Gel] tog



id



IN THE TERRITORIAL COURT OF )THE VIRGIN ISLANDS

DIVISION OF ST. THOMAS AND ST. JOHN



AGNES SEBASTIAN,



Plaintiff,

CIVIL NO. 1074/1984

vs.

ACTION FOR DECLARATORY

ESTATE OF URMAN FREDERICKS, RELIEF



. Defendant.



Nee Nee Nee Neel Se See Se ee



Ee Te ea



MEMORANDUM AND JUDGMENT

Dated June 25, 1986



CHRISTIAN, Alphonso A.’

Senior Sitting Judge -



The question before us is whether a renter of land for the

first time in 1972 at a monthly rent not in excess of $175.00 to

build a superficiary house or houses, who raised the rent without

the approval of the Rent Control Officer pursuant to 28 V.I.C.

Sections 836 et seq, may be sanctioned as provided by Section

844 id. For the reasons set forth below, we hold he may not,

and require the tenant to pay all legal rent accrued and unpaid



to the date of removal from the premises.



I. THE FACTS

In September, 1972, Plaintiff£ rented from Urman Fredericks,

1/ :

Deceased (hereafter "Deceased"), a parcel of his land situate at



Estate Nadir #44 to build a superficiary (plywood) house at a



1

Urman Fredericks died on April 26, 1974.

| instances without the approval of t



_ SEBASTIAN vs. ESTATE OF FREDERICKS

CIVIL NO. 1074/1984

MEMORANDUM AND JUDGMENT ~- PAGE 2



monthly rent of $40.00. In) May, 1974,.\Deceased raised the rent



_to $50.00 a month, and in 1980 to ie a month, in both



@ IRent Control Officer. Upon

1



removal from the premises in 1984, Plaintiff contends that



Defendant, now the estate of Urman Fredericks, Deceased, should



be penalized as provided by 28 V.I.C. Section 844--that the estate



should be required to pay ''double damages predicated on the

2/

illegal overpayment made to Defendant.''



1 The points briefed by| the parties centered on whether the



Court lacked jurisdiction to consider] the case for the reason

that Plaintiff failed to exhaust her administrative remedies;

which of several general statutes of limitation prescribed in



5 V.I.C. Section 31 should govern a claim predicated on 28 V.I.C.

Section 844(a) since no special limitation was prescribed; and



whether the prosecution of the action should not be barred by



the application of the equitable defense of laches.



| 2



In her Amended Complaint, as she did in her original Complaint,

Plaintiff also prayed the Court to "declare Plaintiff's interest

| in the house she constructed on the rented premises or

in the alternative enter an Order requiring Defendant to pay

|Plaintiff the reasonable value of the house built on the

| parcel. Any claim Defendant contemplated or made in this connec-

| tion was stipulated by the parties to be filed in the probate

|proceeding (Probate No. 86/1984), and rejected by the Adminis-

| trator pursuant to 15 V.I.C. Section 391 et seq. At a hearing

|held by the Court on April 30, 1986, on appeal from the Adminis-



| trator's rejection of the claim, the Court affirmed the decision



of the Administrator and directed the parties to brief the rent

control question we now decide in this Opinion.

SEBASTIAN vs. ESTATE OF FREDERICKS

CIVIL NO. 1074/1984 | a]



MEMORANDUM AND JUDGMENT - ir 3 Nal

1 Ane

Wi is.

Il.

A.  - APPLICABILITY OF RENT CONTROL LAW TO THE CASE*



Maximum rents are prescribed in 28 V.I.C. Section 834(1)

for housing accommodations, which by the definitions provided

in Section 831 id. include "land rented for the location of

superficiary houses," in which case the maximum rent which may

be charged is the rent in force and i on July 1, 1947. The

rent we deal with here ‘was not in force and effect on July l,

1947. Subsection (2) of Section 834 id. prescribes maximum rents

chargeable for land on which superficiary houses are constructed,

again, which were in force and effect on July 1, 1947. This

ceiling, also, is inapplicable to the land in question here as

it was rented for the first time in 1972. The wording of Sub-

division (3) of Section 834 id. clearly is intended to deal with

housing and business accommodations which are improvements on

the land and not just vacant land as is the case here. And



Subdivision (4) of Section 834 id prescribes as the maximum rent



the last rent in force and effect prior to July 1, 1947. We



hold that the case before us involves land rented for the construc+



tion of a superficiary house which does not fall within the

language of any of the four maximum rent ceilings set forth in

28 V.I.C. Section 834. Rent control laws being in derogation

of the common law and common law rights should be strictly



construed. See U.S.--Russick v. Hicks, D.C. Mich., 85 F.Supp.



281~--Grimes Packing Co. v. Hynes, D.C. Alaska, 67 F.Supp. 43,



affirmed, C.C.A., 165 F.2d 323, vacated on other grounds 69 S.Ct.



*This issue is addressed by the Court sua sponte.

| SEBASTIAN vs. ESTATE OF FREDERICKS

{CIVIL NO. 1074/1984



| MEMORANDUM AND JUDGMENT - PAGE 4

i Me

968, 337 U.S. 86, 93 L.Ed.|/1231.



Where strict construction is applicable, all doubts should



| be resolved in favor of the construction of pre-existing common

|



|law rights. Here the common law rights of the parties are



||} governed by the rent asked, consented to, and paid by the



tenant for many years.



| , IL

B. - NEED TO EXHAUST ADMINISTRATIVE REMEDIES

BEFORE SEEKING JUDICIAL RELIEF



Defendant contends that before Plaintiff may seek judicial

relief, it must first exhaust the administrative remedies

provided in this case by 28 V.1I.C. Sections 832 et seq. We

disagree. This is true in the ordinary case where such action is



made a condition precedent to invoking the aid of the courts.



put Plaintiff's case is grounded on 28 V.I.C. Section 844 which



reads in pertinent part:



(a) If any landlord receives rent in viola-

tion of any provisions of this subchapter,



1] or of any regulation or order thereunder



i prescribing a rent ceiling, the tenant paying

| such rent or the Rent Control Officer on be-

half of such tenant may bring an action for

| double the amount by which the rent paid

exceeds the applicable rent ceiling or for

$50 whichever is greater, plus attorney's



| fees and costs as determined by the Court.

funderscoring ours].



i

!

|

|

|

t



Clearly, the aggrieved tenant may bring his or her action if the



taken at the end of the administrative route. Since the right to



commence court action is framed and given in the disjunctive,



landlord receives rent in violation either of the statute or action

MEMORANDUM AND JUDGMENT - PAGE 5 j



SEBASTIAN vs. ESTATE OF FREDERICKS

CIVIT, NO. 1074/1984



Plaintiff may bring his action if either or both, not necessarily

both, conditions exist. In this case Plaintiff is basing her

action on the condition that rent was received in violation of

the ceilings prescribed in the statute at 28 V.I.C. Section 834.

Her complaint is legally sufficient. She does not have to



allege prior exhausting of administrative remedies.



Il.



°



C. - THE APPLICABLE STATUTE OF LIMITATIONS



Since the statute does not Pra de any special statute of

limitations applicable to a case based on 28 V.I.C. Section 844,

the parties presented their respective positions on which of the

general statutes of limitation encoded at 5 V.I.C. Section 31 is

applicable to the case. Plaintiff contends that the six-year



general statute of limitation provided at 5 V.1I.C. Section 31(3)(B)



| should govern the case for the reason that this statute applies to

liability for damages only created by statute, and not to penalties

| or forfeitures. She bases her contention on Turbe vs. Ellick,



| 12 V.1. 457, 459 (Mun. Ct. 1976), wherein she argues "the court



characterized the remedy envisaged in 28 V.I.C. Section 844(a) as

one for ‘double damages', and involves no penalties or forfeitures,



But Defendant estate contends that since the case does not invoive



/a common-law right, an action upon a contract, or an action to

/ recover real property, but is an action upon a statute for a



| penalty or forfeiture, where the action is given to the party



aggrieved, or to such party and the Government of the Virgin

SEBASTIAN vs. ESTATE OF FREDERICKS



CIVIL NCQ. 1074/1984



MEMORANDUM AND JUDGMENT - PAGE 6 _



Islands, except where the statute prescribing it provides a

1 Ah



different limitation, the general statute of limitation which

should govern the rights of the parties is the three-year limita-



tion provided at 5 V.I.C. Section 31(4)(B), or the two-year



limitation provided at 5 V.I.C. Section 31(5)(B), an action upon

a statute for a forfeiture or penalty only.



A careful reading and comparative analysis of all three

limitations referred to above and contended for by the parties

make it very EN? that the only correct limitation applicable to

the case is 5 V.I.C. Section 31(4)(B), the three-year general

|



statute of limitation. We find no duplication in the several

limitations enacted at 5 V.I.C. Section 31.

28 V.I.C. Section 844(a) on which Plaintiff's action is



based provides both a civil remedy and a civil penalty. As such



it is at once remedial and penal, although providing only a civil |



aS distinguished from a criminal penalty as does subsection



844(b). To the extent that 844(a) provides that the overcharging

landlord must repay to the victimized tenant the amount by which

he has overcharged the tenant, so as to make him whole, the

relief provided by 844(a) is remedial, provides for the payment

of damages suffered by the tenant. To the extent that 844(a)

requires the offending landlord to pay the rent overcharged a

second time, the statute is penal, although the penalty is a

civil and not a criminal one. Since 5 V.I.C. Section 31(3)(B)

provides an action upon a liability created by statute, "other



than a penalty," civil or criminal, this limitation is inapplicabl



=f



to 28 V.I.C. Section 844(a).

SEBASTIAN vs. ESTATE OF FREDERICKS



CIVTl, NO. 1074/1984

MEMORANDUM AND JUDGMENT - PAGE 7



We do not agree with Ria tot Sie that Turbe v. Ellick supra



throws any light on the issue presented to be decided by the facts

of this case. | | i |

Turning now to limitations (4)(B) and (5)(B), we are satisfie

that only (4)(B), the three-year limitation is applicable to the

facts of this case because that is the only limitation (a)

presented in an action upon a statute for a penalty; ne where



the action is given to the party aggrieved; or (c) to such party



and the Government of’the Virgin Islands; and (d) where the

statute giving the action,| 28 V.I.C, Section 844(/2), does not

prescribe a different limitation. ©n the other hand, 5 V.I.C.

Section 31(5)(B), prescribing the two-year limitation is also an

action on a statute for a forfeiture or a penalty as is 5 V.I.C.

Section 31(4)(B), but here the action is not given to the party

aggrieved “or to such party and the Government of the Virgin

Islands", in this case the Rent Control Officer, on behalf of the

agerieved tenant. We are satisfied that this difference in the



provisions of these two limitations is a sufficient basis to



determine which of these two limitations is applicable to the



case before us.



IT.

D. - LACHES

Defendant also contends that Plaintiff's suit should be



barred by application of the equitable doctrine of laches. The



estate contends to force it to go back at least six years and

SEBASTIAN vs. ESTATE OF FREDERICKS

CIVIL NO. 1074/1984

MEMORANDUM AND ORDER ~ PAGE 8



justify a $10.00 and a $25.00 rent increase is forcing it to do



; the impossible, particularily in this case in which} children of



the deceased are trying to manage the property of their deceased



father without assistance; that for the Court to require them to



do this would unduly penalize them for Plaintiff's inexcusable

delay in asserting her rights, if any.



In the case of Benoit vs. Panthaky, Legullou, Daniel and

Government of the V. I, (Dec. 30, fons eee ran of Appeals

for the Third Circuit stated " w hether laches should be used to



bar an action is a question directed jto the sound ‘discretion of



the trial court, citing Burnett v. New York Railroad Co., 380



U.S. 424, 435(1965)...The elements of the defense of laches are



(1) lack of diligence by the party against whom the defense is



i}

I}

\

|

\|

if

I}



asserted, and (2) prejudice to the party asserting the defense",

citing EEOC v. Great Atlantic and Pacific Tea Co., 735 F.2d 69,

80 (3rd. Cir. 1984) which in turn cited Costello v. United

States, 365 U.S. 265, 282(1961).



In her brief, Plaintiff does not address this defense of

the estate. However, in the fact portion on page one thereof

she admits that from May of 1974 the rent was increased from

$40.00 to $50.00 a month; that this increase of $10.00 a month



continued from May 1974 to February 1980; that the rent was



| again increased in February 1980 from $50.00 to $75.00 a month;



3

Appeal from D.C.V.I. Civ. No. 84-0174 Ca. 3d. Civ. No. 85-3328.

SEBASTIAN vs. ESTATE OF FREDERICKS

CIVIL NO. 1074/1984 |



MEMORANDUM AND JUDGMENT - |PAGE 9 NG



it

|

if) at



and that this second increase) | coneeatad until Po aah left the



hed



"

7 |



premises in 1984.



During all of the ten-year period that the alleged unlawful

increase in the rent existed, it is undisputed that Plaintiff

took no legal action to obtain relief by virtue of 28 V.I.C.

Section 844, or otherwise. |



We hold that the two-prong test laid down by the Court of

Appeals in Benoit has been fulfilled by the facts of this case.

As this Court held in Watlington SN ton, 18 V.Ir, 203, relief

should be denied Plaintiff because she has delayed unduly in

asserting her rights to the prejudice of the Defendant. In the

ten-year period intervening, material witnesses have died or

become difficult to locate, records have disappeared, since

Plaintiff never complained about the small increases Defendant

has been led to its detriment to believe that there was full



acceptance of these small increases in the rent over a period of



escalating taxes, inflation and other costs.



Il.



E. - DEFENDANT'S COUNTERCLAIM



At a hearing held on June 13, 1986, Defendant estate men-

tioned to the Court she had filed a Counterclaim in the case.

When told the Court did not note the existence of any such

pleading, counsel for Defendant informed the Court that she was



referring to a claim of Defendant estate for unpaid rent for



October, 1984. through January, 1986, when Plaintiff vacated the

SEBASTIAN vs. ESTATE OF FREDERICKS

CIVIL NO. 1074/1984

MEMORANDUM AND JUDGMENT - PAGE 10



*



| 4



premises, 16) months/at/i$7/O0)al month!) $1200! 00,\which| she

included as paragraph 3 in the Rejection of Claim of Agnes |

Sebastian by the administrator of the estate, dated and filed

April 29, 1986. When Plaintiff objected to the extreme infor-



mality of this pleading, the Court granted Defendant estate



until Friday, June 20, 1986, to file its Counterclaim in proper

form. On June 23, 1986, the estate instead of filing a counter-

claim for cnpaia rent in the amount of $1,200.00 as originally

claimed, filed a three-part counterclaim. Although Plaintiff |

was ordered off the premises by the Court in January, and the

Counterclaim for rent filed originally ran to January, the formal

Counterclaim claims rent through June, 1986, on the ground that

Plaintiff still has certain debris on the premises and therefore

technically has not moved from the premises. The Court sees no



merit in this argument. The Court considers the Plaintiff as



having vacated the premises and having no rights thereon as of



January, 1986. While it was the duty of the Plaintiff to remove :

the house, having failed to do so within a reasonable time, she

thereby relinquished her ownership of the house to the owner of

the land upon which it was left, and the estate may now deal with

the house in any way it sees fit without incurring any obligation

to account to the Plaintiff, the former owner, for its value, use

or destruction. Nicholson v. Altona Corporation 4 V.I. 478.

Nowhere in Nicholson does it appear that if the owner fails to

remove the house the owner of the land may bill him the cost of



removal from the land; the penalty for the failure of the owner



to remove the structure is the loss of the structure. We will

SEBASTIAN vs. ESTATE OF FREDERICKS



CIVIL NO. 1074/1984



MEMORANDUM AND JUDGMENT - PAGE 11



therefore deny recovery of rent for any period after January, |

1986. For the same reason we will deny Defendant's afterthought,

oh-yes-I-~just-remembered, second Counterclaim of $4,000.00

for removal of the superficiary house from the property. When in |

1972 Defendant rented the land to Plaintiff to build a superfi-

ciary house, Nicholson, decided on June 20, 1963, was already the |

law of the land. Therefore, Defendant cannot say it was unaware

of the fact that it might have a building built by the renter of

the land on its hands, to keep as its property or to remove at



its expense if it elected not to retain the structure as its own.

Furthermore, Defendant saw the type of building constructed on



the land without objection.



As to Defendant's third counterclaim for costs and attorney's

fees, this case arose out of a case for forcible entry and

detainer, Civil No. 492/1985, started by the estate. 28 V.I.C.

Sec. 751 et seq. In that type of case we are prohibited from

awarding fees and) costs. Sec. 794 id. An award of costs as

defined in 5 V.I.C; Rection 541 et sechlies in the discretion of

the Court. We are satisfied from the convoluted route this case

and the related proceedings between the parties have taken, that

it would be an abuse of discretion to grant costs in any of the

actions in which it may be legally granted. While the Court is

of the opinion that the rent control law does not apply to the

land in question neers is no| dispute between the parties that

they agreed that the rent should be at least $40.00 a month. The



dispute centers only’ on the $10.00 and $25.00 a month increase.

i ’ oer ‘Py aaN if



| Lit

SEBASTIAN vs. ESTATE OF PHEDERICKS || |

CIVIL NO. 1074/1984 Wi i

OPINION AND ORDER - PAGE 12 nif



Since Plaintiff has had the expense of moving herisupered cians

structure from the land, and did incur this expense at least in

part, the Court will not require her to pay the disputed amount

of $35.00 per month for the 16 months. She will be ordered to

pay only $40.00 a month fdr the period October, 1984, through

January, 1986, a total of $640.00 instead of $1,200.00.

Leth |

III.



CONCLUSION



We are of the opinion that the rent control law does not

apply to the land involved in the action sub judice. But even

if it does apply, we hold that no exhausting of administrative

remedies is required to enable the Plaintiff to seek judicial

relief; that the applicable statute of limitations is 5 V.I.C.

Section 31(4)(B); that Plaintiff's action is barred by applica-

tion of the equitable doctrine of laches; that Defendant may

recover on its counterclaim only the sum of $640.00 for rent

unpaid to the date of removal in January, 1986; and that each



party shall bear its own costs and attorney's fees.



DATED: JUNE wh , 1986.



QO. Wharwetrua

j ALPHONSO A. CHRISTIAN,

CERTIFIED AINE Gopy



Dated



lola E. Sri



th

Administrator / Clerk of the Court

BY ee



Mat 7 Depity F