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Legal Responsibility

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster4335/4340
ApplicantTusoto Lifestyle Foundation, Inc
Appeal TypeSecond
PA ID#000-UQI8S-00
PW ID#303, 209, 571
Date Signed2021-10-06T16:00:00

Summary Paragraph

From September 5 - 22, 2017, Hurricane Irma and Hurricane Maria caused extensive damage throughout the territory of the U.S. Virgin Islands, including the island of St. Thomas.  The Applicant, a Private Nonprofit organization, runs a medical/wellness center in St. Thomas.  The Applicant sought PA funding after hurricane force winds and flying debris from the events damaged a portion of the building's roof, resulting in rain leaking into the building and damaging floors, systems, and contents.  The lease for the building names two individual doctors as the lessees of the building with responsibility for all repairs.  In Determination Memoranda, FEMA determined the repairs were not eligible for PA funding because the Applicant did not have legal responsibility for the work as the Applicant did not own or lease the building where the claimed work was performed.  The Applicant submitted its first appeal, asserting, while it did not own the building, it has the right of first refusal to purchase the building.  The Virgin Islands Office of Disaster Recovery supported the Applicant’s appeal, stating that, even though the Applicant was not named on the lease, it was effectively the lessee.  The FEMA Region II Acting Regional Administrator denied the first appeal, finding the Applicant did not own or operate the facility and was not legally responsible for the work at the time of the disaster.  The Applicant submits a second appeal reiterating earlier arguments. 

Authorities and Second Appeals

  • 44 C.F.R. § 206.223(a)(3).
  • PAPPG, at 19-21.
  • Roper Hospital Inc., FEMA-4286-DR-SC, at 2.

Headnotes

  • 44 C.F.R. § 206.223(a)(3) states that eligible work must be the legal responsibility of the applicant.  Per the PAPPG, FEMA evaluates legal responsibility for the claimed work on the basis of ownership and written legal agreements.
  • The Applicant does not own or lease the building. Accordingly, the repairs were not the Applicant’s legal responsibility.

Conclusion

FEMA finds the Applicant did not have legal responsibility for the work at the time of the declared incident.  Therefore, this appeal is denied.

Appeal Letter

Adrienne L. Williams-Octalien

Director, Office of Disaster Recovery

Virgin Islands Public Finance Authority

1000 King Street, Suite No. 6

Christiansted, U.S. Virgin Islands 00820-4905

 

Re:  Second Appeal – Tusoto Lifestyle Foundation, Inc., PA ID: 000-UQI8S-00, FEMA-4335/4340-DR-VI, Project Worksheets (PWs) 303, 209, and 571, Grant Manager

        Projects (GMPs) 71030, 86967, 70774, Legal Responsibility  

 

Dear Ms. Williams-Octalien:

This is in response to your letter dated July 8, 2021, which transmitted the referenced second appeal on behalf of Tusoto Lifestyle Foundation, Inc. (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of Public Assistance (PA) funding in the amount of $147,262.82.  

As explained in the enclosed analysis, I have determined the Applicant did not have legal responsibility for the work at the time of the declared incident.  Therefore, this appeal is denied. 

Please inform the Applicant of my decision.  This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.

 

                                                                        Sincerely,

                                                                            /S/

                                                                        Ana Montero

                                                                       Division Director

                                                                       Public Assistance Division

 

Enclosure

cc:  Chad Gorman

Acting Regional Administrator

FEMA Region II

 

Appeal Analysis

Background

From September 5 - 22, 2017, Hurricane Irma and Hurricane Maria caused extensive damage throughout the U.S. Virgin Islands,[1] including the island of St. Thomas.  The Tusoto Lifestyle Foundation, Inc. (Applicant), a Private Nonprofit organization (PNP), runs a medical/wellness center in St. Thomas leased by two of its doctors (Doctors).  The Applicant sought Public Assistance (PA) funding after hurricane force winds and flying debris from the events damaged a portion of the building’s roof, resulting in rain leaking into the building and damaging floors, systems, and contents.  The Federal Emergency Management Agency (FEMA) estimated project costs of $147,262.82The lease for the building places the responsibility for all repairs on the Doctors.[2]  In Determination Memoranda dated September 22, 2020, FEMA determined the repairs were not eligible for PA funding because, among other reasons, the Applicant did not have legal responsibility for the work as it did not own or lease the building where the claimed work was performed. 

 

First Appeal

The Applicant submitted its first appeal on November 6, 2020, asserting the building owner’s will prohibited the property from being sold until 2023.  The Applicant stated that it has the right of first refusal to purchase the building when it becomes available for purchase, and it plans to purchase the building in 2023.  The Applicant provided: (1) excerpts from the lease for the building; (2) excerpts from the will of the deceased property owner showing the property cannot be sold until 2023; (3) documentation of the Applicant’s tax-exempt status; (4) the Applicant’s incorporation documents; (5) a certificate of good standing; and (6) the Applicant’s annual report.  The Virgin Islands Office of Disaster Recovery (Grantee) transmitted the appeal with a letter of support on January 6, 2021, stating that, even though the Applicant was not named on the lease, it was effectively the lessee and had legal responsibility for the work.  The Grantee stated that the totality of the evidence shows the Doctors did not sign the lease in their individual capacities but in their roles as officers/directors of the Applicant.  As evidence, the Grantee cited factors including that the lease contains a provision that the only permitted use of the property is for a medical clinic; both Doctors are on the Applicant’s Board of Directors; the Doctors, respectively, are President and Secretary/Treasurer of the Applicant; and one of the Doctors is the registered corporate agent of the Applicant. 

The FEMA Region II Acting Regional Administrator denied the first appeal in a decision dated March 4, 2021.  Although FEMA found that the Applicant was a PNP, it emphasized that, to be eligible for PA funding, the Applicant had to have legal responsibility for the work.  FEMA noted the Applicant did not own or operate the building and was not legally responsible for the work at the building at the time of the disaster, because it was not named on the lease.  Therefore, FEMA determined the Applicant was not eligible for PA funding.

 

Second Appeal

The Applicant submitted a second appeal on May 8, 2021.  On second appeal, the Applicant resubmits/reincorporates its first appeal attachments, disputes FEMA’s conclusion that it does not own or operate an eligible facility and lacks legal responsibility for the work, and also asserts that equity compels a finding of PA eligibility in its favor.  In support of its appeal, the Applicant attaches various photographs and video clips of it providing aid packages to local residents after the hurricanes and videos documenting the hurricane damage to the local area.  The Grantee transmitted the appeal on July 8, 2021, along with a letter of support.

 

Discussion

FEMA may provide assistance for the repair or restoration of certain facilities damaged by major disasters, including PNP facilities.[3]  For the work to be eligible, an applicant must have legal responsibility for the work.[4]  FEMA evaluates legal responsibility on the basis of ownership and written legal agreements.[5]  When a facility is leased, FEMA looks to the lease to determine legal responsibility for the building repairs.[6]

The lease for the building housing the medical/wellness center provides that the Doctors operate and have legal responsibility for repair and restoration work at the building.[7]  Thus, the Applicant is neither a party to the lease nor mentioned in the lease.  The future intent of the Applicant to purchase the building does not convey legal responsibility under FEMA regulations and policy.  Here, the Applicant is not eligible for PA funding because it was not legally responsible for the work at the time of the declared incident.

 

Conclusion

FEMA finds the Applicant did not have legal responsibility for the work at the time of the declared incident.  Therefore, this appeal is denied.

 

[1] The President declared Hurricane Irma a disaster on Sept. 7, 2017, and declared Hurricane Maria a disaster on Sept. 20, 2017.

[2] Commercial Lease Agreement between Landlord and Tenant (Jan. 1, 2017) [hereinafter Lease]. 

[3] Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act, as amended, § 406(a)(1), (a)(3), Title 42 United States Code (42 U.S.C.) § 5172(a)(1), (a)(3) (2018); see 42 U.S.C. § 5121 note (retroactive effect of 2018 amendments to the Stafford Act).

[4] Title 44 Code of Federal Regulations (44 C.F.R.) § 206.223(a)(3) (2016); Public Assistance Program and Policy Guide, FP 104-009-2, at 19 (Apr. 2018) [hereinafter PAPPG].

[5] PAPPG, at 20-21.

[6] Id.; FEMA Second Appeal Analysis, Roper Hospital Inc., FEMA-4286-DR-SC, at 2 (Dec. 9, 2019).

[7] Lease, at §§ 3(a), 5(b) (stating that the Doctors are responsible for all repairs and restoration to both the interior and exterior structure, whether foreseen and unforeseen, whether ordinary and extraordinary).

Last updated October 6, 2021