Prospective buyers sue Stowe over real estate deals
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By THATCHER MOATS Times Argus Staff - Published: January 9, 2009
STOWE — A growing number of people who thought they would spend this winter in slopeside accommodations at Stowe Mountain Lodge are suing the resort for not closing on their real estate deals.
Stowe Mountain Lodge is a luxury resort that offers golf, a spa and fine dining. It is the hub of an estimated $400 million worth of recent development near Stowe Mountain Resort.
The insurance giant American International Group — the owner of the resort — collapsed last fall as closing dates for several resort properties approached.
Multiple liens were placed on Stowe Mountain Lodge starting last summer, which prevented buyers from closing on properties. Now those disappointed buyers are suing Stowe Mountain Lodge to recoup their deposits, legal fees and other costs.
The Stowe law firm Stackpole & French represents four clients who have filed lawsuits against the company in Lamoille Superior Court. The firm expects to file four more in the next few days.
"Basically, over the last several months liens have been periodically put on the property," said Ed French, a lawyer at Stackpole & French.
Under the contract that French's clients signed, the title must be clean before the deal is closed, French said.
Liens have been filed and discharged constantly over the last several months, said French.
"It's been almost continuous since June or July," he said.
A construction manager for the project is one party that put a lien on Stowe Mountain Lodge, according to court papers.
A letter from the company that was sent to Edythe M. DeMarco states that the "project Construction Manager" had placed a lien on the Stowe Mountain Lodge, which could delay the upcoming closing.
A complaint filed by DeMarco and Thomas W. Byrne states they put down $54,862, and accuses Stowe Mountain Lodge of unjust enrichment for not closing on the property and not returning their deposit.
The breach of contract "has resulted in damages to (DeMarco and Byrne) who have been deprived of the use of their deposit funds as well as property they contracted to purchase," court records state.
One Stackpole & French client is suing for about $70,000, said attorney Jeremy Hoff, who is also working on the cases.
Spruce Peak operations manager Walter Frame did not return a call seeking comment.
The courts have started to take action against Stowe Mountain Lodge, according to French. He said a judge ordered the company last week to put a client's deposit money in an escrow account. The money can't be removed without an additional court order.
"That case obviously could become precedent for all of them," said French.
French declined to speculate on whether the liens indicate that Stowe Mountain Lodge is short of cash.
AIG collapsed and was bailed out in September, swept under by the sub-prime mortgage crisis and the ensuing credit crunch. The $85 billion bailout gave the federal government an 80 percent stake in AIG.
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