S. Ct. Civ. No. 2014-0063

In a mortgage debt foreclosure action, the Superior Court did not err in granting summary judgment for the lender on its case in chief, and in granting summary judgment against the borrowers on their counterclaims. In order to prevail on a foreclosure claim under 28 V.I.C. § 531(a) the plaintiff must show (1) the debtor executed a promissory note and mortgage, (2) the debtor is in default under the terms of the note and mortgage, and (3) the lender is authorized to foreclose on the property mortgaged as security for the note. In this case the borrowers admitted accepting and executing a promissory note and conceded that they defaulted on the loan. Although the Superior Court erred in concluding that the borrowers conceded the legal authority of the lender, it was a harmless error because they failed to establish a genuine issue of material fact in dispute on this issue. Thus entry of summary judgment for the lender was proper. The Superior Court also correctly granted summary judgment on the borrowers' tort claims because they were barred by the two-year statute of limitations set forth in 5 V.I.C. § 31(5)(A). They alleged intentional or negligent misrepresentation claims based on acts which occurred between 2006 and 2007, but the counterclaims were not filed until 2012, and there was no evidence of any "continuing violation" by the lender. The borrowers' contract counterclaims rely on their belief that the lender had a contractual obligation to provide additional funding in the form of a second loan but - if there was an oral agreement for a $500,000 loan - a claim on this basis is barred by the statute of frauds, 28 V.I.C. §244, because any agreement to be performed for a period greater than one year is void and unenforceable unless it is evidenced by a writing to which the party to be charged with the obligation has subscribed. Because the original agreement between the parties was for an interest in real property with a 30-year mortgage, the purported oral replacement agreement is precisely what the statute of frauds was created to prevent. Therefore, the borrowers' contract-based counterclaims are barred by the statute of frauds. The Superior Court's decisions entering summary judgment in favor of the lender in its foreclosure action and granting summary judgment to the lender on the borrowers' counterclaims are affirmed.