Opinion
Civil No. 2003-50.
April 11, 2007
Rachel Morrison, Esq., St. Thomas, U.S.V.I., For the plaintiff, Hugo Turnbull. George M. Miller, Esq., St. Thomas, U.S.V.I., For the defendant Gladston Thomas. Bernard M. VanSluytman, Esq., St. Thomas, U.S.V.I., For the defendant Louisa Turnbull. Matthew J. Duensing, Esq., St. Thomas, U.S.V.I., For the defendant Bank of Nova Scotia. Desmond L. Maynard, Esq., St. Thomas, U.S.V.I., For the defendant Estate of Wallace Alfredo Turnbull. Michael C. Dunston, Esq., St. Thomas, U.S.V.I., For the defendants Horace Turnbull, Turncow Corporation, and Todman Corporation, Limited.
MEMORANDUM OPINION
Before the Court are three motions. Defendant Gladston Thomas ("Thomas") has moved for partial summary judgment against Plaintiff Hugo Turnbull ("Hugo") on the counts to which he is named as a defendant. Hugo moved for summary judgment against Thomas, and Thomas has moved to strike Hugo's cross-motion for partial summary judgment. For the reasons outlined herein, the Court will grant Thomas' motion for summary judgment as to Counts I, III and IV of Hugo's complaint, and deny Hugo's cross-motion for summary judgment as to Count II.
I. FACTS
The Court finds that the material facts that attend these motions are largely undisputed.
On January 9, 2002, Wallace A. Turnbull ("Wallace") died. He was survived by his spouse, Louisa Turnbull ("Louisa"), and his sons, Hugo, Keith Turnbull, and Alvin Hodge. Initially, Louisa distributed assets from Wallace's estate (the "Estate") without filing a probate action in Superior Court.
At the time of his death, Wallace and Louisa jointly owned stock in two corporations, Todman Corporation ("Todman") and Turncow Corporation ("Turncow").
On March 4, 2002, Louisa executed a power of attorney, which specifically gave Thomas the ability to "take control of, manage, operate, and control any and all property owned by [Louisa], both real and personal, wherever found, and wherever situate." (Mem. for Summ. J., Ex. J.) Louisa subsequently authorized Thomas to close a checking account at Banco Popular that she had held jointly with Wallace. Louisa also authorized Thomas to open a new account in her name, from which she and Thomas would be able to draw.
On May 7, 2002, Louisa conveyed property described as Parcel Nos. 8A, 8B and 8C Estate Thomas, No. 6E New Quarter on St. Thomas, PWD No. C9-56-T63 to Thomas for ten dollars.
In June, 2002, Louisa transferred funds from Todman on deposit at a Bank of Nova Scotia ("Scotiabank") branch on Tortola, British Virgin Islands, to a Scotiabank bank account she had on St. Thomas.
On December 10, 2002, Louisa gave Hugo a power of attorney, allowing him to act on her behalf with respect to her Scotiabank account. On December 20, 2002, Hugo made out checks to himself totaling more than $500,000 on Louisa's Scotiabank account. These checks were labeled as "CD for Louisa." On December 21, 2002, Louisa transferred all of her Turncow shares and fifty Todman shares to Hugo. On December 23, 2002, Hugo wrote a check to himself for an additional $125,000 from Louisa's Scotiabank account. The subject line of this check indicated that it was for "Probate of Wallace Turnbull Estate."
Hugo then opened an account in his name at a St. Thomas First Bank of Puerto Rico ("First Bank") into which he deposited the checks. Hugo subsequently used funds from Turncow to pay off a mortgage on property located in Detroit, Michigan.
On January 6, 2003, Louisa withdrew the power of attorney that she had provided to Hugo. Thereafter, Thomas had the sole power of attorney for Louisa.
In late January, 2003, Hugo instituted formal probate proceedings for the Estate in the Superior Court of the Virgin Islands. The Superior Court appointed defendant Horace Turnbull ("Horace") as the estate's special administrator.
On March 17, 2003, Hugo commenced the present action with a five-count complaint. Count I seeks to enjoin Thomas, Louisa, and Scotiabank from diminishing assets in the Estate. Count II requests a declaration that Hugo is the sole owner of Turncow and Todman. Counts III and IV seek damages from Thomas for fraud and conversion. Count V alleges breach of contract against Scotiabank. Thomas is not named as a defendant in Count V.
Thomas argues that he is entitled to summary judgment on Counts I, III, and IV of Hugo's complaint. Thomas also argues that Hugo has unclean hands and lacks standing to seek recovery of Todman or Turncow funds because there is no evidence he ever owned assets of either corporation.
Thomas does not challenge Hugo's claim for breach of contract against Scotiabank in Count V of the complaint.
During argument on these motions, Hugo argued that Thomas's summary judgment motion was not "ripe" because discovery had not been completed in this matter. Hugo did not, however, file an affidavit stating why additional discovery was needed, as required by Federal Rule of Civil Procedure 56(f).
Hugo argues that he is the sole owner of Turncow, and therefore, he is entitled to summary judgment on his claim for declaratory relief.
II. DISCUSSION
Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Hersh v. Allen Prod. Co., 789 F.2d 230, 232 (3d Cir. 1986). "[A]t the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
In a summary judgment motion, the movant has the initial burden of showing there are no genuine issues of material fact.
Once the moving party has supplied sufficient affidavits in support of its motion, the opposing party must respond by supplementing the record in some manner-whether by its own affidavits or otherwise-setting forth specific facts demonstrating that there is a genuinely disputed factual issue for trial.Fireman's Ins. Co. v. Du Fresne, 676 F.2d 965, 969 (3d Cir. 1982).
"[T]here is no issue for trial unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Anderson, 477 U.S. at 249. In making this determination, courts draw all reasonable inferences in favor of the non-moving party. Bd. of Educ. v. Earls, 536 U.S. 822, 850 (2002).
III. ANALYSIS
A. Injunction
In Count I of his complaint, Hugo alleges that Thomas unlawfully depleted assets of the Estate. He seeks to enjoin Thomas from further reducing these assets.
Before a court will issue an injunction, the party seeking the injunction must show it faces an irreparable injury that cannot be redressed by the available legal remedies. Amoco Prod. Co. v. Vill. of Gambell, 480 U.S. 531, 542 (1987). "In each case, a court must balance the competing claims of injury and must consider the effect on each party of the granting or withholding of the requested relief." Id. Also, the Court must consider where the public interest lies. Id.
To have standing for any injunctive relief, the plaintiff must show that factual injury will result from the defendant's conduct. See Roe v. Operation Rescue, 919 F.2d 857, 864 (3d Cir. 1990); see also Adams v. Freedom Forge Corp., 204 F.3d 475, 487 (3d Cir. 2000) ("The dramatic and drastic power of injunctive force may be unleashed only against conditions generating a presently existing actual threat") (quoting Holiday Inns of America, Inc. V. B B, Corp., 409 F.2d 614, 618 (3d Cir. 1969) (emphasis omitted)).
The assets of the Estate are currently controlled by Horace and the Probate Court. For the assets of the estate to be sold, the administrator must obtain permission from the probate court. See V.I. CODE ANN., tit. 5, § 491 (2006). Because Thomas has no control over any of the Estate's assets, he cannot act to diminish them. An injunction would be superfluous and without effect.
In his interrogatories, Hugo alleges that the defendants have refused to acknowledge the Superior Court's order restricting use of the assets in probate. However, Hugo has not presented any evidence to support this claim.
Accordingly, there is no genuine issue of material fact regarding this claim. Thomas is entitled, as a matter of law, to judgment on Hugo's injunction claim.
B. Conversion
In Count III of his complaint, Hugo alleges that, in or around March, 2002, Thomas converted certificates of deposit owned by Todman ("Todman CDs"), additional certificates of deposit in the names of Wallace and Louisa ("personal CDs"), and rent collected from a property owned by Wallace's estate in Anna's Retreat (the "Anna's Retreat property").
Hugo's allegations suffer from a basic standing problem. Standing is a "bedrock requirement" in determining whether the federal courts have jurisdiction over a dispute. Raines v. Boyd, 521 U.S. 811, 818 (1997) (internal quotations omitted). The Supreme Court has "consistently stressed that a plaintiff's complaint must establish that he has a `personal stake' in the alleged dispute, and that the alleged injury suffered is particularized to him." Id. at 818; accord Soc'y Hill Towers Owners' Ass'n v. Rendell, 210 F.3d 168, 177 (3d Cir. 2000) ("the plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties. . . .").
With conversion claims, the critical standing issue involves the plaintiff's right to control the chattel, with which the defendant allegedly interfered. See Restatement (Second) of Torts at § 222A; see also Univ. Premium Acceptance Corp. v. York Bank Trust Co., 69 F.3d 695, 702 (3d Cir. 1995).
Hugo alleges injuries to property that, at the time of the alleged conversion, belonged to the Estate, which was being administered by Horace in Probate Court. Administrators have standing to sue on behalf of the estate, which is "generally based upon a vicarious, third-party representation theory." Am. Petroleum Inst. v. EPA, 216 F.3d 50, 66 n. 4 (D.C. Cir. 2000) (citing Amato v. Wilentz, 952 F.2d 742, 751 (3d Cir. 1991)); see also generally, V.I. ANN. CODE. tit 15, part II, Administration of Estates (2006).
Because Hugo was not the administrator, he does not have standing to bring suit on behalf of the Estate, and he cannot satisfy the basic standing requirements for his conversion claim. Accordingly, Thomas is entitled to judgment as a matter of law on Count III.
C. Fraud Charge
In Count IV, Hugo alleges that Thomas fraudulently obtained Louisa's power of attorney, and used the position to diminish assets from Todman, Turncow, and the Estate.
Under Virgin Islands law, a claim for fraud requires three elements: (1) a misrepresentation made knowingly and with intent to induce reliance, (2) reasonable reliance, and (3) detriment resulting from that reliance. In re Tutu Water Wells Contamination Litig., 32 F. Supp. 2d 800, 805 (D.V.I. 1998) (citing Restatement (Second) of Torts § 530 (1965)).
With respect to the first element, Thomas has presented his own affidavit, as well as Louisa's. Both affidavits state that Louisa freely gave Thomas power of attorney. In opposition, Hugo has introduced his affidavit. Hugo states that Thomas lead Louisa to believe he would assist her with her finances. Hugo further states that Thomas intended instead to use the power of attorney to obtain money for himself. Significantly, Hugo's affidavit is not based on personal knowledge. Indeed, the affidavit is simply a conclusory restatement of his arguments. It is well-established that such "[s]elf-serving affidavits, alone, are not enough to create an issue of [material] fact sufficient to survive summary judgment." Wolfe v. Village of Brice, 37 F. Supp.2d 1021, 1026 (S.D. Ohio 1999) (citing Anderson, 477 U.S. at 251); accord Murray v. City of Sapulpa, 45 F.3d 1417, 1422 (10th Cir. 1995).
There is no genuine issue of material fact as to Hugo's fraud claim. Accordingly, Thomas is entitled to summary judgment on Count IV.
D. Hugo's Cross-Motion for Partial Summary Judgment
Hugo has moved this Court for partial summary judgment against Thomas on Count II of Hugo's complaint, in which Hugo seeks a declaration that he has the sole authority to make decisions regarding control of the Todman and Turncow assets.
Congress has given the federal courts the power to "declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." 28 U.S.C. § 2201; see also Fed.R.Civ.P. 57 (creating procedure for declaratory judgments). Whether to issue a declaratory judgment is a matter of discretion for the Court. 28 U.S.C. § 2201. Declaratory judgments should be issued where they will clarify legal relations and serve a useful purpose. See Los Angeles County Bar Ass'n v. Eu, 979 F.2d 697, 703 (9th Cir. 1992) (holding that courts should consider whether declaratory relief would serve useful purpose, clarify legal relations, and terminate a controversy before exercising declaratory jurisdiction).
In support of his motion with respect to Turncow, Hugo has presented a stock certificate purportedly granting him one-hundred shares in Turncow, and his own affidavit. The stock certificate is undated and unwitnessed. (See Supp. to Cross-Mot. for Summ. J, Ex. G). Curiously, it also purports to grant Hugo an even greater percentage of Turncow than he originally alleged in his complaint. (Compare id. with Compl. ¶ 24). The stock certificates present a genuine issue of material fact. Hugo's affidavit does not resolve that issue, as it merely echoes his claims of ownership. Compare Blair v. Scott Specialty Gases, 283 F.3d 595, 608 (3d Cir. 2002) ("An affidavit that is `essentially conclusory' and lacking in specific facts is inadequate to satisfy the [movant's] burden.") (quoting Maldonado v. Ramirez, 757 F.2d 48, 51 (3d Cir. 1985)).
In support of his motion with respect to Todman, Hugo cites Louisa's deposition, saying that she told Hugo to take possession of Wallace's land in Tortola. This statement is far short of a statement that Louisa transferred a controlling interest in the corporation. The deposition does not even identify the land as a Todman assent.
"He, Hugo, is Wallace child. I tell him [to] go [to] Tortola and take over Wallace land and up there." (Louisa Dep., 65, February 12, 2004).
Accordingly, Hugo's cross-motion for summary judgment will be denied.
Thomas' motion to strike Hugo's motion for summary judgment will be denied as moot.
IV. CONCLUSION
For the reasons stated above, Thomas' motion for summary judgment will be granted. Thomas will be dismissed as a defendant in Counts I, III and IV of Hugo's complaint. Additionally, Hugo's motion for summary judgment will be denied. An appropriate order follows.