- Category: Judge Karlin
- Published on 16 April 2014
- Written by Judge Karlin
BAP NM-13-046 In Re Pickel, Apr. 9, 2014
U.S. Bankruptcy Appellate Panel
of the Tenth Circuit
April 9, 2014
Blaine F. Bates
NOT FOR PUBLICATION
UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE TENTH CIRCUIT
IN RE JACK D. PICKEL, formerlydoing business as Officer of AlamedaLand Investment Corporation, doingbusiness as Sole Member Alameda
Virgin Islands Company, LLC,
formerly doing business asManager/Member of P.O.S.T. Land Ltd.
Company, doing business as Officer ofClub Comanche, Inc., doing business as
J. Pickel & Company, Inc.,
Plaintiff – Counter-
Defendant – Appellant,
JACK D. PICKEL and ALAMEDA
VIRGIN ISLANDS COMPANY, LLC,
Defendants – Counter-
Claimants – Appellees.
BAP No. NM-13-046
Bankr. No. 12-13262
Adv. No. 12-01319
Appeal from the United States Bankruptcy Courtfor the District of New Mexico
Before KARLIN, ROMERO, and HALL , Bankruptcy Judges.
KARLIN, Bankruptcy Judge.
* This unpublished opinion may be cited for its persuasive value, but is not
precedential, except under the doctrines of law of the case, claim preclusion, andissue preclusion. 10th Cir. BAP L.R. 8018-6.
Honorable Sarah A. Hall, United States Bankruptcy Judge, United States
Bankruptcy Court for the Western District of Oklahoma, sitting by designation.
Mary Boehm agreed to sell to Alameda Virgin Islands Company, LLC
(AVIC) her large share of Club Comanche (Comanche), a corporation that owned
a hotel and restaurant (Hotel) located on premium real estate on St. Croix, Virgin
Islands. After AVIC made payments totaling $550,000 of the $800,000 required,
and added $1.9 million in improvements, Boehm seems to have had a change of
heart. She decided it might be a good idea to hold on to this property after all, as
it had more than doubled in value since she sold it.
The bankruptcy court found her efforts to regain the Hotel constituted an
anticipatory repudiation of the contract. As a result, it granted AVIC’s request
for specific performance and awarded a portion of the damages it sought. Boehm
asks this court to reverse those decisions.
Because our review of the record and applicable law confirm that Boehm
repudiated the contract and caused AVIC the damages the bankruptcy court
awarded, we instead affirm.
In 2007, a Virgin Islands superior court granted a money judgment against
Comanche and directed it to issue 156 shares of its stock to a third party. Until
then, Boehm 2 and her late husband owned all of the Comanche stock. As a result
of the judgment, Boehm decided to sell her remaining shares of stock to AVIC,
also a Virgin Islands entity, which was wholly owned and managed by Jack Pickel
(Pickel), the debtor.
The 2007 sale contract (Agreement) conveyed to AVIC the right to vote
447.5 shares of Comanche and to receive any and all dividends or distributions
1 Unless indicated otherwise, the basic facts not in dispute have been taken
from the bankruptcy court’s published opinion, Boehm v. Pickel (In re Pickel),
493 B.R. 258 (Bankr. D.N.M. 2013) (hereafter “Memorandum Opinion”).
2 Boehm’s son was also a party to the Agreement, but because he only owned
one share of Comanche stock and is not a party to this appeal, we refer solely toMary Boehm.
with respect to those shares. In exchange, AVIC was required to pay $800,000 in
four installments; the fourth and final payment was to be $250,000 and was due
November 1, 2009. 3 Pickel also executed a non-negotiable promissory note
(“Note”) in favor of Boehm on behalf of AVIC,4 which required payments be
made to Boehm at the Hotel, since the Agreement contemplated she would
continue to live there for a few months. The Note required her to “designate in
writing” if payments should be sent to a different address. No evidence received
at trial demonstrated she ever so designated.
AVIC made the first three payments totaling $550,000, but did not pay the
final $250,000 installment on its due date. It is AVIC’s failure to timely make
this final payment that precipitated the events that are at the crux of this appeal.
The Agreement provided that AVIC “shall be deemed in default, if after ten (10)
business days after receipt of written notice of default, [AVIC] fails to cure.”5
Accordingly, one day after the final payment was due, Boehm and her daughter
drafted the contemplated written notice (Notice of Default) and delivered it to
The Notice of Default erroneously stated that the last day to cure the
default was November 13, 2009, notwithstanding that the Agreement, itself,
provided a cure period of ten business days—or until November 17, 2009. 6 As a
3 Agreement at 1, ¶ 1, in Appellant’s App. at 312. The payment schedule was
as follows: $275,000 upon execution of Agreement, $25,000 on November 30,2007, $250,000 on November 1, 2008, and $250,000 on November 1, 2009.
4 Id. at 2-3, ¶¶ 4, 6 in Appellant’s App. at 313, 314. The Agreement
expressly states that it is not a sale of the stock itself, but undoubtedlycontemplates a future sale of the stock to AVIC (for one dollar) provided it doesnot default. The language suggests that when the Agreement was executed, anoutright sale of the stock could not take place for legal reasons. Id.
5 Id. at 6, ¶ 15, in Appellant’s App. at 317.
6 Although the Notice of Default actually (and accurately) stated “Alameda
has (10) business days to cure this default in accordance with paragraph 15 of the
result, because AVIC received the Notice of Default on November 2, the
contractual deadline for it to cure nonpayment was actually November 17. 7 The
Notice, which is not on letterhead of any sort, provided no address where the cure
payment should be made.
Notwithstanding that AVIC had an additional four days to cure, Boehm’s
counsel delivered a letter to Pickel on November 13 purporting to terminate the
Agreement and declare it null and void (Termination Letter). The Termination
Letter demanded immediate possession of the Hotel, including turnover of the
keys to all rooms, terminated Pickel’s employment by Comanche, ordered all
employees to vacate the Hotel the same date the Termination Letter was
delivered, and terminated all corporate directors. 8 The letter further claimed that
AVIC had “no further rights.”
Pickel claims that AVIC attempted to cure the default by tendering a check
in the full amount due on November 16, but that Boehm’s counsel refused to
accept the check. He also claims he left a voice mail message for her on
November 17 and told her she could pick up the check from the Hotel that same
day. 9 Nine days later, Boehm filed an action in the Virgin Islands
Agreement,” it then erroneously required AVIC to pay the balance “by November
13, 2009[.]” See Notice of Default, in Appellant’s App. at 353 (emphasis added).
7 No one disputes November 11th was properly omitted as a business day
because it was a federal holiday (Veterans Day).
8 The Agreement provided that Boehm and her son would resign from their
positions as officers and directors of Comanche upon execution to allow “orderly
appointment of new officers and directors and a smooth transition to new
corporate management and governance.” Agreement at 4, ¶ 8, in Appellant’s App.
9 Boehm makes much of the fact that Pickel delivered the check to the Hotel
address when he knew she did not live there, claiming his tender was thus
insufficient, but the Agreement clearly provided the Hotel as the correct location
for all notices to her. She failed to change the location for notices, as the
Agreement clearly allowed. In addition, there is abundant evidence in the record
superior court seeking: 1) a declaratory judgment that she validly terminated the
Agreement and, therefore, it was null and void; and 2) injunctive relief preventing
Pickel from occupying the Hotel or operating a business on the premises (Local
Action). She obtained an ex parte temporary restraining order (TRO)
dispossessing Pickel of the Hotel for four days. Boehm also filed a lis pendens
against the Hotel. Although the Local Action had been on file for several years, it
remained pending when Pickel filed for bankruptcy protection in New Mexico in
II. BANKRUPTCY COURT PROCEEDINGS
Several months after Pickel filed his Chapter 11 petition, Boehm filed this
adversary proceeding seeking a declaratory judgment that the Agreement was null
and void. Pickel counterclaimed for breach of contract and slander of title; he
sought specific performance as well as damages for lost revenue and the
attorney’s fees he incurred when forced to quickly litigate the dissolution of the
TRO in order to regain control of the Hotel. Pickel also sought interest expense
on a construction loan he alleged could not be refinanced at a lower rate due to
the pending Local Action, as well as punitive damages. While the adversary was
pending, Pickel transferred all of AVIC’s rights under the Agreement to himself
in his individual capacity and dissolved AVIC.11
The bankruptcy court conducted a trial on the merits, and after hearing the
testimony of Boehm and Pickel and reviewing the exhibits received, entered
supporting the bankruptcy court’s finding that Boehm appeared to be evading
Pickel in hopes of defeating his ability to cure the default.
10 The bankruptcy court noted that nothing much had happened in the Local
Action after the TRO was dissolved four days after it was granted. Memorandum
Opinion, 493 B.R. at 266, ¶ 42.
11 As a result, AVIC and debtor Pickel are used interchangeably in some
judgment mostly in Pickel’s favor. Applying the law of the Virgin Islands, which
follows the American Law Institute’s Restatements of the Law, the bankruptcy
court determined that: 1) the Termination Letter Boehm delivered to Pickel on
November 13 was ineffective because November 17 was the actual cure date
under the Agreement; and 2) AVIC tendered a timely and adequate cure of the
payment default prior to the correct cure date sufficient to avoid termination of
the Agreement. The bankruptcy court then held that because Boehm’s actions
constituted an anticipatory breach, the Agreement was still binding. As a result,
it ordered specific performance of the Agreement conditioned upon Pickel making
the final payment.
With respect to Pickel’s counterclaim for breach of contract, the bankruptcy
court overruled Boehm’s claim that she had simply been mistaken in interpreting
the contract (which she thought should excuse her clear anticipatory repudiation).
It determined that her breach of the Agreement had caused Pickel out-of-pocket
damages of $2,800 for lost revenue during the short time AVIC was ousted from
the Hotel. Additionally, as an element of contract damages, the bankruptcy court
awarded $10,000, apparently relying on 5 V.I. Code § 541, a provision of Virgin
Island territorial law that permits recovery of fees in some cases. This
represented the attorney’s fees that the bankruptcy court held AVIC was required
to incur to dissolve the TRO Boehm had improperly obtained in the Local Action.
But the bankruptcy court declined Pickel’s request for interest expense and
The bankruptcy court also determined that Boehm may have improperly
filed a lis pendens, thereby slandering Pickel’s title to the Hotel. Notwithstanding
that finding, the bankruptcy court declined to award damages for that alleged
slander of title, noting that the lis pendens did not appear to have caused Pickel
any real damage, and that he had made no effort to get it removed.
III. APPELLATE JURISDICTION
This Court has jurisdiction to hear timely filed appeals from “final
judgments, orders, and decrees” of bankruptcy courts within the Tenth Circuit,
unless one of the parties elects to have the district court hear the appeal.12
Because neither party elected to have this appeal heard by the United States
District Court for the District of New Mexico, they have consented to appellate
review by this Court. A decision is considered final “if it ‘ends the litigation on
the merits and leaves nothing for the court to do but execute the judgment.’”13
Here, the bankruptcy court’s judgment terminated the adversary proceeding, and
therefore is final for purposes of appeal.
IV. ISSUES ON APPEAL AND STANDARD OF REVIEW
Boehm argues the bankruptcy court erroneously determined both that her
Notice of Default was defective and that she anticipatorily breached the
Agreement. She also claims Pickel failed to tender an adequate and timely cure
of his default, that the bankruptcy court lacked jurisdiction to award attorney’s
fees for the TRO—an action over which it did not preside, and that it erred in
finding she improperly filed a lis pendens against the Hotel.
For purposes of standard of review, decisions by trial courts are
traditionally divided into three categories, denominated: 1) questions of law,
which are reviewable de novo; 2) questions of fact, which are reviewable for clear
error; and, 3) matters of discretion, which are reviewable for abuse of discretion.14
Boehm’s argument that the bankruptcy court was without jurisdiction to award
12 28 U.S.C. § 158(a)(1), (b)(1), and (c)(1); Fed. R. Bankr. P. 8002; 10th Cir.
BAP L.R. 8001-3.
13 Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712 (1996) (quoting Catlin
v. United States, 324 U.S. 229, 233 (1945)).
14 Pierce v. Underwood, 487 U.S. 552, 558 (1988); see Fed. R. Bankr. P.
8013; Fowler Bros. v. Young (In re Young), 91 F.3d 1367, 1370 (10th Cir. 1996).
attorney’s fees is a question of law. De novo review of legal questions requires
an independent determination of the issues, giving no special weight to the
bankruptcy court’s decision. 15 Boehm’s assertions of error with respect to breach
of the Agreement and cure of the default are underpinned by the bankruptcy
court’s factual findings. A factual finding is “clearly erroneous” when “‘it is
without factual support in the record, or if the appellate court, after reviewing all
the evidence, is left with the definite and firm conviction that a mistake has been
V. ANALYSIS OF ANTICIPATORY BREACH OF THE AGREEMENT
A. Defective Notice of Default
Boehm first argues that the bankruptcy court erroneously determined her
Notice of Default was defective,17 and that she anticipatorily breached the
Agreement. The bankruptcy court stated, or at least implied, that the Notice of
Default was defective because it contained an incorrect cure date. But the
bankruptcy court also explained that the Agreement did not require the cure
period to be stated in the Notice of Default, as Pickel was a sophisticated party
capable of determining the correct cure date.
The bankruptcy court also concluded that Boehm was not required to send a
corrected Notice of Default reflecting the correct cure period. 18 Therefore,
Boehm’s assertion that the bankruptcy court erred in determining the Notice of
Default was defective is irrelevant because it is not necessary to its conclusion
that she anticipatorily breached the Agreement. Instead, the critical aspects of the
15 Salve Regina Coll. v. Russell, 499 U.S. 225, 238 (1991).
16 Las Vegas Ice & Cold Storage Co. v. Far W. Bank, 893 F.2d 1182, 1185
(10th Cir. 1990) (quoting LeMaire ex rel. LeMaire v. United States, 826 F.2d 949,
953 (10th Cir. 1987)).
17 Notice of Default, Exhibit F, in Appellee’s App. at 33.
18 Memorandum Opinion, 493 B.R. at 268.
bankruptcy court’s holding regarding anticipatory breach of the Agreement
concern the Termination Letter Pickel received on November 13,19 and Boehm’s
alleged evasion of Pickel’s attempts to cure the default.20
B. Anticipatory Breach
The bankruptcy court held that Boehm’s Termination Letter “was plainly
contrary to the Agreement, and constituted an anticipatory breach of the
Agreement.” 21 To support its conclusion, the bankruptcy court cited United Corp.
v. Reed, Wible and Brown, Inc. 22 and Bennington Foods, L.L.C. v. St. Croix
Renaissance Group L.L.L.P. 23 These two Virgin Islands cases apply §§ 244, 250,
251, 253, and 254 of the Restatement (Second) of Contracts (Restatement), as the
Virgin Islands has statutorily adopted application of the Restatement.24
According to § 250 of the Restatement, a repudiation is:
(a) a statement by the obligor to the obligee indicating that theobligor will commit a breach that would of itself give the obligee aclaim for damages for total breach under § 243, or
19 Termination Letter, Exhibit G, in Appellee’s App. at 34.
20 Boehm suggests Pickel was required to respond to her Notice of Default to
both claim he had a longer period to cure and to indicate his intent to timely cure.
Opening Brief at 12-13. Additionally, Boehm argues that nothing in her Notice ofDefault indicated she was not going to perform. Opening Brief at 13. But it is
the Termination Letter that is the key to repudiation, not the Notice of Default.
21 Memorandum Opinion, 493 B.R. at 268.
22 626 F. Supp. 1255, 1257 (D.V.I. 1986).
23 2010 WL 1608483, at *10 (D.V.I. 2010).
24 The Virgin Islands statute provides as follows:
§ 4 Application of common law; Restatements
The rules of the common law, as expressed in the restatements of the lawapproved by the American Law Institute, and to the extent not so expressed,
as generally understood and applied in the United States, shall be the rulesof decision in the courts of the Virgin Islands in cases to which they apply,
in the absence of local laws to the contrary.
V.I. Code Ann. tit 1, § 4 (2013).
(b) a voluntary affirmative act which renders the obligor unable orapparently unable to perform without such a breach.25
Courts have held that in order to constitute repudiation, the party to a contract
must make an absolute and unequivocal refusal to perform an obligation and that
such obligation must be so essential to the purpose of the contract that
nonperformance makes the agreement worthless. 26 While the Termination Letter
clearly meets these requirements, Boehm argued she could not have repudiated
the Agreement because she had no intent to do so. Instead, she claims because
she was merely mistaken about the Agreement’s default provision, she should not
have been held to have repudiated it.27
The bankruptcy court correctly noted that Comment d to § 250 of the
Restatement cautions that “[g]enerally, a party acts at his peril if, insisting on
what he mistakenly believes to be his rights, he refuses to perform his duty.”28
The bankruptcy court was also not convinced, after having the opportunity to
assess her credibility, that Boehm had merely misinterpreted the default
provision. Instead, it found there had been no “defensible but erroneous”
interpretation, and suggested Boehm may have purposely elected to assert an
interpretation she knew was wrong in an attempt to regain possession of the
Boehm also maintains that: 1) under § 251 of the Restatement, Pickel was
required to assure her of his intent and ability to perform under the Agreement,
25 Restatement (Second) of Contracts § 250 (1981).
26 McCloskey & Co. v. Minweld Steel Co., 220 F.2d 101, 104 (3d Cir. 1955).
27 Memorandum Opinion, 493 B.R. at 269.
28 Id. at 270 (internal quotation marks omitted).
and he did not do so;30 and 2) she had no obligation to render performance until
Pickel made the final payment. Boehm concludes that she could not have
breached the Agreement by merely sending Pickel the Notice of Default and
Termination Letter, so it is really Pickel who breached the Agreement, not her.31
As a preliminary matter, it does not appear she made this argument to the
bankruptcy court. Appellate courts consider issues that have not been decided by
the trial court only in rare circumstances not present here. 32 But even were we to
seriously consider this argument, there is no evidence to suggest Boehm made any
demand for an assurance of performance from Pickel. She admits that after she
issued the Notice of Default and the Termination Letter, there was no other
communication between the parties. And frankly, what would she have had
Pickel do to resuscitate the Agreement after she herself deemed the Agreement
terminated, null and void?
As a result, we conclude Boehm has not demonstrated that the bankruptcy
court erred in holding that she anticipatorily breached, or repudiated, the
30 That section of the Restatement provides as follows:
§ 251 When a Failure to Give Assurance May Be Treated as a
(1) Where reasonable grounds arise to believe that the obligor will commita breach by non-performance that would of itself give the obligee a claimfor damages for total breach under § 243, the obligee may demand adequateassurance of due performance and may, if reasonable, suspend anyperformance for which he has not already received the agreed exchangeuntil he receives such assurance.
(2) The obligee may treat as a repudiation the obligor’s failure to providewithin a reasonable time such assurance of due performance as is adequatein the circumstances of the particular case.
Restatement (Second) of Contracts § 251 (1981).
31 Opening Brief at 14-15.
32 In re C.W. Mining Co., 625 F.3d 1240, 1246 (10th Cir. 2010) (citing
Singleton v. Wulff, 428 U.S. 106, 120 (1976)).
C. Tender of Adequate and Timely Cure by Pickel
Under § 253 of the Restatement, a party’s repudiation of a duty under a
contract gives rise to a claim for damages for total breach. 33 But a “party’s duty
to pay damages for total breach by repudiation is discharged if it appears after the
breach that there would have been a total failure by the injured party to perform
his return promise.” 34 As explained in Williston on Contracts,
the party claiming that an anticipatory repudiation has excusedperformance of a condition precedent must show that but for therepudiation, it would have been ready, willing, and able to performits obligations under the contract, at least when the defendant–that is,
the repudiating party–places in issue the ability of the plaintiff toperform.35
Therefore, a critical aspect of this case, and an intensely factual one, is whether
Pickel tendered a timely and adequate cure, or was at least ready, willing, and
able to do so.
Pickel maintained, and the bankruptcy court found, that he both:
1) tendered a check to Boehm’s counsel on November 16, which was refused; and
2) had a check waiting for Boehm to pick up at the Hotel on November 17, and so
33 That section of the Restatement provides:
§ 253 Effect of a Repudiation as a Breach and on Other Party’s Duties
(1) Where an obligor repudiates a duty before he has committed a breach bynon-performance and before he has received all of the agreed exchange forit, his repudiation alone gives rise to a claim for damages for total breach.
(2) Where performances are to be exchanged under an exchange ofpromises, one party’s repudiation of a duty to render performancedischarges the other party’s remaining duties to render performance.
Restatement (Second) of Contracts § 253 (1981).
34 Restatement (Second) of Contracts § 254 (1981).
35 Richard A. Lord, 13 Williston on Contracts § 39:41 (4th ed. 2013)
informed Boehm by leaving a message on her answering machine. 36 Boehm
contends § 254 of the Restatement discharges her duty to pay damages for breach
by repudiation because there is no evidence to support the bankruptcy court’s
findings that Pickel attempted to cure the default. Boehm further argues that,
even if Pickel in fact tendered a check to cure the default, there remains a failure
to perform because he admitted it was drawn on an account with insufficient
funds to cover the payment.37
1. Tender of payment
In determining whether Pickel tendered a timely and adequate cure of the
default, the first dispute concerns the proper place for, or manner of, making that
payment. Although Boehm resided at the Hotel when the parties executed the
Agreement, the parties clearly anticipated she would be vacating the premises
within a couple months, if not sooner. 38 Nevertheless, the Agreement expressly
directs all notices to Boehm be delivered or mailed to her at the Hotel,39 but
provides no place or method for making payment. The Note specifies that Pickel
make payments to Boehm at the Hotel, “or at such other place as the holder
hereof may from time to time designate in writing.”40
The bankruptcy court held that Boehm never designated a different address
for making payments, and Boehm certainly did not testify she did or otherwise
seek to admit a copy of such a written designation at trial. She did testify that
Pickel had made previous payments through the trust account of an attorney
payment of $25,000 was due on November 30, 2007, or when Boehm vacated the
36 Memorandum Opinion, 493 B.R. at 263, ¶¶ 22, 23.
37 Opening Brief at 16.
38 Agreement at 1, ¶ 1, and 4, ¶ 7, in Appellant’s App. at 312, 315. A
premises, if earlier.
39 Id. at 6-7, ¶ 16, in Appellant’s App. at 317-18.
40 Non-Negotiable Promissory Note at 1, in Appellant’s App. at 338.
named Lorin Kleeger, who brought the parties together for the sale transaction.41
As a result of this payment history, she argues Pickel made no good faith attempt
to present the final payment and cure the default because he “failed to utilize the
common course of dealing in making payments” under the Agreement by not
“sending payment to the trust account of his attorney.” 42 This argument is not
persuasive for several reasons.
First, only four payments were due under the Agreement. One payment
was made upon execution of the Agreement, leaving only two other installment
payments before the final payment at issue here. That makes a true “course of
performance” difficult to establish. Second, and more importantly, the Note
expressly provides for payment to Boehm at the Hotel and mentions nothing of an
intermediary. Section 203(b) of the Restatement provides that the express terms
of a contract are to be given greater weight than course of performance and course
of dealing between the parties.43
Pickel testified that on November 16, one day prior to the cure deadline, his
41 Transcript of Proceedings on May 30, 2013 (“Transcript”) at 17-18, in
Appellant’s App. at 64. It should be noted that ¶ 16 of the Agreement providesthat notice to AVIC be given to Lorin M. Kleeger, Esq., suggesting Mr. Kleeger isAVIC’s counsel. Apparently, however, Mr. Kleeger also represents Boehm innumerous matters. Transcript at 48-49, in Appellant’s App. at 95-96.
42 Opening Brief at 16.
43 That section of the Restatement provides:
§ 203 Standards of Preference in Interpretation
In the interpretation of a promise or agreement or a term thereof, the
following standards of preference are generally applicable:
. . .
(b) express terms are given greater weight than course of performance,
course of dealing, and usage of trade, course of performance is givengreater weight than course of dealing or usage of trade, and course ofdealing is given greater weight than usage of trade[.]
Restatement (Second) of Contracts § 203 (1981).
representative attempted to hand deliver a check to Boehm’s attorney, Ezart A.
Wynter, Sr. (“Wynter”), but that Wynter refused to accept it. 44 On appeal, Boehm
argues there is nothing in the record to support the bankruptcy court’s finding that
the cure payment was tendered to Wynter because he “was never called as a
witness to explain the affidavit the [bankruptcy] court relied on to say [ ] Wynter
attempted to avoid receipt of the November 16, 2009 insufficient check.” 45 The
affidavit Boehm refers to was made by Wynter on January 4, 2010, in connection
with her Local Action seeking declaratory judgment and injunctive relief.46
In the affidavit, Wynter stated he was contacted by Pickel’s representative
inquiring about Boehm’s whereabouts and that he indicated he was unaware of
Boehm’s location, and additionally, that he was not authorized to accept any
documents on her behalf. The affidavit states Pickel’s representative “called” on
November 13. It is uncertain whether “called” means contacted in person or by
telephone, or whether the date of November 13 is accurate. What is important is
that Boehm provided no evidence at trial to counter Pickel’s evidence that his
representative tried to tender the final installment payment to her own lawyer,
except that she testified she was in constant contact with her lawyer and would
have known if this had occurred. 47 No one stopped Boehm from calling Wynter to
testify if she wished to rebut Pickel’s version of events.
Further, Pickel testified that he personally left a telephone message for
Boehm on November 16, advising her that the check was available for her to
Transcript at 134-36, 167, in Appellant’s App. at 181-83, 214; Exhibit H,
in Appellee’s App. at 36.
45 Opening Brief at 17.
46 Exhibit AA, Affidavit of Eszart A. Wynter, Sr., in Appellee’s App. at 120.
47 Transcript at 28, in Appellant’s App. at 75.
retrieve at the Hotel on November 17. 48 Pickel also produced a
contemporaneously written and witnessed account of that phone call. 49 Boehm
testified she never received Pickel’s message.50
The bankruptcy judge ultimately did what all trial judges have to do; he
listened to the testimony of Boehm and Pickel and assessed their credibility. For
good reason, Federal Rule of Bankruptcy Procedure 8013 requires that this Court
give due regard “to the opportunity of the bankruptcy court to judge the
credibility of the witnesses.” 51 The bankruptcy court clearly believed Pickel’s
version of the events over Boehm’s version. Accordingly, without any persuasive
corroborative evidence to support Boehm’s version of the events, we must accept
the bankruptcy court’s findings regarding tender of the cure payment.
2. Pickel’s ability to make good on cure payment
Pickel tendered a full cure of the default in the form of a check drawn on
his account at a New Mexico bank. 52 Boehm argues that Pickel admitted his
account had insufficient funds to cover the payment, and that drawing and
delivering a worthless check is a crime.53
At trial, Pickel testified he had made arrangements for a bank loan that
would cover the check he tendered to cure the default. 54 That plan required him
to notify the senior vice president loan officer at his bank the moment Boehm
retrieved the check and to arrange to have the borrowed funds immediately
48 Transcript at 134-36, 154-56, in Appellant’s App. at 181-83, 201-03.
49 Exhibit I, in Appellee’s App. at 37.
50 Memorandum Opinion, 493 B.R. at 263, ¶¶ 22-24.
51 Fed. R. Bankr. P. 8013.
52 Letter and Check dated November 16, Exhibit H, in Appellee’s App. at 36.
53 Opening Brief at 16.
54 Transcript at 135-36, in Appellant’s App. at 182-83.
wired. 55 Because Boehm was in the Virgin Islands, whereas the check was drawn
on a New Mexico bank, this plan was intended to allow time for funds to be
deposited in the account to cover the check before it was presented. Pickel also
offered into evidence a copy of an email he received on the morning of November
17, from his lawyer arranging this transaction. The email confirmed that the loan
documents had been prepared and the funds had been received.56
Once again, the bankruptcy court believed Pickel’s version of these events,
and found that Pickel credibly demonstrated he was ready, willing, and able to
perform his obligations under the contract. Boehm failed to specifically
contradict any of this evidence. As a result, there is no basis to reverse the
D. Summary of Anticipatory Breach and Cure of Default
Boehm’s arguments on appeal with respect to breach of the Agreement and
cure of the default are based on her allegations that the bankruptcy court’s factual
findings were erroneous. Under the “clearly erroneous” standard of review,
reversal is appropriate only if such findings are “‘without factual support in the
record, or if the appellate court, after reviewing all the evidence, is left with the
definite and firm conviction that a mistake has been made.’” 57 The only witnesses
appearing at trial were the parties themselves, perhaps because other witnesses
were located in the Virgin Islands. As a result, the amount and type of evidence
received was limited. But, after hearing and assessing the credibility of the
witnesses and reviewing the documentary evidence, the bankruptcy court
concluded that, rather than sincerely trying to collect the final $250,000 payment,
(10th Cir. 1990) (quoting LeMaire ex rel. LeMaire v. United States, 826 F.2d 949,
55 Id. at 154-56, in Appellant’s App. at 201-03.
56 Exhibit CC, in Appellee’s App. at 129.
57 Las Vegas Ice & Cold Storage Co. v. Far W. Bank, 893 F.2d 1182, 1185
953 (10th Cir. 1987)).
at some point Boehm became more interested in getting back the Comanche stock
(and thus the Hotel) she had sold to Pickel.58
According to the bankruptcy court, it was possible that to further that goal,
Boehm may have intentionally “misinterpreted” the default provision in the
Agreement, issued the erroneous Notice of Default and Termination Letter and
refused to correct them, and then evaded Pickel’s attempt to cure. 59 As the
bankruptcy court opined, allowing Boehm to regain the stock using this ploy
would be tantamount to a forfeiture, which is disfavored by the law.60
Pickel had already paid $550,000 of the $800,000 purchase price due under
the Agreement. Additionally, Pickel testified he had spent almost $2 million
repairing and improving the Hotel after the Agreement was signed,61 and that the
Hotel was now worth more than double what it had been worth when he signed
the purchase Agreement with Boehm. 62 The stock covered by the Agreement
represented a 42.6% interest in Comanche, and therefore likely had a value in
excess of $2 million. To permit Boehm to regain the stock to satisfy Pickel’s
$250,000 outstanding debt would be inequitable, especially in light of Boehm’s
actions that were contrary to the Agreement.
Our review of the appellate record63 demonstrates that there is more than
58 Memorandum Opinion, 493 B.R. at 264, ¶ 32.
59 Id. at 270.
60 Id. at 271.
61 Id. at 264, ¶ 34.
62 Id. at 264-65, ¶ 35.
63 As to the record on appeal, Pickel filed a Motion to Strike Portions of
Appellant’s Joint Appendix (“Motion to Strike”), complaining about the
documents Boehm submitted in Volumes XII and XIII of her Appendix. But two
days after filing his Motion to Strike, Pickel filed his own Appendix, and itcontains all but two or three of the very exhibits he now seeks to strike fromBoehm’s Appendix. At oral argument, Pickel’s counsel admitted those additional
adequate factual support in the record for those findings. We are not left with the
definite and firm conviction that the bankruptcy court made any mistake in these
findings of fact. Additionally, we note the bankruptcy court appears to have
reached its conclusions regarding anticipatory breach and evasion of cure
attempts, in part, based on Boehm’s pattern of behavior. It did not escape the
bankruptcy court’s attention, or ours, that in addition to this adversary
proceeding, Boehm has been litigating matters related to the Hotel and
Comanche’s stock for 20 years in at least eight other civil actions. 64 We therefore
affirm its decision that Boehm anticipatorily breached the Agreement and that
Pickel tendered an adequate cure of the default, or at least was ready, willing, and
able to do so.
VI. ANALYSIS OF ATTORNEY’S FEES AND LIS PENDENS
A. Attorney’s Fees
The bankruptcy court awarded Pickel $10,000 for the attorney’s fees AVIC
incurred in dissolving the TRO in the Local Action, effectively finding that its
efforts to dissolve the TRO were necessary for AVIC to regain possession of the
Hotel and realize the benefit of its bargain. The bankruptcy court held that those
fees were recoverable not as attorney’s fees per se, but instead as an element of
breach of contract damages. 65 Key to the decision is that the Virgin Islands does
not follow the general “American Rule” that parties bear their own costs,
documents were of no consequence to his position on appeal, and indicated his
Motion to Strike could be denied. We conclude the Motion to Strike was ill-
advised as Pickel put essentially identical documents before this court for review
and the few that were not duplicative were immaterial to the appeal.
Accordingly, we deny his Motion to Strike as moot.
64 Memorandum Opinion, 493 B.R. at 264, ¶ 33.
65 Id. at 273.
expenses and fees, absent contractual or statutory provisions to the contrary.66
Instead, under Virgin Islands law, attorney’s fees may be allowed as an element
of costs in the court’s discretion. 67 The bankruptcy court determined that if
Boehm had not breached the Agreement, and had she not sought the TRO, Pickel
would not have incurred the $10,000 in expenses necessary to dissolve the
TRO—classic breach of contract damages.
Boehm misunderstands the character of the award when she argues that the
bankruptcy court “lacks jurisdiction to award attorney’s fees in a case that was
never before the court.” 68 Admittedly, the Virgin Islands statute contemplates
that the judge hearing the case who is familiar with the work involved and the
services rendered has the authority to award such fees. But the bankruptcy court
found credible Pickel’s testimony that he had incurred $25,000 in defending the
Virgin Islands litigation caused by Boehm’s anticipatory breach, and that at least
$10,000 of it was directly attributable to the TRO litigation itself.
Boehm questions the award of $10,000 in damages because Pickel did not
introduce documentary evidence—such as an itemization of hours expended
multiplied by the applicable hourly rate. While it is true that Pickel did not
introduce an itemized accounting of the legal work performed, there is
considerable other evidence in the record supporting the award.
First, the record contains the order dissolving the TRO, which recites that
66 Prosser v. Prosser, 40 F. Supp. 2d 663, 671 (D.V.I. 1998) (holding that
“[i]n the courts of the Virgin Islands[,] the American Rule against shifting fees tothe losing party does not apply”), rev’d on other grounds, 186 F.3d 403 (3d Cir
1999); Anderson v. Bryan, No. ST-08-CV-545, 2013 WL 3215672, at *3 (V.I.
June 24, 2013) (same).
67 V.I. Code Ann. tit 5, § 541 (West 2013). But see Pan Am. Realty Trust v.
Twenty One Kings, Inc., 297 F. Supp. 143, 151 (D.V. I. 1968), aff’d, 408 F.2d 937(3d Cir. 1969) (“The amount to be awarded is wholly within the discretion of thejudge before whom the case has been tried and who is, therefore, familiar with thework involved and the services rendered.”) (emphasis added).
68 Opening Brief at 17.
AVIC filed an emergency motion to vacate the TRO the day after it was entered,
and also that the hearing on that motion was held only three days later. 69 Pickel
testified he had already paid his attorneys $15,000 in connection with this matter,
and still owed them more. 70 He also testified that the billing rates of his two
attorneys were $250 to $300 an hour, that they “were called out at 7:00 at night
and worked through the night” in order to prepare an emergency motion to quash
the TRO, and then “worked several hours each day that week in preparing for the
hearing” on the TRO. 71 Boehm is simply incorrect that there was no evidence in
the record to support the award.
While an itemized bill might have been more persuasive evidence, the
bankruptcy court clearly found Pickel’s testimony credible and believed that his
attorneys would likely have needed to spend long hours over a very short period
of time to prepare for, and attend, the hearing to dissolve the TRO. And at $250$
300 per hour for his two attorneys, an hourly rate Boehm does not challenge, it
is not difficult to see how AVIC incurred $10,000 in fees.
Boehm knew or reasonably should have known that her election to breach
the Agreement and have Pickel evicted from the Hotel would cause AVIC
damages, including the attorney’s fees required to dissolve the improperly
acquired TRO. There is sufficient evidence in the record to support those fees as
an element of damages for her breach. We decline, therefore, to reverse the
bankruptcy court’s award of $10,000 as an element of contract damages.
69 The Appellee’s Appendix contains pleadings and orders from the Local
Action, including the complaint, amended complaint, affidavit in support of TRO,
order granting TRO, order staying TRO, and order dissolving TRO. See Exhibits
O through T, in Appellee’s App. at 58 to 78. Boehm obtained the ex parte TROon Monday, December 14, 2009, and delivered it to Pickel that same evening. By
9:00 a.m. the next morning, Pickel filed the emergency motion to dissolve orvacate the TRO. The actual hearing on the TRO was held four days later.
70 Transcript at 194-96, in Appellant’s App. at 241-43.
71 Id. at 195, in Appellant’s App. at 242.
B. Improper Filing of Lis Pendens
Boehm’s final argument is that the bankruptcy court erred in finding that
she improperly filed a lis pendens against the Hotel. The bankruptcy court stated,
or at least implied, the filing of the lis pendens was improper because Boehm had
no personal claim against the property, as any claim would be held by the
corporation, itself, not by her as an individual shareholder. Boehm’s lis pendens
argument is irrelevant to her appeal, however, because the bankruptcy court
declined to award any damages in connection with Pickel’s counterclaim for
slander of title.72
Boehm’s appeal of the bankruptcy court’s decision, which held that the
Agreement remained in full force and effect, and thus both parties were entitled to
specific performance of all their rights under the Agreement, is ultimately based
on her disagreement with that court’s factual findings. We cannot say that those
findings, essentially that Boehm repudiated the Agreement and Pickel tendered a
timely and adequate cure, are clearly erroneous. Therefore, the bankruptcy
court’s order is hereby AFFIRMED.
Memorandum Opinion, 493 B.R. at 274.