indicated so plainly. Given that WAPA’s description as an “autonomous government instrumentality” is rather paradoxical, it has been a cause of confusion in this jurisdiction. In Virgin islands Press Association v, WAPA et al, 17 V1. 329, 331 (D.V I. 1980), the District Court emphasized that WAPA is “wholly separate and apart from the Government.” Accordingly, the court determined that without an amendment to WAPA’s charter, the Legislature could not include WAPA within the meaning of a “Governmental agency” or an “agency” as it had done in the Government in the Sunshine Act. fd. Nevertheless, in Gabrielle Eddy v. WAPA et al, the same court determined that WAPA is the “alter ego” of the Government and that the actions taken by WAPA are “state action.” As a result, this Court will examine the Third Circuit's test for determining whether an entity is an arm or “alter ego” of the Government for Eleventh Amendment Government of the Virgin Islands, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred. The Government consents to have the liability determined in accordance with the rule of law as applied to actions in the courts of the Virgin Islands against individuals or corporations, Provided, that the claimant complies with the provisions of this chapter,” *35 V1. 441, 454 35 Vidal, 452 Emmett A. Petersen, Sr. vy. V.I. Water and Power Authority & Eige] Lenhardt Case No. ST-08-CV-577 Memorandum Opinion and Order, October 16, 2007 4 of 8 purposes. See #edres v. The Camden Board of Education, 445 F.3d 227, 229 (3d Cir. 2005) citing Urbane v. Ba. Of Managers, 415 F.2d 247, 250-251 (3d Cir, 1969). The nine factor test in Urbano was subsequently condensed to three primary criteria, See FiteAik y. NU Transit Rail Operations, Inc. 873 F.2d 655, 659 (3d Cir. 1989). The Fitchik test considers the following criteria: (1) whether the payment of the judgment assessed against the sued entity would come from the state, (2) the status the entity has under state law, and (3) the degree of autonomy enjoyed by the entity. In addition, criteria (2) has four sub-factors to be considered: (1) how the Government treats the entity generally, (ii) whether the entity can sue or be sued, (ii) whether the entity is separately incorporated, and (iv) whether the entity is immune from state taxation. Febres, supra, at 230. a) The Entity’s Status under Territorial Law With regard to WAPA’s legal status, WAPA is “a corporation having legal existence and personality separate and apart from the Government.” 30 ¥.LC. § 103(b). WAPA has the right to have “perpetual existence as a corporation.” 30 V.I.C. § 105(1). In addition, WAPA has the right “to sue and be sued in its corporate manner.” 30 V.LC. § 105(4). Moreover, the “debts, obligations, contracts, bonds, notes, debentures, receipts, expenditures, accounts, funds, facilities, and property of the authority shall be deemed to be those of said Authority and not to be those of the Government of the Virgin Islands.” 30 V.LC. § 103{b). As a result, WAPA has complete control and supervision over its assets, See Chiang v. Turnbull, 43 V.L 49, 64 (T. Ct. 2000). WAPA has the right to acquire property necessary or desirable to carry out its purposes,’ and the right to sell, 430 V.LC. § 10506) Emmett A. Petersen, Sr. v, V.1. Water and Power Authority & Eigel Lenhardt Case No. ST-G8-CV-577 Memorandum Opinion and Order, October 16, 2007 5 of 8 lease, exchange, transfer, assign, mortgage, pledge, or otherwise dispose of said property.” WAPA also has the power to “make contracts and execute all instruments necessary or convenient in the exercise of any of its powers.” 30 V.LC. § 105(5), WAPA is also exempt from all taxes and special assessments of the Virgin Islands. 30 V.LC. § 111, Finally, 30 VIC. § 122 states that WAPA is not exempted “from any law made specifically applicable thereto or generally applicable to independent instrumentalities of the Government of the United States Virgin Islands ...” See also Virgin Islands Public Service Commission vy, WAPA, S. Ct. Civ. No. 2007-027, Shp opinion at 12 (V.I. June 9, 2008) (the language of 30 V.LC. § 122 “subjects WAPA only to laws that are specific to WAPA and those that apply generally to independent instrumentalities’}. Thus, only laws that explicitly state they apply to WAPA are deemed applicable to it, The Court finds that other than WAPA’s tax exempt status, WAPA’s legal status weighs against recognizing that WAPA has immunity. See Febres, supra, at 231. b) The Entity’s Degree of Autonomy With respect to WAPA’s autonomy, WAPA is managed by a Governing Board of nine individuals, six of which are “non-government members” appointed by the Governor of the Virgin Islands with the advice and consent of the Legislature, and three of which are appointed by the Governor “from among the heads of cabinent-level executive departments or agencies.” 30 V.L.C. § 103. The fact that the Governor appoints the Board members and that three are government employees weighs “slightly” in favor of 330 V.LC. § 105(7} Emmett A. Petersen, Sr. v. V1. Water and Power Authority & Eigel Lenhardt Case No. ST-08-CV-577 Memorandum Opinion and Order, October 16, 2007 6 of 8 immunity. See febres, supra, at 23] citing Christy v. Pa, Turnpike Comm'n, 54 F.3d 1140, 1149 (3d Cir. 1995). c) Government Liability for the Payment of a Judgment With regards to the state-treasury criterion, WAPA is legally regneacible for payment of judgments” assessed against it. After the Government eeansherned? its water supply system to WAPA on January |, 1988, “WAPA became completely responsible ... and independently liable for any lawsuit filed with reference to that system.” Lombardi v. Government of the Virgin Islands, 33 V1. 3, 7 (T. Ct. 1995), In addition, although a plainuff cannot force WAPA to pay a judgment entered against it, the plaintiff can rely on WAPA’s liability insurance. Turbe v, Government of the V1, 938 F.2d 427, 429 (3d Cir. 1991). The Third Circuit has also held that the “general “waiver of governmental * immunity in 33 V.LC. § 3408 does net affect the special statutory provisions concerning [WAPA].” Concepcion v. Cruz Soto, 12 V.L 200, 203 (3d Cir, 1975). In addition, several similarly situated quasi-zovernmental entities in the Virgin Islands do not enjoy the protection of sovereign immunity. The Virgin Islands Housing Authority VIHA”) is described as an “agency of the Government of the Virgin Islands,” 29 VIC. § 31 Ann. 1, Nevertheless, as a “separate and distinct legal entity,” VIHA is “Hable on its debts and responsible for its torts, to the exclusion on the part of the Government.” Greawx v. Gov't of the VIL, 14 V.L 160, 166 (T. Ct. 1977). Similarly, the "As the Virgin Islands’ only utility company, WAPA generates substantial revenue from its customers such that it is unlikely that practical necessity would require the Government to replenish any funds used by WAPA to satisfy a judgment entered against it. * The Government did not “delegate [its] obligations with respect to the water supply system to WAPA” but rather “transferred al] assets, rights, and responsibilities relating to the water supply to WAPA,” Lombardi v. Government of the Virgin Istands, 33 V1.3, 9 (T. Ct. 1995). Emmett A. Petersen, Sr. v. V.1, Water and Power Authority & Eige! Lenhardt Case No. ST-08-CV-577 Memorandum Opinion and Order, October 16, 2007 7of8 Virgin Islands Port Authority (“VIPA”) is characterized as “a public corporation and an autonomous governmental instrumentality of the Government,” 29 V.I.C. § 541. VIPA, however, is not the “alter ego” of the Government because the Government has immunized itself from VIPA debts and any judgments that may be entered against VIPA would not technically affect the funds of the Government. Virgin Islands Port Auth. v. Balfour Beatty, Inc,, 30 V.1. 289 (D.V.1, 1994). Accordingly, “the Tort Claims Act .., which applies to the government to insulate it from liability under certain circumstances-- does not apply to VIPA.” Ballentine v. Virgin Isiands Port Authority, 955 F. Supp. 480, 484 (D.V. I. 1997). In light of the foregoing, WAPA’s responsibility to pay its obligations weighs against WAPA’s immunity. See Hess v. Port Authority Trans-Hudson Corp., 513 U.S, 30, 51 (1994) (eleventh amendment’s core concern is not implicated when the state is not obligated to pay the debts of the sued entity). d) The Totality of the Factors Considering the totality of the factors, WAPA is not an arm of the Government of the Virgin Islands. WAPA’s exclusive control over its assets and its employees, through the contracts it forms with them, makes WAPA, and not the Government, liable for a WAPA employee's negligent operation of property owned by WAPA. As a distinct and separate corporate entity, WAPA does not enjoy the privilege of sovereign immunity and Plaintiff's failure to comply with the notice provisions of the TCA does not deprive this Court of subject matter jurisdiction over this matter. CONCLUSION Emmett A. Petersen, Sr. v. V.[. Water and Power Authonty & Eigel Lenhardt Case No. ST-08-CV-577 Memorandum Opinion and Order, October 16, 2007 8 of 8 The Court being advised in the premises, IT IS HEREBY ORDERED that Defendants’ Motion to Vacate is DENIED, and itis further ORDERED that copies of this Order be directed to counsel of record. pi = —— TION MICHAEL C. DUNSTON JUDGE OF THE SUPERIOR COURT OF THE VIRGIN ISLANDS Dated: October/Z, 2009 Date: October . 2009 Venetia H. Velazquez, Esq. Clerk of the Court CERTIFIED A TRUE COPY ' (0/1907 — vue: LOL P/ OF ay (7 Venétia H. Melazgues, "sq, Court Clerk Supervisor Duet of the Cour Court Clee