By Mike Donoghue, Senior Correspondent
A Vermont judge has issued separate rulings, including one that says the explosive lawsuit against the current Woodstock Foundation Board of Directors for claims of mismanagement and improper removal of two longtime trustees can proceed toward trial.
Judge H. Dickson Corbett rejected arguments by the defendants who claimed former board leaders Ellen R.C. Pomeroy and Salvatore Iannuzzi did not have any legal standing to file the civil lawsuit in Vermont Superior Court.
Judge H. Dickson Corbett
Corbett also rejected an unrelated effort by current trustees James S. Sligar, Michael D. Nolan, John T. Hallowell, Douglas R. Horne and David M. Simmons to have claims of defamation against them thrown out. Pomeroy and Iannuzzi have maintained their reputations were defamed by the defendants through various words and actions, records show.
They filed several other claims in the lawsuit, including that the defendants breached their fiduciary duties to the Foundation and its subsidiary, the Woodstock Holdings. Sligar and Nolan, who are both lawyers, also face claims of legal malpractice in the lawsuit for advice they reportedly provided to the board during the skirmish, court papers note.
Pomeroy and Iannuzzi, who maintain they were unceremoniously dumped by the rest of the board, have said they filed the lawsuit on Jan. 20 primarily in an effort to provide employees at the Woodstock Inn & Resort and the Billings Farm & Museum better working conditions.
Iannuzzi, with Pomeroy’s approval, began a preliminary investigation of wrongdoing after hearing reports starting in May 2022 about mismanagement, sexual harassment and discrimination and malfeasance by officers and management at the Inn and the Farm, the initial 31-page lawsuit outlined. Iannuzzi and Pomeroy said more than 40 employees offered comments, but they were removed before Iannuzzi could file his report with the full board.
The defendants took no action when they first learned of the employee complaints, the lawsuit claims. The defendants first suspended Pomeroy and Iannuzzi at a secret meeting without notice to the two targets and later they voted not to retain them on the board, records show.
The defendants eventually hired a New York City law firm, Provenzano, Grann & Bader, who reportedly interviewed about 20 past and present Foundation employees about conditions and filed a report. The trustees also directed the law firm to look into how the initial investigation into workplace problems was handled by Iannuzzi and Pomeroy.
The investigation by the defendants’ law firm found there was no basis for the claims made to Iannuzzi and Pomeroy, the trustees have said.
The trustees provided only general conclusions and the purported written report, which officials say supports those findings, however remains under wraps after 10 months.
Foundation officials had said initially they expected to release a copy of the investigative report with some possible redactions of personal information. The document, which reportedly is more than 70 pages, remains withheld this week despite repeated verbal and written requests by the Vermont Standard, some current and former employees, and others, seeking transparency.
Longtime defense lawyer Christopher D. Roy of Burlington, who represents the individual trustees, has said the defendants take exception to many of the legal claims in the lawsuit.
The first ruling by Corbett, made public last Thursday, means it is full speed ahead for the lawsuit initially filed against the five trustees by Iannuzzi and Pomeroy.
They filed their lawsuit both as individuals and derivatively on behalf of the Foundation and Woodstock Holdings LLC after they were abruptly dumped from the board.
Ellen Pomeroy
Pomeroy was an original Foundation member and had been the chair for almost 10 years. Iannuzzi had been on the Foundation board for 13 years and vice chair for seven years.
The defendants maintained that Pomeroy and Iannuzzi — now as former board members — had no legal standing to file the civil lawsuit. Judge Corbett noted the defendant trustees relied in their filings on a ruling from a California appeals court, but the Vermont judge noted the California Supreme Court later reversed that decision.
Corbett said California’s highest court ruled its state’s non-profit governance statute has no requirement that a director be a current sitting member on a foundation throughout the lifetime of a lawsuit. Corbett said he was applying the same rationale in the Woodstock case.
He said there was a legal basis to deny the motion to dismiss filed by the defendants in March.
The lawsuit claims there was a hostile takeover and a secret ouster of Pomeroy and Iannuzzi from both their board seats and their offices after they began to investigate employee complaints in 2022 about wrongdoing and questionable work conditions.
One month after the initial lawsuit, Pomeroy and Iannuzzi added three less involved trustees — William S. Moody, Gail Waddell, and Angela K. Ardolic — as defendants and added more specific legal claims due to subsequent misconduct by board members, court records maintain.
Sal Iannuzzi
“Sal Iannuzzi and Ellen Pomeroy were very pleased by the recent rulings of the Vermont Superior Court denying the defendant directors’ latest motions to dismiss,” White River Junction lawyer Michael F. Hanley of Plante & Hanley, their primary local attorney, said this week.
“My clients hope that the ruling will help them achieve their goals of improving both working conditions at the Woodstock Inn and Billings Farm and the relationship between those institutions and the community they were created to serve,” he wrote in an email to the Vermont Standard.
James Sligar, who was made board president in January after Pomeroy’s removal, did not respond to multiple messages over the past few days seeking comments about the two rulings.
The Vermont Standard also tried unsuccessfully to make inquiries about the two court rulings and the legal process to Roy, the defense lawyer at Downs, Rachlin Martin in Burlington. Those inquiries were redirected to a New York City public relations and marketing firm hired by the defendant trustees.
The trustees and Roy would have no comments about the rulings, according to Vincent Novicki, a vice president with Risa Heller Communications in New York City.
Awaited ruling
The parties on both sides of the high-profile case, along with the Greater Woodstock community, have been waiting for a ruling on whether Pomeroy and Iannuzzi had the legal right or standing to file the lawsuit. The Woodstock Foundation and Holdings play a major role in the region as an economic engine and employer. They also operate the Woodstock Country Club and the Saskadena Six Ski Area (formerly Suicide Six.)
Iannuzzi and Pomeroy maintain the defendants went beyond their legal power or authority for the Foundation, including during two improperly warned meetings. Pomeroy and Iannuzzi have asked the court to reverse any unauthorized actions and to have the defendants resign.
The trustee defendants had maintained the two removed Foundation leaders no longer had standing to challenge actions by their former board. The defendants were hoping that a favorable ruling for them on the motion to dismiss for lack of standing would have ended the lawsuit.
Instead, Corbett’s findings will allow the case to move toward a jury trial. Hanley said Tuesday he was unaware of any upcoming hearings scheduled in the case. Roy remained unavailable to comment on the next step.
Corbett, who was appointed a state judge in April by Gov. Phil Scott, took over the Woodstock Foundation case on Sept. 5 when he rotated into the superior court in Woodstock to serve as the presiding judge for 12 months.
Earlier this summer longtime Judge Samual Hoar Jr. had rejected efforts by the defendants to have the case thrown out. Among the allegations in the lawsuit are claims of hiding mismanagement and misconduct, records show.
Pomeroy and Iannuzzi also are asking the court to reverse their improper removal because they were only attempting to investigate possible wrongdoing as reported by employees, court records show.
While giving a green light for much of the case, Hoar did agree to temporarily dismiss the defamation claim as vague, but gave lawyers for Pomeroy and Iannuzzi two weeks to re-file more specific claims. Otherwise, Hoar said he would permanently dismiss the defamation portion of the lawsuit if nothing was amended.
Hanley refiled detailed allegations on Sept. 7 and Roy filed arguments against accepting the claims. Hanley filed a response asking the court to reject the claims by the defendants.
Corbett, after weighing all the written legal arguments by both sides, ruled in a one-page entry order also made public last Thursday that there was enough to proceed with the defamation claim.
Corbett said a ruling on the specific merit of the defamation claims would have to wait for another day.
“The motion is not an opportunity to force a merits determination in the early stage of the litigation,” he wrote in his findings.
Corbett ruled the plaintiffs filed an amended complaint that identifies some of the possible offending statements made by certain defendants during meetings held with employees and others on Nov. 11 and 12, 2022.
“One of the defendants is alleged to have told the audience that plaintiffs’ departure from the board had involved ‘unfortunate circumstances,’ and that the remaining board members would commission a law firm to undertake an ‘investigation’ into ‘whistleblower complaints’ that had been made, the judge wrote.
“Plaintiffs contend that the implications of these allusions are defamatory,” Corbett said.
The plaintiffs also are represented by Andrew Levander and Elkan Abramowitz, who are with two prominent New York City law firms.
Longtime Norwich lawyer Geoffrey J. Vitt is representing the long-term interests of the Foundation.