Martinez v. Colombian Emeralds, Inc.

HODGE, Chief Justice; CABRET, Associate Justice', and SWAN, Associate Justice, dissenting.

OPINION OF THE COURT

(March 4, 2009)

HODGE, C.J.

Appellant Franklin Martinez (“Martinez”) challenges the Superior Court’s order dismissing his complaint and ordering him to arbitration, and denying both his subsequent motion for reconsideration of the dismissal and his companion motion for stay of the proceedings pending arbitration. Martinez also challenges the award of attorney’s fees to Appellee Colombian Emeralds, Inc. (“CEI”). For the reasons stated below, the dismissal of the complaint and award of attorneys’ fees will be reversed.

I. BACKGROUND

Martinez, a citizen of Colombia and Switzerland, filed suit against CEI, a Virgin Islands corporation, alleging that he possessed an interest in certain real property located in St. Thomas, U.S. Virgin Islands, titled in CEI’s name. He sought an injunction to prevent CEI from selling the property or listing it for sale. Following service of process, the parties stipulated that CEI’s answer or other responsive pleading was due on August 1, 2003. On August 5,2003, CEI, not having pled to the complaint by the stipulated deadline, motioned the court for an extension to August 21, 2003 to plead. Martinez, on August 12, 2003, objected to the request and in its prayer for relief asked the trial court to enter CEI’s default. The Superior Court denied the extension without prejudice stating that CEI had failed to make the required showing of excusable neglect for its failure to timely plead.

On September 2, 2003, CEI, without seeking further leave of the court, filed a motion to dismiss the action. CEI argued that an October 10, 1992 agreement between the parties concerning the property in question (“1992 agreement”) contained an arbitration clause requiring the parties *180to arbitrate the dispute.1 Prior to Martinez responding to CEI’s motion to dismiss, the parties entered into a series of court-approved stipulations which stayed the action until April 30, 2004 to permit the parties to pursue settlement discussions. The parties were unable to reach a settlement, however, and on November 18, 2004, the Superior Court entered a prompting order requiring Martinez to advise it of the status of the case within thirty days or the matter would be dismissed. In response to the prompting order, Martinez filed a motion for entry of default against CEI, alleging that it had failed to answer, respond or otherwise plead to the complaint. CEI in turn filed motions to have its motion to dismiss deemed conceded and renewed the motion to dismiss. In response, Martinez moved to strike CEI’s motion to dismiss and again moved for entry of CEI’s default.

The trial court granted CEI’s motion to dismiss on January 2, 2007 and denied as moot Martinez’s motion to enter CEI’s default. Martinez thereafter moved for reconsideration of the dismissal and, for the first time, sought a stay pending arbitration on January 18, 2007. Both motions were denied by the court on January 24, 2007.

Following dismissal, the Superior Court granted CEI’s request for attorney’s fees on January 30, 2007, one day after it was filed and before Martinez’s court-ordered response date of February 14, 2007. This timely appeal of the trial court’s dismissal and reconsideration orders, as well as its attorneys’ fees award, followed.2

II. JURISDICTION

Prior to considering the merits of an appeal, this Court must first determine whether it has jurisdiction over the matter. V.I. Gov’t Hosp. and Health Facilities Corp. v. Gov’t of the V.I., 50 V.I. 276, 279 (V.I. 2008). This Court, recognizing that its jurisdiction to hear this matter might be *181affected by the United Nations Convention on the Recognition and Enforcement of Foreign Arbital Awards, informally known as the New York Convention (hereafter “the Convention”), codified as 9 U.S.C. § 201 et seq., issued an October 3, 2008 order directing the parties to submit supplemental briefs on this issue. In their supplemental briefs, both parties agreed that the Convention is applicable to this dispute because it is governed by an arbitral agreement “arising out of a legal relationship . . . which is considered commercial” that is not entirely between United States citizens. 9 U.S.C. § 202. Accordingly, we must consider how the Convention may affect the subjeciMnatter jurisdiction of this Court and the Superior Court.

1. Virgin Islands Local Courts Have Jurisdiction Over Agreements Governed by the Convention.

Congress, seeking to facilitate the enforcement of international arbitration agreements in the federal courts, granted federal district courts original jurisdiction over arbitration agreements that fall under the Convention. The statute reads, in pertinent part:

An action or proceeding falling under the Convention shall be deemed to arise under the laws and treaties of the United States. The district courts of the United States... shall have original jurisdiction over such an action or proceeding, regardless of the amount in controversy.

9 U.S.C. § 203. “Original jurisdiction” is defined as “[a] court’s power to hear and decide a matter before any other court can review the matter.” Black’s Law Dictionary 869 (8th ed. 2004).

However, granting a court “original jurisdiction” does not in itself preclude other courts from hearing the matter, for multiple courts may have original and concurrent jurisdiction.3 “Concurrent jurisdiction” is *182defined as “[^jurisdiction that might be exercised simultaneously by more than one court over the same subject matter and within the same territory, a litigant having the right to choose the court in which to file the action.” Id. at 868. For a court of original jurisdiction to have the exclusive right to hear a case, it must also possess “exclusive jurisdiction,” which is defined as “[a] court’s power to adjudicate an action or class of actions to the exclusion of all other courts.” Id.

Any inquiry as to whether a state or territorial court has jurisdiction over matters Congress has authorized federal courts to consider must begin with a rebuttable presumption that the courts share concurrent jurisdiction, for it is well established that, “[t]o give federal courts exclusive jurisdiction over a federal cause of action, Congress must, in an exercise of its powers under the Supremacy Clause, affirmatively divest state courts of their presumptively concurrent jurisdiction.” Yellow Freight Sys., Inc. v. Donnelly, 494 U.S. 820, 823, 110 S. Ct. 1566, 108 L. Ed. 2d 834 (1990). This affirmative divestment of a local court’s jurisdiction can come in the form of “an explicit statutory directive, by unmistakable implication from legislative history, or by a clear incompatibility between state-court jurisdiction and federal interests.” Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 478, 101 S. Ct. 2870, 69 L. Ed. 2d 784 (1981). Merely granting a federal court original jurisdiction to hear a matter is not sufficient for a finding of divestment, for “[i]t is black letter law . . . that the mere grant of jurisdiction to a federal court does not operate to oust a state court from concurrent jurisdiction over the cause of action.” Id. at 479.

Because 9 U.S.C. § 203 grants “district courts of the United States . . . original jurisdiction,” a presumption exists that federal district courts share concurrent original jurisdiction over agreements covered by *183the Convention with state and territorial courts, including the Superior Court of the Virgin Islands. Though this presumption is rebuttable, none of the requirements for rebuttal are met. Notably, the statute not only fails to explicitly divest state courts of jurisdiction, but affirms that state courts have jurisdiction over these matters. The statute’s removal provision reads, in pertinent part:

Where the subject matter of an action or proceeding pending in a State court relates to an arbitration agreement or award falling under the Convention, the defendant or the defendants may, at any time before the trial thereof remove such action or proceeding to the district court of the United States for the district and division embracing the place where the action or proceeding is pending.

9 U.S.C. § 205 (emphasis added). Since the plain text of the statute allows a defendant to, at his discretion, choose to litigate the matter in either state or federal court, the clear implication is that the state court has jurisdiction to actually conduct a trial and render a judgment.4 See LaFarge Coppee v. Venezolana De Cementos, S.A.CA., 31 F.3d 70 (2d Cir. 1994) (denying removal to federal court under 9 U.S.C. § 205 because action, though involving an agreement falling under the Convention, had already proceeded to trial in New York state court). In other words, the Convention’s enabling legislation essentially allows a defendant to consent to adjudication in state court through its inaction. See Caringal v. Karteria Shipping, Ltd., 108 F. Supp. 2d 651, 656 (E.D. La. 2000) (remanding matter involving agreement falling under the Convention to state court because only a defendant can remove such a matter under 9 U.S.C. § 205 and defendant had not done so in this case); see also Employers Ins. of Wausau v. Certain Underwriters at Lloyd’s, London, 787 F. Supp. 165 (W.D. Wis. 1992), mandamus den., In re *184Amoco Petroleum Additives Company, 964 F.2d 706, 711-13 (7th Cir. 1992) (remanding to state court action arising under a Convention agreement because all defendants must consent to removal to federal court pursuant to 9 U.S.C. § 205). Likewise, nothing in the statute’s legislative history remotely indicates that Congress intended to strip state courts of their jurisdiction in such matters. See H.R. Rep. No. 91-1181 (1970).

We must, however, still consider whether there is “a clear incompatibility between state-court jurisdiction and federal interests.” Gulf Offshore Co., 453 U.S. at 478. For a state court to enforce an international arbitration agreement under the Convention, it must possess the ability to further the policies underlying the Convention. At least one federal circuit court has observed that 9 U.S.C. § 201 et seq. in and of itself does not require state courts to grant a stay of proceedings under the Convention. See McDermott Int’l Inc. v. Lloyds Underwriters of London, 944 F.2d 1199, 1211 n.16 (5th Cir. 1991). Thus, if a state court does not have the procedural mechanisms in place to facilitate the policies underlying the Convention, it may not have jurisdiction over the dispute because of the clear incompatibility between state court jurisdiction and the federal interest of having an international arbitration agreement enforced in accordance with the Convention. See id. at 1211.

The U.S. Virgin Islands, unlike most other jurisdictions, does not have an independent statute explicitly allowing local courts to force the parties to enter binding arbitration pursuant to the terms of their agreement, let alone an independent international arbitration statute mandating compliance with the Convention. However, this does not mean that Virgin Islands local courts do not have the power to compel arbitration and are not bound to enforce agreements pursuant to the terms of the Convention. Under section 4, title 1 of the Virgin Islands Code, “the restatements of the law approved by the American Law Institute .. . shall be the rules of decision in the courts of the Virgin Islands in cases to which they apply, in the absence of local laws to the contrary.” The Restatement (Third) of Foreign Relations Law reads, in pertinent part:

Under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ... a court in a state party to the Convention must, at the request of any party to an action, stay or dismiss the action pending arbitration if an agreement to arbitrate falling under the Convention is in effect and covers the controversy on which the action is based.

*185Restatement (Third) of Foreign Relations Law of the United States, § 487(2) (1987) (emphasis added).

The Restatement — which, due to the absence of a local law to the contrary, provides the rule of decision in a case involving international arbitration — clearly requires a Virgin Islands local court to apply the Convention and stay or dismiss the action upon the request of a party.5 See Gov’t v. United Indus. Workers, 40 V.I. 489, 169 F.3d 172, *186177 (3d Cir. 1999) (holding that RESTATEMENT (SECOND) OF CONTRACTS § 345(f) requires Virgin Islands local courts to apply the Federal Arbitration Act.) As a result, there is no fear that a Virgin Islands court, if it had jurisdiction over a dispute relating to an agreement covered by the Convention, would undermine Congress’s clear intent and refuse to grant a stay or dismissal pursuant to the Convention. Accordingly, there is no “clear incompatibility” between federal interests and Virgin Islands local courts having jurisdiction over such matters.6 Thus, the Superior *187Court had jurisdiction over the original litigation, and this Court has appellate jurisdiction pursuant to title 4, section 32(a) of the Virgin Islands Code.

III. DISCUSSION

Our review of a dismissal under Federal Rule of Civil Procedure 12(b)(6) is de novo. Ballentine v. United States, 486 F.3d 806, 808, 48 V.I. 1059 (3d Cir. 2007). We also review de novo the trial court’s jurisdictional determinations. Id. A denial of a motion for entry of default is reviewed for abuse of discretion. Stephenson v. El-Batrawi, 524 F.3d 907, 915 (8th Cir. 2008). In this case, the initial issue before this Court is whether the motion to dismiss filed by CEI was properly before the trial court. If it was, then we must decide whether the trial court erred in granting the motion while denying Martinez’s request for entry of default as moot.

In the trial court, Martinez sought entry of default against CEI arguing that the motion to dismiss filed as a responsive pleading in lieu of an answer, was untimely and, therefore, was not properly before the court. CEI sought dismissal based on the parties’ prior agreement to arbitrate disputes. The trial court, upon finding that the dispute was clearly subject to arbitration pursuant to the parties’ agreement, concluded that the Federal Arbitration Act (“FAA”) and decisions interpreting the FAA essentially divested it of subject matter jurisdiction over the dispute. As a result, the trial court did not reach the issues of the timeliness of the motion or CEI’s position or standing before the court to assert it, presumably because the court treated the issues as affecting subject matter jurisdiction which can be raised and addressed by the court at anytime. See CSX Transp. Co. v. Novolog Bucks County, 502 F.3d 247, 254 (3d Cir. 2007).

CEI’s motion to dismiss did not state any rule or authority to support the dismissal. It merely requested that the court enter “an order of dismissal as a result of plaintiff’s failure to submit the dispute to *188arbitration.” (J.A. at 19.) The motion further argued that under “[t]he October 10,1992 Agreement of the parties and pursuant to the [FAA], the Court is divested of subject matter jurisdiction.” (J.A. at 20.) It is thus clear that CEI was moving the trial court to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. Federal Rule of Civil Procedure 12(b) provides, in pertinent part:

Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: (1) lack of jurisdiction over the subject matter,... (6) failure to state a claim upon which relief can be granted ... A motion making any of these defenses shall be made before pleading if afurther pleading is permitted.

Fed. R. Civ. P. 12(b) (emphasis added).

However, the presence of an arbitration agreement does not deprive the trial court of subject matter jurisdiction. Since the trial court may stay the proceeding pending arbitration, it does not lose jurisdiction of the subject matter. See Harris v. Green Tree Fin. Corp., 183 F.3d 173, 176 (3d Cir. 1999). In fact, motions seeking the dismissal of an action on the basis that arbitration is required are not jurisdictional as they raise a defense to the merits of an action. See Llyod v. Hovensa, LLC, 369 F.3d 263, 272 (3d Cir. 2004); John Ashe Assocs., Inc. v. Envirogenics Co., 425 F. Supp. 238, 241 n.3 (E.D. Pa. 1977) (stating that arbitration agreements limit the scope of a court’s review, not its subject matter jurisdiction (collecting cases)). Such motions are not covered by Rule 12(b)(1), dealing with subject matter jurisdiction, but are instead considered under Federal Rules of Civil procedure 12(b)(6) or 56.7 Nationwide Ins. Co. of Columbus, Ohio v. Patterson, 953 F.2d 44, 45 n.1 (3d Cir. 1991). The Third Circuit Court of Appeals explained the difference as follows:

Although the court did not specify under which subsection of Rule 12 the action was being dismissed, the magistrate discussed the issue in *189terms of subject matterjurisdiction. This procedural error is significant because of the differing standards for evaluating the evidence under Rule 12(b)(1) and Rule 12(b)(6). Under Rule 12(b)(1), the court is “free to weigh the evidence and satisfy itself as to the existence of its power to hear the case.” Mortensen v. First Federal Savings and Loan Assn., 549 F.2d 884, 891 (3rd Cir. 1977). In contrast, because a Rule 12(b)(6) motion “results in a determination on the merits at an early stage of plaintiff’s case, the plaintiff is afforded the safeguard of having all its allegations taken as true and all inferences favorable to plaintiff will be drawn.” Id.; see also [Malak v. Associated Physicians, Inc., 784 F.2d 277, 280 (7th Cir. 1986).]

Boyle v. Governor’s Veterans Outreach & Assistance Ctr., 925 F.2d 71, 74 (3d Cir. 1991).

We will, therefore, consider whether the trial court’s dismissal was proper under Rule 12(b)(6). A motion to stay pending arbitration is not included in the ambit of Federal Rule of Civil Procedure 12(b) as a motion that suffices as a responsive pleading in lieu of an answer. However, courts traditionally have “entertained pre-answer motions that are not specifically provided for in the Federal Rules of Civil Procedure, including motions to stay pending arbitration.” See Intec USA, LLC v. Engle, No. 1:05CV468, 2006 U.S. Dist. LEXIS 24100, *1 n.1, [WL] (M.D.N.C. Mar. 23, 2006) (citing Smith v. Pay-Fone Sys., Inc, 627 F. Supp. 121, 122 (N.D. Ga. 1985)); 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1347 (3d ed. 2007) (stating that Rule 12(b) promotes the expeditious and simultaneous presentation of defenses and objections). Thus, CEI’s motion to dismiss in favor of arbitration will be treated as a pre-answer motion under Rule 12(b)(6). Palcko v. Airborne Express, Inc., 372 F.3d 588, 598 (3d Cir. 2004); Nationwide Ins. Co., 953 F.2d at 45 n.1.

A pre-answer Rule 12(b)(6) motion to dismiss is allowed only if it is made before pleading, “if a further pleading is permitted.” FED. R. Civ. P. 12(b). Martinez contends that as a result of CEI’s failure to timely plead, coupled with the denial of CEI’s request for an extension of time to plead, no further pleading by CEI was permitted, and, therefore, CEI’s motion to dismiss was not properly before the trial court. We agree.

According to the specified time limitation on Rule 12(b) motions, they must be made “before pleading;” and Rule 12(a), which *190allows twenty days for filing responsive pleadings, normally controls the time limit on Rule 12(b) motions. See, 5C WRIGHT et al., supra, § 1361. In this case, CEI was required by the parties’ court approved stipulation to plead to the complaint by August 1, 2003, but CEI did not do so. Instead, after expiration of the filing deadline, CEI moved the court for an extension of time to plead. In its motion for an extension, however, CEI did not show that its failure to timely plead was the result of excusable neglect as required by Superior Court Rule 10(a).8 See Farrington v. Benjamin, 20 V.I. 470, 473, 100 F.R.D. 474 (D.V.I. 1984). The trial court was within its discretion to deny the motion for extension without prejudice due to the absence of the required showing of excusable neglect. See id. (courts have discretion to permit an act to be done after expiration of the original prescribed period only upon motion of the party desiring to act timely and only upon a showing that the failure to act was the result of excusable neglect). At that posture of the case, absent the granting of a proper motion by CEI to plead out of time filed with the requisite showing of excusable neglect, no further pleading was permitted by CEI, and, consequently, the filing of a pre-answer motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) was not permitted.9 See Granger v. Kemm, Inc., 250 F. Supp. 644, 645 (E.D. Pa. 1966) (objection to venue denied when filed thirty-five days after date to answer expired and no answer filed). The motion to dismiss in favor of arbitration was filed on September 2, 2003, nearly three weeks after Martinez opposed CEI’s motion to extend the time to plead to the complaint and first asked the trial court to enter CEI’s default. Furthermore, section 3 of the Federal Arbitration Act — applicable to Virgin Islands local courts pursuant to *191Restatement (Second) of Contracts § 345(f), as recognized by the Third Circuit’s decision in United Indus. Workers, N.A., 169 F.3d at 177 — expressly states that a trial court may not act on a party’s motion to stay the proceedings pending arbitration or to refer the matter to arbitration when that party is in default.10 9 U.S.C. § 3; see also Satcom Int’l Group PLC v. Orbcomm In’l Partners, L.P., 49 F. Supp. 2d 331 (S.D.N.Y. 1999) (holding that FAA applies to actions involving the Convention).

The motion to dismiss was therefore not properly before the trial court and should not have been considered. Id. The trial court should have considered Martinez’s motion to strike the motion to dismiss and its motion for entry of CEI’s default before considering CEI’s Rule 12(b) motion.11

Since the trial court did not address the timeliness or propriety of the pre-answer Rule 12(b)(6) motion to dismiss, and summarily denied Martinez’s request for entry of default as moot when it erroneously treated the dismissal motion as depriving it of subject matter jurisdiction, we will reverse the dismissal and permit the trial court to address those matters fully in the first instance.12 We reach this conclusion fully aware that there is a strong federal policy favoring arbitration, see Lloyd, 369 F. *1923d at 270, and that this result will further delay final resolution of this long-running dispute which the parties may have agreed to resolve by arbitration. However, it is equally important that parties abide by the rules of procedure in presenting their claims to the courts and not circumvent those rules or valid court orders, as was done by CEI in this case. See generally, Wirtz v. Hooper-Holmes Bureau, Inc., 327 F.2d 939, 943 (5th Cir. 1964).

Our resolution of the dismissal issue makes it unnecessary to consider the remaining issues raised, except that the award of attorney’s fees cannot stand because, by our disposition, CEI is no longer the prevailing party entitled to attorney’s fees. See 5 V.I.C. § 541(b). The attorney’s fee award will, therefore, be vacated.

IV. CONCLUSION

This Court will reverse and remand the order of dismissal in favor of arbitration, so that the trial court may consider the posture of the motion under the correct standard and address Martinez’s motion for entry of default. Our decision herein makes it unnecessary to consider the trial court’s denial of reconsideration.13 Finally, we vacate the award of attorney’s fees as CEI is no longer the prevailing party entitled to recover attorney’s fees.

The agreement was between Martinez, Seahorse Foundation — a Turks and Caicos corporation — and Young Caribbean Jewelry Company Limited (“Young Caribbean”), a Cayman Islands corporation. CEI is a wholly-owned subsidiary of Young Caribbean. Though it is not a signatory to the agreement, CEI admits that the agreement is binding on it. See E.I. DuPont de Nemours & Co. v. Rhone Poulec Fiber & Resin Intermediates, S.A.S., 269 F.3d 187, 195 (3d Cir. 2001) (holding that an arbitration agreement is binding on a non-signatory affiliate corporation).

The appeal of the January 2,2007 dismissal was timely filed on January 31,2007, within the thirty days required by Supreme Court Rule 5(a)(1).

The dissent states, at the outset, that the Revised Organic Act, the Virgin Islands Code, the Convention, the Restatement (Third) of Foreign Relations Law, and the United States Code do not grant this Court or the Superior Court jurisdiction to hear matters involving international arbitration agreements. However, had the United States not enacted the Convention, and the facts of this dispute otherwise remained the same, there is no question that the Superior Court — and consequently, this Court — would have subject matter jurisdiction pursuant to title 4, section 76(a) of the Virgin Islands Code, which grants the Superior Court “original jurisdiction in all civil actions regardless of the amount in controversy,” and section 22 of the Revised Organic Act, which authorizes the Legislature to vest the Superior Court with jurisdiction over all civil proceedings except those with respect to income tax laws.

*182Because both the Revised Organic Act and the Virgin Islands Code expressly confer Virgin Islands local courts with subject matter jurisdiction over this dispute — a civil action involving real property located in the Virgin Islands — the question here is not whether any of these authorities grants subject matter jurisdiction over cases involving international arbitration agreements to the Superior Court, but whether the Convention’s enabling legislation revokes subject matter jurisdiction the Superior Court already has pursuant to the ROA and local law. As discussed further in this section, Congress, in enacting this enabling legislation, clearly sought to expand the jurisdiction of federal courts without limiting the jurisdiction of local courts. Cf. Restatement (Third) of Foreign Relations Law § 487 cmt. h (1987) (noting that only state courts may hear matters involving foreign judgments that are not governed by the Convention, unless another basis for federal jurisdiction exists).

Although Virgin Islands local courts are technically not “state” courts, it is well established that Congress has chosen to give the Virgin Islands territorial government “autonomy similar to that of the states.” Harris v. Boreham, 3 V.I. 565, 233 F.2d 110, 113-14 (3d Cir. 1956). Though Congress has the right to “revise, alter and revoke” this autonomy, this “does not diminish the powers while they reside in the territory.” Id. at 113. Thus, references to “state courts” in federal legislation have been construed to include Virgin Islands local courts in the absence of language that would explicitly exclude the territorial courts. See Gov’t v. United Indus. Workers of N. Am., 38 V.I. 170, 987 F.Supp. 439, 444 (D.V.I. App. Div. 1997), aff'd 40 V.I. 489, 169 F.3d 172 (3d Cir. 1999) (applying the Federal Arbitration Act to the Virgin Islands judicial system).

The dissent argues that our opinion in Browne v. People, 50 V.I. 241 (V.I. 2008) emphasized that title 1, section 4 is triggered only in cases involving the common law, and thus precludes our application of (he Restatement (Third) of Foreign Relations Law to this case. We disagree. Although this Court emphasized the phrase “rules of the common law” in Browne, the phrase “common law,” has not been construed as narrowly as advocated in the dissent. For instance, in Browne itself, this Court, in order to determine which party bore the burden of proving that the “proof is evident or the presumption is great” under section 3 of the Revised Organic Act, invoiced section 4 to adopt the rule applied by the “vast majority of jurisdictions with constitutional provisions similar to section 3 of the ROA.” Id. at 259 (emphasis added). Likewise, in Tobal v. People, S. Ct. Crim. No. 2008-080, 2009 V.I. Supreme LEXIS 11, *7 (V.I. Feb. 11, 2009), this Court, citing to Browne, interpreted the phrase “bailable by sufficient sureties” in the Revised Organic Act by applying the constitutional interpretation adopted by a majority of other jurisdictions.

The dissent is correct that not all Restatement provisions restate the common law, but may restate statutory law or even promote new rules preferred by the drafters. See, e.g., Frank J. Vandall, A Critique of the Restatement (Third), Apportionment as it Affects Joint and Several Liability, 49 EMORY L.J. 565, 619 (2000) (criticizing the Restatement (Third) of Torts for adopting “four tort reform alternatives” unsupported by actual law); WILLIAM L. Prosser, Handbook of the Law ofTorts 39 n.12 (4th ed. 1971) (noting that a requirement found in the Restatement (Second) ofTorts that a person may recover for assault even in the absence of a gesture is not supported by any case law). Nevertheless, it is well established that a Restatement rule shall constitute the “common law” of the Virgin Islands even if it is not itself based on the common law. Most significantly, the Third Circuit has expressly held that section 4 requires Virgin Islands local courts to apply Restatement provisions even if they are based on federal statutory law rather than the common law, such as section 345(f) of the Restatement (Second) of Contracts. See Gov’t v. United Indus. Workers, 40 V.I. 489, 169 F.3d 172, 177-78 (3d Cir. 1999) (“The common law, as articulated by the Restatement, provides that arbitration law depends on statutory schemes, and thus the [Superior] Court should apply the FAA scheme to questions of arbitration.”). See also Abdallah v. Callender, 28 V.I. 416, 428, 1 F.3d 141, 147 (3d Cir. 1993) (holding that common law only applies in the absence of local law or a Restatement rule); Co-Build Companies, Inc., v. Virgin Islands Refinery Corp., 15 V.I. 528, 533, 570 F.2d 492, 494 (3d Cir. 1978) (“When no precedents relate specifically to the adjudication of a Virgin Islands dispute, the courts are directed to turn to the various Restatements of Law, approved by the American Law Institute, which are to provide the rules of decision for such cases ‘in the absence of local laws to the contrary.’ ”); Skeoch v. Ottley, 6 V.I. 241, 252, 377 F.2d 804, 810 (3d Cir. 1967) (“We have in mind also that Virgin Islands law, absent contrary local law or statute, incorporates the principles enunciated in the ‘restatements of law approved by the American Law Institute.’ ”);

*186Courts in the Virgin Islands have also consistently applied Restatement provisions based on the Third Circuit’s broad reading of section 4, even when the rule articulated in that Restatement is not grounded in the common law or covers matters that are not traditionally resolved through the common law. Notably, the District Court of the Virgin Islands has applied the rules articulated in the Restatement (Third) of Foreign Relations Law pursuant to section 4 in the absence of contrary Virgin Islands legislation. See Guardian Ins. Co. v. Bain Hogg Int’l Ltd., 52 F. Supp. 2d 536, 540 (D.V.I. 1999). Likewise, several Virgin Islands courts —including this Court — have applied the Restatement (Third) of the Law Governing Lawyers (2000) even though rules governing the legal profession are typically set by court rule or statute. See, e.g., V.I. Bar v. Brusch, 49 V.I. 409, 412 (V.I. 2008) (applying Restatement (Third) of the Law Governing Lawyers § 5 pursuant to section 4); Nunez v. Lovell, 50 V.I. 707, 718 (D.V.I. 2008) (applying conflict of interests rules articulated in RESTATEMENT (Third) of the Law Governing Lawyers § 121 pursuant to section 4); Mendez v. Hovensa, LLC, 49 V.I. 849, 863 (D.V.I. 2008) (holding that, because the Restatements provide the common law of the Virgin Islands, Restatement (Third) OF Law Governing LAWYERS § 100, which defines a represented non-client, is applicable). Accordingly, the Restatement (Third) of Foreign Relations Law § 487(2), even if based on a federal statute, clearly provides the rule of decision in this case. See United Indus. Workers, 169 F.3d at 177.

The dissent, citing title 1, section 2 of the Virgin Islands Code, which limits application of the Code to the territory of the Virgin Islands, argues that a clear incompatibility exists because the Superior Court cannot compel the parties to arbitrate this dispute in the Cayman Islands. Although Congress’s enabling legislation states that “[a] court having jurisdiction under this chapter may direct that arbitration be held in accordance with the agreement at any place therein provided for, whether that place is within or without the United States,” 9 U.S.C. § 206 (emphasis added), this provision is not intended to displace jurisdiction from courts that lacked the ability to compel arbitration, but, by its own terms, is intended to grant federal district courts — the courts which received concurrent original jurisdiction to hear these actions pursuant to 9 U.S .C. § 203 — an additional power to compel international arbitration. See McDermott In'l, 944 F.2d at 1211 n.16 (holding that 9 U.S.C. § 206 “arguably confers no authority on state courts to compel arbitration” because “the only courts ‘having jurisdiction under [the Convention Act]’ are federal.”).

Because the issue of whether the Superior Court has the power to compel arbitration in a foreign country is not properly before this Court, it is inappropriate for us to address this issue at this time. See St. Thomas-St. John Bd. of Elections v. Daniel, 49 V.I. 322, 328 n. 8 (V.I. 2007). Nevertheless, even if the Superior Court lacks this power, an inability to compel ar*187bitration outside of the Virgin Islands would not frustrate the policy underlying the Convention so long as the Superior Court is required to stay or dismiss a proceeding involving an agreement that arises under the Convention. To the extent a defendant wishes to compel international arbitration — rather than merely staying or dismissing the proceedings — and finds that the Superior Court is unable to grant such relief, it may simply remove the proceedings to a federal district court pursuant to the Convention’s removal provisions. See 9 U.S.C. § 205.

The motion to dismiss in this case was not converted to a Rule 56 motion for summary judgment as permitted by Federal Rule of Civil Procedure 12(c) because no notice or opportunity was provided to the parties to present pertinent Rule 56 materials.

“When an act is required or allowed to be done at or within a specified time —

(a) The court for cause shown may at any time in its discretion:
1. With or without notice, order the period enlarged if application therefor is made before the expiration of the period originally prescribed or as extended by a previous order of the court.
2. On motion, permit the act to be done after the expiration of the specified period if the failure to act was the result of excusable neglect.”

Super. Ct. R. 10(a).

In fact, a motion for relief under Rule 55(c) is required when a defendant has failed to answer within the required time period even when a formal entry of default has not been made by the court. See 10A Charles Alan Wright & Arthur R. Miller, Federal Practice AND PROCEDURE § 2692 (3d ed. 2007) (citing Gray v. John Jovino Co., Inc., 84 F.R.D. 46, 47 (E.D. Tenn. 1979)).

Notably, 9 U.S.C. § 3 also applies to Convention proceedings in federal court. See 9 U.S.C. § 208 (stating that provisions of the Federal Arbitration Act are incorporated into the Convention unless expressly contradicted).

Our decision is not intended to prevent trial courts from exercising discretion to consider untimely motions to dismiss in all cases. While courts within the Third Circuit have moved away from the mle in Granger prohibiting consideration of late-filed motions to dismiss, see, e.g., Breland v. ATC Vancom, Inc., 212 F.R.D. 475, 477 (E.D. Pa. 2002), the restrictive interpretation in Granger is still binding where the Rule 12(b)(6) motion is made after the expiration of the time to plead and after the plaintiff has moved for an entry of default. See Breland, 212 F.R.D. at 477 (compiling cases). A restrictive interpretation of the time limits is justified when, as in this case, a defendant agrees to a stipulated due date for pleading but ignores that date and, after the plaintiff moves for entry of default, the defendant files an untimely motion for extension of time to plead without showing excusable neglect.

Where the court exercises its discretion to accept late motions it must specify the factors considered so that a reviewing court may evaluate the decision for an abuse of discretion. Cf. Landon v. Jean-Paul Budinger, Inc., 724 S.W.2d 931, 940 (Tex. App. 1987) (“The better practice would have been for the trial court to state in the record its reasoning so that the parties particularly, but also the appellate court, might intelligently assess whether the trial court erred----”). In this case, the court did not review the motion to strike or the request for entry of default or give any reason for considering the motion to dismiss other than the conclusion that it lacked subject matter jurisdiction.

Since our resolution of this case does not require us to address Martinez’s motion for reconsideration, we need not consider whether Martinez’s motion for reconsideration was timely filed within the ten-day time limitation of Local Rule of Civil Procedure 7.4.