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Local contractor seeks foreclosure on Hermitage lots

 

WILMINGTON- Five more Hermitage properties are facing foreclosure, this time by a local contractor.

Brown's Country Services has filed a foreclosure complaint on five building lots on Mann Road. According to the complaint, mortgage deeds on the lots were part of a deal between Hitchcock Lands LLC and Brown's for the excavation company's work in preparing the lots for future construction. Hitchcock Lands is a Vermont real estate holding company owned by LCB Investments, a Connecticut company owned by James Barnes.

According to an August 4, 2017 memorandum written by Jim Barnes and addressed to Brown's Country Services owner Jeff Brown, and included with the foreclosure complaint, the work during “Phase 1” was to include clearing of the five lots, erosion control, storm water control, installation of underground electrical, and the construction of a main roadway. A second phase would include the installation of sewer mains, water mains, and hydrants

The total compensation for Phase 1 of the work was to be $332,750, and Barnes promised a flat 8% ($26,620) interest on $332,750, to be paid upon the sale of the lots. The $332,750 principal was to be paid as each of the five lots was sold, or $66,550 from each lot. Phase 2 would have added another $122,303 to Brown's compensation, also paid in five increments of $24,460.65 with the sale of each of the five lots.
“The lots are currently held in an LLC (Hitchcock Lands) that James R. Barnes owns 100% of,” according to the memorandum, signed by Brown and Barnes. “Currently four of the lots have mortgages on them, one does not. During the time frame of this agreement Hitchcock Lands LLC, will grant you second mortgages on four of the lots, and a first mortgage on one of the lots.”

Barnes also suggested that the outlook for a quick sale of the lots at auction was pretty good. “There has been a lot of interest in these lots from current members,” Barnes wrote. “We are coming into our best-selling season. The lots are unique. We believe if Jeff does a great job at preparing the site, the auction will be a success. In the event the aution is not successful, we still believe the lots will be sold in the next 60 to 90 days.”

Also according to the memo, Brown was to start the work on August 14, 2017 “because of an expired permit,” and was to “do as much work as possible” before a planned auction date between September 8-10, 2017.

In the complaint, Brown's Country Services attorney Lance Shader writes that Brown carried out as much of the work as possible. “In good faith, the plaintiff did the majority of the work in Phase 1 and a substantial portion of the work in Phase 2, for a total of $150,804.11, including $26,620 for an 8% interest payment payable per the agreement.”

But Barnes, through Hitchcock Lands and LCB Investment Company, failed in his responsibility to hire blasting contractors that were needed for completion of Brown's work, according to the complaint. “Defendants also were responsible to bring the lots to auction. Defendants failed to do both of those things, and breached their agreement with (Brown.)”

Brown's Country Services billed Barnes and “repeatedly” requested payment, according to the complaint, “but defendants did not pay plaintiff any part of what was owed.”

Shader says the defendant is owed the full amount of the contract, $455,053.23, or “in the alternative, $150,804.11, the amount of work defendant's default allowed him to perform.”

The complaint asks the court to order Hitchcock Lands to pay the full amount owed, with an interest rate of 1% per month, along with court costs and other fees, or grant Brown's a writ of possession of the mortgaged properties. Brown's also seeks costs related to “maintaining and protecting the value of the mortgaged premises,” to include the payment of municipal charges, taxes and insurance payments.”

 

The Deerfield Valley News

797 VT Route 100 North
Wilmington, VT 05363

Phone: 802-464-3388
Fax: 802-464-7255

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