SUPERIOR COURT OF THE VIRGIN ISLANDS
DIVISION OF ST CROIX
CLAIRMONT INVESTMENTS, LLC,
PLAINTIFF,
V SX 09 CV 417
Cite as 2020 V 1 Super 061U
MONTPELLIER HOLDING Co , LLC, AND JEFF
TEEL
DEFENDANTS
Appearances ‘
Scot F McChain, Esq
For Plamtzfi”
H A Curt Otto, Esq
For Defendants
MEMORANDUM OPINION
WILLOCKS Presiding Judge
{[1 THIS MATTER is before the Court on the Plaintiff’s Motion for Summary Judgment
(hereinafter ‘Plaintift‘s Motion”) filed May 27 2010 The Defendants filed an ‘Opposition to Motion
for Summary Judgment and Cross Motion for Summary Judgment (hereinafter Defendants
Opposition ) on June 16 2010 The Plaintiff responded with an Opposition to the Cross Motion
(hereinafter ‘ Plaintiff‘s Opposition ’) on June 29, 2010 and a Reply to the Opposition to Motion for
Summary Judgment (hereinafter ‘Plaintiff’ 5 Reply”) on June 30, 2010 The last filing made in this
matter was the Defendants’ Reply to the Opposition to the Cross Motion (hereinafter Defendants’
Reply) on July 9 2010
BACKGROUND
112 Clairmont Investments, LLC (hereinafter Clairmont ) states that Montpellier Holding
Company LLC (hereinafter Montpellier ) borrowed $250 000 (two hundred fifiy thousand dollars)
Wm that both Attorney McChain and Attorney Otto haw “ ithdrawn from this matter
Howet er, there is indication that the Plaintiff is tepresented by Attorney Mark Eckard
Clairmom lmeslments LLC 1 WontpeI/ier Holding Co LLC 2020 V 1 Super 061U
SX 2009 CV 417
Memorandum Opinion
Page 2 of 8
from it on February 13, 2008 and executed a promissory note for repayment of the principal on
February 12 2009 (Mem of Law to Mot I See lnglehart Aff Si 3 ) The promissory note also included
provisions requiring monthly installments of interest to commence on March I, 2009, but these were
allegedly set aside mutually by Clairmont and Montpellier in favor of a requirement for quarterly
payments of 60% (sixty percent) of net rental revenue from Clairmont’s property at the Residences at
Villa Greenleaf (Unit 2B the Clainnont Suite) (Mem of Law at 2 See lnglehart Aff fl 6 7)
Clairmont states that the agreement for a share of rental income (hereinafier the Revenue Agreement ’)
was to remain in effect until full satisfaction of the promissory note and was to be secured by the
exchange of a warranty deed to the Ciairmont Suite at Residences at Villa Greenleaf (Mem of Law
at 2 ) The Revenue Agreement reads as follows
The relevant text of the Revenue Agreement is as follows
By and between Montpellier Holding Col LLC Jeff Teel (MHC) and Clairmont
Investments, LLC (CI) The parties agree to set aside the interest payment provision of
a certain promissory note of the same date and replace it with the following
MHC will pay CI sixty percent (60%) of the net rental revenue of the Clairmont suite
(Unite 2E) at the Residences at Villa Greenleaf MHC will deduct normal operating
expenses to include utilities, taxes grounds and unit maintenance that are properly
apportioned to that unit Payments will be made on a quarterly basis along with a detail
[sic] summary reconciliation
This agreement will be in effect until the payment of the promissory note of even date
has been satisfied It is the intent of the parties to satisfy the payment of such note with
the exchange of a Warranty Deed to Unit 2E Clairmont Suite at the Residences at Villa
Greenleaf at which time the note will be canceled
$13 JeffTeel (hereinafter ‘Teel’ ) executed a Guaranty of Payment of Performance on February 13,
2008 which promised the full and prompt payment of the amounts due under the promissory note (Id
at 1 lnglehart Aff if 4 ) The Guaranty provides that [Teel] agreed to pay all costs and expenses which
may be incurred by [Clairmont] in collection of the Guaranty, including, but not limited to, reasonable
attorneys fees and costs (Mem of Law at 4 )
Clairmont Investments LLC‘ v Montpelher Holding Co LLC 2020 V 1 Super 061U
SX 2009 CV 417
Memorandum Opinion
Page 3 of 8
{[4 According to Clairmont Montpellier did not make any of its quarterly payments and never
delivered a warranty deed to the Clairmont Suite (Id at 3 ) Despite demands for payment, ‘ [t]he
indebtedness was not paid promptly or at maturity on February 12 2009 or otherwise or at all
(Id See Inglehart Aff ii 10 ) On September 1 2009 Clairmont notified Teel of Montpellier s default
and demanded payment of the principal sum, plus interest but was denied (Mem of Law at 4 )
{is Clairmont argues that there are no genuine disputes that it is entitled to relief because the
Revenue Agreement ‘clearly did not amend the due date of the Note or the repayment provisions,
which require payment on February 12, 2009, ofthe principal sum of$250,000 ’ (1d at 6 ) ‘Therefore,
[Montpeliier] and [Teel] are liable to [Clairmont] for the outstanding debt, unpaid net rental revenues,
costs and fees associated with this matter ”(Id 6 )
116 Montpellier and Teel state that renting the Clairmont suite has produced no net rental revenue
(Opp n 3 ) The Defendants aiso allege that the Revenue Agreement is unambiguous that “[i]t allows
for the continued payment of the promissory note by payment of net income from the [Clairmont suite]
until there is an exchange of a warranty deed to Unit 2E Clairmont Suite at the Residences at Villa
Greenleaf, at which time there would be cancellation of the note ” (Id) In other words, ‘the loan will
be paid by exchange of the deed, thereby fully modifying the terms of the note ’ (Id at 6, citation
omitted)
{[7 As to the warranty deed, the Defendants state that it has not been possible to obtain the
financing to remove the two mortgages that underlie the property at issue ” (Id at 4 ) They state that
Clairmont Investments, LLC was apprised of the mortgages, and understood full and well that there
existed the underlying mortgages and that it would be necessary to obtain a release of that portion of
the property relating to the proposed condominium unit, and without that, there could be no transfer
(Id) The Defendants assert that Teel, working on behalf of Montpellier, is working in good faith to
have the mortgages released, but the failure to make progress is not breach (Id)
Clairmont Investments LLC v Montpelliei Holding Co LLC 2020 V 1 Super 06iU
SX 2009 CV 417
Memorandum Opinion
Page 4 of 8
118 The Defendants also argue that summary judgment is inappropriate because discovery has not
been conducted (or rather, had not been completed at the time the Plaintiff’s Motion was filed), and
discovery would assist the Court if it found the Revenue Agreement to be ambiguous (Id at 7 )
1i9 In the Plaintiff 8 Opposition Clairmont contests the Defendants’ interpretation of the Revenue
Agreement According to Clairmont the Defendants have asserted that the note will not be satisfied
until the deed is exchanged and that the exchange constitutes payment ofthe loan but Clairmont argues
that the Revenue Agreement ‘does not contain either ofthese provisions as alleged by the Defendants
(Pl ’3 Opp n 4) The language of the Revenue Agreement states that it replaces the provision that
requires the payment of interest with payments of quarterly net rental revenue and does not amend the
other contract terms such as the maturity date of the note or the payment of the principal $250 000
(Id ) Clairmont’s interpretation is that the promissory note would be satisfied if a warranty deed was
provided, (10') which it has not
1110 Clairmont also points out that the Defendants interpretation is flawed because if true, ‘this
would result in there being absolutely no maturity date for the Note and absolutely no requirement that
the funds loaned by the Plaintiff would ever need to be repaid by the Defendants,’ which could not
have been the intention (1d at 5, emphasis removed) Clairmont maintains that if it had been the
parties’ intent to fully modify the contract, such an intent would have been clearly stated in the Revenue
Agreement As support, Clairmont provides correspondence with Teel from after the maturity of the
promissory note, wherein Teel requests an extension on the note and payments ofone thousand dollars
each month and discusses the money owed to Clairmont Clairmont alleges that these emails are proof
that Teel was aware of his obligation to repay the note (Id at 5 6 )
1111 Clairmont further argues that this summary judgment can proceed without complete discovery
because the contractual provisions are clear and unambiguous (Pl ’5 Reply at l 2) Additionally,
Clairmont asserts that the only fact really disputed by Teel in his affidavit provided with the
Defendants Opposition is related to the amount of rental income Clairmont concedes that this point
Clairmom Investments LLC v Montpellrei Holding Co LLC 2020 V I Super O61U
SX 2009 CV 417
Memorandum Opinion
Page 5 of 8
is not ready for summary judgment but notes that the affidavit did not otherwise dispute the facts
because the assertion that the terms of the contract were fully modified is conclusory (Id at 2 5 )
STANDARD OF LAW
1112 When parties enter into multiple written agreements relating to the same subject matter
as part of the same transaction, courts consider the meaning of each document and the
surrounding circumstances to determine the parties’ intent Contract interpretation, that
is ascertaining the meaning of contractuai language, involves mixed questions of law
and fact If a contract is unambiguous, ‘the meaning of its terms is a question of law ”
If however a contract is ambiguous and extrinsic evidence offered in support of
interpretation is disputed the meaning of the contract 3 terms is a question of fact
To determine whether a contract is ambiguous we resort to principles of contract
interpretation, keeping in mind that our primary purpose is to ascertain and give effect
to the parties’ objective intent
Phillip t Marsh Monsanto 66 V I 612 624 25 (V I Sup 2017) (citations and internal brackets
omitted)
1113 A determination about ambiguity does not depend only on the clarity of the language used but
also on extrinsic evidence in support of each party’s interpretation White v Spenceley Realty LLC,
53 V I 666 (V I 2010) (quoting Teamsters Indus Employees Welfare Fund v Rolls Royce Motor
Cars Inc 989 F 2d 132 135 (3d Cir 1993) Extrinsic evidence to be considered may include each
party 5 conduct if it indicates their understanding of the contract’s meaning thte, 53 V I at 678
(citing CAT Aircraft Leasmg Inc v Cessna Aircraft Co 22 V I 442 (D VI 1986) ‘Where the
language of a contract is clear and unambiguous, the parties intent must be derived from the plain
meaning of its terms ” Phillip, 66 V 1 at 625
{[14 Further, the Court may grant summary judgment pursuant to Rule 56 of the Virgin Islands
Rules of Civil Procedure V IR Civ P 56 ‘Summary judgment is a drastic remedy ’ [and] is only
appropriate where the pleadings, the discovery, and disclosure materials on file, and any affidavits
show that there is no genuine issue as to any material fact and that the movant is entitled to judgment
as a matter of law Anthony v FtrstBank Virgzn Islands 58 VI 224, 228 (Sup Ct 2013) (citing
Willzamsv United Corp 50V] 191 194 (Sup Ct 2008)
Gunman! Imeslmenls LLCt Montpellier Holding Co LLC 2020 V 1 Super 061U
SX 2009 CV 417
Memorandum Opinion
Page 6 of 8
DISCUSSION
1 There is no genuine dispute of fact that the Defendants are indebted to the Plaintiff
$250,000 in principal, plus quarterly net revenue
1115 In this case, the primary question is whether the Revenue Agreement is ambiguous The Court
has reviewed the language used in the Revenue Agreement and the parties’ extrinsic conduct and now
finds that it is unambiguous The Revenue Agreement clearly evinces the parties’ intent to set aside
the interest payment provision and replace it ” This statement is unambiguous and the Court applies
the plain meaning of the words the Revenue Agreement modifies and replaces the provisions of the
promissory note that required Montpeliier to pay interest after the payment of the principal
1116 The Revenue Agreement then says that Montpellier ‘will pay sixty percent (60%) of the net
rental revenue Here the use of the word ‘will’ plainly indicates a future obligation Though
historically the word shall’ has perhaps been more common in contract to denote a legal obligation,
the use of the word “will” is not problematic This is because the context of the sentence regarding
payment of the net rental revenue supports the creation of an obligation, as does the Revenue
Agreement’s attachment to the promissory note
1117 The meaning of net rental revenue’ also requires only its plain meaning whatever income is
received after the subtraction of associated expenses The parties have specified that this amount to be
deducted is the ‘normal operating expenses which is utilities taxes grounds and unit
maintenance The Court notes a distinction between the word ‘including,’ which would typically
indicate a non exhaustive list, and the parties’ use of the phrase ‘to include,” which considered in
context indicates a closed list of specific items
{[18 Furthermore, [p]ayments will be made on a quarterly basis ” This means that the net rental
revenue is to be paid to Clairmont four times per year, in a manner following the standard calendar
quarters as widely understood in business and society The parties then express a duration for the
agreement to pay net rental revenue by stating that it will be in effect until the payment of the
Clan mom Investments LLC 1 Wontpellter Holding Co LLC 2020 V I Super 06lU
SX 2009 CV 41']
Memorandum Opinion
Page 7 of 8
promissory note has been satisfied ” This means that quarterly payments will continue until the entire
note is deemed satisfied within the meaning of the complete agreement
1119 The parties also give meaning to the term ‘ satisfied” in the remaining portion of the Revenue
Agreement it is their intent to satisfy the payment of such note with the exchange of a Warranty
Deed at which time the note will be canceled ” Here, Montpellier has asserted that the provision
means there is no requirement to pay the principal amount because the warranty deed is the new means
of complete payment Clairmont argues that the provision regarding payment of the principal remains
unchanged In order to make a proper determination regarding ambiguity, the Court has examined
extrinsic evidence including the parties conduct and concluded that there are no latent ambiguities
$120 In support of this determination is the fact that the Revenue Agreement ciearly and
unambiguously states that its scope is to replace the interest provision of the promissory note Taking
the contract as a whole, including the promissory note it is possible that the parties intended to modify
all the terms of payment by adding a clause to the Revenue Agreement, but this is very unlikely The
parties specifically stated that the interest provision of the note was being replaced but did not state
that the other terms were being modified and did not otherwise indicate an intent to redraft the terms
of the note As Clairmont points out, those specifications could easily have been made if they were
intended Additionally Montpellier s interpretation would mean that Clairmont might never be repaid
in any form This is especially true if as the Defendants claim, the property is not producing any net
rental revenue and they are continually unable to execute a warranty deed despite acting in good faith
to do so In considering the intent of the parties at the time of contracting, the Court doubts that
Clairmont intended to give Montpellier $250 000 without assurance of repayment That is, afier all,
the purpose of a promissory note Moreover Clairmont has provided exhibits indicating that Jeff Tee]
understands the note and Revenue Agreement to require payment of cash, as opposed to only the deed,
to satisfy the Defendants’ obligations
Claitmon! Investments LLC‘ 1 Montpe/lier Holding Co LLC‘ 2020 V I Super 061U
SX 2009 CV 417
Memorandum Opinion
Page 8 of 8
{[21 In light of all the circumstances, the Court must find in favor Clairmont using the common
sense and plainest interpretation of the Revenue Agreement The warranty deed provision can only be
interpreted to mean that, after the principal is repaid and/or in addition thereto, Clairmont is entitled to
revenue payments (replacing the interest payments) until Montpellier gives Clairmont a warranty deed
to the subject property At the time the deed is given to Clairmont, Montpellier’s obligation to pay
rental revenue is extinguished because the note will be fully satisfied To this end, there is no genuine
dispute of fact that Clairmont is owed the principal due under the promissory note, plus quarterly
payments of net rental revenue (minus normal operating expenses) The quarterly payments must
continue until the deed is delivered
CONCLUSION
1122 In sum the materials on file demonstrate that there is no genuine dispute of fact that Clairmont
Investments is owed $250,000 in principal under the promissory note executed by the Defendants
Clairmont is also entitled to quarterly net revenue payments from the rental of the Clairmont Suite, as
stated in the Revenue Agreement, to continue until such time as the Defendants deliver a warranty
deed to the property to Clairmont The Court will grant summary judgment and award attorney fees to
Clairmont Accordingly, it is hereby
ORDERED that Clairmont Investments LLC 5 Motion for Summary Judgment is
GRANTED The Court will issue the judgment in a separate document
MA
DONE and so ORDERED this 269 day of May 2020
ATTEST pig/J; i/éc g 7/”W
Tamara Charles HAROLD W L WILLOCKS
Clerk of the Court Presiding Judge of the Superior Court
‘
41.3) EMA-v ’
Coupervisor
Dated .74" JD
SUPERIOR COURT OF THE VIRGIN ISLANDS
DIVISION OF ST CROIX
CLAIRMONT INVESTMENTS LLC
PLAINTIFF,
V SX 09 CV 417
MONTPELLIER HOLDING COMPANY
LLC AND JEFF TEEL
DEFENDANTS
ORDER
AND NOW in accordance with the Judgment of even date, it is hereby
ORDERED that this case be CLOSED The Court will retain jurisdiction over the matter for
sixty (60) days to allow the parties to make any necessary filings
DONE and so ORDERED this Qwfiy of May 2020
ATTEST L ’/ flJ76 7
Tamara Charles HAROLD W L WILLOC
Clerk of the Court Presiding Judge of the Superior Court
By «I.» ’W
Co w ervi or
Dated I 171/JO