MRL Development I, LLC v. Whitecap Investment Corp.

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

______

No. 14-4738

______

MRL DEVELOPMENT I, LLC;

MICHAEL R. LUCHT,

Appellants

v.

WHITECAP INVESTMENT CORP. d/b/a Paradise Lumber;

GREAT SOUTHERN WOOD PERSERVING, INC.;

PUTNAM LUMBER AND EXPORT COMPANY;

PUTNAM FAMILY PROPERTIES, INC.

______

On Appeal from District Court

of the Virgin Islands

(D.C. No. 3-13-cv-00048)

District Judge: Honorable Curtis V. Gomez

______

Argued December 7, 2015

Before: FISHER, KRAUSE, ROTH, Circuit Judges.

(Filed: May 17, 2016)

Jared D. Bayer, Esq.

Thomas G. Wilkinson, Jr., Esq. [ARGUED]

Cozen O'Connor

1650 Market Street

One Liberty Place, Suite 2800

Philadelphia, PA 19103

David A. Bornn, Esq.

The Bornn Firm

5079 Norre Gade, Suite 1

Charlotte Amalie

St. Thomas, VI 00802

Counsel for Appellants

Chad C. Messier, Esq.

Alex M. Moskowitz, Esq. [ARGUED]

Lisa M. Komives, Esq.

Dudley Topper & Feuerzeig

1000 Frederiksberg Gade

P.O. Box 756

St. Thomas, VI 00804

John S. Baker, IV, Esq.

Lee M. Hollis, Esq.

2

S. Andrew Kelly, Esq. [ARGUED]

Lightfoot Franklin & White

400 20th Street North

The Clark Building

Birmingham, AL 35203

Daryl C. Barnes, Esq.

Sunshine S. Benoit, Esq.

Bryant Barnes Blair & Benoit

1134 King Street, 2nd Floor

P.O. Box 224589

Christiansted, St. Croix, VI 00820

Robert A. Carlson, Esq. [ARGUED]

Lana M. Naghshineh, Esq.

Ryan M. Charlson, Esq.

Lee Hernandez Landrum Garofalo & Blake

100 North Biscayne Boulevard, Suite 605

Miami, FL 33132

Counsel for Appellees

______

OPINION OF THE COURT

______

FISHER, Circuit Judge.

3

Michael Lucht (and his company, MRL Development

I, LLC), purchased treated lumber for a deck on his vacation

home in the Virgin Islands. The lumber allegedly decayed

prematurely. After replacing rotten deck boards, Lucht

brought suit against the retailer, wholesaler, and treatment

company of the lumber.

Lucht purchased the lumber between 2002 and 2006.

He began replacing deck boards in 2010, but he claims he did

not discover the severity of the problem until the fall of 2011.

Lucht and MRL filed suit in February 2013, alleging the

following claims against the appellees: (1) a Uniform

Commercial Code contract claim; (2) a common law contract

claim; (3) a breach of warranty claim; (4) a negligence claim;

(5) a strict liability claim; and (6) a deceptive trade practices

claim under the Virgin Islands Deceptive Trade Practices Act

(“DTPA”). The appellees are the retailer, Whitecap

Investment Corporation, d/b/a Paradise Lumber (“Paradise”);

the wholesaler, Putnam Lumber & Export Company and

Putnam Family Properties, Inc. (“Putnam”); and the treatment

company, Great Southern Wood Preserving, Inc. (“Great

Southern”).

The District Court granted summary judgment against

Lucht and MRL on the basis that all claims were time-barred.

We agree, except that we will review the tort claims under the

gist of the action doctrine, and will affirm on that basis.

I.

A.

The underlying product at the heart of this dispute, the

lumber, was pressure treated by Great Southern. It offers

various services, one of which is called Yellawood and one

designated as “Treatment Services Only” (“TSO”). Under the

TSO process, Great Southern does not purchase the lumber

4

itself, but rather treats lumber purchased by the customer to

the customer’s requested treatment level. Great Southern does

not test the lumber for retention or penetration levels when it

fills a TSO lumber order. Yellawood is lumber that has been

purchased and pressure treated by Great Southern. It is tested

for retention and penetration levels and includes a warranty.

Great Southern supplied primarily TSO lumber to

Putnam on a wholesale basis, order-by-order. The TSO

lumber has a green tag. The appellees assert that the

appellants purchased TSO lumber rather than Yellawood

lumber, and Lucht stated on the record that he believes the

tags on the lumber were green.

The lumber that the appellants purchased was for a

home that MRL acquired in the Virgin Islands to serve as a

vacation home for Lucht and a rental property for MRL.

Lucht began renovating the home, a project which extended

from 2002 to December 2006. As part of this project, Lucht

added a deck which he constructed with pressure-treated

lumber that was purchased from Paradise.

After finishing the deck, at the latest in December

2006, Lucht visited the home every three months. Lucht

alleges that, starting in 2010, each time he visited the home he

had to replace a few boards in the deck. A year after he

started replacing the boards, in the fall of 2011, he asserts that

he had a meeting with a carpenter friend who informed Lucht

that he had been replacing bad lumber all over the island.

Lucht contends that he then realized that the problem with his

deck was widespread and would likely continue.

B.

The appellants filed their complaint in this action in

5

the Virgin Islands Superior Court in February 2013. They

amended their complaint on March 7, 2013. The appellees

thereafter removed the case to the District Court of the Virgin

Islands based on diversity jurisdiction. In addition, the

appellees asserted various cross-claims against each other.

Putnam filed the first dispositive motion (pertinent to

this appeal), requesting that the District Court dismiss the

appellants’ contract, breach of warranty, and DTPA claims.

The District Court granted this motion.1 Thereafter, Great

Southern and Putnam filed motions for summary judgment,

and Paradise joined in each motion. The appellees also filed

motions for summary judgment on the cross-claims. The

District Court granted the appellees’ motions for summary

judgment against appellants, dismissed the motions regarding

the cross-claims as moot, and entered judgment in favor of

the appellees.

The District Court found that the appellants’ contract

claims were time-barred because (1) they were subject to the

U.C.C.’s four-year statute of limitations; (2) the discovery

rule is inapplicable under the U.C.C.; and (3) the statute of

limitations had thus expired in December 2010 prior to the

filing of the complaint. Similarly, the District Court found the

warranty claim was time-barred. As to the negligence and

strict liability claims, the District Court found that although

the applicable two-year statute of limitations is subject to the

discovery rule, Lucht discovered the rotting lumber in 2010,

his investigation of the issue was insufficient, and he was

therefore ineligible for tolling of the limitations period.

Finally, the District Court found that the DTPA claims were

subject to the two-year statute of limitations in the version of

the DTPA in place at the time of filing the complaint, rather

1

The appellants have not appealed that decision.

6

than under the amended statute (which provided a six-year

statute of limitations) because the claims accrued at or before

the time of purchase in 2006. Accordingly, the District Court

held that the DTPA claims were time-barred.

The appellants timely appealed the District Court’s

dismissal.

II.

The District Court had jurisdiction under 28 U.S.C.

§ 1332(a) and 48 U.S.C. §§ 1612(a) and 1613 because the

parties meet the requirements for diversity jurisdiction. This

Court has appellate jurisdiction under 28 U.S.C. § 1291.2 The

appellants appealed only the District Court’s order granting

summary judgment. We apply “a plenary standard in

reviewing orders entered on motions for summary judgment,

applying the same standard as the District Court.” Blunt v.

Lower Merion Sch. Dist., 767 F.3d 247, 265 (3d Cir. 2014).

We must therefore consider “whether there are any genuine

issues of material fact such that a reasonable jury could return

a verdict for the [appellants].” Banks v. Int’l Rental &

2

Although we recently determined that our jurisdiction

over cases arising from the Virgin Islands District Court has

been altered by the 1984 Revised Organic Act and the 1990

amendment by the Virgin Islands legislature to 4 V.I. Code §

76(a), we also indicated that there was “no reason not to

incorporate the federalism principles applicable throughout

the circuit into our relationship with the Virgin Islands

courts” and to act otherwise would “subvert[] the dual aims of

Erie [R.R. Co. v. Tompkins, 304 U.S. 64 (1938)].” Edwards v.

HOVENSA, LLC, 497 F.3d 355, 360–61 (3d Cir. 2007). Thus,

jurisdiction is proper in this action as the parties are diverse.

Id.

7

Leasing Corp., 680 F.3d 296, 297 n.1 (3d Cir. 2012). In doing

so, we must apply the substantive laws of the Virgin Islands,

including its statutes of limitations. HOVENSA, 497 F.3d at

360 (“The fact that the District Court of the Virgin Islands is

an Article IV court rather than an Article III court does not

preclude the application of Erie.”).

The appellees have advanced some arguments that

were not relied upon by the District Court in granting

summary judgment. The appellants argue that this Court

should not consider any grounds other than those considered

by the District Court. New Castle Cty. v. Nat’l Union Fire Ins.

Co. of Pittsburgh, 174 F.3d 338, 342 (3d Cir. 1999) (“[A]s a

general rule, we will consider only issues passed upon by the

court below.”). However, “[i]nasmuch as our review is

plenary, ‘we may affirm the District Court on any grounds

supported by the record,’ even if the court did not rely on

those grounds.” Blunt, 767 F.3d at 265 (quoting Nicini v.

Morra, 212 F.3d 798, 805 (3d Cir. 2000)). Accordingly, this

Court may consider the other arguments that have been

advanced by the appellees.

III.

We will undertake a review of the appellants’ claims in

the order they appear in the appellants’ amended complaint,

starting with the breach of contract and warranty claims,

moving next to the tort claims, and ending with the DTPA

claims.

A.

The appellants asserted two breach of contract

claims—one against Putnam and one against Paradise—

pursuant to the U.C.C. and common law; and a breach of

warranty claim against all of the appellees. Common law

contract and warranty claims have a six-year statute of

8

limitations under the Virgin Islands Code. V.I. Code tit. 5, §

31(3)(A). The parties agree that the discovery rule3 is

applicable to common law claims. The parties disagree,

however, about whether the U.C.C. supplants the common

law claims in this action and precludes the application of the

discovery rule, which would in turn bar the appellants’

claims. V.I. Code tit. 11A, § 2-725.

In order to apply the correct statute of limitations, we

must first determine whether the appellants’ common law

claims may stand or are supplanted by the U.C.C. This will

allow us to then determine the applicability of the discovery

rule and apply the correct statute of limitations.

1.

In assessing whether the U.C.C. displaces a common

law claim, this Court begins with two basic principles. First,

the U.C.C. “must be liberally construed and applied to

promote its underlying purposes and policies.” V.I. Code tit.

11A, § 1-103(a); N.J. Bank, N.A. v. Bradford Sec. Operations,

Inc., 690 F.2d 339, 345 (3d Cir. 1982). Second, “[u]nless

displaced by the particular provisions of [the U.C.C.], the

principles of law and equity . . . supplement its provisions.”

V.I. Code tit. 11, § 1-103(b). Thus, the U.C.C. displaces the

common law only “insofar as reliance on the common law

would thwart the purposes of the Code.” N.J. Bank, 690 F.2d

at 346. Where the U.C.C. supplants common law contract

claims, the common law action will be barred. Id.

3

We have, at various times, described the discovery

rule as postponing the accrual date of a cause of action or,

more precisely, as tolling the running of the limitations period

once the action has accrued. See G.L. v. Ligonier Valley Sch.

Dist. Auth., 802 F.3d 601, 613 n.10 (3d Cir. 2015).

9

We must decide whether the Virgin Islands U.C.C.

supplants the appellants’ common law claims. The Virgin

Islands Supreme Court has not spoken on this issue. Where

this occurs, we are “required to predict how the Supreme

Court of the Virgin Islands would decide an issue of

territorial law, and should seek guidance from Superior Court

decisions in undertaking this endeavor.” HOVENSA, 497 F.3d

at 361 n.3. The Superior Court of the Virgin Islands,

however, “is not the highest court of the Territory [or] even

an intermediate appellate court, but rather a trial court.” Id. at

361. Accordingly, we are not bound by Superior Court

decisions. Id.; see also Commissioner of Internal Revenue v.

Estate of Bosch, 387 U.S. 456, 465 (1967) (“[D]ecrees of

lower state courts should be attributed some weight [but] the

decision is not controlling where the highest court of the State

has not spoken on the point.” (internal quotation marks

omitted)).

The parties have cited two Territorial Court decisions

for their separate positions regarding the applicability of the

U.C.C.’s statute of limitations. The Superior Court has

subsumed the role of the Territorial Court and we will review

those decisions as if they were decided by the Superior Court.

The Virgin Islands Territorial Court in White v. S&E

Bakery, Inc., 26 V.I. 87 (Terr. Ct. 1991), found that the

plaintiff in that action could go forward with claims under

both the U.C.C. and the common law statutes of limitation.

White, 26 V.I. at 90. However, White has never been cited by

any other Virgin Islands court, and the opinion did not

address the purview of the U.C.C. Additionally, the plaintiff

in White had filed his action within the four-year statute of

limitations that is provided by the U.C.C., and thus the

finding that the claim qualified under both statute of

limitations was unnecessary. Id.

10

Six years earlier in Fombrun v. Controlled Concrete

Prods., Inc., 21 V.I. 578 (Terr. Ct. 1985), the Territorial Court

addressed the purview of the U.C.C. and found that a contract

for the sale of goods was supplanted by the U.C.C. Id. at 581–

82. Although earlier, Fombrun provides a clearer analysis and

the White court failed to cite it or discuss the prior holding in

Fombrun.

Despite Fombrun’s persuasive qualities, these cases do

not provide a clear picture of what the current law is on this

issue as we would be forced to pick between two

contradictory holdings—one of which failed to recognize that

it was creating such a division. Thus, given that the Territorial

Court decisions are not controlling on this Court because the

Virgin Islands Supreme Court has not spoken on the subject,

Estate of Bosch, 387 U.S. at 465, and no other Virgin Islands

courts have cited either case (other than the District Court in

citing Fombrun), we will have to look elsewhere to make our

prediction.

Consequently, we will analyze the application of the

U.C.C. by applying a plain meaning interpretation of whether

lumber qualifies as a “good” to determine whether the

appellants’ common law contract and warranty claims should

be supplanted by the U.C.C. See In re Am. Home Mortg.

Holdings, Inc., 637 F.3d 246, 254–55 (3d Cir. 2011).

“Goods” are “all things (including specially manufactured

goods) which are movable at the time of identification to the

contract for sale.” V.I. Code tit. 11A, § 2-105(1). The

contracts at issue in this case are clearly governed by the

U.C.C. The appellants allege that they had oral contracts,

memorialized by invoices, with Putnam and Paradise, for the

purchase of lumber. Lumber is a thing that is movable at the

time of identification to the alleged contract for sale. Under a

plain reading of the definition of “goods,” lumber is included

11

and the appellants’ claims fall within the purview of the

U.C.C.4

This conclusion is bolstered by the purpose of the

U.C.C. “[t]o introduce a uniform statute of limitations for

sales contracts, thus eliminating jurisdictional variations and

providing needed relief for concerns doing business on a

nationwide scale.” V.I. Code tit. 11A, § 2-725 cmt. As such,

failure to apply the U.C.C. in this situation would thwart the

U.C.C.’s purpose to provide uniform limitations periods for

claims involving contracts for the sale of goods, including

lumber.

2.

Because the U.C.C. applies, we will now address the

appellants’ argument that the discovery rule applies to the

U.C.C.

The Virgin Islands Code provides a six-year statute of

limitations for actions involving a contract “except when, in

special cases, a different limitation is prescribed by statute.”

V.I. Code tit. 5, § 31. The Virgin Islands U.C.C., on the other

hand, provides that an action for breach of contract is subject

4

The District Court similarly concluded that the

U.C.C. statute of limitations governed the claims against all

appellees for breach of warranty. The appellants do not argue

on appeal that, because the bulk of the lumber shipped from

Great Southern to Putnam was TSO lumber, the alleged

contracts at issue were for services and not goods; instead,

they argue that U.C.C. and common law contract claims may

be asserted simultaneously. The argument that these contracts

were for services is therefore waived, and we need not

address it. See, e.g., In re Surrick, 338 F.3d 224, 237 (3d Cir.

2003).

12

to a four-year statute of limitations. V.I. Code tit. 11A, § 2-

725(1). This statute of limitations is restricted by the

subsection that follows, subsection two, which provides that

“[a] cause of action accrues when the breach occurs,

regardless of the aggrieved party’s lack of knowledge of the

breach. V.I. Code tit. 11A, § 2-725(2) (hereinafter referred to

as “subsection two”). Subsection four of that provision,

however, states that “[t]his section does not alter the law on

tolling of the statute of limitations nor does it apply to causes

of actions which have accrued before this title becomes

effective.” V.I. Code tit. 11A, § 2-275(4) (hereinafter referred

to as “subsection four”).

The appellants argue that, despite subsection two’s

instruction that the aggrieved party’s knowledge is not to be

considered, subsection four’s pronouncement allows for the

application of the discovery rule to U.C.C. claims. The

appellees argue, and the District Court found, that subsection

two prohibits the application of the discovery rule and

subsection four refers to equitable tolling.

One Virgin Islands court has found that the discovery

rule does not apply to the U.C.C. Fombrun, 21 V.I. at 582–

83. This case is a Territorial Court case, however, and the

court did not undergo a review of subsection two in

conjunction with subsection four. The Fombrun court did not

undertake a review of what comprises “the law on tolling.”

This Court must therefore interpret the statute to determine

whether the discovery rule is applicable because neither the

Virgin Islands legislature nor the Virgin Islands Supreme

Court has provided the parameters for what constitutes “the

law on tolling.”

When interpreting a statute, this Court must give effect

to the legislature’s intent. In re Am. Home Mortg., 637 F.3d at

13

254. This determination begins with the statute and if the text

is plain, this Court need not inquire further. Id. at 255. If the

legislature’s intent is made plain, “it is unnecessary for us to

refer to other canons of statutory construction, and indeed we

should not do so.” Id. at 254–55. Moreover, just because

party opponents may “proffer different interpretations of the

statutory language does not make the language ambiguous. It

just makes the court’s role difficult in deciding which

interpretation is persuasive.” Id. at 256.

Given the parties’ differing interpretations, this Court

must determine which interpretation of the two subsections is

correct. We have indicated that both the discovery rule and

equitable tolling require diligence on the part of the plaintiff

with the potential consequence of losing the benefit of either

doctrine.5 The two doctrines differ, however, as to their

purposes in application. G.L., 802 F.3d at 613 n.10, 614 n.12

(citing William A. Graham Co. v. Haughey, 646 F.3d 138,

150 (3d Cir. 2011); Oshiver, 38 F.3d at 1390).

The discovery rule focuses on the plaintiff’s

knowledge of injury, whereas equitable tolling focuses on the

time to bring an action despite discovery of the injury. Id. at

614 n.2. Given the difference between the two doctrines, the

two § 2-725 subsections each stand alone, subsection two

referring to the discovery rule and subsection four referring to

equitable estoppel. Such a reading is consistent with this

5

Oshiver v. Levin, Fishbein, Sedran & Berman, 38

F.3d 1380, 1390 (3d Cir. 1994) (citing Keystone Ins. Co. v.

Houghton, 863 F.2d 1125, 1127 (3d. Cir. 1988), abrogated on

other grounds by Klehr v. A.O. Smith Corp., 521 U.S. 179

(1997) (for the discovery rule); Reeb v. Econ. Opportunity

Atlanta, Inc., 516 F.2d 924, 930 (5th Cir. 1975) (for equitable

tolling)).

14

Court’s preference to construe a statute in a way that gives

meaning to all provisions. Kendall v. Russell, 572 F.3d 126,

143 (3d Cir. 2009) (“It is a well known canon of statutory

construction that courts should construe statutory language to

avoid interpretations that would render any phrase

superfluous.”).

Subsection two encompasses the discovery rule

because it relies on the plaintiff’s knowledge or imputed

knowledge, coinciding with subsection two’s prohibition on

considering the “aggrieved party’s lack of knowledge of the

breach.” V.I. Code tit. 11A, § 2-725(2). This leaves

subsection four, which refers to “tolling”, to be applied where

equitable tolling is at issue. In contrast, reading the two

subsections together as the appellants request would

essentially read subsection two out of the statute, rendering

the “phrase superfluous.” See Kendall, 572 F.3d at 143; see

also Hull v. Eaton Corp., 825 F.2d 448, 456–57 (D.C. Cir.

1987) (finding that identical language of a statute was clear

and weighed against the application of the discovery rule).

Such a result is consistent with our prior holdings.

We have previously found the discovery rule

inapplicable to conversion actions under Pennsylvania’s

U.C.C. Menichini v. Grant, 995 F.2d 1224, 1229–31 (3d Cir.

1993). In making that finding, our focus centered on the

U.C.C.’s “objectives of negotiability, finality, and uniformity

in commercial transactions.” Id. at 1230. Similar objectives

are found in the Virgin Islands U.C.C.’s official comment

regarding the statute of limitations:

[the purpose of this section is] [t]o introduce a

uniform statute of limitations for sales

contracts, thus eliminating jurisdictional

variations and providing needed relief for

15

concerns doing business on a nationwide scale

whose contracts have heretofore been governed

by several different periods of limitation

depending upon the state in which the

transaction occurred.

V.I. Code tit. 11A, § 2-725 cmt. In accordance with this

focus, we find that the discovery rule does not apply to

contract claims covered by the Virgin Islands U.C.C.

3.

Under the applicable four-year statute of limitations,

the appellants’ contract claims are time-barred. A claim for

breach of contract accrues when the breach occurs. This

precludes the consideration of the plaintiff’s knowledge of the

breach. Id. § 2-725(1). The appellants’ contract claim is

clearly time-barred as the breach of the contract occurred in

December 2006, at the latest, when the last of the lumber was

purchased from Paradise. As the appellants did not file this

action until February 2013, the two contract claims fall

outside of the four-year limitations period.

The breach of warranty claims are also time-barred.

Where the underlying contract falls within the U.C.C., the

warranty claim will also be subject to the U.C.C.’s

application. Id. §§ 2-313, 2-314, 2-315 (referencing

warranties in relation to the contract for the sale of goods to

which they attach). A breach of warranty claim starts to

accrue “when tender of delivery is made, except that where a

warranty explicitly extends to future performance of the

goods and discovery of the breach must await the time of

such performance the cause of action accrues when the breach

is or should have been discovered.” Id.; § 2-725.

16

The final tender of delivery of the lumber was made in

December 2006, when the last lumber was bought for the

renovation of the home. Thus, the warranty claim is time-

barred if there is no explicit warranty extending to future

performance of the lumber.

The term “explicit” under the U.C.C. is defined as “not

implied merely or conveyed by implication; distinctly stated;

plain in language; clear; not ambiguous; express;

unequivocal” or “that which is so clearly or distinctly set

forth that there is no doubt as to its meaning.” Jones &

Laughlin Steel Corp. v Johns-Manville Sales Corp., 626 F.2d

280, 291 n.25 (3d Cir. 1980) (internal quotation marks and

citation omitted). Moreover, the defendant’s knowledge of the

plaintiff’s expectations or the possible reliance by the plaintiff

on the defendant’s expertise does not transform

“representations regarding the performance of existing

products . . . into explicit warranties of future performance.”

Id.

No reasonable jury could find, based on Lucht’s

statements during his deposition, that an explicit warranty of

future performance was made. Lucht stated that he: (1) never

had contact with or heard of Putnam or Great Southern prior

to this suit, (2) was not told by any Paradise employee that the

lumber was treated a certain way or that it would last for a

certain amount of time, (3) did not request a specific type of

treatment of the lumber and purportedly relied on the

representation that the lumber was pressure treated, (4) could

not recall exactly what the tags on the end of the individual

pieces of lumber stated but remembered that the tags were

green, and (5) did not receive a warranty or any other

representations from Putnam. Great Southern also provided

evidence that the Yellawood tags, which provide a limited

warranty, are not green and that the majority of the lumber

17

sold to Putnam is TSO lumber, which has no warranty and

has green tags. Additionally, the invoices from Paradise to

Lucht do not state that Lucht received a warranty.

Lucht also stated in his deposition that he had no

knowledge of whether his contractor informed Paradise that

he needed a certain type of treated lumber or that he indicated

at any time what type of lumber he needed when he picked up

orders from Paradise. Lucht did state that he relied on

Paradise to furnish the correct lumber, but he provided no

evidence that suggests that his reliance was justified or that

Paradise had reason to know of such reliance. Lucht indicated

that he relied only on his architect to specify, and his

contractor to pick, the correct type of lumber.

The appellees made no warranties. Given the record,

there is no genuine issue of material fact that Lucht was given

any type of explicit warranty of future performance.

The only other available avenue of recovery for the

appellants would be equitable tolling under subsection four of

the U.C.C.’s statute of limitations provision. The appellants,

however, have failed to assert this argument in this appeal.

Rather, the appellants focus on the discovery rule in their

briefs and the only parties to address such an argument,

interestingly, are the appellees. Accordingly, this Court will

not consider this argument as it has been waived by the

appellants. In re Surrick, 338 F.3d at 237 (“Failure to identify

or argue [an] issue in [the] opening brief constitutes waiver of

[an] argument on appeal.”).

B.

Three issues arose in the District Court regarding the

appellants’ tort claims, whether the claims were: (1)

18

precluded by the gist of the action doctrine, (2) timely filed,

or (3) precluded by the economic loss doctrine. Because the

appellants’ tort claims are barred by the gist of the action

doctrine, we will not undertake a review of the other two

issues.

This Court has found that the gist of the action

doctrine applies in Virgin Islands actions. Addie v. Kjaer, 737

F.3d 854, 868–69 (3d Cir. 2013). “[T]he ‘gist of the action

doctrine’ bars plaintiffs from bringing a tort claim that merely

replicates a claim for breach of an underlying contract.”

Werwinski v. Ford Motor Co., 286 F.3d 661, 680 n.8 (3d Cir.

2002) (applying Pennsylvania law). “[W]hile the existence of

a contractual relationship between two parties does not

prevent one party from bringing a tort claim against another,

the gist of the action doctrine precludes tort suits for the mere

breach of contractual duties”; the plaintiff must instead point

to “independent events giving rise to the tort.” Addie, 737

F.3d at 865–66. “[T]he important difference between contract

and tort actions is that the latter lie from the breach of duties

imposed as a matter of social policy while the former lie for

the breach of duties imposed by mutual consensus.” Bohler–

Uddeholm Am., Inc. v Ellwood Grp. Inc., 247 F.3d 79, 103

(3d Cir. 2001) (quotation marks and citation omitted).

A claim arises from contract, rather than social policy,

when it is one:

(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 the terms of a contract.

19

Id. at 866 (quoting eToll, Inc. v. Elias/Savion Advertising,

Inc., 811 A.2d 10, 19 (Pa. Super. Ct. 2002)).

The appellants assert that their tort claims are

supported by the public policy that sellers have a duty not to

distribute defective and unreasonably dangerous construction

products. This public policy argument, however, runs counter

to the gist of the action doctrine. The appellants’ negligence

and strict liability claims and alleged injuries arise solely

from the allegation that the purchased lumber was not

appropriately treated for use as building material in the Virgin

Islands: a breach of a duty established, if at all, from a

contract or warranty rather than a tort. The appellants have

not asserted any other injury to themselves or to renters of the

home. The appellants’ tort claims “essentially duplicate [the]

breach of contract claim[s].” Jefferson v. Bay Isles Assoc.,

L.L.L.P., Civil No. ST-09-CV-186, 2011 WL 3853332, 59

V.I. 31 at *10 (Super. Ct. Feb. 1, 2011) (quoting eToll, 811

A.2d at 19). As a result, the appellants’ tort claims are barred

by the gist of the action doctrine.

C.

The appellants’ DTPA claim against Putnam was

previously dismissed and was not appealed. The only DTPA

claims pending on appeal are those against Great Southern

and Paradise. Those claims are time-barred.

The appellants assert that the DTPA’s six-year statute

of limitations, which went into effect in October 2013, rather

than the two-year statute of limitations that was in place at the

time their complaint was filed in February 2013, applies. The

appellants’ assertion is incorrect.

The appellants argue that the six-year statute of

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limitations applies because the Virgin Islands legislature

voiced social policy concerns in the amendment’s bill. The

text of the bill indicates that the legislature was concerned

that other states “provide greater protection to their citizens

and businesses while the laws of the Virgin Islands fail to

give the same strong protections and remedies.” Bill No. 30-

0123, 30th Leg., Reg. Sess. (V.I. 2013).

There is a presumption against applying legislation

that would revive otherwise untimely claims. This

presumption is based on the principle “that the legal effect of

conduct should ordinarily be assessed under the law that

existed when the conduct took place.” Kaiser Aluminum &

Chem. Corp. v. Bonjorno, 494 U.S. 827, 855 (1990) (Scalia,

J., concurring); see also Vartelas v. Holder, 132 S. Ct. 1479,

1486 (2012); In re Exxon Mobil Corp. Sec. Litig., 500 F.3d

189, 196 (3d Cir. 2007), as amended (Nov. 20, 2007). In

applying this presumption, we are guided by:

a two-part test for determining whether a

particular statute applies retroactively. At the

first stage, a court must determine if Congress

has expressly prescribed the statute’s intended

reach. If Congress has done so, the inquiry ends

. . . If the statute is ambiguous or contains no

express command, a court must examine

whether the statute would have an adverse

effect if it were held to be retroactive; that is to

say, “whether it would . . . increase a party’s

liability for past conduct . . . .”

Lieberman v. Cambridge Partners, LLC, 432 F.3d 482, 488–

89 (citation omitted) (quoting Landgraf v. USI Film Prods.,

511 U.S. 244, 280 (1994)).

21

The language used by the Virgin Islands legislature

and cited by the appellants does not meet the first step of the

Lieberman test. A social policy concern that consumers be

protected does not meet the specificity requirement that a

legislature enunciate an express and unambiguous intent that

expired claims should be revived. Thus, the appellants’

DTPA claims are subject to the two-year statute of limitations

unless the second Lieberman step is met.

The DTPA statute of limitations began “running from

the date the violation of the statute occurred, not the date the

violation was discovered.” Island Insteel Sys., Inc. v. Waters,

296 F.3d 200, 214 (3d Cir. 2002). Each DTPA claim that the

appellants have asserted and the applicable DTPA

enumerated prohibited activities—misrepresentation of the

quality or standard of the goods, or misrepresentation of a

material fact or failing to state a material fact “if such use

deceives or tends to deceive”—involve pre-sale conduct. See

V.I. Code tit. 12A, § 102; App. at 122–23 (appellants’ DTPA

claims only allege pre-sale conduct). Any DTPA violation

therefore occurred at the latest in December 2006 when the

last of the allegedly defective lumber was purchased.

Consequently, retroactively applying the six-year

statute of limitations period would impermissibly increase the

appellees’ liability. See Lieberman, 432 F.3d at 492

(explaining that “resurrection of previously time-barred

claims ‘increases a party’s liability’ by abolishing complete

defense to a suit” (quoting In re Enter. Mrtg. Acceptance Co.,

LLC Sec. Litig., 391 F.3d 401, 409-10 (2d Cir. 2005)).

Because the Lieberman test is not met, the appellants had to

file by December 2008 under the two-year statute of

limitations. They failed to do so and their DTPA claims are

22

time-barred.6

IV.

For the reasons set forth above, we will affirm the

order of the District Court.

6

Moreover, even if we were to apply the six-year

statute of limitations, which we have found does not apply,

the appellants’ DTPA claims are time-barred.

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