Hermitage Club founder asks to represent self in White House Inn case

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NEWFANE — Hermitage Club founder Jim Barnes wants to represent himself in a case alleging he filed a "bogus" $1.9 million lien that is negatively affecting the sale of the White House Inn in Wilmington.

But inn owner Robert Grinold's attorney David Dunn of Phillips, Dunn Shriver & Carroll of Brattleboro said the Vermont Limited Liability Act no longer allows someone who is not an attorney to represent a limited liability company.

"As such, a member cannot represent the entity unless the entity is an attorney or otherwise permitted by law," Dunn wrote in an objection to Barnes' request to represent the White House by Hermitage LLC filed in Windham Superior Court, Civil Division. "The law previously permitted a nonattorney to represent a limited liability company, but that language was repealed by the Legislature in 2015."

Grinold provided seller financing to a previous owner who sold the property to White House by Hermitage Inn LLC, according to a motion for preliminary injunction to remove the lien. Barnes defaulted on the mortgage then a stipulation agreement to make certain payments on schedule.

Barnes had been represented in this case by attorney Bob Fisher of Fisher and Fisher in Brattleboro through May 22, when the court granted summary judgment to Grinold and Fisher's request to withdraw as counsel in this matter, according to background information provided to the court by Dunn.

In October, Barnes filed the lien alleging that the White House by Hermitage Inn LLC owed the Hermitage Club LLC about $1.9 million for construction services, according to the motion. Both LLCs are controlled directly or indirectly by Barnes, Dunn said in an earlier filing, calling the lien "nothing more than an attempt to assert control over a property that he has already transferred to Grinold by a deed containing warranty covenants."

Barnes filed a notice of appearance for self-represented litigant and a request for a non-lawyer to represent a corporate entity on Jan. 4.

His request was unsigned, Dunn wrote, so it is not authorized by the LLC in which Barnes is not a member. Dunn said Hermitage Inn Real Estate Holding Company LLC is the sole member.

With HIREHC assets placed in receivership since June as part of a foreclosure initiated by Berkshire Bank, Dunn called Barnes' request without approval from the court-appointed receiver "inappropriate." Alan Tantleff of FTI Consulting is the receiver tasked with preserving the value of the foreclosed properties — including the private ski resort at Haystack Mountain, a golf course and four inns but not the White House Inn — until the process plays out.

Dunn said Barnes has not shown that he has "adequate knowledge or legal skill" to represent the LLC and his interests are not aligned with the corporation since he has personally guaranteed the loan made by the corporation.

"[I]t is in Barnes' personal interest to see that the LLC shoulders the entirety of the burden of the loan and any deficiency, placing him in an irreconcilable conflict of interest," Dunn wrote. "Finally, Barnes has signed and filed a mechanic's lien (allegedly on behalf of Hermitage Club LLC, another entity whose assets are in receivership) against White House by Hermitage LLC. To enforce that lien, Barnes (acting as he states as 'duly authorized' representative of Hermitage Club LLC) would have to file suit against White House by Hermitage LLC. This presents a second irreconcilable conflict of interest."

Dunn has told the court Grinold has listed the White House Inn for sale and several interested parties have come forward.

"The filing of the notice of mechanic's lien caused special damages because," he wrote, "potential purchasers have balked at entering into agreements to purchase the White House Inn ... At a minimum, this will delay any closing, increasing Mr. Grinold's carrying costs, including but not limited to maintenance, utilities, real estate taxes and insurance."

Reach staff writer Chris Mays at cmays@reformer.com, at @CMaysBR on Twitter and 802-254-2311, ext. 273.


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