in the supreme court of the virgin islands of the … · jahleejah love peace v. bppr s. ct. civ....

IN THE SUPREME COURT OF THE VIRGIN ISLANDS

OF THE UNITED STATES

JAHLEEJAH LOVE PEACE d/b/a ) NATURAL LIVITY KULCHA SHOP ) & JUICE BAR, ) ) Plaintiff/Appellant, ) S. Ct. Civ. No. 2019-0057

) Super. Ct. ST-15 - CV- 0047 v. ) ) BANCO POPULAR de PUERTO RICO ) ) Defendant/Appellee. ) _______________________________ )

APPEAL FROM THE SUPERIOR COURT OF THE VIRGIN ISLANDS

APPELLANTS’ REPLY BRIEF

Date: August 3, 2020 Respectfully submitted,

THE RUSSELL LAW FIRM, LLP

By: /s/ Ronald E. Russell Ronald E. Russell, Esquire

Counsel for Plaintiff/appellant P.O. Box 3259 Kingshill, VI 00851 Tel: (340) 692-00832 Fax: (844) 272-0308 Email: canaanlawgroup@gmail.com

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TABLE OF CONTENTS

Table of Authorities……………………………………………. 3 Argument

I. THE COURT COMMITTED CLEAR ERROR REGARDING

APPELLANT’S APPLICATION TO THE BANK………. 5

II. THE COURT ERRED IN FINDING THERE WAS NO SPECIAL RELATIONSHIP BETWEEN APPELLANT AND APPELLEE…………………………………………… 12

III. THE TRIAL COURT ERRED IN FINDING THAT APPELLEE FAILED TO ESTABLISH THAT THE BANK’S ACTIONS INTERFERED WITH HER BUSINESS RELATIONS…… 15

Conclusion………………………………………………………….. 17

Certificate of Bar Membership……………………………………. 19

Certificate of Word Count…………………………………………. 19 Certificate of Service………………………………………………. 20

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TABLE OF AUTHORITIES Cases

Barnett Bank of West Florida v. Hooper, 498 So. 2d 923 (Supreme Ct. Fl. 1986)……………………………. 5

Blyden v. People, 53 V.I. 637, 646 (V.I. 2010)……………………… 5

Bucci v. Wachovia Bank, N.A., 591 F.Supp. 2d 773(D.C.P.A. 2008). 18

Capital Bank v. Mvb, 644 So. 2d 515 (Fla. 1994)…………………. 11 Financial Trust Co., Inc. v. Citibank, N.A., 268 F.Supp. 2d 561(D.C.V.I. 2003)…………………………………. 11

Henry v. Dennery, 55 V.I. 986, 991(V.I. 2011)………………………. 5 Kiwi Construction, LLC v. Pono, 2016 V.I. LEXIS (Super. Ct. Jan. 15, 2016)……………………………………………… 16 Merchant’s Commercial Bank v. Oceanside Village, Inc., 2015 WESTLAW 9855658 (V.I. Super. Dec. 18, 2015)…………….. 10 Pell v. E.I. DuPont de Nemours & Co. Inc., 539 F.3d 292 (3d Cir. 2008)…………………………………………………………….. 5 Rainey v. Hemon, 55 V.I. 875, 879-80 (V.I. 2011)…………………… 17

Richfield Bank & Trust Co v. Sjogren, 244 N.W.2d 648 (Minn. 1976)………………………………………….. 11

Ross v. Hodge, 58 V.I. 492, (V.I. 2013)……………………………….. 17

St. Thomas–St. John Bd. of Elections v. Daniel, 49 V.I. 322, 329 (V.I.2007)……………………………………………… 5

Virgin Islands Waste Management Authority v.

Bovoni Investments, LLC, 61 V.I. 355, (V.I. 2014)…………………. 17

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Watts v. Blake-Coleman, 2012 W.L. 1080323 (Super. Ct. 3/12/2012)…………………………………………………. 12

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ARGUMENT

I. THE COURT COMMITTED CLEAR ERROR REGARDING

APPELLANT’S APPLICATION TO THE BANK

On appeal, a trial court’s findings are reviewed for clear error. Henry

v. Dennery, 55 V.I. 986, 991(V.I. 2011); Blyden v. People, 53 V.I. 637, 646

(V.I. 2010); Pell v. E.I. DuPont de Nemours & Co. Inc., 539 F.3d 292, 300

(3d Cir. 2008). Generally, we review factual findings from the finder of fact

for clear error and exercise plenary review over legal conclusions. St.

Thomas-St. John Bd. of Elections v. Daniel, 49 V.I. 322, 329 (V.I. 2007).

The trial judge committed clear error when it found that Appellant

applied for an increase in her business line of credit.1 This finding is clear

error and not supported by the facts or by the evidence adduced at trial.

1 In its Memorandum Opinion dated December 15, 2016 the trial court correctly stated the following:

“In September 2013, Plaintiff applied for a business credit card with a credit limit of $50,000.00, and Defendant issued Plaintiff a credit card with a $10,000.00 credit limit in October 2013. On or about February 18, 2014, Plaintiff wrote to Defendant requesting "an increase in our line of credit, which is currently limited to $10,000.00 . . . an increase in our credit limit to $50,000.00 will enable us to complete [our] planned expansion." 1 Plaintiffs request for the increase to the credit card limit to $50,000.00 was approved by Defendant on March 31, 2014.”

VOL. I, App. 30.

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The court’s erroneous finding forms the basis for its erroneous conclusion

of law.

In fact, the testimony at trial was that Appellant applied for and was

the holder of an Advantage Business Visa credit card issued by Appellee

bank. Vol II App.146-147. Appellant testified that based on a promotion

by Appellee bank, she requested an increase in her credit card limit.

BY ATTORNEY RUSSELL: . Tell me what that document, exhibit 25 is? What is that Jahleejah?

A. This is the pamphlet from Banco Popular that has their solutions for your business. Based on the pamphlet we have the Visa corporate card and the Visa credit card which I applied for the Visa advantage business card which

is circled right here.

Q. Yes

A. And I had a maximum limit of 50,000.

Vol II App. 149 ,153-154. (Plaintiff's Exhibit 25 marked for identification)

The testimony also revealed that what Appellee issued to Appellant

was a secured line of credit. Daren Brown’s deposition testimony was

admitted at trial and his testimony confirmed that Appellant was offered

something materially different from what she requested.

BY MR. RUSSELL

[RUSSELL]: Let's break it down. Was a Visa revolving line

of credit -- tell me what that is.

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DAREN BROWN: In my own personal opinion I think

that's not properly titled. Because you either have Visa

credit cards or you have lines of credit.

Q Okay. And I understand that, that's why I asked you

that. So explain the two differences for me. What --how

you would separate them and why?

A Okay. Well, the bank has commercial credit cards, so

you have the bank, to the best of my knowledge, might

have changed, but the bank offers three -- three business

credit cards, Visa business, Visa Advantage, Visa

Corporate. Those are credit cards like you take a credit

card out of your wallet and you have a credit card. Those

are credit cards.

Q Right.

A The bank has lines of credit, has an ideal business line

of credit and stand-alone line of credit which can be

revolving or non-revolving.

Vol. III App. 619; 442-449.

Daren Brown’s testimony demonstrated that the documents presented to

Appellant were confusing, misleading; and contained errors. Further, the

Commitment Letter presented to Appellant by Appellee contained a

provision REQUIRING the bank to provide a “legal opinion “favorably

opining as to the due execution and enforceability of the Line documents

executed with the Line.” Vol. III, App. 446. No opinion was provided and

Appellant was not advised to seek the assistance of counsel, contrary to

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the language in the Commitment Letter. Vol. III, App. 642.

Sterling Knight also testified to the difference between the credit card and the

secured line of credit.

[RUSSELL]: Are you familiar with what's contained in

Exhibit 5?

A Yes.

Q What is Exhibit 5?

A Its a standard Visa Business agreement.

Q Is there anything in the standard Visa business agreement that discusses secured versus unsecured

credit cards?

A Not that I can recall, no.

Vol II App 408.

Thus the trial Court also erred in finding that Appellant was aware

that she was offered a secured line of credit rather than the credit card

increase that she requested. At trial, Appellant testified as follows:

[JAHLEEJAH[: Did you approach Banco Popular on April 2, 2014 for a business loan?

A: No, I did not.

Q: Why did you sign? And that’s your signature on the second page of the business loan?

A: Yes, it looks like it.

Q: Okay, why did you sign that and you didn't apply for a business loan?

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A: Like I said, all these documents was together when I went under the notion that I was coming in to sign for the credit card increase. So, he told me to sign here and initial there, and I signed there and initialed there because he said it was in reference to the increase.

Q: Okay. Thank you. Now, I want you to look at that document here for me. It says on the first page. It says amount of note.

Look at that?

A: Uh-huh. Yes.

Q: You see a loan for $50,000 cash in

BY ATTORNEY RUSSELL:

Q Okay, Jahleejah?

A Yes.

your account as a result of this business loan agreement?

A No.

Q Now, look at the document a little carefully, please. So, it refers to you or the personal signing it as a borrower, correct?

A Yes.

Q And it also says here a UCC1 lien. You did not agree to any of that. Is that your testimony?

A Yes, I did not agree.

Vol II App 178.

The foregoing testimony conclusively establishes that Appellee bank

misrepresented the transaction to Appellant. One who makes a

misrepresentation of fact, opinion, intention, or law that he or she either

knew or had reason to know was false, and that was made for the purpose

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of inducing another to act or refrain from acting on it, is subject to liability to

the other for pecuniary loss caused by the other's justifiable reliance on the

misrepresentation. See, Merchant’s Commercial Bank v. Oceanside

Village, Inc., 2015 WESTLAW 9855658 (V.I. Super. Dec. 18, 2015).

Jose Escalera, Vice President and Manager of Commercial Credit

Center, testified that an increase in credit card limit does not require the

imposition of a lien. He also testified that the bank was required to notify

Appellant and obtain her consent prior to imposing the UCC lien.

[RUSSELL]: You said it's a Commercial Card Agreement Visa Business Card?

When would you use this document in the commercial facility transaction?

A.· · You're asking when is it used?

Q.··Yes.

A: It's used in connection with that type of product, the

Commercial Visa Business Advantage.

Okay.· Would you use this card for loans?

A: For commercial loan, no.

Vol III App. 592; Exh. 5 “Commercial Cards Agreement Visa Business Advantage, Vol. III, App. 450-452. Thus, Escalera testified that the Commercial Cards Agreement does not

require security. Escalera’s testimony confirmed that Appellant signed the

agreement for an increase in credit card limit on the same day that she

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signed the agreement for a secured line of credit. that she did not give her

consent because she was not notified.

Appellee bank presented Appellant with a secured line of credit

although she applied for an increase in her credit card limit. As the

evidence demonstrates, Appellee bank knew that what was being offered

was materially different from what was requested. Appellee bank also

knew that Appellant needed the access to finances to keep her business

going. Appellant relied on the bank’s actions, signed the documents

without being fully informed, and suffered great loss because of it.

The foregoing facts were adduced at trial. Therefore, the Court’s

finding that Appellant was advised of the true nature of the facility she was

offered is clearly erroneous. When a bank knows, or has reason to know

that a customer is placing trust and confidence in the bank and is relying on

the bank to counsel and inform him, the bank is held liable if it fails to

disclose a material fact. Barnett Bank of West Florida v. Hooper, 498 So.

2d 923, 925 (Supreme Ct. Fl. 1986); Richfield Bank & Trust Co v. Sjogren,

244 N.W.2d 648, 650-51 (Minn. 1976); Capital Bank v. Mvb, 644 So. 2d

515 (Fla. 1994); Financial Trust Co., Inc. v. Citibank, N.A., 268 F.Supp. 2d

561(D.C.V.I. 2003): Watts v. Blake-Coleman, 2012 W.L. 1080323 (Super.

Ct. 3/12/2012).

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II. THE COURT ERRED IN FINDING THERE WAS NO SPECIAL RELATIONSHIP BETWEEN APPELLANT AND APPELLEE

The evidence adduced at trial was that Appellant had been banking

with Appellee bank for 8 years prior to her request. They knew her

finances because she had a savings account, a checking account, a bank

issued credit card, and had applied for loans from the bank in 2010 and

2012. Both were denied. During the entire process the bank

communicated with Appellant regarding the inner workings of her business.

Alexandra Yanotti Suid, Appellant’s accountant, testified to

Appellant’s relationship with Appellee bank as follows:

A. . . . We had been going back and forth providing updated information and answering questions and then she received this a year or so later.I don’t know how any time you give somebody a loan you never know if the income is going to materialize. So, I don’t know. I just don't think it was a very fair assessment. Maybe they could have offered a little less money to start her to make sure she could make the payments. Q: Do you know if Jahleejah did banking with Banco

Popular?

A Yes, she had a business account.

Q So, the bank would have access to her financial information.

A Yes, it was a business checking account.

Vol.II, App. 099. . . .

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Q: No, back then in 2012 and 2013?

[YANOTTI]: Well, pertaining to the loan, the business plan, the loan application. They had asked questions as I stated about the projections and financial statements that were submitted for prior years with the loan documentation that they wanted. or the business plan you have to show a projection of three to five years based on the expansion and what you expect your income and your expenses to be. So, they had called I would say two or three times with questions about some of the information that was on the business plan.

Q: And did you provide them with that information?

A: Yes.

Vol II App. 102-103. . . .

Q: When did you open up your personal bank account?

[JAHLEEJAH]: Maybe in 2002 when I moved here. Q Okay, when you say personal bank account, explain that?

A: A savings and checking.

Q: So, you did your banking at Banco Popular?

A: Yes.

Q: That's your personal bank?

A: That’s my personal bank, yes.

Q: So, in 2010 you opened up a business account?

A: Yes. A business account.

Q: What type of business account did you open?

A: I opened a checking. I think it was an Ideal business account, a checking account.

Vol II App 133-134.

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The foregoing clearly establishes that Appellant had a relationship

with the bank that was more than strictly “arms length.” Plaintiff was a long

time customer who had shared her business details with Appellee bank.

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III. THE TRIAL COURT ERRED IN FINDING THAT APPELLEE FAILED TO ESTABLISH THAT THE BANK’S ACTIONS

INTERFERED WITH HER BUSINESS RELATIONS

Appellant testified that the UCC lien prevented her from paying her

vendors and obtaining additional credit.

Attorney Russell to Jahleejah Love Peace Q Okay. And in the operation of the business. Did you have relationships, contracts with any vendors or any persons to supply you with merchandise? A Yes, I did. Q What type of contracts you had? A I had a contract from companies in New York for clothing, merchandise and stuff. I had contracts with Merchants Market for food and so forth, produce from Merchants Market. Most of the time I would buy in cash which I really don’t do much credit for merchandise. So, I would always just spend the money and get the merchandise so I don’t have any balance. Vol II App 141: Attorney Russell to Jahleejah Love Peace Q And then you had Merchants Market and vendors in the states, right? A Yes. Vol II App 142:

At trial, Appellant proved that the bank’s actions interfered with her

business. See, Kiwi Construction, LLC v. Pono, 2016 V.I. LEXIS 1, *12

(Super. Ct. Jan. 15, 2016). The testimony demonstrated that between

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2014 -- when she requested relief from the lien because it was interfering

with her obtaining additional credit -- and March of 2015 when she received

a loan from the EDA, Appellant’s business suffered severe financial loss.

Appellant testified that during that time, she incurred debts that equalled

the amount of the EDA loan, leaving no funds to invest in the business.

By Attorney Russell to Jahleejah Love Peace Q So, now when they initially approached the EDA, did they grant you or deny you? A They denied me. Q Why? A Because of the lien.

Vol II App 208:

Appellant’s accountant also testified regarding the negative effect of the

lien on Appellant’s business:

Attorney Russell to Yannotti Q Now, in regards to Jahleejah’s involvement with the bank. Do you know anything about a UCC lien that was placed on Jahleejah’s property? A She advised me about it when she found out about it when she applied to another bank for a loan.

As a result, Appellant was unable to repay her vendors, or repay the EDA

loan and was forced to close her business.

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CONCLUSION

The foregoing recitation of the facts adduced at trial clearly

demonstrates that the Court’s decision did not reflect the evidence. This is

clear error and the remedy on appeal is reversal. Rainey v. Hemon, 55

V.I. 875, 879-80 (V.I. 2011)(In reviewing findings of fact for clear error, the

appellate court reverses if the trial court's determination was completely

devoid of minimum evidentiary support or it bears no rational relationship to

the supportive evidentiary data); Ross v. Hodge, 58 V.I. 492, (V.I. 2013)

(same).

In this case, the trial court premised its Memorandum Opinion on an

erroneous finding of fact despite clear facts to the contrary. Additionally,

the trial court made findings that “bore no rational relationship to the

supportive evidentiary data”. See, Virgin Islands Waste Management

Authority v. Bovoni Investments, LLC, 61 V.I. 355, (V.I. 2014).

The trial evidence established that Appellee bank misrepresented the

facility offered to Appellant when it offered her a secured line of credit in

response to her request for an increase in her credit card limit. The

evidence also established that the relationship between Appellant and

Appellee was more than an arms length relationship but was more akin to a

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special relationship giving rise to a duty of care to disclose information that

is necessary to prevent a statement from being misleading. Bucci v.

Wachovia Bank, N.A., 591 F.Supp. 2d 773, 783 (D.C.P.A. 2008).

Lastly, the evidence at trial proved that the actions of Appellee bank

caused Appellant to default on her payments to vendors.

For all the reasons as more fully described in the foregoing analysis,

Appellant prays that this Court reverse Superior Court’s judgment on all

counts at trial; award judgment on all counts in favor of Appellant; and

remand this matter to determine the damages to be awarded to Appellant.

Date: August 3, 2020 Respectfully submitted,

/s/ Ronald E. Russell Ronald E. Russell Esq. V.I. Bar No. 86 P.O. Box 3259 St. Croix, VI 00851 (340) 690 - 0832 (cell) (800) 772 - 0376 (fax)

canaanlawgroup@gmail.com

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CERTIFICATE OF BAR MEMBERSHIP

The undersigned hereby certifies and affirms pursuant to Rule 22(l) of

the Rules of the Supreme Court of the Virgin Islands that the undersigned

is a member in good standing of the United States Virgin Islands Bar and

the Bar of the Supreme Court of the Virgin Islands.

By: /s/ Ronald E. Russell

CERTIFICATE OF WORD COUNT The undersigned hereby certifies and affirms that the instant brief

does not exceed 3,900 words.

/s/ Ronald E. Russell, Esq

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CERTIFICATE OF SERVICE

I DO HEREBY CERTIFY that on August 3, 2020, I caused the

foregoing Appellant's Reply Brief o to be delivered via the Supreme Court

Electronic Filing System (“VISCEFS”), which will deliver a copy of the same

to the following:

Veronica J. Handy Clerk of the Court Supreme Court of the Virgin Islands PO Box 590 Charlotte Amalie St. Thomas, US Virgin Islands 00804 Alex Muskovitz, Esq. Law House P.O. Box 756 St Thomas, VI. 00804-0756 By: /s/ Ronald E. Russell

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