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Desvi, Inc. v. Continental Ins. Co.

filed: June 12, 1992.

DESVI, INC., ON BEHALF OF ITSELF AND ALL OTHERS SIMILARLY SITUATED, APPELLANT
v.
CONTINENTAL INSURANCE COMPANY



APPEAL FROM THE DISTRICT COURT OF THE VIRGIN ISLANDS DIVISION OF ST. THOMAS AND ST. JOHN. D.C. No. 91-00104

Before Sloviter, Chief Judge, Mansmann, and Weis, Circuit Judges

Author: Weis

Opinion OF THE COURT

WEIS, Circuit Judge.

A statute of the Virgin Islands requires insurance companies to pay interest on claims to date of judgment when a policy holder brings a suit against the carrier. The district court concluded that the statute did not apply when litigants settled their dispute before entry of judgment. We agree and will affirm.

After its property was damaged by Hurricane Hugo in September 1989, plaintiff submitted a claim to its carrier, defendant Continental Insurance Company. Plaintiff estimated the cost of repairs to be approximately $500,000. When defendant refused to pay that amount, plaintiff filed suit in the district court.

After some negotiations plaintiff submitted a proof of loss on March 9, 1991, in the amount of $198,481.50. A few days later, plaintiff advised defendant that, pursuant to a Virgin Islands statute, interest was due on the settlement amount. On March 25, 1991, defendant issued a draft in the amount of the settlement, less a $1,000 deductible, and tendered the draft to plaintiff. Defendant refused to pay interest, but plaintiff ultimately accepted the draft and negotiated it.

Within days after defendants tender, plaintiff filed this class action on behalf of residents of St. Thomas who were insured by defendant on the date that Hurricane Hugo struck the island. Plaintiff alleged that, by operation of law, interest was due on all previously settled and pending claims.

The district court granted summary judgment for defendant, concluding that 22 V.I. Code § 228(b) required the payment of interest only when an insured was required to take a suit to judgment. In the court's view, the statute did not apply to settlements, but only to judgments. The court denied relief to plaintiff and did not address its request for class certification.

On appeal, plaintiff contends that the district court erred in mentioning the one year limitation period in actions brought under the policy, and that the prerequisites of a class action have been met. Moreover, plaintiff asserts that contested issues of fact remain and the court erred in its statutory interpretation.

A district court may grant summary judgment when the record shows "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). In deciding whether there is a disputed issue of material fact, the court must resolve doubts in favor of the non-moving party. Meyer v. Riegel Prod. Corp., 720 F.2d 303, 307 n.2 (3d Cir. 1983). The threshold inquiry is whether there are "genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). This Court's review of a district court's grant of summary judgment is plenary. J.E. Mamiye & Sons, Inc. v. Fidelity Bank, 813 F.2d 610, 613 (3d Cir. 1987).

Although insisting that summary judgment was not appropriate because factual matters are in dispute, plaintiffs brief does not identify a single issue of material fact that is in controversy. Plaintiffs extended Discussion of the factors appropriate to class certification is misplaced because, if the district court's reading of the statute is correct, the putative class has no cause of action in any event. Summary judgment, therefore, was an appropriate procedure.*fn1

22 V.I. Code § 228(b) provides:

"In cases where suit is brought by the insured to recover the payment due under the policy, interest at the prevailing prime rate applicable on the date of judgment, under section 951 of Title 11, Virgin Islands Code, from the date of loss to the date of judgment, shall be added to the ...


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