Judge sides with plaintiffs in Hermitage cases

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NEWFANE — In rulings affecting more than $2.5 million worth of real estate and property connected to the Hermitage Club, three plaintiffs' motions for immediate orders were approved Tuesday in separate hearings at Windham Superior Court, Civil Division.

The rulings, regarding a foreclosure on the White House Inn and default judgments on golf carts and a townhouse, were approved by Judge John Treadwell. None was opposed by Bob Fisher, the attorney for the Hermitage Club and its founder, Jim Barnes.

Fisher told reporters that Barnes, who did not attend the hearings, was meeting with three people in New York City about restructuring the company. Fisher was present only for the 1:30 p.m. hearing on the White House Inn.

Attorney David Dunn of Brattleboro represented former inn owner and Wilmington resident Robert Grinold, who filed a foreclosure complaint against White House By Hermitage LLC in May 2017. Barnes defaulted on the mortgage after failing to make payments on a $1.4 million note. The parties agreed a total of about $1,373,693 was due as of April 27, 2017.

Tax delinquencies also constitute "an additional default under the note and mortgage," Dunn wrote in court documents. About $16,158 in property taxes and $2,521 in sewer fees are owed, Wilmington Town Manager Scott Tucker told the Reformer last week.

"The court is granting the motion for summary judgment for plaintiff in this matter unless there is something you wish to present on this particular point today," Treadwell told Fisher, referring to a judgment entered by a court for one party and against another party without having a full trial, usually based on merits or certain issues in the case.

Fisher replied, "No, your honor."

Barnes was given 30 days in which he could attempt to satisfy creditors and reclaim the property.

"I don't think we are looking for shorter time, especially with the condition of the property," Dunn said. "It's going to take time to get it in shape and ready for sale."

Dunn argued for the court to appoint a receiver to maintain the property before public auction. He proposed the receiver be Adam Grinold, son of Robert Grinold and executive director of the Brattleboro Development Credit Corp. But Treadwell expressed concerns about the "familial" relationship as a receiver should act as an agent of the court, and indicated he would decide on that request later.

The plan involves having someone live on the property. That would "substantially reduce" insurance costs, Dunn said.

"We're not consenting to it," Fisher said. "We're not taking any position either."

During testimony, Robert Grinold told the court Barnes bought the inn, then let the insurance lapse.

"I was quite upset," Robert Grinold said. "No one wants to insure an empty building."

The Vermont Department of Taxes had shut down the property due to the Hermitage not paying taxes.

Robert Grinold said he would like the property cleaned up and shingles replaced. He said an emergency generator and a grooming machine used for a sledding hill out front have gone missing. He said Barnes offered this week to have an employee who is living at a different hotel stay at the White House Inn to help with insurance issues and Barnes hoped to have money available within a couple of months to pay the mortgage.

Robert Grinold does not want to wait.

"There's been quite a bit of delays already," he told the court.

He said his son is "very familiar" with the property: "He was raised there then kind of took over as management."

Robert Grinold expects his son would charge $80 to $100 an hour, less than other groups for receiver services. Deferred maintenance would be addressed as well as municipal taxes and fees.

"I don't think it's appropriate to say it's an extraordinary remedy," Dunn argued in defense of receivership. "It's a remedy available."

Dunn said the Hermitage "essentially abandoned this property" and there is no plan of reopening. He said Elizabeth Glynn, attorney for Berkshire Bank, did not believe the inn could be included in the scope of a separate receivership being considered by the court for Hermitage properties such as a private ski resort, golf course, four inns and townhouses.

With Adam Grinold appointed receiver and a tenant on the premises, Fisher said, it might make insurance costs less burdensome for Barnes.

"My client is hopeful, as we mention in last Thursday's hearing, of a restructuring deal that would provide money with which to provide Mr. Grinold for the mortgage," he told the court.

Goodbye golf carts

Following a hearing at 11:30 a.m. on Monday, Treadwell ordered in favor of the Iowa-based TCF Equipment Finance. The company moved for default judgment in the amount of about $194,361. No attorney or representative from the Hermitage appeared in court to oppose the motion. Default judgement is a binding judgment for one party based on a failure of action by another.

Treadwell also issued an order that allows TCF to recover 74 electric golf carts and two other golf-related vehicles.

"The property is to be turned over to its owner," the order says, "to satisfy the judgement for damages, costs and attorney's fees that it has recovered in an action brought by TCF against Hermitage..."

Attorney Paul Kulig, of Rutland, said TCF will make arrangements with the Windham County Sheriff's Office to get the golf carts.

"Obviously, there's a lot of equipment that's going to have to be hauled away for release, sale, whatever's going to happen," he told the court.

An official from TCF was called as a witness via telephone to tell the court how the figure sought for in the motion for summary judgement represented money due or past due for leases on the equipment.

"One of many"

A hearing scheduled for 3:30 p.m. saw Treadwell order in favor of Tyler Dickson and Rose Stewart Dickson, of Rye, N.Y., who entered into a written agreement with Barnes and the Hermitage for the purchase of a townhouse in October 2015.

The couple paid $982,955 for the deposit and all progress payments as required by the contract, then they were denied a conveyance to transfer the property, according to a complaint. They were expecting to take possession of the townhouse in December 2015.

"My clients are just one of many who have been wronged by this company," attorney Evan Chadwick of Brattleboro told Treadwell. "They can't close on this. The property is encumbered by more liens than I care to count ... This is just one big mess, your honor."

Treadwell said he would enter default judgment in favor of the couple and order the Hermitage to close on the sale and provide clear title to the property.

Treadwell has yet to rule on Berkshire Bank's request for a court-appointed receiver. Berkshire Bank filed for foreclosure in February after the Hermitage failed to make payments on three loans. Those properties included the company's private ski resort at Haystack Mountain, the Hermitage Inn, a golf course, Chamonix townhouses, the Snow Goose Inn, the Horizon Inn, the Doveberry Inn, second homes under construction, and other properties. The foreclosure complaint has 35 liens from vendors and contractors for bills and claims the Hermitage could not pay.

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

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