Club waffles on membership refund agreement
by Mike Eldred
Sep 07, 2017 | 3725 views | 1 1 comments | 133 133 recommendations | email to a friend | print
Hermitage Club
Contractors work on a foundation at Haystack Mountain. A member of the Hermitage Club has filed a complaint with the attorney general’s office, saying the club failed to honor a membership refund agreement.
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WILMINGTON- A local resident has filed a complaint against the Hermitage Club with the Vermont Attorney General’s office in an effort to recoup money he says the club owes him.

Bill Stewart says he bought his membership at the Hermitage Club with two thoughts in mind. First, he believed the investment would boost the local economy. Second, he hoped the club would broaden his local social contacts.

Stewart and his wife moved to Wilmington from Connecticut shortly before Tropical Storm Irene, but they were already quite familiar with the valley. They were married at the White House of Wilmington, and had their honeymoon dinner at Poncho’s Wreck. About seven years ago, they decided to move here permanently, and were able to continue working remotely for their Connecticut employers.

“After Irene hit, we were afraid we were going to be living in a ghost town, and we wondered ‘what are we going to do?’” Stewart says. “Then, a month or two later, we saw something in the paper about the Hermitage Club. When we moved up here, we really didn’t know anyone and thought it would be a good way to provide jobs and economic relief to the community, as well as meet a few people.”

Stewart was among the earliest club members – he estimates he and his wife were among the first 10 members. He purchased his membership for $20,000, with annual dues at about $4,500. Today, memberships cost $85,000 and annual dues have nearly doubled. Under the contract and club rules Stewart signed, the membership initiation fee of $20,000 was refundable. According to the rules, a member who resigned could receive 100% reimbursement after the club sold another membership. However, the rules also stipulated that the club could amend its rules at any time.

But after a few years, Stewart and his wife found they used their membership infrequently, and stopped paying their annual dues.

In late September 2016, they submitted their resignation, and discovered that the rules had changed. Instead of selling one new membership before Stewart’s could be refunded, the club now required the sale of three new memberships. In other words, for Stewart to receive his initiation fee of $20,000, the club had to sell three memberships at $85,000, raising $255,000 in new revenue. In addition, Stewart was number 11 on a list of members seeking a refund, meaning that 30 memberships, with a total cost of $2.55 million, had to sell before any membership sales could be counted toward the three that must sell before Stewart could receive his refund.

Understanding that the changes to refund payments made by the club were covered under the club rules, Stewart says he accepted the situation. He contacted the club on a monthly basis for updates.

“They would reply and we were progressing through the list,” Stewart says, “and the club staff were always attentive and responsive, which was nice.”

When he called on March 2, club staff told him that his membership was being processed and they were referring him to the accounting department. Stewart thought that meant that his refund was imminent. “Then the next day, March 3, that’s when the club sent out a note saying ‘we’re putting a moratorium on reimbursement of intiation fees until we review it again in 2018.’ So, it’s they’re not even going to pay in March 2018, they’re going to wait and review it then.”

During the interim, Stewart says, members “in limbo” are allowed to use the facilities. “That would be great, but we didn’t use the club even before.”

Stewart says the moratorium, which came after he had already qualified for a refund under the rules that were in place at the time, is a breach of the club’s fiduciary responsibility to members. “That’s where the rub is for us,” he says.

The email also promised an update in 60 to 90 days. Sometime in July, Stewart began to email club officials, asking for the promised update. He never received an answer he says, despite a growing level of frustration in his requests.

Last month, Stewart filed a complaint through the Vermont Attorney General’s Consumer Assistance Program.

Program coordinator Jason Duquette-Hoffman says the CAP acts as a mediator for consumer complaints, prompting both parties to communicate and arrive at a solution. “We don’t investigate complaints as part of the process and we don’t provide legal advice, we provide a communication forum,” he says.

But he says the consumer assistance program also provides a bank of information on issues that may be emerging in the marketplace. The attorney general’s office may use the information to clarify policies, seek legislative changes or, if there’s a pattern of behavior regarding a particular business, the information is available to attorneys in the consumer protection division. Duquette-Hoffman says Stewart’s complaint is the only one that has been filed against the Hermitage.

The CAP contacted the Hermitage Club regarding Stewart’s complaint, asking them to contact Stewart and inform the CAP office of steps taken to resolve the issue. In the club’s reply to the attorney general’s office, as well as in an email responding to a request for information for this article, Hermitage Club founder and President Jim Barnes said the club takes CAP’s notice very seriously, but goes on to note that “we are a private club and our membership rules and regulations can change at any time and per the direction of our management and board of directors. At the present time our club has decided that no resignations from members will be purchased back at this time, and we have noticed members that there is a moratorium on this until March of 2018.”

Barnes also accused Stewart of making a threat to the club that he would take his complaint to the media, and that he contacted other members in hopes of finding support for his position.

Stewart says if the club took the matter seriously, Barnes or the four other Hermitage executives copied on his emails would have replied to the requests for information he sent in July and August. Regarding references to the rules, Stewart says “the issue is that the club changed the rules after canceled members had qualified for 100% of their initiation fees.”

Despite his battle with the club for the return of his money, Stewart says he still supports the Hermitage Club and believes that the development has been, and continues to be beneficial to the town. He says it has created the jobs in the valley he hoped for when he bought his membership, increased tourist traffic, and he hopes it will prosper in the future. “I’m not wishing ill on the club, the members or employees. I just want the club to adhere to the obligations they said they would.”
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Bill Semore Olenik
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September 09, 2017
Classic bait and switch...


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