Legal Memorandum: Recovering Economic Losses in Tort in VI

Issue: Under the law of the Virgin Islands, may a plaintiff recover purely economic losses under an action based in tort?

The Virgin Islands has applied the economic loss doctrine which “prohibits plaintiffs from recovering in tort economic losses to which their entitlement flows only from contract.”  Ringo v. Southland Gaming of the United States V.I., Inc., 2010 V.I. LEXIS 62, 15 (V.I. Super. Ct. Sept. 22, 2010) (Dunston, J.) (quoting Werwinski v. Ford Motor Co., 286 F.3d 661, 671 (3d Cir. 2002)); see also Addie v. Kjaer, 737 F.3d 854, 866 (3d Cir 2013) (citing Ringo, 2010 V.I. Lexis 62, at *13-14)).

The Third Circuit also applies the gist of the action doctrine which precludes plaintiffs from recasting ordinary breach of contract claims into tort claims.  Addie, 737 F.3d at 868 (quoting Pediatrix Screening, Inc. v. TeleChem Int’l, Inc., 602 F.3d 541, 548 (3^rd Cir. 2010)).  The gist of the action doctrine bars tort claims:

(1)               arising solely from a contract between the parties;

(2)        where the duties allegedly breached were created and grounded in the contract itself;

(3)        where liability stems from a contract; or

(4)        where the tort claim essentially duplicates a breach of contract claim or the success of which is wholly dependent on terms of a contract.

V.I. Port Auth. v. Callwood, No. ST-11-CV-305, 2014 V.I. LEXIS 11, 10 (V.I. Super. Ct. Feb. 28, 2014) (Dunston, J.) (citing Ringo, 2010 V.I. LEXIS 62, 12).  Courts must apply a factually […]