IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS

DIVISION OF ST. THOMAS AND ST. JOHN



GREAT ST. JIM, LLC, and LSJE, LLC,



)

)

Plaintiffs, ) CASE NO. ST-19-CV-57

vs. )

)

PROSOLAR SYSTEMS, LLC, ) ACTION FOR BREACH

) OF CONTRACT AND

Defendant, ) FRAUD

)



Cite as 2020 VI Super 25U



MEMORANDUM OPINION



{1 THIS MATTER is before the Court on Defendant ProSolar Systems, LLC

(hereinafter “ProSolar”)’s Motion to Dismiss Count II of Plaintiff's Complaint, filed

on April 2, 2019 pursuant to the gist of the action doctrine and Virgin Islands Rules

of Civil Procedure 9(b) and 12(b)6. Plaintiffs, Great St. Jim, LLC and LSJE, LLC

(together “GSJ”), oppose the Motion.! For the reasons set forth herein the Motion will

be denied.



{2 In support of its Motion, ProSolar argues that 1)GSJ is “disguising a contract

claim as a tort claim in contradiction of the gist of the action doctrine,” and 2) GSJ

has “failed to plead fraud with the requisite particularity required by V.I. R. Civ. P.



9(b).” For these reasons, ProSolar argues that Count II of GSJ’s complaint should be



1 The motion is fully briefed.









Great St. Jim, LLC v. ProSolar System



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Master Company, LLC No. 2-17-17, 2018 WL 1193010 at *3 (D.V.I. Mar. 7, 2018)

(quoting Holst v. Oxman, 290 Fed. Appx. 508, 510 (3d Cir. 2008) (quoting Lum v. Bank

of Am., 361 F.3d 217, 224 (3d Cir. 2004))). The Court acknowledges that the Third

Circuit’s finding is in no way binding on this Court.? However, since Virgin Islands

courts have yet to establish a test by which the factual particularity of a complaint

for fraud is evaluated—at least under a notice pleading standard—this Court will

apply a heightened level of specificity similar to the Third Circuit and evaluate the

facts alleged in GSJ’s complaint accordingly. Importantly, this does not mean that

the Court is establishing a conjunctive test akin to that of the Third Circuit that

requires complaints for fraud to definitively state the date, place or time of the fraud,

the person or entity that made a misrepresentation, and the general content of the

misrepresentation. To require complaints for fraud to allege these exact facts (e.g.,

date, place, time) would be to demand more than is appropriate and required in a



notice pleading jurisdiction, !° especially since nothing in the text of V.I. R. Civ. P. 9(b)



9 Third Circuit decisions are only binding on the Superior Court when such decisions “can be traced to

a case where the Third Circuit had exercised its power as the final arbiter of Virgin Islands local] law.”

Najawicz v. People, 58 V.I. 315, 328 (V.I. 2013) (footnote omitted) (collecting cases); see also

Government of the Virgin Islands v. Connor, 60 V.I. 597, 606 n. 1 (V.I. 2014) (citation omitted)

(“Superior Court should treat decisions of the United States Court of Appeals for the Third Circuit. . .

as binding precedent with respect to issues of local law.”). Third Circuit cases “are merely persuasive

authority if the case was before that court on appeal from ... the District Court of the Virgin Islands

sitting as a federal trial court.” Ernest v. Morris, 64 V.I. 627, 630 (V.I. 2016). However, the Third

Circuit’s standard in Lum v. Bank of America originated in New Jersey and is not a in case that can

be traced to the Virgin Islands.



10 Such requirements are more appropriate in federal courts in which the more rigorous plausibility

standard applies.

Great St. Jim, LLC v. ProSolar System



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states that the date, place, and time are required.!! Rather, V.I. R. Civ. P. 9(b)

requires the plaintiff to allege facts with sufficient specificity to put the defendant on

notice of the plaintiffs claim. The Court finds that a complaint that alleges sufficient



factual specificity satisfies V.I. R. Civ. P. 9(b) heightened requirement for claims of



fraud.!2



B. Count II Satisfies the Pleading Requirement under V.I. R. Civ. P. 9(b)

{11 ProSolar argues that Count II of GSJ’s complaint should be dismissed because

it fails to satisfy the heightened pleading requirement. The Parties agree that if V.I.

R. Civ. P. 9(b) is the appropriate standard by which to evaluate GSJ’s complaint, then

GSJ’s complaint must satisfy a heightened pleading requirement. Citing to this

Court’s decision in Tutu Park, Ltd. V. Harthman Leasing I, LLLP, No. ST-14-CV-456,

2016 WL 5853346 at *4 (V.I. Super. Ct. Sept. 27, 2016), ProSolar argues that V.I. R.

Civ. P. 9(b) “requires a claimant to do more than the ‘usual investigation’ before filing

his fraud claim.” Specifically, ProSolar argues that GSJ must have alleged precise



information, mirroring that required by the Third Circuit, including the “date, time,



11 GSJ also argues this point, citing Merchants Commercial Bank v. Oceanside Vill., Inc., No. ST-2011-

CV-653, 2015 WL 9855658 at *9 (V.I. Super. Ct. Dec. 18, 2015) for support. However, since this case

was decided before the Virgin Islands Rules were set forth and before the notice pleading standard

was restored, the Court refrains from using this case, and others of the like, as support.



12 The Court clarifies that the standard in VI. R. Civ. P. 9(b) is one that demands less than the three-

pronged plausibility analysis applied by federal courts, but more than the notice pleading standard for

non-fraud claims under V.I. R. Civ. P. 8(a).

Great St. Jim, LLC v. ProSolar System



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and place of the alleged fraud or misrepresentation,” for Count II of their complaint

to satisfy V.I. R. Civ. P 9(b). ProSolar argues that GSJ failed to satisfy this

requirement because the complaint only contains the date of “November 2016” and

“does not state when the solar power system was installed, the warranty was

purchased, or when the Plaintiffs noticed the alleged deficiencies within the system

and warranty.” ProSolar explains that without such information, ProSolar cannot

identify the exact date of the alleged fraud. ProSolar also argues that GSJ only makes

“overly general statements” of fraudulent misrepresentation and fails to “specify

what exactly ProSolar knew and when they knew it.”



412 The Court finds that nothing in the text of, nor case law relevant to V.I. R. Civ.

P. 9(b) requires the plaintiff to state the specific date, time, or place of the alleged

fraud, or to allege what the defendant knew and when they knew it. The Court finds

that such demands go beyond the parameters of the notice pleading standard as it

applies to V.I. R. Civ. P. 9(b). The cases cited by ProSolar concern Fed. R. Civ. P. 9(b)

and were not analyzed under a notice pleading standard. Ordinarily, local case law

concerning federal rules would be highly persuasive to this court, since the language

of the federal rules are identical or very similar to that adopted by the Virgin Islands.

However, as a notice pleading jurisdiction, there are variances and the cases cited by

ProSolar were decided prior to the restoration of the notice pleading standard and

include reasoning predicated on the plausibility standard. This standard would



require more definitive factual allegations, such as those required by the Third

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Circuit, in order to satisfy the more rigorous three-pronged analysis. However, since

the plausibility standard is no longer applied by Virgin Islands courts, decisions

applying or predicated on that standard are no longer relevant to this Court’s

analysis. While V.I. R. Civ. P. 9(b) implies a heightened standard, the standard is not

so demanding as to go beyond the notice pleading standard entirely. As such, the

Court finds that all that is required for a complaint for fraud to survive a motion to

dismiss, is that the claim is pled with enough factual specificity to put the defendant

on notice.



413 Here, GSJ alleges that, in or about November 2016—when GSJ purchased a

solar power system and warranty from ProSolar—ProSolar “represented to GSJ that

it could provide a fully functional solar power system and [that] it would provide for

all of GSJ’s power needs on an uninterrupted basis.” GSJ further alleges that:



*“ProSolar was well aware that it could not provide such a

system,”



*ProSolar “intentionally misrepresented its ability to provide

such a system,”



-ProSolar “promoted and sold GSJ a warranty which ProSolar

claimed would cover replacement parts among other things,”



* “at the time ProSolar sold the warranty, ProSolar knew it had

no ability to guarantee that any replacement parts existed or would exist

in the future,” and



*ProSolar “intentionally misrepresented its ability to provide [a



fully functioning solar power system].”

Great St. Jim, LLC v. ProSolar System



Case No. ST-19-CV-57 Cite as 2020 VI Super 25U

Memorandum Opinion



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The Court finds that these allegations are sufficiently specific to satisfy V.I. R. Civ.

P. 9(b)’s particularity requirement. GSJ alleges the “specific misrepresentations

known by ProSolar to be false when made” and alleges that ProSolar “intended GSJ

to rely on those misrepresentations,” which GSJ did “to its detriment.” The Court

finds that these factual allegations are sufficiently specific so as to adequately state



and put ProSolar on notice of GSJ’s claim for fraud.



CONCLUSION

414 The Court finds that GSJ’s fraud claim is distinct from its claim for breach of

contract. So, GSJ’s fraud claim is not barred by the gist of action doctrine. GSJ has

also pled sufficient facts to satisfy a heightened pleading requirement for V.I. R. Civ.

P 9(b). Therefore, the Motion to Dismiss will be denied. An Order consistent with this



opinion will immediately follow.



DATED: February “> , 2020 GOCE Aig ¥



Kathleen Mackay

Judge of the Superior Court

of the Virgin Islands



ATTEST:



DONNA DONOVAN J

Court Clerk Supervisor a / (3 / dO aD