On Appeal from the District Court of the Virgin Islands (D.C. No. 01-cv-00122) Chief District Judge: Honorable Raymond L. Finch District Judge: Thomas K. Moore
The opinion of the court was delivered by: Nygaard, Circuit Judge
Before: NYGAARD, RENDELL, and SMITH, Circuit Judges.
This case calls upon us to decide whether a conveyance of real property between two subsidiary corporations, each wholly-owned by the same parent, is the equivalent of a "bona fide offer to purchase" triggering a right of first refusal on the property. The District Court answered this question in the negative. We will affirm.
In 1957, Appellant Margaret Creque purchased a tract of land known as Lot No. 1A Estate Demerara, St. Thomas, U.S. Virgin Islands. In 1963, Texaco Antilles Ltd. ("TAL"), a Canadian corporation and a wholly-owned subsidiary of Texaco, Inc., acquired the adjacent Lot No. 1 Estate Demerara. At that time, Creque and TAL entered into an agreement by which TAL sold Creque the northern portion of Lot No. 1, designated as Lot No. 1B Estate Demerara, and granted her the right of first refusal to purchase all of Lot No. 1 "on the same terms and at the same price as set forth in a bona fide offer to purchase..." the property. (App. at 1657). TAL also granted Creque the right to take over tenancy of Lot No. 1 and to operate the gas station located upon it in the event of a change in tenancy.
A decade later, in 1973, Canada changed its tax law in a manner that would have resulted in an increased tax liability for TAL of approximately $470,000 per year. To avoid this new expense, general tax counsel for Texaco recommended to Texaco that TAL transfer all its assets and liabilities to Texaco Caribbean, Inc. ("TCI"), another wholly-owned subsidiary of Texaco, incorporated in Delaware. (App. at 1675–78).
Accordingly, on September 27, 1973, the Boards of TAL and TCI each approved the sale of TAL's assets to TCI for $5,000 and the assumption of TAL's liabilities. *fn1 (App. at 1684–91). It is important to note that the five directors on the Board of TAL comprised five of the six directors of TCI's Board. The transfer was accomplished by deed on May 16, 1974.
Creque exercised her right to take tenancy of Lot No. 1 as the operator of the gas station in 1987. Through a dispute over a proposed rent increase, she learned in 1995 of the 1974 transaction between TAL and TCI. As a result, Creque sought, without success, to exercise her right of first refusal to purchase Lot No. 1. She then brought the present lawsuit in the Territorial Court of the Virgin Islands against TAL and TCI, seeking damages and specific performance.
TAL and TCI moved for summary judgment, arguing that the conveyance of Lot No. 1 to TCI was an intra-company transfer rather than a sale. The Territorial Court denied the motion and sent the case to trial. Prior to trial, the Defendants filed a renewed motion for summary judgment, which the Court also denied. A jury entered a verdict in favor of Creque and the Defendants appealed to the Appellate Division of the United States District Court for the District of the Virgin Islands. A three judge panel reversed the Territorial Court's denial of the renewed motion for summary judgment. It held that Creque "failed to set forth any evidence... that a disputed issue of material fact existed regarding whether TCI made a 'bona fide offer to purchase' the property from TAL." (App. at xi). The District Court, therefore, vacated the entry of judgment in favor of Creque and remanded the case to the Territorial Court with instructions to dismiss with prejudice. Creque now appeals.
We have jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review over the grant or denial of summary judgment. E.g. Curley v. Klem, 298 F.3d 271, 276 (3d Cir. 2002). Summary judgment is appropriate if, when viewing all evidence in the light most favorable to the non-moving party, and when giving that party the benefit of all reasonable inferences, there are no genuine issues ...