HARTFORD, CONN. — An attorney for Hermitage Club founder Jim Barnes and the Hermitage Inn Real Estate Holding Company LLC is questioning how litigation should move forward without more than 25 members of the investment group it could affect.
Edward C. Taiman Jr. of Sabia Taiman, LLC of Hartford, Conn., moved for a civil court in Connecticut to strike an application for prejudgment remedy on the grounds that "indispensable parties" have not joined the lawsuit over a loan made to construct a chairlift known as the Barnstormer at the Hermitage Club's private ski resort at Haystack Mountain. He said the plaintiffs represent only 80 percent of the Barnstormer Summit Lift LLC.
"Who is to say the five named plaintiffs are not attempting to advance their own interests over those of the other nonparty Barnstormer members?" Taiman wrote in the motion.
According to the plaintiffs, HIREHC defaulted on a $7.8 million loan after only one payment in March 2016, but it has not declared the loan to be in default or acted to protect the investment group's security interest in the loan. The plaintiffs worry their security interest is significantly at risk since Berkshire Bank obtained summary judgment in Windham Superior Court, Civil Division in a foreclosure case after HIREHC defaulted on a mortgage totaling more than $17 million.
The bank foreclosed the Hermitage's ski resort, golf course and four inns in February, then the Vermont Department of Taxes shut down the company's establishments the following month for not paying taxes. A receiver has been appointed by the Windham County court to preserve the value of the properties until the process plays out.
Taiman said there's no way of knowing why the plaintiffs do not have the support of all of the Barnstormer LLC's members because they do not have a voice in the proceedings and there's nothing preventing other members of the group from bringing on their own separate litigation.
"The other, nonparticipating/nonparty members could institute their own action in Vermont and we may find ourselves with conflicting orders from different courts in different states in favor of different parties who all claim to speak on behalf of the Barnstormer membership," he wrote. "For this action to properly proceed, all of the members of Barnstormer must be made party to the instant action. The principles of due process, good conscience and equity demand the same."
The plaintiffs' attorney Aaron Romney of Zeisler & Zeisler of Bridgeport, Conn., said his clients have the support of a significant majority of the group.
"They are not seeking to enforce rights that belong to themselves or any other Barnstormer members in their individual capacities," he wrote, adding that names and addresses must be included in a motion to strike that relies on an argument regarding the absence of parties. "HIREHC and Barnes, as the manager and de facto manager of Barnstormer, respectively, know the names and have contact information for all of Barnstormer's members. Yet, consistent with Barnes/HIREHC's repeated failure and refusal to share information with Barnstormer's members, Barnes/HIREHC failed to provide this information to the court as required by [statute]."
Romney said the plaintiffs are looking for an order that would allow them to protect and enforce their group's existing security interest in the chairlift.
"Absent the relief requested, Berkshire will foreclose on the ski lift and Barnstormer will be left with an empty bag," he wrote. "Said differently, if plaintiffs cannot protect Barnstormer's interest in the ski lift, it will be worthless by the time they obtain a final judgment in this action because Barnes/HIREHC will allow Berkshire to foreclose on the ski lift."
Reach staff writer Chris Mays at firstname.lastname@example.org, at @CMaysBR on Twitter and 802-254-2311, ext. 273.