EN THE SCPERIOR COURT
OF THE VIRGIN ISLANDS

FILE

TAMARA CHARLES IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS
eee DIVISION OF ST, CROIX
STEADROY WILLIAMS, as ASSIGNEE of )
ELITE SECURITY AGENCY, INC., } CASE NO.: SX-18-CV-27
Plaintiff, )
v, ) ACTION FOR BREACH OF
5 CONTRACT, BREACH OF DUTY
INTER-OCEAN INSURANCE AGENCY, INC., ) OF GOOD FAITHAND FAIR
PRIME INSURANCE SYNDICATE, INC. and } DEALING AND NEGLIGENCE
PRIME INSURANCE COMPANY, ) ate 7
Defendants. 2 I Super 8°

MEMORANDUM OPINION and ORDER

qi Before the Court is Defendants Prime Insurance Syndicate, Inc.’s and Prime Insurance
Company’s (jointly “Prime”)! Rule 12(b)(6) Motion to Dismiss, filed April 24, 2018, converted
by April 2, 2020 Order, pursuant to V.I. R. Civ. P. 12(d), to a Rule 56 motion for summary
judgment to provide Plaintiff further reasonable opportunity to present all material pertinent to the
Motion. Plaintiff's Opposition was filed June 22, 2018, was not supplemented following the April
2, 2020 Order, and Plaintiff's motion to further extend discovery deadlines is denied by separate
Order entered herewith. Prime’s Reply to Plaintiff's Opposition was filed June 27, 2018. Also
before the Court is Defendant Inter-Ocean Insurance Agency Inc.’s (“Inter-Ocean”) Motion for
Summary Judgment filed May 11, 2018; Plaintiff's Opposition, filed on June 22, 2018; and Inter-
Ocean’s Reply, filed July 10,2018. These Motions came on for oral argument September 22, 2020.
For the reasons that follow, the Prime Defendants’ converted Motion will be granted; Inter-
Ocean’s Motion will be granted, and Plaintiff's Complaint will be dismissed with prejudice as to
all claims and all Defendants.

BACKGROUND

{2 The current action against Prime and Inter-Ocean follows a tort action brought by Plaintiff
Steadroy Williams (SX-10-CV-140), seeking damages from Elite Security Agency, Inc. and others
for an assault and battery allegedly committed against Plaintiff by Elite Security’s employee
Ramon Richardson on or about September 16, 2009 at a Virgin Islands Water and Power Authority

' Prime Insurance Syndicate, Inc. merged with and became a part of Prime Insurance Company on
December 30, 2009, See Complaint, 7 7. All parties treat the Prime Defendants as one and the same entity.
Steadroy Williams v Inter-Ocean insurance Agency, et al; SX 18 CV 27
Memorandum Opinion and Order 

Page 2 of 19

facility where Plaintiff was employed. At the time of the incident, Elite was insured by Prime, as
it had been since April 23, 2005, by a commercial liability policy issued and renewed annually
through Inter-Ocean (General Liability Policy No. SP0904006 (‘the Policy”),

13  OnMarch 26, 2009, Elite Security applied through Inter-Ocean to renew liability insurance
coverage for risks related to its security business. Inter-Ocean issued the Policy to Elite Security
covering specified risks relating to the security business, based upon Elite’s application describing
the nature and operations of its business, effective for the period April 1, 2009 to April 1, 2010.
Following the September 16, 2009 incident, Williams filed his Verified Complaint in SX-10-CV-
140 on March 29, 2010, seeking damages in tort against Richardson, Elite Security and WAPA.
Upon being served with process, Elite tendered the defense of the suit to its carrier, Prime, through
Inter-Ocean. On April 30, 2010, Prime informed Elite Security that it would not defend the action
or indemnify Elite against the claims, citing a lack of coverage under the Policy, which Prime
stated explicitly excluded claims arising from assault and battery, including allegations of
negligent hiring/training/supervision related to the alleged assault.

£4 During the pendency of the tort litigation, with the coverage dispute unresolved, Plaintiff
and Elite Security entered into a Consent Judgment and an Assignment and Agreement not to
Execute. By the parties’ agreements, Elite Security agreed to entry of judgment against it in favor
of Williams in the amount of $100,000 and assigned to Plaintiff all of its rights against Prime
and/or Inter-Ocean arising under the Policy, including the failure to fulfill good faith obligations
to protect Etite from liability to Williams and to properly underwrite the Policy to indemnify Elite
in the tort action. In exchange, Williams agreed that he would not execute on or otherwise seek
satisfaction of the Consent Judgment from or against any assets of Elite, other than any and all

rights Elite had against Prime and/or Inter-Ocean.”

* The Court takes judicial notice of the records of the Superior Court in SX-10-CV-140. The Consent
Judgment in favor of Plaintiff Williams against Elite was entered July 14, 2017. By Joint Stipulation, Order
entered February 2, 2018 dismissing with prejudice Plaintiff's claims against WAPA. Default was entered
against the sole remaining defendant, Ramon Richardson, on February 21, 2018. No substantive activity
has occurred since, and Plaintiff's action against Defendant Richardson remains pending. Effective March
18, 2011, Elite filed its Verified First Amended Third-Party Complaint against Prime and Inter-Ocean and
its principal, substantively comparable to Plaintiff's Complaint herein. Elite’s subsequent motion to dismiss
its third-party claims without prejudice was granted by Order entered December 4, 2017. Plaintiff's
Complaint in this action seeking the same relief against Prime and Inter-Ocean was filed February 2, 2018.
Steadroy Williams v Inter-Ocean Insurance Agency, et al: SX 18 CV 27
Memorandum Opinion and Order 

Page 3 of 19

15 Plaintiff Williams brings this action, as assignee of Elite Security, alleging by his
Complaint the following causes of action against Defendants:

Count I: Breach of Contract (Prime and Inter-Ocean)

Count If: Breach of the Duty of Good Faith and Fair Dealing (Prime and Inter-Ocean)

Count Ill: Negligence (Inter-Ocean)

CountIV: Negligence (Prime)

Count V: Failure to Defend or Indemnify (Prime)

Count Vi: Bad Faith (Prime and Inter-Ocean)

Count VII: Fraud (Prime and Inter-Ocean)

Count VIII: Negligent Misrepresentation (Prime and Inter-Ocean)

CountIX: — Estoppel (Prime and Inter-Ocean)
16 Plaintiff claims that as a result of Defendants’ breaches, acts, omissions, bad faith and
fraud, Elite Security was forced to enter into the Consent Judgment and has suffered compensable
economic loses. As assignee of Elite’s claims, Plaintiff alleges that Inter-Ocean and Prime failed
to properly evaluate the risks and exposure to Elite, failed to provide an appropriate liability policy
for Elite’s business risks, and wrongly failed to defend and indemnify Elite in the tort action that
presented claims that the Policy by its terms did in fact cover or, alternatively, from which Elite

should have been protected had Defendants provided the coverage required and requested by Elite.
STANDARD OF REVIEW

17 In evaluating motions for summary judgment, the Court must determine whether there
exists a genuine dispute of material fact; one that would impact the outcome of the case under
applicable law. Machado v. Yacht Haven U.S.V.L, LLC, 61 V.1. 373, 379-80 (V.I. 2014) (quoting
Williams v. United Corp., 50 V.1. 191, 194 (V.I. 2008)). Such a dispute is genuine if it is material
to the claim presented and a reasonable trier of fact could decide that factual issue in favor of the
non-moving party. /d, at 391-92. “Because summary judgment is a drastic remedy, it should be
granted only when the pleadings, the discovery and disclosure materials on file, and any affidavits
show there is no genuine issue as to any material fact and that the movant is entitled to judgment
as a matter of law.” Williams, 50 V.I. at 194 (internal citation omitted).

78 Reviewing Defendants’ Motions, the Court does not weigh the credibility of the evidence
offered. Instead, all inferences from the evidence are drawn in favor of the nonmoving party, and

any conflicting allegations, if properly supported by the record, are resolved in favor of the
Steadroy Williams v Inter-Ocean Insurance Agency, et al: SX 18 CV 27
Memorandum Opinion and Order 

Page 4 of 19

nonmovant. See Perez v. Ritz-Carlton (V.L), Inc., 59 V.1. 522, 527 (V.I. 2013) (citing Williams,
50 VI. at 194-95). The moving party bears the burden of demonstrating the absence of any genuine
issue of material fact. Martin v. Martin, 54 V.1. 379, 389 (V.L 2010). If the “moving party fails to
carry its initial burden of production, the nonmoving party has no obligation to produce anything,
even if the nonmoving party would have the ultimate burden of persuasion at trial.” Jd. at 391
(citation omitted). If the moving party does carry its initial burden to produce evidence of the
absence of material facts in dispute, then “the burden shifts to the non-moving party to present
‘affirmative evidence’ from which a jury might reasonably return a verdict in his favor.” Chapman
v. Cornwall, 58 V.1. 431, 436 (V.L 2013) (citations omitted).

19 “A party asserting that a fact... is genuinely disputed must... support the assertion by: (i)
citing to particular parts of materials in the record. ..; or (ii) showing that the materials cited do not
establish the absence... of a genuine dispute, or that an adverse party cannot produce admissible
evidence to support the fact.” V.I. R. Civ. P. 56(c)(1). Although the facts are to be interpreted in
the light most favorable to the nonmoving party, the nonmoving party “may not rest upon mere
allegations and must present actual evidence showing a genuine issue for trial.” Machado, 61 V.I.
at 379. To determine whether summary judgment is appropriate, the Court must determine the

substantive law governing the causes of action presented. See Perez, 59 V.I. at 528.
DISCUSSION

{10 The Motions of Prime and Inter-Ocean are treated in order, each addressing the

Complaint’s allegations set out in each Count against that Defendant.
Prime’s converted Motion for Summary Judgment

711 Count]: Breach of Contract.
In order to prevail on a claim of breach of contract under Virgin Islands law, a plaintiff

must establish the existence of four elements: ‘(1) an agreement; (2) a duty created by that
agreement; (3) a breach of that duty; and (4) damages.” Phillip v. Marsh-Monsanto, 

 (V.1. 2017) (multiple citations omitted). To survive summary judgment, Plaintiff must point
to evidence in the record by which a reasonable trier of fact could find in his favor as to each

element of his breach of contract claim.
Steadroy Williams v Inter-Ocean Insurance Agency, et al: SX 18 CV 27
Memorandum Opinion and Order 2620 VI Super 89U
Page 5 of 19

{12 As Elite’s assignee, Plaintiff alleges and Prime concedes the existence of an insurance
contract between the parties. A copy of the Policy is attached as Exhibit 1 to Prime’s Motion. The
Complaint alleges that “Prime breached the contract of insurance by failing to honor the terms and
conditions of that contract” in that, upon receipt of notice of the tort action, Prime “informed Elite
Security that it would not defend or indemnify it against the claims...” Complaint, 4 19, 17.

{13 To defeat summary judgment, Plaintiff must present evidence of a duty created under the
Policy and breached by Prime. By its Motion, Prime contends that, Plaintiffs claims
notwithstanding, the Policy imposed no duty to defend and indemnify Elite in the tort action.
Section I. B. of the Policy is entitled “Exclusions,” and states:

This Policy does not cover, and we will not be obligated to defend you against or pay
Damages on your behalf for any of the following: ...

7. Claims related to or arising out of actual or alleged assault and/or battery, whether
caused by or at the direction of the Insured, the Insured’s employees or patrons, or
from any cause whatsoever. This Policy further excludes claims, accusations or
charges of negligent hiring, placement, training, or supervision regarding any actual
or alleged assault and battery. No coverage is provided for Claims alleging negligent
hiring or entrustment, training or supervision, failure to provide adequate security, or
other allegations of intentional, negligent, or reckless conduct related to actual or
alleged assault and/or battery.

714 The Verified Complaint in the tort action, in the section entitled “Facts Giving Rise to
Claim,” alleges that “... defendant Ramon Richardson physically and brutally assault[ed] plaintiff
by attacking plaintiff with his fist and punched plaintiff several times about the face causing
plaintiff to fall to the floor.” Complaint, Exhibit A, Verified Complaint | 8 (SX-10-CV-140).,
Plaintiff claimed that he suffered serious physical, emotional and economic injuries “[als a direct
and proximate result of defendants’ attacks.” Jd. 7 10, Liability against Richardson is alleged for
his “viciously assaulting Plaintiff without provocation.” /d. | 12. WAPA was alleged to be
“negligent and careless in hiring defendant Elite Security...” as a result of which “Plaintiff suffered
a vicious attack [] by defendant Ramon Richardson.” /d. 4 14-15. WAPA, as Plaintiff's employer,
is alleged to have breached its duty to provide a safe workplace by hiring Elite, as a result of which
Piaintiff “suffered a vicious attack” and serious injuries. Jd. 44 22-23. “Defendant Elite Security
was negligent in the hiring, training, supervising and retaining of defendant Ramon Richardson,”
as a result of which Plaintiff “suffered a vicious attack” and resulting injuries. Jd. 9] 17-18.
Steadroy Williams v Inter-Ocean Insurance Agency, et al: SX.18 CV 27
Memorandum Opinion and Order 2020 Vi Super 89U
Page 6 of 19

¥15 Every insurance contract in the Virgin Islands is to be construed according to the entirety
of the policy’s terms and conditions. 22 V.1.C. § 846. “In the Virgin Islands, [t]he interpretation,
construction and legal effect of an insurance policy is a question to be determined by the court as
a matter of law.” James v. Guardian Insurance Company, 

, 33 (V.1. Super. 2015)
(citing Certain Underwriters at Lloyds v. Robert Ellis Brown, Inc., 

(D.V.I. 2013) (emphasis in original) (internal quotation omitted)). “If the terms of a policy are
unambiguous, it must be construed according to its plain language.” /d., quoting Devcon Int'l
Corp. v. Reliance Ins. Co., 

, at *8 (D.V.I. 2007).

{16 The Court is to “read policies to avoid ambiguities and not to torture the language of the
policy to create them.” General Star Indemnity Co v. Virgin Islands Port A uthority, 48 V.1. 696,
700 (D.V.I. 2007). By its terms, the Policy clearly, unambiguously and explicitly excludes from
defense and coverage claims arising out of actual or alleged assault and/or battery, as well as
negligent hiring, training, supervision or other intentional or negligent conduct related to an actual
or alleged assault and/or battery.

{17 By his Complaint in this action, Plaintiff asserts that Elite understood that it had obtained
liability coverage “to protect it from all claims that foreseeably would arise from engaging in the
business of a security company.” Complaint, € 12. In a case where the policy terms are ambiguous,
the reasonable expectation of the insured relating to coverage may be a factor in determination of
the scope of coverage. Thus, the burden is on Plaintiff, as assignee of the insured, Elite, to proffer
a reasonable reading of the Policy terms demonstrating an ambiguity. Yet, Plaintiff has not alleged
that the Policy language is ambiguous and has offered no explanation why the plain language of
the Policy, excluding coverage for claims arising from assault, does not apply. Because the Policy
unambiguously excluded coverage for all claims arising from or related to an actual or alleged
assault and/or battery, there is no need to consider Elite’s contrary expectations of
coverage. Devcon Int'l Corp. v. Reliance Ins. Co., 

, at *8-9 (D.V.1.
2007) (citations omitted).

{.18 While there existed a contract between Prime and Elite to provide liability coverage for
various Claims arising out of its business operations, there are no material facts in dispute to deny

entry of judgment on this Count as a matter of law. The explicit language of the Policy excluded
Steadroy Williams v Inter-Ocean Insurance Agency, et al: SX 18 CV 27
Memorandum Opinion and Order 2020 V1 Super 89U
Page 7 of t9

coverage for claims arising from an assault, such that Prime had no duty to provide coverage for

claims asserted in the tort action, and Prime’s Motion will be granted as to Count I.

J19 Count Il: Breach of Duty of Good Faith and Fair Dealing.

By this Count, as to Prime, Plaintiff alleges simply that “Prime Defendants’ conduct in

failing to defend and/or indemnify Elite Security Agency, Inc. against the claims asserted by
Plaintiff Steadroy Williams amounts to a breach of the duty of good faith and fair dealing.”
Complaint { 25. That is, the allegations that Prime breached its duty of good faith and fair dealing
inherent in its insurance contract with Elite mirrors the breach of contract allegations of the
preceding Count. “Every contract imposes upon each party a duty of good faith and fair dealing in
its performance and its enforcement.” Chapman v. Cornwall, 58 V1. at 441 (quoting RESTATEMENT
(SECOND) OF CONTRACTS § 205). “The duty of good faith limits the parties’ ability to act
unreasonably in contravention of the other party’s reasonable expectations. A successful claim ...
requires proof of acts amounting to fraud or deceit...” Jd. (citation omitted),
120 Here, because Prime had no duty to defend or cover the claims against Elite in the tort
action, Elite could not have harbored any reasonable expectation of coverage by Prime. Plaintiff
has presented no factual basis for his claim of Prime’s breach of this implied covenant in its
contract with Elite and has not proffered any evidence of acts of Prime “amounting to fraud or
deceit.” Rather, Plaintiff has simply alleged that Prime failed to defend and indemnify Elite in the
tort action, without even claiming by his Complaint that Prime acted fraudulently or deceitfully in
its response to Elite’s tender to it of the tort action for defense. Accordingly, Plaintiff has failed to
allege any facts or provide any proof to permit a finding that Prime breached its duty of good faith
and fair dealing with respect to the assault action Plaintiff filed against Elite, and Prime’s Motion
will be granted as to this Count.

721 Count IV: Negligence.
The foundationa! elements of negligence are well-settled in the Virgin Islands, consisting

of: “(1) a legal duty of care to the plaintiff, (2) a breach of that duty of care by the defendant (3)
constituting the factual and legal cause of (4) damages to the plaintiff.” Machado, 61 V.1. at 380.
Accordingly, in order to prevail on a claim for negligence, Plaintiff must first show that a duty

existed and that same was breached before proceeding to the causation and damages elements.
Steadray Williams v Inter-Ocean Insurance Agency, et al: SX 18 CV 27
Memorandum Opinion and Order 

Page 8 of 19

722 Here, Plaintiff alleges that Prime was negligent in failing to properly evaluate the risk and
exposure of Elite and in failing to procure the “appropriate coverage” for Elite, despite being fully
informed, through Inter-Ocean, of Elite’s “specific needs.” Complaint {4 38-39. Plaintiff asserts
that Inter-Ocean “acted as agents for Elite Security as well as agents for the Prime Defendants.”
Id, 19. Yet, the record is devoid of any proof that Elite ever communicated with Prime regarding
the scope of coverage sought. Rather, the Affidavit of Aston Wayne Harty, president of Inter-
Ocean, notes that in the relationships among Elite, Inter-Ocean and Prime, Inter-Ocean dating back
to 2004, Inter-Ocean “was serving as the broker.” In the Virgin Islands, during the relevant period
involving the interactions among the parties, an insurance broker was defined as “any person who,
on behalf of the insured, for compensation as an independent contractor, for commission, or fee,
and not being an agent of the insurer, solicits, negotiates, or procures insurance or reinsurance or
the renewal or continuance thereof, or in any other matter aids therein, for insureds or prospective
insured other than himself. Plaintiff has offered no facts to rebut the affirmation of Wayne Harty
that “Elite through its President, Romeo Christopher submitted {to Inter-Ocean} on March 26, 2009
a Commercial Insurance Application for Commercial Generat Liability Insurance for its
Company...” Harty Affidavit 4. Accordingly, there are no facts in the record to suggest that there
is an unresolved issue of material fact regarding Plaintiff's assertion that Prime was negligent in
failing to evaluate Elite’s risk and procure appropriate coverage.

723 Plaintiff further alleges that Prime knew or should have known that Elite needed a liability
policy providing coverage for personal injury, assault and battery, false arrest, negligent hiring and
retention “and other coverage that a security company would foreseeably need.” Complaint J 40.
Essentially, Elite alleges that Prime was negligent in failing to provide Elite an insurance policy
that covered claims arising from intentional torts committed by Elite’s employees. In addition to
the fact that Plaintiff provides no proof that Elite ever solicited such coverage from Prime, as
opposed ta from Inter-Ocean, acting as independent contractor broker on behalf of Elite, the
“willful acts” and assault and battery exclusions set out in the Policy were “standard with respect

to all commercial policies” such that “there was no alternative, to either Inter-Ocean or to Elite, to

> Memorandum in Support of Inter-Ocean’s Motion for Summary Judgment, Exhibit A, q 3.

422 V.LC. § 751(c) (emphasis added). The statute was amended by Act No. 7964, effective February 19,
2017, without substantive change to the definition of “broker,” now defined at 22 V.LC. § 75 1a(d).
Steadroy Williams v Inter-Ocean insurance Agency, et al: SX 18 CV 27
Memorandum Opinion and Order 

Page 9 of 19

secure insurance coverage without these exclusions, as no carriers were issuing commercial
policies in the U.S. Virgin Islands without theses exclusions.” Harty Affidavit J 9-10.

424 It is arguable whether Plaintiff could present against Prime a colorable claim in negligence
not barred by the gist of the action doctrine, requiring that claims arise out of the scope of a contract
sound in contract and not in tort. Nonetheless, Plaintiff has not provided proof of the existence of
a duty that Prime breached. Plaintiff has not supported his claim that Prime had a duty to evaluate
the risk and exposure to Elite. Rather, the record and Virgin Islands law are consistent with the
independence of Prime from any breach occasioned by Elite’s submission of an application to
Inter-Ocean, which did not act as agent for Prime in this context. Further, to the extent that a duty
could be imposed upon Prime to procure a liability policy to meet Elite’s “specific needs”
(Complaint § 41), Plaintiff has failed to rebut the record evidence to the effect that no liability
policy without the objectionable exclusions from coverage was available in the Virgin Islands.
Accordingly, because Plaintiff has not articulated any duty of Prime that a finder of fact could

reasonably determine was breached by Prime, Prime’s Motion will be granted as to Count IV.

725 Count V: Failure to Defend and/or Indemnity.

Plaintiff claims that by failing to defend and/or indemnify Elite against the claims asserted
by Plaintiff in the tort action, Prime violated its duty under the Policy. Complaint J 47. However,
as noted above, Plaintiff's claims against Elite were explicitly excluded from coverage in the
Policy. “The policy, the written application therefor, if any, and any rider or endorsement which
does not conflict with the provisions of this Chapter shalt constitute the entire contract between
the parties.” Joseph v. Inter-Ocean Ins, Agency, Inc., 59 V.1. 820, 825 (V.I. 2013) (concerning
Statutory provision regarding compulsory automobile liability policy) (citation omitted) (emphasis
in original omitted). Here, Plaintiff points to no statutory or regulatory provision that would
supersede the plain language of the Policy. Because the Policy terms exclude precisely the defense
and indemnification Elite sought from Prime, without any overriding statutory mandate imposing
coverage contrary to the Policy terms, Prime had no duty to defend or indemnify Elite in the tort
action, and its Motion will be granted as to Count V.

126 Count VI: Bad Faith.

Plaintiff alleges that Prime’s conduct in failing to defend and/or indemnify Elite constitutes
Steadroy Williams v Inter-Ocean Insurance Agency, et al: SX 18 CV 27
Memorandum Opinion and Order 

Page 10 of 19

the tort of bad faith, which “evolved in most jurisdictions from the duty of fair dealing and good
faith insurers owe their insured by virtue of an insurance contract.” Justin v. Guardian Ins. Co., 

 (D.V.I 1987) (citation omitted). In that case more than 30 years ago, the District
Court set forth the standard it required to make out a claim for bad faith, putting the parties on
notice of their obligations and duties. “{IJn the Virgin Islands, in order to make out a cause of
action for the tort of bad faith a plaintiff will be required to show: 1) the existence of an insurance
contract between the parties and a breach by the insurer; 2) intentional refusal to pay the claim: 3)
the nonexistence of any reasonably legitimate or arguable reason for the refusal (debatable reason)
either in law or fact; 4) the insurer’s knowledge of the absence of such a debatable reason or 5)
when the plaintiff argues that the intentional failure results from the failure of the insurer to
determine the existence of an arguable basis, the plaintiff must prove the insurer’s intentional
failure to determine the existence of such a debatable reason.” Jd. at 282.

427 As described above, Plaintiff has failed to present evidence of a beach of the Policy by
Prime. Prime did intentionally refuse to defend or pay the claim against Elite for the legitimate
reason that coverage for the claims presented against Elite was specifically subject to exclusion
under the Policy terms. Accordingly, viewing the record in the light most favorable to Plaintiff as
nonmovant, there is no disputed issue of material fact with regard to the Policy exclusions, such
that Plaintiff's claim that Prime acted in bad faith must fail. Prime’s Motion will be granted as to
Count VI.

728 Count VIL Fraud.

Assuming, without deciding, that Plaintiff's Complaint satisfies the pleading requirements
of V.I. R. Civ. P. 9(b) that the circumstances constituting fraud must be stated with particularity,
Plaintiff nonetheless cannot survive summary judgment on this Count. The Complaint alleges that
Defendants intentionally falsely told Elite that the Policy sold to Elite would protect it from all
liability claims. Complaint { 60. As noted above, Prime, as insurer, by statute is not held
responsible for the acts and representations of independent broker Inter-Ocean, not an agent of
Prime. Also, the facts in the summary judgment record contradict the allegations of the Complaint
and have not been challenged by any countervailing presentation of facts. Through its president,
Elite obtained the Policy “with full knowledge of the terms, conditions and exclusions of the Prime
policy.” Harty Affidavit 6. At no time did Elite’s representative seek coverage for
Steadroy Williams v Inter-Ocean insurance Agency, et al; SX 18 CV 27
Memorandum Opinion and Order 

Page 11 of 19

“willful/intentional acts and/or acts of assault and battery,” nor did Elite seek coverage for any
“special needs.” Jd. | 7. The exclusions from coverage were explained to Elite’s president and “he
knew there would be no coverage for any willful/intentional act, assault or battery.” Jd 4 11.
Coverage for risks relating to intentional torts was unavailable in the Virgin Islands for the Policy
in issue as was the case “for the coverage years prior thereto.” Jd. 49. None of these facts in the
record has been challenged by Plaintiff, and those facts are undisputed in the consideration of
Prime’s Motion.

429 The elements of proof required to sustain a common law cause of action for fraudulent
misrepresentation have recently been reviewed in the Superior Court. In Arvidson y. Buchar, the
court set forth six elements that comprise a fraudulent misrepresentation claim in the Virgin
Islands, as follows: 1) a misrepresentation; 2) the defendant’s knowledge or reason to know that
the misrepresentation was false; 3) the defendant’s making the misrepresentation for the purpose
of inducing another to act or to refrain from acting; 4) the plaintiff's justifiable reliance upon the
misrepresentation; and 5) the pecuniary loss or injury 6) caused by justifiably relying upon the
misrepresentation. 

, 358 (V.I. Super. 2019) (adopting Banks’ analysis of Merchants
Commercial Bank v. Oceanside Village, Inc., 64 V.1. 3, 21-22 (V.I. Super. 2015) based upon
RESTATEMENT (SECOND) OF TORTS § 525).

{30 The record here includes uncontradicted proof in support of Prime’s position that it made
no false representations of material fact to Elite. Plaintiff has not presented facts in response to
Prime’s Motion to permit a finding that any misrepresentation regarding the Policy was made by
Prime or an agent of Prime. In fact, Plaintiff does not challenge Prime’s proof that it made no
representations conceming necessary coverage or the Policy to Elite, as all communications
occurred through Inter-Ocean, the independent broker seeking coverage on behalf of Elite.
Without facts in the record disputing that Prime, directly or through an agent, made a
misrepresentation of fact regarding the Policy, Plaintiff's claim fails to establish the first element
of a fraudulent misrepresentation claim and cannot, therefore, survive summary judgment.

Accordingly, Prime’s Motion will be granted as to Count VIL.

731 Count VIII Negligent Misrepresentation.
In his Complaint, Plaintiff alleges that Inter-Ocean misrepresented the Policy coverage, a

misrepresentation that Prime ratified. Complaint J] 68-69. The Complaint does not allege any
Steadroy Williams v Inter-Ocean Insurance Agency, et al: SX 18 CV 27
Memorandum Opinion and Order 

Page 12 of 19

specific misrepresentation, only that Inter-Ocean misrepresented the coverage that Elite was to
receive under the Policy. Jd. 7 68. Virgin Islands courts have held that to state a claim for the tort
of negligent misrepresentation, a plaintiff must allege that: 1) the defendant made a representation
that was false; 2) the defendant should have known the representation to be false; 3) the plaintiff
relied upon the representation; 4) the plaintiff suffered pecuniary loss due to its justifiable reliance
on the representation; and 5) the defendant failed to exercise reasonable care or competence in
obtaining or communicating the information. Addie v, Kjaer, 51 V.1. 507, 511 (D.V.1. 2009) (citing
RESTATEMENT (SECOND) OF Torts § 552). A successful claim of negligent misrepresentation
“requires an express representation which is false or misleading at the time it is made.” Jd. (citing
Charleswell v, Chase Manhattan Bank, N.A., 45 V.1. 495, 521 (D.V.1. 2004) (emphasis in original).
432 The Complaint alleges generally that Elite described to Inter-Ocean its business involving
security operations with no dogs and 20 employees, including five who occasionally provide
armed security services. With that information “of Elite’s Security’s specific needs,” Inter-Ocean
issued the Policy “purporting to provide it coverage and protection from foreseeable security
related claims.” Complaint © 14-15. These allegations are unsupported by any proof in the
summary judgment record and are contradicted by Inter-Ocean’s president: “At no time did [Elite]
ever request insurance from Inter-Ocean that would cover willful/intentional acts and/or acts of
assault and battery.” And Elite sought no coverage for any “special needs.” Harty Affidavit q7.
Even the allegations of the Complaint, unsupported in the record, fail to set forth facts that nter-
Ocean expressly represented that the Policy covered intentional torts of Elite’s employees. Instead,
the Complaint alleges that Inter-Ocean issued the Policy based upon needs of the business as
generally described by Elite.

{33 In addition to the fact that Inter-Ocean acted independently on behalf of Elite and not as
Prime’s agent, Plaintiff has failed to present facts that demonstrate the existence of any genuine
issue of material fact that Prime (or Elite) made an express false representation regarding the scope
of coverage under the Policy. Because Plaintiff has failed to present proof from which a jury could
determine that Prime falsely represented to Elite the scope of coverage under the Policy, he cannot
establish the existence of the first element of the tort of negligent misrepresentation. Plaintiff's

“failure to allege any affirmative, false representations requires that [his] negligent
Steadray Williams v Inter-Ocean Insurance Agency, et al: SX 18 CV 27
Memorandum Opinion and Order 2620 VI Super 89U
Page 13 of 19

misrepresentation claim be dismissed.” Charleswell, 45 V.1. at 521. Prime’s Motion will be
granted as to this Count.

934 Count IX: Estoppel,

The Complaint alleges that Elite relied upon misrepresentations of Prime as to the scope
of coverage to be placed if Elite agreed to purchase the Policy, and appears to allege that the Policy
terms agreed to by Elite cannot be enforced against Elite because Prime had misrepresented those
terms. Complaint $¥ 72-73. Neither party has presented a Banks analysis of a common law estoppel
claim nor is any found in post-Banks Virgin Islands caselaw. In the context of an action for breach
of contract alleging failure to procure insurance, the District Court cited the RESTATEMENT
(SECOND) OF CONTRACTS § 90(1) in Charleswell,> noting that a promise without consideration
may be enforceable against a promisor who should reasonably expect to induce action or
forbearance by a promise, which does induce such action or forbearance, if injustice can be avoided

only by enforcement of the promise.

{35 Here, Plaintiff asserts that Prime is estopped from relying on the specific exclusions from
defense and coverage set out within the Policy provisions on account of the atleged contrary
promises made by Inter-Ocean concerning the scope of coverage. As with all other Counts, since
Plaintiff has not presented proof of direct contacts between Elite and Prime, he depends upon a
finding that Inter-Ocean acted as Prime’s agent, rather than as an independent contractor acting on
behalf of Elite. Additionally, here Elite consummated the insurance contract by accepting the
Policy Plaintiff seeks to invalidate by reason of Elite’s alleged pre-contract reliance upon
representations as to terms that would be included in the Policy.
Promissory estoppel should not be used to supplement or modify a written, enforceable
contract. The doctrine applies in situations where parties failed to satisfy the formal
requirements of contract formation and where justice would be served by enforcing a
promise, Logically, a promissory estoppel claim can proceed only where a contract is
absent. If the court finds that a contract exists, the promissory estoppel claim must fail.

When parties have formed an enforceable contract, relief under a promissory estoppel
claim is unwarranted.

Orthovita, Inc v Erbe, 

, *40-41 (E.D, Pa. 2008) (citations and internal
quotations omitted).

545 VL. at 509-10.
Steadray Williams v Inter-Ocean Insurance Agency, et al; SX (8 CV 27
Memorandum Opinion and Order 2020 Vi Super 89U
Page 14 of 19

436 Though wholly unsupported by the record, if Inter-Ocean had made a promise to Elite,
chargeable to Prime, that the Policy would provide defense and coverage for intentional torts, such
promise is not enforceable against Prime. Prime cannot be deemed obligated on such a promise
because no reliance by Elite could be deemed reasonable where the Policy terms explicitly state
the contrary. Where a contract of insurance issues, the parties are bound by those contract terms,
not by promises or representations in pre-contract communications or negotiations. The
substantive terms of the parties’ ultimate contractual agreement bind each as to benefits and
obligations to which each is entitled and committed, See Charleswell, 45 V.1. at 509; see also First
American Development Group/Carib, LLC v. WestLB AG, 55 V.1. 316, 330 (V.I. Super. 2011). As
the coverage provided by the Policy was explicitly laid out in its terms, Elite was bound by those
undisputed and unambiguous terms. There is no issue of fact in dispute and Prime’s Motion will

be granted as to this Count.

Inter-Ocean’s Motion for Summary Judgment

437 Count: Breach of Contract,

Plaintiff asserts that “Inter-Ocean breached the contract of insurance by failing to pre-
disclose to Elite Security exclusions set forth in the contract that were contrary to the contract Elite
Security had requested.” Complaint 4 20. By its Motion, Inter-Ocean presents evidence that the
terms of the Policy were unchanged and renewed for each year from 2004 through 2010 “with no
changes to the terms, conditions and exclusions.” Harty Affidavit q 3. Further, “information
concerning Exclusions was provided to Mr. Christopher (Elite’s president] at the time he procured
his insurance coverage with Prime through Inter-Ocean, and the Exclusions were explained to him.
As a consequence, he knew there would be no coverage for any willful/intentional act, assault or
battery.” /d. 7 11. “At no time was there ever any agreement that Inter-Ocean would obtain
commercial insurance coverage for Elite’s ‘special needs.” Jd. § 7 Given local insurance
conditions in 2009, “there was no alternative, to either Inter-Ocean or to Elite, to secure insurance
coverage without these exclusions, as no other carriers were issuing commercial policies in the
U.S. Virgin Islands without these exclusions.” Jd, J 10. Upon issuance of the Policy, Elite’s
president signed a Policy Receipt Form, acknowledging, among other things, that “Both [Prime’s]

delivery of the Policy to the broker or agent acting for you and your signature on this form
Steadroy Williams v Inter-Ocean Insurance Agency, et al; SX 18 CV 27
Memorandum Opinion and Order 

Page 15 of 19

separately constitute your express acceptance of the terms and conditions of the Policy.” Motion,
Exhibit D, Policy Receipt Form and Coverage Conditions Summary, Plaintiff has presented no
facts to dispute any of the forgoing.

938 Plaintiff has failed to allege any facts that would allow the Court to find that Inter-Ocean
failed to “pre-disclose” to Elite the Policy provisions or that Prime breached those provisions of
the insurance contract. In light of the undisputed facts in the summary judgment record, viewed in
the light most favorable to Plaintiff as nonmovant, there are no genuine issues of material fact in
dispute concerning the agreed Policy terms, Inter-Ocean is entitled to judgment as a matter of law

on Plaintiff's breach of contract claim, and the Motion will be granted as to this Count.

739 Count II: Breach of Duty of Good Faith and Fair Dealing.

Plaintiff alleges that Inter-Ocean’s conduct in failing to evaluate Elite’s risk and to
recommend and procure an “appropriate policy of insurance” to protect Elite against liability and
from potential lawsuits amount to a breach of Inter-Ocean's contractual duty of good faith and fair
dealing. Complaint €4 23-24. As noted, the undisputed record establishes that the Policy as issued
was a renewal of the same liability coverage originally issued July 23, 2004 and renewed each
succeeding year without changes. Harty Affidavit § 3. Further, Inter-Ocean specifically explained
coverage exclusions to Elite, Elite sought no coverage for needs particular to its business, and no
carrier in the Virgin Islands was willing to offer Elite a commercial policy through Inter-Ocean
that did not exclude intentional torts. Jd. J 7, 10, 11. In light of these facts, Elite could not have
held any reasonable expectation of liability coverage without the exclusions to which Plaintiff
now objects. Plaintiff has failed to present any facts that would allow a finding that Inter-Ocean
breached its duty of good faith and fair dealing with respect to issuance of the Policy, and Inter-
Ocean’s Motion will be granted as to this Count.

140 Count III: Negligence,
Plaintiff alleges that Inter-Ocean negligently failed to recommend and procure adequate

insurance coverage for Elite after being “fully informed of Elite’s specific coverage needs.”
Complaint { 29-30. To the extent that this Count may been seen to properly allege a negligence
claim, rather than a claim sounding in contract, Plaintiff has failed to present evidence required to

demonstrate the existence of an issue of material fact in dispute. Specifically, if Inter-Ocean had a
Steadroy Williams v Inter-Ocean Insurance Agency, et al: SX 18 CV 27
Memorandum Opinion and Order 

Page 16 of 19

duty to exercise reasonable care in its relationship with Elite to procure appropriate liability
coverage, the Affidavit of Inter-Ocean’s president sets forth facts that purport to show that Inter-
Ocean met its duty by explaining coverage exclusions to Elite’s president and assuring through the
Policy Receipt Form that Elite expressly accepted the terms of the Policy as issued. Plaintiff has
presented no facts in support of the Complaint’s allegation that Elite sought specific and particular
coverage for any special needs, which is denied by Inter-Ocean’s proof. Further, the record
evidence remains undisputed, showing that no carrier in the Virgin Islands offered a commercial
liability policy to include coverage for the intentional torts of employees of the insured.

141 Plaintiff has presented no evidence to show that Inter-Ocean breached any duty of care to
Elite, Clearly, Inter-Ocean could not have provided commercial liability coverage including
protection from the intentional tort giving rise to Plaintiff's original Superior Court action, where
such coverage was universally excluded by ali Virgin Islands liability insurers. Because Plaintiff
has failed to provide facts in response to Inter-Ocean’s Motion sufficient to support a claim of
negligence, viewed in the light most favorable to Plaintiff, Inter-Ocean’s Motion will be granted

as to this Count.

£42 Count VI: Bad Faith.

Plaintiff's Complaint equates both Defendants in this Count, alleging Inter-Ocean’s bad
faith conduct “on its own and as agent for Prime Defendants in failing to procure an appropriate
policy for Elite Security, in failing to disclose all relevant exclusions to Elite Security, and failing
to properly evaluate the risk and exposure.” Complaint § 52. As addressed above, the undisputed
facts in the record establish that Inter-Ocean “was acting as your [Elite’s] agent and NOT as our
{Prime’s] agent.” Policy Receipt Form € 4 (emphasis in original). Because Inter-Ocean was not an
insurer, it cannot be liable for the tort of bad faith since the foundational element of such tort is the
existence of an insurance contract between the parties. See Justin v. Guardian Ins. Co., 23 V.1. at
282, Since Inter-Ocean is not an insurer and since there was no contract of insurance coverage
between it and Elite, Plaintiff's allegations against Inter-Ocean as to this Count are misplaced and
Inter-Ocean’s Motion will be granted.

943 «Count VII: Fraud.

Plaintiff alleges that Inter-Ocean’s failure to properly evaluate the risk and exposure to
Steadroy Williams v Inter-Ocean insurance Agency, et al: SX 18 CV 27
Memorandum Opinion and Order 

Page 17 of 19

Elite and the failure procure an appropriate policy to cover Elite from the claims presented in the
tort action by Plaintiff Steadroy Williams constitutes fraud. Complaint { 57. Plaintiff asserts that
Defendants intentionally falsely told Elite that the insurance policy would protect it from all
liability claims. Jd. { 60. The elements of the tort of fraudulent misrepresentation are addressed
above with regard to this same Count alleging liability of Prime. To the extent that the failures of
Inter-Ocean as alleged coutd be deemed sufficient to state a cause of action for fraud, Plaintiff has
failed to offer any factual support to rebut the facts presented with Inter-Ocean’s Motion.

44 Inter-Ocean has provided evidence that Elite received, reviewed and expressly accepted
the terms and conditions of the Policy. Policy Receipt Form § 10. By the uncontested Affidavit of
its president, Inter-Ocean has provided proof that Elite had fult knowledge of the terms, conditions
and exclusions of the Policy; that Elite did not seek coverage for intentional acts of its employees;
or any other special needs. Harty Affidavit 4] 6-7. Further, the intentional tort exclusions from
coverage were explained to Elite’s president and coverage during the policy term in issue was
identical to that provided for the prior several years, which also excluded coverage for risks relating
to intentional torts that was unavailable in the Virgin Islands Jd. £419, 11. On these bases, Plaintiff's

claim for fraud against Inter-Ocean fails and the Motion will be granted as to this Count,

145 Count VIII: Negligent Misrepresentation,
Plaintiff alleges that Inter-Ocean misrepresented, negligently if not fraudulently, the

coverage that Elite Security was to receive under the Policy. Complaint J 68. However, Plaintiff's
allegations are unsupported in the record and Inter-Ocean’s proof in support of its Motion refuting
this allegation is undisputed. Specifically, Inter-Ocean explained the coverage exclusions to Elite’s
president, who sought no special coverage for Elite’s particular business requirements. In addition,
no carrier in the Virgin Islands offered commercial liability coverage without an exclusion for
intentional torts. Harty Affidavit ff 7, 10, 11. As Plaintiff offers no facts to refute the proofs offered
in support of Inter-Ocean’s Motion, the Motion will be granted as to Plaintiff's negligent

misrepresentation Count.

9746 Count IX: Estoppel.

Plaintiff asserts that Elite relied upon the misrepresentations of Defendants Inter-Ocean

and Prime as to the scope of coverage and that, therefore, Defendants were estopped from
Steadroy Williams v Inter-Ocean Insurance Agency, et al: SX 18 CV 27
Memorandum Opinion and Order 

Page 18 of 19

enforcing the provisions of the Policy to deny defense and indemnification in the tort action.
Complaint {J 72-73. As Inter-Ocean did not act as insurer, Plaintiff's estoppe! claim is unrelated
to and misplaced against Inter-Ocean. To the extent that the Complaint seeks to present an estoppel
claim against Inter-Ocean, such claim fails and Inter-Ocean’s Motion will be granted as to this
Count.

147 Statute of Limitations.

In addition to the substantive claims presented by each Defendant’s Motion, both assert
that Plaintiff's claims are barred by the applicable statute of limitations. Defendants claim that the
tort claims presented by Plaintiff's Complaint are barred by the two-year statute of limitations and
Plaintiff's claims sounding in contract are barred by the six-year limitation period, set out in 5
V.1.C. § 31(5)(A) and (3)(A), respectively. The Complaint alleges that Prime notified Elite of its
denial of coverage on April 30, 2010, such that the Complaint in this action should have been filed
as to tort claims not later than April 30, 2012 and as to contract claims not later than April 30,
2016. Plaintiff brings his action as assignee of Elite Security. Elite filed its original Third-Party
Complaint in that action seeking comparable relief to that sought here against the Prime
Defendants and Inter-Ocean on May 19, 2010.

148 Plaintiff has not responded to this argument of Defendants and neither Defendant has
acknowledged Elite’s filing in the tort action or presented any argument whether Plaintiff should
be entitled in this action to have the limitation date equitably tolled to the date that Elite’s Third-
Party Compiaint was filed there, in compliance with the statutory limitations periods. As that issue
is not addressed by the parties and as Plaintiff's claims are all disposed of substantively by the

Motions, the Court declines to rule on Defendant's statute of limitations claims.
CONCLUSION

149 Inreviewing Prime’s Motion to Dismiss, converted to a motion for summary judgment and
Inter-Ocean’s Motion for Summary Judgement, the Court must determine whether there exist
genuine disputes of material facts that would impact the outcome of the case under applicable law,
without weighing the credibility of the evidence offered. Any conflicting allegations, if properly
supported by the record, are resolved in favor of Plaintiff as the nonmoving party and all inferences

from the evidence are drawn in favor of the nonmovant. Each moving party bears the burden of
Steadroy Williams v Inter-Ocean Insurance Agency, et al: SX 18 CV 27
Memorandum Opinion and Order 

Page 19 of 19

demonstrating the absence of any genuine issue of material fact. As set out above as to each Count,
each moving Defendant has satisfied its burden to produce evidence of the absence of material
facts in dispute, while Plaintiff has failed to present affirmative evidence beyond the allegations
of his pleading from which a jury might reasonably return a verdict in his favor. Accordingly, for

the reasons set forth above, it is hereby

ORDERED that Defendants Prime Insurance Syndicate, Inc. and Prime Insurance
Company’s Motion to Dismiss, converted to a motion for summary judgment, is GRANTED, and
all claims against the Prime Defendants as set forth in Count I, Count II, Count 1V, Count V, Count
VI, Count ViI, Count VIII and Count [X are DISMISSED with prejudice. it is further

ORDERED that Defendant Inter-Ocean Insurance Agency, Inc.’s Motion for Summary
Judgment is GRANTED, and all claims against Defendant Inter-Ocean as set forth in Count I,
Count II, Count III, Count VI, Count VII, Count VIII and Count IX are DISMISSED with

prejudice,

, ta:

DATED: October 7” , 2020. LL. Q7~/A,
DOUGLAS A. BRADY/ JUDGE
ATTEST:
TAMARA CHARLES
Clerk of the Court
LEE

By:

Court Clerk Superviser2Z—

oie