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KMART Corporation v. Balfour Beatty, Inc.

District Court of the Virgin Islands
994 F.Supp. 634 (1998)


Facts

Balfour Beatty, Inc. (BBI) (defendant) entered into a construction contract to perform work on a shopping center owned by Tutu Park Ltd. (TPL). KMART Corporation (KMART) (plaintiff) was a tenant of TPL and would have a store located in the new shopping center. The contract provided that BBI’s construction schedules were to comply with KMART’s requirements, that the drawings made in the design phase were to be submitted to KMART, and that warranties of work performed by BBI were to be executed in KMART’s favor and submitted directly to KMART. The contract also contained a provision requiring all parties to the contract to submit any disputes to arbitration. BBI completed the work as specified in the contract. In September of 1995, however, the roof of the shopping center was damaged by Hurricane Marilyn. KMART brought suit in the District Court of the Virgin Islands against BBI alleging breach of contract and negligence. KMART argued it was a third party beneficiary of BBI’s contract with TPL and thus had rights under the contract that were violated by BBI. BBI claimed that KMART was not a third party beneficiary under its contract with TPL, and moved to dismiss KMART’s suit. In the alternative, if KMART was found to be a third party beneficiary, BBI argued that KMART’s action be stayed pending enforcement of the contract’s arbitration clause.

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Holding and Reasoning (Moore, J.)

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  • A “yes” or “no” answer to the question framed in the issue section;
  • A summary of the majority or plurality opinion, using the CREAC method; and
  • The procedural disposition (e.g. reversed and remanded, affirmed, etc.).

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