Years of lease disputes end as top court backs Harthman's claim to Smith Bay land

A commercial property battle spanning more than a decade has reached its conclusion after the V.I. Supreme Court declined to revisit a dispute over three parcels in Estate Smith Bay on St. Thomas.

In a decision released Tuesday, September 29, the justices ruled that FirstBank Puerto Rico's appeal could not proceed because a separate lawsuit had already definitively established that Harthman Leasing III, LLLP holds the right to occupy Parcels 17B, 17C and 17D. Since that question had been settled, the court found no practical purpose in hearing FirstBank's arguments anew.

The conflict began in 2003 when Harthman leased Parcel 17B to East End Plaza, LLC. Two additional parcels were added through later agreements. East End Plaza obtained construction financing from FirstBank, using its lease as collateral, but stopped meeting its obligations in 2011. FirstBank took over the lease in March 2012 after East End Plaza defaulted.

Tensions mounted over whether a fourth parcel, 17E, belonged to the original lease. When the parties reached an impasse, Harthman ended the lease in May 2012. FirstBank initially continued rent payments but switched to depositing money in an attorney escrow account beginning in September 2014 rather than paying Harthman directly.

Harthman filed a forcible entry and detainer action in 2015 to reclaim the three parcels, citing FirstBank's failure to pay rent. A magistrate sided with Harthman in March 2016. When FirstBank appealed, the Superior Court upheld that decision in March 2024.

A parallel civil lawsuit filed in 2012 had been moving through the courts independently. The Superior Court ruled in June 2021 that Harthman was entitled to possession of Parcels 17B, 17C and 17D. The V.I. Supreme Court affirmed that judgment in August 2025, making it final.

Because the Supreme Court had already resolved the possession question in the civil case, justices determined that ruling on FirstBank's appeal would serve no meaningful outcome. The court dismissed the case as moot, noting that deciding an already-settled matter could waste judicial resources and risk conflicting decisions.

Associate Justice Harold W.L. Willocks authored the opinion, joined by Chief Justice Rhys S. Hodge and Associate Justice Denise M. Francois. Arguments were heard July 14.