THE STATE OF NEW HAMPSHIRE
MERRIMACK, SS SUPERIOR COURT
Case No. 217-2012-CV-00326
Lawrence J. Spellman, et al.,
RESPONSE TO OBJECTION TO MOTION TO VACATE
Petitioner responds to the Objection filed by three defendants.
1. Petitioner has still not seen the Court’s Order
On November 15th Opposing counsel emailed Petitioner a copy of counsel’s cover letter and Objection to Petitioner’s Motion to Vacate but neglected to attach a copy of the order which is under review.
Until November 10th when power was fully restored after Hurricane Sandy, Petitioner was superintending matters at his New York offices. Petitioner was in Manchester to vote, but the Court’s order was not yet available on November 6th.
Although Petitioner anticipates that the Order may be received on November 19th, there is no guarantee he will receive it then. Mailings and other materials have been delayed in reaching petitioner due to the hurricane and second storm, which is why all of Petitioner’s documents routinely agree to accept service by fax or email. Petitioner has yet to see any of the collegiality or courtesy which the New Hampshire Supreme Court mentioned in In Re Proposed Rules, 139 N.H. 512, 659 A.2d 420, 424-425 (N.H. 1995).
2. Neither the Court nor Petitioner are blocking defendants
Neither the Court nor the Petitioner have taken any action which precluded the defendants from taking any actions. Rather the Defendants’ own manipulations are what reflect bad faith.
The Defendants took control of a historic national landmark promising to “reopen” the premises. The property was in turn-key condition although requiring ongoing maintenance consistent with any other hundred year-old building. Instead of reopening and maintaining-while-open - which is the practice followed by every other historical hotel in the United States - the Defendants took control for approximately $2 million, collected approximately $800,000 for an easement, and then stripped the interior of the hotel for more cash thereby both (1) precluding the hotel from reopening and (2) reducing their investment to a tiny fraction, substantially less than a million dollars. Defendants have apparently listed the property for resale at $5 million, seeking a 500% profit in just a few months.
The 500% profit reflects value that should be recovered for the victims/beneficiaries of the trust, who were victims of fiduciary abuse and corruption. The speculators who worked out a sweetheart deal with the Attorney General and the Tillotson “trustees” should not be allowed to retain the fruits of their corruption.
Going one step further, it is reasonable to ask: what was/is the Defendants “announced” business plan? Defendants now propose to take a property in which they have invested less than a million dollars and to seek new “investors” who will “invest” somewhere between $10-20 million dollars in the venture. While P. T. Barnum said there was a “sucker born every minute,” there are probably not many suckers who will risk $10-20 million when the principals have less than a million in the deal. In other words, the announced “plan” was/is merely a pretext for the purchase-and-flip scheme which the defendants had when they acquired control of the asset.
Defendants never had any intention of reopening the hotel, never prepared architectural plans prior to purchase, never prepared a reopening budget prior to purchase, and never sought financing or did any of the normal practices and procedures related to due diligence before people purchase an ongoing business for repair and renovation.
3. This lawsuit is neither frivolous not vexatious
New Hampshire is a “low tax/small government” state. But who can act in the absence of a government bureaucracy when public officials abuse the public trust? The defendants argue that once the Attorney General abdicated his fiduciary duty concerning The Balsams, and assumed the posture less of Justice Cardozo and more that of Pontius Pilate, the public was and is powerless to fight or even question the General’s official corruption because of the judicially-created standing doctrine.
The normal rules of judicial standing cannot and must not be used to shield official corruption from meaningful public inquiry in a common law equity petition. The Attorney General was charged with supervising a public trust. There were hundreds of beneficiaries of this Trust in three states. Neil Tillotson intended to benefit people, not highfalutin trustees and law firms. Tillotson’s intentions were cast aside.
4. The Attorney General acts in an administrative,
not prosecutorial, capacity with regard to the supervision of charitable trusts
The Attorney General ignored any normal standards of fiduciary review and rubber-stamped the “sale” of The Balsams to real estate speculators in four days over a Thanksgiving Day holiday. The General had no intention of protecting the rights of the beneficiaries from corrupt and predatory trustees. Indeed the purchasers’ subsequent actions in trying to “flip” The Balsams strongly suggests that the trustees were engaged in a deal to benefit insiders and to ignore the struggling families that lost a significant source of employment.
Both state law and the common law are clear that the Attorney General was acting in an administrative, not prosecutorial manner in the case of fiduciary review. Therefore, the stricter standards of administrative law and judicial review of administrative action apply. In fact, the Charitable Trust statute, NHRS 7:20 et seq. provides for the adoption of procedural rules by the Director, confers broad administrative and investigatory powers, NHRS 7:24 and expressly applies fiduciary standards, NHRS 7:28-e. To some extent, therefore, this Petition in Equity could be deemed a review of common law administrative action and dereliction of duty by the constitutional officer in charge.
Administrative law and fiduciary law are clear: the common law power to approve a fiduciary action carries with it the power to impose reasonable conditions on that approval.
The exercise of fiduciary duty by a state constitutional officer implies a duty to engage in meaningful and informed inquiry before issuing approval that could lead to the elimination of hundreds of irreplaceable New Hampshire jobs.
After receiving the Defendants’ materials on the afternoon before Thanksgiving Day, the Attorney General did nothing. He or his staff (letters indicate both the General and his staff participated) simply rubber-stamped the incomplete information that was provided to them.
The refusal of the Attorney General to act in a bona fide fiduciary capacity, and the damage inflicted on a public trust by the Tillotson trustees, are reasons why this Court should order an expedited trial instead of acting in a manner which elevates “procedural technicalities” over “emphasis on justice” that frustrates a search for truth into why a constitutional officer allowed The Balsams to be sold to buyers who had no intention of protecting the Tillotson Trust beneficiaries.
In forty-three years since graduating from law school and fighting corruption nationally, The Balsams scandal is perhaps the most corrupt example that petitioner has ever seen of insiders allowing a theft from the beneficiaries of a public trust to enrich outsiders.
In a “low tax/small government” environment, where state government does not have a large bureaucracy to superintend official corruption, the common law mandates citizen action step into the breach. The courts cannot constitutionally bar a bona fide lawsuit which seeks to investigate and undo an obvious example of corruption and maladministration.
The “standing” doctrine was not created and never intended to shield or insulate New Hampshire constitutional officers from stealing or allowing others to steal from a public trust.
5. There is no basis for attorneys’ fees
The Defendants demand attorneys’ fees because their
clients have been hauled into court to explain a suspicious transaction in which hundreds of beneficiaries were victimized and a handful of insiders were benefited. There is no basis for any award of attorneys’ fees in this action. The undisputed and unavoidable facts reflect that a public trust was looted to benefit insiders and to both ignore the interests of the beneficiaries of the trust and the trustor’s intentions.
The Tillotson Trust was created to benefit people in the North Country and not trustees or law firms in Manchester and Boston.
Petitioner fearlessly helped to send corrupt gangsters and politicians to federal prison. If Petitioner was not intimidated decades ago by the Chicago Crime Syndicate and its progeny, it is unlikely he will be intimidated by opposing counsel’s efforts to prevent him from objecting to the heist of the Tillotson Trust by the defendants.
The appearance of impartiality and justice are not served when a Court departs from normal practices and procedures and prevents a Petitioner from filing even one amended pleading.
This case is going to be reviewed by the New Hampshire Supreme Court, as well as potentially by federal criminal authorities and even courts in other states where intended beneficiaries reside. It will certainly raise judicial eyebrows if the nisi prius court frustrated the filing of even one amended pleading.
At a minimum this Court should afford the New Hampshire Supreme Court a full record including allowing Petitioner to file one amended pleading.
DATED: November 16, 2012
ANDY MARTIN, J.D.,
Adjunct Professor of Law
Principal address for
service of documents:
NATIONAL LITIGATION CENTER
P. O. Box 1851
New York, NY 10150-1851
Toll-free tel.(866) 706-2639
Toll-free fax (866) 707-2639
SERVICE OF NOTICES IS RESPECTFULLY
REQUESTED BY FAX OR E-MAIL
Additional e-mail address available upon request
with additional courtesy copy
[if defendants desire to serve
a second copy] to:
Andy Martin, J.D.
816 Elm Street #251
Manchester, NH 03101-2105
Certificate of Service
I certify I have served opposing counsel by email on November 16, 2012 as follows:
 After Petitioner prepared an initial draft of this response he received a Google Alert that a report had also appeared in the Union Leader on November 15th. It appears everyone in New Hampshire has been furnished with a copy of the Court’s order except the Petitioner. The news report contained the false claim that the litigation had somehow precluded the defendants from making “renovations,” which is part of a seeming disinformation campaign disseminated by the defendants. http://www.unionleader.com/article/20121114/
 Petitioner’s personal observation was that the facility was operating fine. To the extent that there was any deferred maintenance, that deferral reflects waste and mismanagement by the trustees. Any real property requires ongoing maintenance.
 Meinhard v. Salmon, 249 N.Y. 458, 464 (N.Y. 1928); In Re Estate of Crowley, 129 N.H. 557, 529 A.2d 960, 962 (N.H. 1987); Mussman’s Case, 116 N.H. 541, 364 A.2d 1263, 1265 (N.H. 1976).
 Whitaker v. Drew, 149 N.H. 55, 816 A.2d 984, 988 (N.H. 2003).
 Now that the election is over and Petitioner is no longer traveling nationally he is going to take The Balsams case to federal prosecutors. Like the army “generals” who now find themselves ensnared in embarrassing situations, opposing counsel should weigh carefully whether their actions and professional behavior would withstand independent inquiry.