CONCORD - A lawsuit filed six years ago by operators of the Mount Sunapee ski area against the state finally will head to trial after the Supreme Court concluded the ski area's allegations of official misconduct and capricious dealing on the part of the state were genuine issues of material facts.
"We're just happy we're going to have a trial," said Attorney James E. Higgins of Manchester, who represents Sunapee Difference LLC, which filed suit in 2007 seeking $13 million to $14 million in damages against the state. This is the second appeal the Supreme Court has heard in the case.
The lawsuit centers around Sunapee's ability to expand the ski area they lease from the state to property it purchased in Goshen, on the west side of Mount Sunapee State Park, to further develop the ski resort.
Sunapee maintained former state Department of Resources and Economic Development Commissioner Robb Thomson made representations the lease would cover the entire state park. But when Gov. Jeanne Shaheen and the Executive Council approved the lease in 1998, there were buffer zones to the north and west, preventing expansion.
"Certainly those are the allegations but we don't think there's any evidence Mr. Thomson behaved in the manner in which they allege," said associate attorney general Richard W. Head.
Head said the court's decision Tuesday was primarily procedural and, at trial, Sunapee will have to show a "high burden" of proof in order to prevail.
Sunapee sued after Gov. John Lynch refused to present an amended lease for Mount Sunapee State Park - expanding the ski area to include the entire park - to the Executive Council for approval. The buffer areas prevent Sunapee from connecting to property it purchased for $2.1 million in Goshen for an expansion. The ski area cannot be expanded on the east because of an old-growth forest.
The high court, in its 20-page ruling, said Lynch, who had campaigned strongly against the expansion, had the right to not allow the amended lease to go before the Executive Council for a vote.
But in the unanimous decision, the jurists also said Judge Nicole Nicolosi should not have granted the state summary judgment in the case, resulting in it being dismissed, because there were factual disputes to be settled at trial.
Among those was Sunapee's claim that the state committed fraud when Thomson allegedly made representations the lease would cover the entire park. Sunapee's general manager, Donald MacAskill, testified at a deposition that he spoke to Thomson three or four times and was told "that the leasehold would include the land around the perimeter of the lifts and trail network. And, specifically on the north and west side, would be coterminous with the state park boundary."
According to the Supreme Court ruling, Thomson said in a deposition he did not recall ever telling anyone the lease included the park's boundaries on the north and west. At the same time, he said he never told anyone responding to the Request for Proposal that there were buffer zones on the north and west in the area the state was leasing.
"We conclude, therefore, that Sunapee raised a genuine issue of material fact as to whether Thomson knowingly made a false representation or concealed a material fact relating to the leasehold's northern and western boundaries," the court said.
Sunapee also contended that when the error about the boundaries was discovered, the state's representatives agreed to change it. That never happened.
A drawing was included in the lease that was signed, Head said, but the survey plan was not because it had not been completed. Sunapee maintains the survey map was not ordered until a month after the lease was signed.
Head said the high court, for the most part, ruled in the state's favor when it came to breach of contract claims.
In 1998, the state agreed to lease Sunapee for 20 years with a 20-year option to Timothy and Diane Mueller or their successors and required them to file capital improvement requests on a regular basis.
In 2001, the Muellers proposed expanding trails and a lift after obtaining an option on the private property in Goshen.
According to the Supreme Court ruling, in 2002 then-DRED commissioner George Bald said he would recommend the lease be amended after Sunapee met three conditions. Sunapee had informed the state that its purchase options on the Goshen land would soon expire but, based on Bald's assurances that he favored the western expansion plan with conditions, Sunapee purchased the land for $2.1 million.
Even though Sunapee met the conditions, the expansion plan was not presented to then Gov. Benson and the Executive Council. By 2004, Sean O'Kane was DRED commissioner and he imposed additional conditions which Sunapee also met.
In 2005, Lynch became governor and he urged O'Kane to reject the plan, but O'Kane recommended the state conditionally approve a lease amendment expanding the area.
Lynch refused to bring it before the Executive Council and the lawsuit was filed.