On Appeal from the District Court of the Virgin Islands (Division of St. Thomas and St. John)
(D.C. Civil Action Nos. 92-00081 and 93-00059)
BEFORE: GREENBERG and MCKEE, CIRCUIT JUDGES, and ACKERMAN, DISTRICT JUDGE *fn*
HAROLD A. ACKERMAN, Senior District Judge
(Filed: February 7, 1996)
On this appeal, we are faced with several interrelated jurisdictional issues arising out of appellant Long Bay Trust's inverse condemnation action filed in the District Court of the Virgin Islands and the Government of the Virgin Islands' ("government") parallel eminent domain action filed in the Territorial Court of the Virgin Islands. Both cases involved the same parcels of land.
First, we must determine whether the government's eminent domain case was properly removed from Territorial Court to the district court. Second, we must assess the impact, if any, of the district court's order consolidating the eminent domain and inverse condemnation cases following the removal from the Territorial Court, and the parties' subsequent submission of their claims to binding arbitration.
For the following reasons, we conclude that the district court did not have subject matter jurisdiction over the government's eminent domain case and that the case was therefore improperly removed to the district court. Ultimately, this lack of jurisdiction requires us to vacate the district court's order confirming the arbitration award. The eminent domain and inverse condemnation cases will be remanded to the district court with instructions to remand the eminent domain case to the territorial court. Finally, for the reasons we set forth below, the district court is to consider abstaining from deciding the inverse condemnation case.
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
This appeal involves a dispute that arose out of the Virgin Island Government's plans to condemn a portion of privately-owned commercial property located in the Virgin Islands. Sometime prior to 1988, the government began planning to improve traffic circulation on or about Long Bay Road and Route 313 in the Virgin Islands. The project, which was to be 100% U.S. federally funded, and was known as the "Long Bay Road Highway Improvement Project" required the use of additional land. Accordingly, the Virgin Islands government commenced negotiations for the "taking" of private land that would be needed for the project.
Specifically, the government required approximately 2.64 acres of land known as Parcels No. 6 and No. 9, located in Estate Thomas, Kings Quarter, St. Thomas. The property was commercially zoned and several buildings were situated upon the land. During December 1988 or January 1989, the government commenced negotiations with the owners of the property, Millad Associates, for the acquisition of the property.
Before a deal could be ironed out with the government, Millad Associates sold the property to Jolie Stahl and Barry Brown, as co-trustees ("trustees") of the Long Bay Trust. The purchasers paid $3.25 million for both the property and the buildings situated upon the property. A deed to the property was executed by the parties on May 9, 1989, and the deed was recorded on May 31, 1989. At the time of purchase, the trustees were aware of the government's plans to "take" a portion of the property.
Three years after the trustees purchased the subject property, the trustees filed an inverse condemnation action in the District Court of the Virgin Islands against the government, alleging that the government had unreasonably delayed in taking portions of the trust property. According to the trustees, the government had deprived the trust of the highest and best value of its property by unreasonably delaying in the condemnation of Lots 6 and 9, while at the same time condemning property across the street from the two lots. The trustees contended that this sequence of events allowed a competitor to get a head-start on business, to the detriment of the trust. Moreover, the trustees alleged that they could not secure financing or tenants while the government's proposed taking was pending. *fn1
The government responded to the trustees' federal court action on August 13, 1992, by filing an eminent domain action, pursuant to V.I. Code Ann. tit. 28, Section(s) 411 (1957 & Supp. 1994), in the Virgin Islands Territorial Court. The government alleged in its complaint that the property was worth approximately $1.2 million. Furthermore, the government submitted a Declaration of Taking and an ...