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SUPERIOR COURT OF THE VIRGIN ISLANDS DIVISION OF ST. CROIX LARRY A. FINLEY, SR PLAINTIFF, V. GOVERNMENT OF THE VIRGIN ISLANDS, DEPARTMENT OF PUBLIC WORKS, GOVERNMENT EMPLOYEE RETIREMENT SYSTEM AND GOVERNMENT DIVISION OF PERSONNEL, DEFENDANT. Appearances: Ronald E. Russell, Esq. The Russell Law Firm, LLP St. Croix, USVI For Plaintiff Zuleyma Chapman, Esq. Department of Public Works St. Croix, USVI SX-16-CV-456 ACTION FOR BREACH OF CONTRACT, DEBT, BREACH OF GOOD FAITH DEALINGS AND DAMAGES 2019 VI SUPER 78U MEMORANDUM OPINION WILLOCKS, Administrative Judge 7) THIS MATTER is before the Court on the Motion to Dismiss (hereinafter “Motion’”) of Defendants Government of the Virgin Islands, Department of Public Works, Government Employee Retirement System and Government Division of Personnel (hereinafter collectively “Defendants”), filed on December 2, 2016. In response, the Plaintiff Larry Finley (hereinafter “Plaintiff’), filed a Motion in Opposition (hereinafter “Opposition”), on February 8, 2017. Finley, Sr. v. Gov't of the Virgin tstands 2019 VI SUPER 78U SX-16-CV- 456 Memorandum Opinion BACKGROUND q2 The Plaintiff worked for the Department of Public Works for twenty-eight years before retiring in 2005. (Mot. 1.) According to the Complaint, prior to the Plaintiff retiring, he was issued a Notification of Personnel Action! ( hereinafter “NOPA”) that entitled him to a salary increase of $65,000. (Compl. 2.) However, the Defendants failed to process the correct NOPA and as a result, his retirement annuity does not reflect the pay increase that was indicated on his NOPA. dd.) STANDARD OF REVIEW 43 Under Rule |2(b)(6) of the Virgin Islands Rules of Civil Procedure, a party may seek to dismiss a claim due to “failure to state a claim upon which relief can be granted.”? In ruling on a 12(b)(6) motion, a court determines whether the claim has been adequately stated in the pleadings.* The court must accept all well-pleaded allegations as true and view them ina light most favorable to the pleader.' According, to the Supreme Court of the Virgin Islands the court must: [flirst, take note of the elements a plaintiff must plead to state a claim in order for the court to be aware of each item the plaintiff must sufficiently plead. Secondly, the court must identify allegations that are mere conclusions and not entitled to the assumption of the truth. Finally, the court must “assume the veracity of well-pleaded factual allegations and then determine whether they are plausible to entitle relief. However, since the Supreme Court adopted the Virgin Islands Rules of Civil Procedure the plausibility requirement is now omitted.* 44 Moreover, Rule 8 of the Virgin Islands Rules of Civil Procedure states “that the Virgin Islands is a notice pleading jurisdiction, therefore an approach that dismisses a case based on failure to allege specific facts that if established would plausibly entitle the pleader to relief is not applicable.’ Rather, ' A Notification of Personnel Action is a document that records all personnel actions regarding an employee's tenure with the government. Appointments to classified and exempt position become effective once they are approved by the Governor. Thus, upon appointment to a government position employee receive a Letter of Appointment from the Governor and a Notification of Personnel Action form. Government of the United States Virgin Islands Employee Handbook, Division of Personnel. J 200:4 (2011). An employee receives a NOPA and a Letter of Appointment once their employment has been approved by the Governor. * Smith v. Law Office of Kari A. Bentz P.C..2017 V.1. LEXIS 111, at *3-4 (V.I. Super. Ct. 2017). “Id, Vd. “Smith, 2017 V.1. LEXIS at *3-4: see also Mills- Williams v. Mapp. 67 V.1. Supreme LEXIS 35 at **11 (V.I. 2017). "VLR. Civ. Pro. 8. Finley, Sr. v. Gov't of the Virgin ssiands 2019 VI SUPER 78U SX-16-CV- 456 Memorandum Opinion a complaint need only present a short, plain statement of the cause of action and the basis for the claim for relief.’ DISCUSSION Statute of Limitations q5 The Defendants claim that under Title 5 of the Virgin Islands Code Section 31(3)(A), an action for breach of contract has a statute of limitation of six years. (Mot. 3.) Therefore, this matter should be dismissed because the statute of limitations began to run in 2005 when the Plaintiff retired and received his NOPA that he alleges entitled him to a pay increase. (/d.) q6 According to the Plaintiff there has been a continuing violation of his rights, therefore, the statute of limitations should be tolled under the continuing violation doctrine. (Opp’n. 3.) Given that the Defendants have continued to pay him the wrong amount. (/d. 4.) 7 In the Virgin Islands, a party may raise a statute of limitation defense in a Rule 12(b)(6) Motion to Dismiss.® Traditionally, the statute of limitations on any cause of action begins to run when the conduct that gives rise to the claim occurs.” Pursuit to Title 5 of the Virgin Isiands Code Section 31, civil actions for breach of contract claims have a six (6) year statute of limitations.'° qs However, under the continuing violation doctrine, “when a claim involves continuing or repeated conduct the limitation period does not begin to run until the date of the last injury or when the wrongful conduct ceases.”'' In order for the continuing violation doctrine to be "Id. * Ronnie v. Hess Oil V.I. Corp., 2014 V.1. LEXIS 118 at *2 (VL. Super. Ct. April 2, 2014); see also Pepper-Reed Co. v. McBro Planning & Dev. Co.. 564 F. Supp. 569, 571 (D.V.1. 1983}(** When an affirmative defense is potentially dispositive it is logical and efficient to consider it on a Rule 12(b)(6) motion. and courts frequently do.”) * Burton v. First Bank of Puerto Rico. 49 V1. 16, 20¢ V.L. Super. Ct. July 19, 2007). "5 V.LC. § 31(3)(A). '' Anthony v, First Bank Virgin Islands. 58 V1. 224. 230 (V.1. 201 3)(quoting Bluebeard’s Castle, Inc. v. Hodge. 51 V.1. 672. 689 (D.I.V. 2009). Finley, Sr. v. Gov't of the Virgin tstands 2019 VI SUPER 78U SX-16-CV- 456 Memorandum Opinion applicable, a plaintiff must “make a threshold showing that his claim involved continual unlawful acts, not continual ill effects from an original violation.”!? q9 Here the Plaintiff is alleging that the at the time of his retirement the Defendants processed the wrong NOPA and as a result, his retirement payments have been inaccurate. The Plaintiff retired in 2005 and started receiving annuity payments at that time thus the statute of limitations commenced in 2005. Given that the Complaint was filed in 2016 it is untimely. {10 Moreover, the Plaintiff's assertion that the statute of limitations is tolled under the continuing violation doctrine is inaccurate. The test for determining whether a contract is continuous depends on “whether the services were performed under one continuous contract, either express or implied, with no definite time fixed for payment, or rendered under several separate contracts.”'* If the services are fixed under one agreement that does not have a fixed time for payment or termination of services, the contract will be considered continuous and the statute of limitations does not run until the termination of the contractual relationship between the parties.”!+ 411 In order to determine whether the contract in this matter is continuous, it must first be ascertained whether the Plaintiff's NOPA is a contract. “It is well settled that an enforceable contract requires an offer, acceptance, and manifestation of mutual assent, which tends to exist when one party makes an offer and the other party accepts the offer.”!* The Plaintiff is alleging that his NOPA which states that he was entitled to a salary increase of 65,000 constitutes a binding contract between him and the Defendants. However, the Plaintiff has failed to allege any facts that the NOPA is a contract that the Defendants intended to be bound by. Given that 2 fd. '\ Raab v. Lander, 427 Fed. Appx. 182, 185(3d Cir. 2011) (citing Thorpe v. Schoenburn. 202 Pa. Super. 375, 378 (1963). '4 Raab. 427 Fed. Appx. 185. 'S Williams v, Virgin Islands Government Hospital & Health Facilities Corp., 2016 V.1. LEXIS 30 at *6-7 (V.L. Super. Ct. April 1, 2016.) quoting Peppertree Terrace v. Williams. 52 V.1. 225, 241 (V.1. 2009) see also Titan Med. Group v. Governor Juan F. Luis Hosp. & Med. Ctr.. 2015 V.1. LEXIS 79 at *7 (V.I. Super. Ct. July 14, 2015). Finley, Sr. v. Gov't of the Virgin tstands 2019 VI SUPER 78U SX-16-CV- 456 Memorandum Opinion the Complaint only states that the salary increase “is reflected on his NOPA that was issued and prepared according to an agreement Plaintiff made with his Union and the Government.” (Compl. 2.) Based on this assertion the Defendants did not intend to be bound by the NOPA but that the NOPA was produced as a result of an agreement. 412 Generally, NOPAs are not considered contracts as they are a means of recording all personnel actions during one’s employment with the Virgin Islands Government (hereinafter “Government”).'® In addition, they are traditionally prepared once an individual has been selected and their position is approved by the Governor. Therefore, a NOPA is not a binding contract between the Government and employees but rather is prepared subsequent to an employment agreement. However, because this is an issue of first impression in this jurisdiction, the Court finds that a Banks analysis in accordance with the Supreme Court’s decision in Banks v. Int’l Rental & Leasing Corp., is necessary in order to determine whether the Virgin Islands should recognize NOPAs as contracts.!7 A. Virgin Islands Precedent {13 In reviewing the decision of the courts within this jurisdiction — the Supreme Court, Superior Court, District Court, and the Third Circuit only a few cases have involved NOPAs and those that did, did not address the present issue. In general, when a breach of contract claim involved a NOPA, the NOPA was used to describe one’s employment or note any changes that 16 See National Treasury Emplovees Union v. Reagan, 663 F.2d 239, 243 (D.C. Cir, 1981)(“notifications of personnel actions primarily provide basic documentation of a person's Federal employment, to notify the employee of the personnel action. and to provide basic records...) " Banks v. Int'l Rental & Leasing Corp.. 55 V.1. 967, 981 (V.1. 2011). See also Gov't of the Virgin Islands v. Connor, 60 V.1. 597, 603 (V.L 2014)(“[T]he Superior Court, when considering a question not foreclosed by prior precedent from this Court, must perform a three-part analysis as set forth in Banks. The first step in the analysis - whether any Virgin Islands courts have previously adopted a particular rule — requires the Superior Court to ascertain whether any other local courts have considered the issue and rendered any reasoned decision upon which citizens have grown to rely. The second step- determining the positioning taken by a majority of courts from other jurisdictions — directs the Superior Court to consider all potential sides of an issue by viewing the potentially different ways that other states and territories have resolves a particular question, Finally, third step in the Banks analysis — identifying the best rule for the Virgin Islands- mandates that the Superior Court weigh all persuasive authority both within and outside the Virgin Islands, and determine the appropriate common law rule based on the unique characteristics and needs of the Virgin Islands.”)(citations omitted) Finley, Sr. v. Gov't of the Virgin’ stands 2019 VI SUPER 78U SX-16-CV- 456 Memorandum Opinion Page 6 of II occur during the employee’s tenure with the Government.'® Therefore, it can be inferred that the Virgin Islands does not have a history of recognizing NOPAs as a binding contract. B. Majority Approach G!4 A search of other jurisdiction also revealed that majority do not recognize NOPAs as binding contract. The search showed that NOPAs are generally issued at the beginning of federal employment and since it is well-established that federal employees do not have a contractual relationship with the government unless specifically authorized, a NOPA was not a contract.'? Given that NOPAs in this jurisdiction serve the same purpose as those in the federal government strongly favors adopting the same approach here. C. The Best Rule for the Virgin Islands 15 Having considered the precedent both here and in other jurisdictions it would be best for the Virgin Islands to not recognize NOPAs as contracts. As this is the most common approach and it will also maintain a consistent course within the jurisdiction. Having determined that a NOPA is not a contract the continuing violation doctrine is not applicable to toll the statute of limitations. As a result, the Court must grant the Defendants’ Motion due to the Complaint being time-barred. '8 See Government of the Virgin Islands v. Davis, 2001 U.S. Dist. LEXIS 20191 at *5 (D.V.1, 2001)(‘The Government subsequently executed a Notification of Personnel Action transferring Davis from the unclassified service to the classified service."): Mcintosh-Luis v. DeJongh, 2012 U.S. Dist. LEXIS 45362 at *2 (D.V.1. 2012)(“The Notification of Personnel Action that describes the employment relationship between the Government and Plaintiff indicated that the position was an “exempt” position.”): Willocks-Gonzalez v. Public Emples. Rels, Bd.. 2019 V1. LEXIS 108 at *6 (VL Super. Ci. Aug. 6, 2019)(“A Notification of Personnel Action dated January 26, 2004 reflects Willocks-Gonzalez appointment to the position of Forensic Chemist in the Exempt Service.”): Williams vy. V.L Gov't Hosps. & Health Facilities Corp. 2016 V.1. LEXIS 30 at *3 (V.1. Super. Ct. April 1. 2016)(*Around the same time as the execution of the foregoing Employment Agreement. a Notification of Personnel Action dated June 12. 2008 was issued to Williams, which denoted a change in annual salary from $80,000 to $95,000.”) "9 See, e.g.. Yamashita v. Gutierrez, 2002 Guam LEXIS 17 44 (Guam May 13. 2002): Calvin vy. United States. 63 Fed. Cl. 468. 473 (Ct. Cl. 2005): Abernethy v. Donahoe. 2013 U.S. Dist. LEXIS 82301. 19 (W.D. Va. June 11. 2013): Corrigan v. United States. 68 Fed. Cl. 589, 595 (2005): Chu v. United States. 773 F.2d 1226, 1229 (Fed. Cir. 1985): Harrison v. United States, 120 Fed. Cl 533. 538-39 (2015): Hayman v. United States. 590 F.2d 344, 218 (Ct. Cl. 1978): Urbina v. United States, 428 F.2d 1280 (Ct. Cl. 1970): United States v. Hopkins. 427 U.S. 123 (1976): Shaw v. United States, 640 F.2d 1254 (1981): Finley, Sr. v. Gov't of the Virgin Is.unds 2019 VI SUPER 78U SX-16-CV- 456 Memorandum Opinion Page 7 of f1 Count I: Breach of Contract 116 Having already determined that the Complaint is untimely the Court will still address the other claims. The Supreme Court of the Virgin Islands has established that a breach of contract claim requires the plaintiff to demonstrate: 1) an agreement; 2) a duty created by the agreement; 3) a breach of that duty; and 4) damages.”° In addition, it is also established that internal personnel rules can be construed as an implied contract if it is evident that the employer intended to be bound by those rules.”?! {17 The Defendants claim that the matter should be dismissed because the Plaintiff has failed to sufficiently allege that the NOPA constituted a contract between the parties. (Mot. 4.) The Plaintiff contends that the NOPA is a binding contract, which the Defendants breached by failing to compensate him according to the amount reflected on the NOPA. (Compl. 2.) In support of this assertion the Plaintiff claims that in Kendall v. Superior Court of the Virgin Islands the District Court of the Virgin Islands held that a contractual relationship exists when a government employee makes contributions to the Government Employees Retirement System (hereinafter “GERS”) and in exchange upon his retirement GERS is to provide the employee with an annuity. (Opp’n. 2.) Thus, a contractual relationship is established with the Government due to the employee making contributions to GERS. (id.) 418 | However, the Plaintiff has misinterpreted Kendall, as the court did not state that a contractual relationship exists due to an employee’s contributions to GERS.22 Rather the court stated, “that all members of GERS by virtue of their payment into the system have a vested interest in such contributions." 20 Phillip v. Marsh-Monsanto, 66 V.1. 612. 620 (V.1. 2017). 1 Roebuck y. V.L. Hous. Auth. & Gov't of the V.1., 60 V.1. 137, 144 (V.I. Super. Ct. May 7. 2014). 2 Kendall v. Superior Court of the Virgin Islands. 2013 U.S. Dist. LEXIS 27320, at *48-49 (D.V.I. 2013). 3 Id, Finley, Sr. v. Gov't of the Virgitr stands 2019 VI SUPER 78U SX-16-CV- 456 Memorandum Opinion q!9 Furthermore, because the Court has already determined that a NOPA does not constitute a contract the Plaintiff is unable to successfully establish a breach of contract claim. Because the Plaintiff has failed to meet the first prong of a breach of contract claim, the Court will grant the Defendants’ Motion in regard to Count I of the Complaint. Count II: Conversion by Defendants {20 The Virgin Islands have adopted Restatement (Second) of Torts §222A, which defines conversion as an “intentional exercise of dominion or control over a chattel which so seriously interferes with the right of another to control it that the actor may justly be required to pay the other the full value of the chattel.”*4 In addition, conversion does not require the defendant to have knowledge, intent, motive, mistake, or good faith.?° Also, legal title or absolute ownership is not required.*° However, the proponent must still allege that he was entitled to immediate control at the time of conversion.*” {21 The Defendants claim that Count II should be dismissed under the gist of the action doctrine and the economic loss doctrine because the Plaintiff is attempting to recast his breach of contract claim as a tort matter. (Mot. 4.) §22 According to the Plaintiff he has brought the inconsistency between his NOPA and annuity payments to the attention of the Defendants numerous times. (Opp’n. 4.) Therefore, the Defendants’ inaction constitutes an intentional and wrongful control and dominion over his property. (/d.) {23 Similar to his breach of contract claim the Plaintiff asserts that the Defendants failure to provide him with the salary increase as noted on his NOPA constitutes conversion by the Defendants. However, other than the NOPA, the Plaintiff did not present any evidence proving 4 Restatement (Second) of Tort § 222A: see also Issa v. Crichlow. 66 V.1, 38. 58 (V.1. Super. Ct. 2015). °S Chaput v. Scafidi, 66 V.1. 160. 196 (V.I. Super. Ct. June 14, 2017). 26 Id. 27 Id, Finley, Sr. v. Gov't of the Virgin Is:ands 2019 VISUPER 78U SX-16-CV- 456 Memorandum Opinion Page 9 of It that he was entitled to immediate ownership of the salary increase or had some form of control at the time of the alleged conversion. Moreover, because conversion requires exercising dominion and control over another’s chattel, which is moveable or transferrable personal property except for real property or money the Defendants could not convert the Plaintiff’s salary increase even if he had control of it at the time of the alleged act.?8 Therefore, the Plaintiff's conversion claim is unsuccessful because rights to a salary increase do not constitute chattel. {24 In addition, to Count II being legally insufficient it is also barred under the gist of the action doctrine. This Court has stated that the gist of the action doctrine “is applicable to the Virgin Islands pursuant to the Third Circuit Court of Appeal’s holding in Addie v. Kjaer.”?° Under the gist of the action doctrine, plaintiffs are precluded from recasting ordinary breach of contract claims into tort claims.*° As a result, the gist of the action doctrine bars tort claims: 1) arising solely from a contract between the parties; 2) where the duties allegedly breached were created and grounded in the contract itself; 3) where liability stems from a contract; or 4) where the tort claim essentially duplicates a breach of contract claim or the source of which is wholly dependent on terms of a contract.*! For this reason, when tort claims are “inextricably intertwined with a contract claim it must be dismissed.” Although the gist of the action doctrine is a legal question it requires a factual analysis and courts must determine whether the claim stems from a tort or contract. *8 Black's Law: Dictionary 268 (9th ed. 2009). 2° VI. Port Auth. v, Callwood. 2014 V.I. LEXIS 11 at *10 (V.L. Super. Ct. Feb. 28. 2014). MT. Td. 32 Id. Finley, Sr. v. Gov't of the Virgitt stands 2019 VI SUPER 78U SX-16-CV- 456 Memorandum Opinion Page 0 of II {25 Here, the Plaintiff is alleging that he is entitled to an increase in retirement benefits because of a NOPA that indicates an increase in his salary. (Compl. 2.) Given this assertion and because the Plaintiff did not assert any additional cause for the tort claim it is clear that his conversion claim is solely based on the NOPA, which the Plaintiff contends is a contract. As a result, Plaintiff's tort claim is solely based on his contract claim. Therefore, even if his conversion claim was legally sound and the NOPA was a contract it would still necessitate dismiss under the gist of the action doctrine. {26 The Defendants also claim that Count II should be dismissed under the economic loss doctrine. Historically, in the Virgin Islands, the economic loss doctrine was only applicable to products liability cases.*4 Then, in Turnbull v. Univ. of the V.L, the Court expanded the scope of the doctrine and established the rule in the Virgin Islands pursuant to a Banks analysis.*> However, the Court in Turnbull, ultimately decided that the doctrine did not apply in that particular negligent misrepresentation case.** In reaching its decision the Court determined that because the relationship between the parties was not fundamentally commercial that applying the doctrine would be inappropriate.*’ {27 Likewise, the Court finds that the economic loss doctrine would be ill-suited for the present case. Although, the doctrine prevents a party from recovering in tort economic losses that arise from a breach of contract claim there is no need to apply the doctrine given the facts in this matter. Given that the Plaintiff is not alleging a pecuniary loss but instead alleging that he is entitled to an increase in benefits. Nonetheless, even if the Plaintiff was asserting a practical pecuniary loss an employer/employee relationship is not fundamentally commercial * Turnbull v. University of the Virgin Islands, 2016 V.1. LEXIS 22. at *7 (V.1. Super. Ct. March 2, 2016). 8 Ud. 8 Id. 7d, Finley, Sr. v. Gov't of the Virgin stands 2019 VI SUPER 78U SX-16-CV- 456 Memorandum Opinion therefore the economic loss doctrine is ill-suited as a remedy. Even still given the aforementioned reasons the Court will grant the Defendant’s Motions in regard to Count II. Count Il: Violation of Personnel Rules and Procedure {28 The Defendants claim that Count III should also be dismissed under the gist of the action doctrine and the economic loss doctrine because the claim is also based the NOPA, which the Plaintiff alleges is a contract. (Mot. 4-5.) 729 In Count III of the Complaint, the Plaintiff claims that the Defendants breached the personnel rules and regulations regarding his increase in pay and annuity. (Compl. 3.) Consequently, the Plaintiff fails to allege what personnel rules and regulations the Defendants breached and what actions or inactions on the part of the Defendants constitutes a breach of those rules and regulations. Further, the Plaintiff failed to incorporate the previous paragraphs of the Complaint into Count III. As a result, the Plaintiff has not presented a short and plain statement of the cause of action or basis for the claim for relief as required by Rule 8. Therefore, even drawing all inferences in favor of the Plaintiff, the Court finds that he has not stated a claim upon which relief can be granted. Thus, the Defendants’ Motion is granted regarding Count III. CONCLUSION 930 = After careful consideration of this matter, the Court will grant the Defendants’ Motion to Dismiss. An Order consistent with this Memorandum Opinion will soon follow. DONE and so ORDERED this \he day wep Diu ATTEST: be Le) Oo Vy) Estrella H. George ‘7 "HAROLD W.L. WILLOCKS Clerk of the Court Presiding Judge of the Superior Court