Consumer Fraud? Hermitage founder sued by club members

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WILMINGTON — More than $2 million advanced to the Hermitage was expected to go toward the construction of three townhomes at the private ski club founded by Jim Barnes.

Instead, an investment firm, an LLC based in Vermont and a man who lives in New Jersey got nothing more than a concrete foundation. That's according to documents filed with the U.S. District Court for the District of Vermont by Langrock Sperry & Wool, a Vermont law firm, on behalf of RTM Capital Partners, LPV 15-Hermitage LLC, and Matthew Curtis.

"Each of the plaintiffs entered into a real estate purchase and sale agreement with the Hermitage for the purchase of a townhome, all of which were to be located in Building 13, Grenoble Way at the Mountain ... negotiated and signed by Barnes on behalf of Hermitage [and] to be constructed offsite by a third party modular builder, Ritz-Craft," states the court document.

Despite assurances from Barnes that the townhomes were being built, wrote Erin Miller Heins, an attorney at Langrock Sperry & Wool, no progress other than the pouring of foundations was ever made.

Though the contracts were signed starting in 2015, Barnes waited until November of 2017 to admit to the plaintiffs the townhomes were not being built, wrote Heins.

On a number of occasions, she wrote, "Barnes purposefully misrepresented facts concerning the status of construction on Plaintiffs' townhomes and the use of the funds advanced by Plaintiffs. ... Barnes was motivated to misrepresent these material facts in order to obtain additional funds from Plaintiffs and to use these funds for other purposes."

In total, RTM paid $745,000 to Barnes and the Hermitage, LPV paid $741,281.10, and Curtis paid $594,246.67.

Barnes, until recently, was the president and CEO of the exclusive ski club he founded on the spot of the former Haystack Mountain Ski Area. According to the filing by Heins, Barnes lives in Avon, Conn., and was the managing member and majority interest holder of the Hermitage Inn Real Estate Holding Company, which is the real estate holding company that owns the Hermitage Club at Haystack Mountain.

The ski and golf club has been mired in controversy. In addition to making late tax and utility payments, the Hermitage recently received a foreclosure complaint from Berkshire Bank. Barnes is also being sued for sexual harassment, employment discrimination and wrongful termination by two former employees. Twice this month, due to a lack of cash on hand, the Hermitage was forced to shut down operations.

Nonetheless, on Monday, Barnes issued a press release stating "We are thrilled to have completed a wonderful and safe experience for our members, the completion of a successful 2018 season. With unprecedented snow fall and with our earliest season start yet, we had 18 full weekends of corduroy skiing."

The court filing on behalf of RTM, LPV and Curtis calls for a jury trial to recoup the investments, alleging Barnes committed consumer fraud and negligent and fraudulent misrepresentation when he induced the three plaintiffs to continue to advance funds for the construction of the three townhomes.

"Barnes purposefully misrepresented facts concerning the status of construction on Plaintiffs' townhomes and the use of the funds advanced by Plaintiffs," wrote Heins. And instead of using the money for its intended purposes, Barnes used it for "his own use and enjoyment and/or that of Hermitage," she wrote. "Barnes had a duty to bring the lack of progress and return of funds to Plaintiffs' attention. Instead of bringing the lack of construction progress and return of funds to Plaintiffs' attention, Barnes willfully and repeatedly concealed these facts and gave Plaintiffs false information to the contrary."

Bob Audette can be contacted at 802-254-2311, ext. 151, or raudette@reformer.com.


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