VIRGIN GRAND ESTATES 60 VILLA ASSOCIATION, a/k/a Virgin Grand no. 60 Homeowners… v. Inter-Ocean Insurance Agency, St. Thomas, LLC

U.S. COURT OF APPEALS FOR THE THIRD CIRCUIT
No. 25-1804
VIRGIN GRAND ESTATES #60 VILLA ASSOCIATION,
a/k/a Virgin Grand no. 60 Homeowners Association,
Appellant
v.
INTER-OCEAN INSURANCE AGENCY, ST. THOMAS, LLC
_____________________________
Appeal from the District Court, D.V.I.
Judge Robert A. Molloy, No. 3:21-cv-00074
Before: KRAUSE, CHUNG, and SMITH, Circuit Judges
Argued: May 13, 2026; Filed: August 18, 2026
_____________________________
NONPRECEDENTIAL OPINION*
CHUNG, Circuit Judge. After an individual filed a lawsuit due to the injury he suffered
on the property of Virgin Grand Estates #60 Villa Association (“Virgin Grand”), Virgin
Grand sought defense and indemnity from Certain Underwriters at Lloyd’s of London
(“Lloyd’s”). Because Lloyd’s denied coverage, Virgin Grand brought contractual and
insurance bad-faith claims against Lloyd’s and tort claims against Lloyd’s coverholder Red
Hook Agencies (“Red Hook”). The District Court dismissed Virgin Grand’s First
Amended Complaint (“FAC”) and denied Virgin Grand’s motions for reconsideration and
leave to amend, which Virgin Grand now appeals. We will affirm the District Court’s
orders.
* This disposition is not an opinion of the full Court and, under I.O.P. 5.7, is not binding
precedent.

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I. BACKGROUND1
Virgin Grand is a homeowners’ association for property located in St. John, United
States Virgin Islands (“Property”). As early as 2011, Virgin Grand used broker Inter-
Ocean Insurance Agency, St. Thomas, LLC (“Inter-Ocean”) to procure insurance. Inter-
Ocean transacted with Red Hook, Lloyd’s coverholder,2 to obtain an annual commercial
general liability insurance policy for Virgin Grand. The policy was typically renewed by
a series of communications. Lloyd’s would inform Red Hook of its willingness to renew
Virgin Grand’s policy ahead of the annual renewal deadline. Red Hook would then notify
Inter-Ocean, who would then inform, and provide a renewal application to, Cimmaron
Property Management, Virgin Grand’s property manager. Cimmaron would in turn request
Virgin Grand’s authorization to renew the policy and, upon receiving authorization, would
sign the renewal application and remit payment to Inter-Ocean. Inter-Ocean would then
send the completed application and payment to Red Hook, which, after reviewing the
application, would forward it to Lloyd’s for issuance of the renewed policy upon final
approval. In January 2017, Lloyd’s approved renewal of Virgin Grand’s policy in
accordance with this custom. The resulting policy was effective from February 1, 2017 to
February 1, 2018 (“February 2017 policy”).
1 Because we write for the parties, we assume familiarity with the factual and procedural
history and recite only the facts pertinent to our decision.
2 A coverholder “is a company or partnership authorized by a managing agent to enter
into a contract or contracts of insurance to be underwritten by the members of a syndicate
managed by it … Coverholders allow Lloyd’s syndicates to operate in a region or country
as if they were the local insurer.” JA318.

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Consistent with that practice, Red Hook advised Inter-Ocean on January 10, 2018 that
Lloyd’s was willing to renew the policy and that the new policy would have an effective
date of February 1, 2018, the date that the February 2017 policy ceased to be in effect. But
Inter-Ocean waited until March 6—nearly two months later—to relay the renewal offer to
Cimmaron. Virgin Grand authorized renewal, and Cimmaron completed the renewal
application and returned it to Inter-Ocean along with a check for the renewal premium on
March 8. Red Hook then made a handwritten notation striking the checkmark next to
“Renewal” and inserted a checkmark next to “New” on Virgin Grand’s application
paperwork. JA350 at ¶ 190, citing JA430.3
Meanwhile, on February 23, 2018, a worker was injured on the Property and later sued
Virgin Grand. When Virgin Grand submitted a claim to Lloyd’s seeking defense and
indemnity, Lloyd’s denied the claim stating the Property had no coverage between
February 2, 2018 and March 11, 2018.
Virgin Grand then sued Lloyd’s, Inter-Ocean, and Red Hook.4 In the FAC, Virgin
Grand asserted claims against Lloyd’s for breach of contract, breach of the implied
covenant of good faith and fair dealing, and insurer bad faith. As against Red Hook, Virgin
Grand brought claims for negligence, breach of fiduciary duty, fraudulent concealment,
3 The FAC refers to this document both as an application and as
“application/underwriting forms.” JA350 at ¶ 190; JA370 at ¶ 294.
4 Virgin Grand accepted Inter-Ocean’s Second Amended Offer of Judgment on August
29, 2024, and judgment was entered against Inter-Ocean on January 31, 2025, though the
District Court retained jurisdiction to determine Virgin Grand’s entitlement to pre-
judgment interest and attorney’s fees.

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and aiding and abetting of fraudulent concealment. Virgin Grand also brought RICO
claims against all Defendants. Lloyd’s and Red Hook moved to dismiss Virgin Grand’s
claims and the District Court granted their motions in orders dated September 22 and
October 12, 2022. Virgin Grand thereafter moved for reconsideration and leave to amend,
which the District Court denied.
Virgin Grand filed a notice of appeal,5 and challenges the dismissal of its FAC and
denials of its motions for reconsideration and for leave to amend.
II. JURISDICTION6
Lloyd’s and Red Hook assert that Virgin Grand lacks standing to bring this appeal or,
in the alternative, that its appeal has been mooted. The reason that Virgin Grand lacks
standing as an aggrieved party and that a successful appeal would not provide it relief
because Virgin Grand’s settlement with Inter-Ocean has fully compensated it for its losses.
Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992) (holding that, to have standing, a
party must have suffered a concrete and particularized harm, redressable by a favorable
decision); Ordonez-Tevalan v. Att’y Gen., 837 F.3d 331, 339-40 (3d Cir. 2016) (“[A]n issue
5 Virgin Grand’s notice of appeal addresses a discovery order regarding the Rule 30(b)(6)
deposition of Red Hook but omits any discussion of this order in its opening brief.
Likewise, Virgin Grand does not address the dismissed RICO claims and the aiding and
abetting of fraudulent concealment claim against Red Hook. Thus, Virgin Grand forfeited
its challenges to the discovery order and to the dismissal of its claims for RICO and aiding
and abetting of fraudulent concealment, and there are no exceptional circumstances that
would justify reaching these arguments. See Altman v. Altman, 653 F.2d 755, 758 (3d Cir.
1981).
6 The District Court had jurisdiction under 28 U.S.C. § 1332(a), and we have jurisdiction
under 28 U.S.C. § 1291. See Fed. R. Civ. P. 54(b); Dist. Ct. Dkt. 305.

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is moot if changes in circumstances that prevailed at the beginning of the litigation have
forestalled any occasion for meaningful relief.” (quoting Thomas v. Att’y Gen., 625 F.3d
134, 140 (3d Cir. 2010)). We disagree. Virgin Grand’s settlement with Inter-Ocean did
not resolve Virgin Grand’s claim for punitive damages against Lloyd’s and Red Hook.
Accordingly, Virgin Grand has standing, and we may exercise jurisdiction over its appeal.
III. The District Court Did Not Err in Dismissing Virgin Grand’s Claims7
A motion to dismiss will be granted when the complaint’s factual allegations, with the
presumption of truth, fail to state a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S.
662, 678w (2009). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does
not need detailed factual allegations,” a plaintiff must offer “more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The court “draw[s] all reasonable
inferences in favor of the non-moving party.” In re Rockefeller Ctr. Props., Inc. Secs.
Litig., 311 F.3d 198, 215 (3d Cir. 2002).
A. Breach of Contract and Insurer Bad Faith Claims Against Lloyd’s
To state a breach of contract claim or an insurer bad faith claim under Virgin Islands
law, a plaintiff must establish, among other things, that a defendant breached the terms of
a contract. See George v. V.I. Lottery Comm’n, 54 V.I. 533, 539 (2010) (stating elements
7 We review the dismissal of a complaint under Federal Rule of Civil Procedure 12(b)(6)
de novo. Mayer v. Belichick, 605 F.3d 223, 229 (3d Cir. 2010). We review denial of
reconsideration for abuse of discretion, and predicate issues of law de novo. Max’s Seafood
Cafe ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 673 (3d Cir. 1999). Finally, denial
of leave to amend is likewise reviewed for abuse of discretion. Great W. Mining & Min.
Co. v. Fox Rothschild LLP, 615 F.3d 159, 175 (3d Cir. 2010).

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of a breach of contract claim); Justin v. Guardian Ins. Co., 670 F. Supp. 614, 617 (D.V.I.
1987) (stating elements of insurer bad faith claim).
Virgin Grand claims that Lloyd’s breached the policy’s terms by denying coverage.
Virgin Grand relies upon a provision requiring Lloyd’s to provide notice “thirty days prior
to the effective date for non-renewal or cancellation.” JA101. Virgin Grand alleges that,
because it never received proper notice, the policy was in effect on February 23, 2018, the
date the worker was injured. Crucially, though, that section was labeled “Cancellation and
Nonrenewal by Underwriters,” id., and addressed situations where Lloyd’s elected to
cancel or to not renew the insurance policy.8
Even construing the FAC in the light most favorable to Virgin Grand, Lloyd’s did not
do so. To the contrary, Lloyd’s, through Red Hook, conveyed its willingness to renew
Virgin Grand’s insurance policy to Inter-Ocean on January 10, 2018. Inter-Ocean failed
to relay this to Virgin Grand until March 6, 2018. When Virgin Grand did not timely accept
Lloyd’s offer, the policy expired. Stated differently, the nonrenewal was by Virgin Grand,
not Lloyd’s. Because the FAC’s factual allegations do not reasonably support an inference
that any policy was in effect on the date of the accident, Virgin Grand has not plausibly
alleged that Lloyd’s denial was a breach. We will thus affirm the District Court’s dismissal
of Virgin Grand’s breach of contract and insurer bad faith claims.
B. Breach of Implied Covenant of Good Faith and Fair Dealing Claim Against
Lloyd’s
8 Virgin Grand further argued that this was an affirmative nonrenewal in its motion to
reconsider. We address that argument below.

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To state a claim for breach of the implied covenant of good faith and fair dealing, a
plaintiff must show “that, in the performance or enforcement of an existing contract
between two parties, the opposing party engaged in conduct that was fraudulent, deceitful,
or otherwise inconsistent with the purpose of the agreement or the reasonable expectations
of the parties.” Agueda v. Marcano, 79 V.I. 533, 552 (2024).
The FAC lacks factual allegations supporting an inference that Lloyd’s deceived Virgin
Grand or acted inconsistently with the parties’ expectations. Instead, the FAC supports an
inference that Virgin Grand reasonably expected Lloyd’s and Red Hook to provide Inter-
Ocean a renewal application in January 2018. Lloyd’s and Red Hook did so, but Virgin
Grand did not receive the renewal offer because of Inter-Ocean’s mistake. Because Virgin
Grand has not plausibly alleged that Lloyd’s acted “inconsistently with … the reasonable
expectations of the parties,” Agueda, 79 V.I. at 552, we will affirm the District Court’s
dismissal of Virgin Grand’s claim for breach of the implied covenant of good faith and fair
dealing.
C. Claims Against Red Hook for Negligence, Breach of Fiduciary Duty, and
Fraudulent Concealment
Virgin Grand brought claims against Red Hook for negligence, breach of fiduciary duty
per 22 V.I.C. § 2, and fraudulent concealment. Stating a claim for negligence or breach of
fiduciary duty requires Virgin Grand to plausibly allege Red Hook violated a duty, causing
harm to Virgin Grand. See Machado v. Yacht Haven U.S.V.I., LLC, 61 V.I. 373, 380
(2014); Roebuck v. V.I. Hous. Auth., 60 V.I. 137, 147 (Super. Ct. 2014). Stating a
fraudulent concealment claim requires Virgin Grand to plausibly allege that Red Hook

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engaged in material misrepresentation causing harm. See Gov’t of United States Virgin
Islands v. Takata Corp., 67 V.I. 316, 417 (Super. Ct. 2017).
Virgin Grand first claims that Red Hook violated a duty it owed to Virgin Grand, or
concealed a material fact from it, by altering Virgin Grand’s renewal application without
first providing notice. But from these facts it would not be a reasonable inference that the
change to the untimely form was false. And were we to nevertheless conclude that falsity
was plausibly alleged, Virgin Grand offers on appeal only its general belief that the
handwritten change was material or harmful. The FAC does not aver any facts from which
it can be reasonably inferred that the change created the coverage gap. Accordingly, these
facts do not state a claim for fraudulent concealment, negligence, or breach of fiduciary
duty.
Next, Virgin Grand claims that Red Hook violated a duty it owed to Virgin Grand, or
concealed a material fact from it, by failing to verify that Inter-Ocean had sent a renewal
notice, inform Virgin Grand that coverage expired, and that Virgin Grand had issued a new
policy instead of renewing the existing policy, thereby creating a gap in coverage. Virgin
Grand does not cite any facts to support the proposition that Red Hook’s silence, in the
face of Virgin Grand’s own failure to renew, was tantamount to concealment and so it
failed to state a claim for fraudulent concealment on these facts.
In support of its negligence and breach of fiduciary duty claims, Virgin Grand asserts
that “Red Hook’s breaches [of its duty] are (a) inconsistent with Virgin Grand’s reasonable
expectations, (b) contrary to established claims practices and legal requirements,
(c) contrary to insurance industry custom and practice, and (d) contrary to the express terms

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of the Subject Policy.” JA367, JA371. Assuming that Red Hook owed Virgin Grand a
duty, these claims still fail. We concluded in Part B that the FAC does not support a
reasonable inference that Red Hook acted inconsistently with Virgin Grand’s reasonable
expectations. Moreover, Red Hook is not a party to the policy.9 The FAC also does not
aver facts supporting a reasonable inference that Red Hook acted contrary to industry
norms or legal requirements. Therefore, Virgin Grand also fails to state a claim under this
theory.
Based on the foregoing, we will affirm the District Court’s order of dismissal.
IV. The District Court Did Not Abuse Its Discretion in Denying
Virgin Grand’s Motions for Reconsideration and for Leave to Amend
A. Motions for Reconsideration
Virgin Grand moved the District Court to reconsider its dismissals. A party may move
a district court to reconsider its orders pursuant to Federal Rules of Civil Procedure 59(e)
or 54(b). A Rule 59(e) motion “must rely on one of three grounds: (1) an intervening
change in controlling law; (2) the availability of new evidence; or (3) the need to correct
clear error of law or prevent manifest injustice.” Lazaridis v. Wehmer, 591 F.3d 666, 669
(3d Cir. 2010). Rule 54(b) permits reconsideration pursuant to a district court’s “inherent
power” when reconsideration is “consonant with justice to do so.” United States v. Jerry,
487 F.2d 600, 605 (3d Cir. 1973), abrogated on other grounds by Ohio v. Johnson, 467
U.S. 493 (1984).
9 Even if it were, the FAC does not support a conclusion that Red Hook acted contrary
to the terms of the policy for the same reasons set forth in Part A as to Lloyd’s.

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Virgin Grand contends that the District Court incorrectly applied Rule 59(e)’s standard
to its Rule 54(b) motions. The District Court did not abuse its discretion in denying Virgin
Grand’s motions for reconsideration, whether brought under Rule 59(e) or Rule 54(b). As
to Rule 59(e), Virgin Grand argued that newly discovered evidence justified
reconsideration, relying on: (1) a “[l]iability [r]enewal [q]uote” which included language
that “this policy will be non-renewed if renewal has not been requested by the expiration
date,” Virgin Grand’s Opening Br. at 57 (citation modified); and, (2) deposition testimony
by Leroy Walker, Vice President of Inter-Ocean, that “[i]f [Inter-Ocean] did not send in a
renewal, [Red Hook] automatically said this policy is not renewed,”10 Virgin Grand’s
Opening Br. at 55. Virgin Grand asserts that Walker’s testimony “shows Red Hook
engaged in an affirmative nonrenewal action that created notice obligations under the
policy, yet failed to provide the notice.” Virgin Grand’s Opening Br. at 57-58. Virgin
Grand further asserts that its new evidence conflicts with the pre-dismissal deposition
statement of the President of Red Hook, Tami Noel, taken in the personal injury suit
brought by the injured worker. There, Noel stated that the February 2017 policy expired
when Virgin Grand failed to renew by February 1, 2018.
We disagree. The facts alleged in the FAC and the new evidence offered by Virgin
Grand support a reasonable inference that Lloyd’s, through Red Hook, offered to renew.
In contrast, no reasonable inference can be drawn that the insurance policy expired due to
10 In its motions for reconsideration, but not Opening Brief, Virgin Grand also addressed
the testimony of Inter-Ocean employee Joycelyn Claxton. As a result, it has forfeited any
argument related to Claxton.

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an affirmative decision by Lloyd’s or Red Hook not to renew the policy. Walker’s
testimony and the liability renewal quote simply reflect the obvious consequence when
Lloyd’s offer was met with silence: a nonrenewal by Virgin Grand, not Lloyd’s. That is
consistent with, not contradicted by, Noel’s testimony and hence does not call for
reconsideration under Rule 59(e). For the same reasons, under Rule 54(b), reconsideration
of the dismissal was not consonant with justice as the new evidence offered by Virgin
Grand did not support its argument that Lloyd’s failed to provide it notice in breach of the
contract and other similar arguments, nor support its tort claims against Red Hook. We
will thus affirm the District Court’s denial of Virgin Grand’s motions for reconsideration.
B. Motion to Amend
Leave to amend “generally must be granted unless the amendment would not cure the
[complaint’s] deficiency.” Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000). An
amendment is futile if the amended complaint “would fail to state a claim upon which relief
could be granted.” Id. The District Court did not err in denying Virgin Grand’s motion
for leave to amend. For the same reasons set forth above, the proposed amendments do
not support a reasonable inference that Red Hook, on behalf of Lloyd’s, made a decision
not to renew the insurance policy or made a material misrepresentation. Because the
proposed amendments fail to remedy the FAC’s deficiencies, we will affirm the District
Court’s denial of Virgin Grand’s motion for leave to amend.
* * * * *
For the reasons stated above, we will AFFIRM the District Court’s orders.

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Counsel for Appellant
Kenneth R. Behrend [ARGUED]
BEHREND LAW GROUP
Douglas B. Chanco
JD LAW GROUP
Counsel for Appellees
Gregory L. Mast [ARGUED]
John P. Golden
Emma Han
FIELDS HOWELL, LLP
Edward L. Barry

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