King's Grant owner sues Gilford officials over 2011 raid

CONCORD — Will Drew, the owner of Kelsey's at the Grant, the watering hole and exotic-dancing night club in Gilford, has filed suit against the state of New Hampshire and the town of Gilford, along with half a dozen agents of each, charging that their actions before and after October 18, 2011 when the New Hampshire Drug Task Force raided the nightclub, then operating under independent management as Mardi Gras North, violated his constitutional rights and damaged his reputation.

Historically, Drew's property has been known as King's Grant Inn.

The suit names the Drug Task Force, together with James Norris, its commander, and Adam Fanjoy, one of its agents, as well as the town, its then selectmen — John O'Brien, Gus Benavides and Kevin Hayes — and town administrator Scott Dunn. All persons are named both individually and in their official capacities. Claiming losses to his business and reputation, Drew seeks compensatory, enhanced compensatory and damages against the defendants jointly and severally. He has asked for a jury trial.

Filed by attorney David Bownes of Laconia, the suit charges that the Drug Task Force, accompanied by agents of the New Hampshire Liquor Commission and officials of the town of Gilford, "conducted a broad search of the premises which plainly exceeded the scope and authority of the warrant" in violation of the fourth and fourteenth amendments of the United States Constitution, by which all persons are secured against "unreasonable searches and seizures" and guaranteed "due process" and "equal protection" of the law.

Furthermore, following the raid on the club and proceedings before the Liquor Commission, Bownes alleges that Dunn and the selectmen "used artifice and pretext" for more than a year to deny Drew's application for a live entertainment license that included exotic dancing, in clear violation of his first amendment rights. In 2003, when a different Board of Selectmen in Gilford denied a similar application, Drew, who was represented by Bownes, prevailed in federal court, where Judge Steven McAuliffe struck down the town's licensing policy on exotic dancing as a "prior restraint on a particular type of artistic speech."

The current suit stems from an investigation into drug trafficking at the night club, that began in June, 2011. During the investigation undercover agents of the Drug Task Force purchased illicit drugs from a number of female dancers working at the club.

Though Drew was not involved in the management of Mardi Gras North, the operators were using his liquor license.

In October, Fanjoy obtained a warrant to search the club for illicit drugs, drug paraphernalia, items, documents and records related to drug trafficking, evidence of proceeds from drug sales or of resources for drug purchases, items identifying the occupants and owners of the property, devices for monitoring police communications and firearms, ammunition and dangerous weapons. Fanjoy also secured arrest warrants for six employees of the club.

The suit claims that the Drug Task Force and its agents never requested "an administrative warrant for the search of the premises or asked that any independent state or town authorities be permitted to inspect the premises.

Bownes notes that at least four agents of the New Hampshire Liquor Commission conducted an inspection at the club. Likewise, he claims that the Gilford selectmen, along with the town administrator, police chief, fire chief, code enforcement officer and director of Public Works also entered the building with "the sole purpose of inspecting the interior of the commercial building for town code violations contrary to the clear mandate of the search warrant and contrary to established law." The suit charges that neither the inspections to investigate violations of liquor laws or town codes "were supported by probable cause" and both were undertaken in violation of the fourth and fourteenth amendments.

The day after the search the Board of Selectmen asked the Liquor Commission to revoke Drew's license. The commission charged Drew with seven violations of liquor laws and, following a hearing in May, 2012, found evidence of three — serving an intoxicated patron, allowing an employee to drink while working, and giving away free drinks — and imposed a fine of $350 and suspended his license for three days.

In July, Drew applied for a license to stage exotic dancing. Dunn presented him with a list of a dozen densely worded questions and "strongly suggested" he address them. He asked Drew to provide photo identification of managerial employees, licenses for presenting copyrighted music and copies of all citations, notices and decisions issued by the Liquor Commission to all businesses entities operating under his jurisdiction at 15 Kimball Road. "Although you are not legally required to answer these questions," Dunn closed, I anticipate that any refusal on your part to demonstrate a genuine sense of cooperation in dealing with these matters will likely result in the denial of your license. Furthermore," he continued, "your responses will be used by me in making my final recommendation to the Board of Selectmen on your application."

Bownes describes the questions as "simply a pretext in that he (Dunn) had expressed both publicly and privately in the past that he would do all in his power to ensure that Kelsey's at the Grant was not able to obtain a live entertainment license that included exotic dancing." Several of the questions, Bownes noted, referred to allegations for which the Liquor Commission found insufficient evidence.

The suit alleges that when the board considered the application Dunn said that it should be denied "based principally and solely on his view that exotic dancing in the town of Gilford should not be permitted under any conditions." With Benavides dissenting, the board granted Drew a license for live entertainment, but specifically excluded exotic dancing. While O'Brien and Hayes are named for wrongfully inspecting the premises and hindering Drew's application, Benavides is not. Drew submitted a fresh application on behalf of Lakes Region Cafe and Tavern in October, 2013 and, advised by legal counsel that denial would violate his first amendment rights, the board granted it. The club has featured exotic dancing since November 2013.

Throughout consideration of Drew's license application the suit alleges that Dunn and the selectmen maliciously "caused to be published" false and defamatory statements about the property at 15 Kimball Road, including that it had "the elements of a methamphetamine lab," was used for "manufacturing, possession, use, sale and distribution of illegal drugs, and had repeatedly violated liquor laws. As a result Drew "suffered a loss to his reputation and good standing in the community."