A federal judge hearing a civil case involving St. John’s oldest resort has given the opposing legal teams until Feb. 8 to submit written arguments over the ownership of Caneel Bay Resort.
Circuit Judge Cheryl Ann Krause recently heard arguments in the District Court of St. Thomas where lawyers for the current resort owner and the U.S. Justice Department explained why Caneel Bay Resort and its assets belong to their respective clients.
Lawyers for Justice are representing the Department of the Interior and the Virgin Islands National Park in the case of EHI Acquisitions, LLC vs. United States of America. At issue is a 40-year retained use estate agreement established in 1983.
As they argued in court at a Jan. 17 hearing, both sides agreed that the land belongs to the park service. Each side used portions of the agreement to justify their ownership claims. At one point, Krause admitted that she, too, found the explanations confusing.
On Friday, the judge issued an order asking for clarification of the terms found in the agreement: “offer”, “acceptance”, and “offer to convey and transfer”. Depending on the parties’ interpretation, Krause said, the court may have to turn to sources outside of the retained use agreement — also called the 1983 Indenture — to find the terms needed to craft a decision.
The legal teams for Justice and EHI Acquisitions, LLC were also directed to explain whether an “offer to convey and transfer” could be seen as the transfer of a gift and/or as a “reasonable opportunity” to bid for the provision of “public accommodations, facilities, and services” that became part of the resort over the past 40 years.
When the agreement was first formed, an entity called Jackson Hole Preserve was a party to the agreement. But Caneel Bay was awarded to EHI after the resort sustained heavy damages from hurricanes Irma and Maria in 2017.
The resort — first opened in 1956 — has been closed since then.
Now, with the indenture at its 2023 expiration date, the court is being asked to determine if the national park owns Caneel Bay Resort free and clear or if they have to pay EHI $70 million for improvements made on the property since 1983.
In the Friday order, the judge expressed the hope that information obtained through written motions and by seeking extrinsic evidence will clarify whether the court should view the dispute as either a contract matter or a property matter.
