Lawyer's report critical of Gunstock Commission actions

GILFORD — A preliminary report intended to identify how disagreements between the Gunstock Area Commission and the Belknap County Delegation “snowballed” into a lawsuit has left some unanswered questions, but generally reflects poorly on commission actions.

Among the findings was that the lawsuit “was not well-founded and was likely to be dismissed.”

Commissioner Gary Kiedaisch said the attorney hired to review Gunstock’s records in an effort to determine whether Gunstock should pay the legal expenses incurred by the delegation in fighting the lawsuit “went beyond the scope and admits he does not have enough information to make a decision on the matter. So why publish it?”

Kiedaisch was alone in voting against making the attorney’s preliminary findings public following Friday’s non-public meeting. Chair Peter Ness also said that the report — “conspicuously labeled as ‘preliminary,’” — addresses the law but not the facts, and needs other documentary and testimonial evidence to make a final determination; but he went along with other members who said the information should be made available to the public as quickly as possible.

According to draft minutes of the non-public session, Commissioner Doug Lambert worried that the ongoing publicity about the dispute could have a negative effect on customer ticket-purchasing decisions at Gunstock Mountain Resort. “He wants the truth found and disseminated to the public as quickly as possible,” according to the minutes.

The commission also agreed to release the billing records from its attorneys at Devine/Millimet for legal services between November 2020 and March 2022. Ness opposed their release, calling it “reckless,” but the other commissioners agreed to make the records public.

Attorney’s report

Peter Callaghan of the PretiFlaherty law firm addressed three interrelated issues that culminated in the lawsuit seeking an injunction to prevent the delegation from removing commissioners Kiedaisch, Brian Gallagher, and Rusty McLear.

The first was the ethics policy, adopted on February 27, 2019, that expands upon the ethics rules included in Gunstock’s enabling legislation from 1959. The original legislation states, “No member of said commission shall receive any compensation for services other than compensation herein provided, or reimbursement for personal expenses actually incurred, or have any financial interest in the area, or in its operation, either directly or indirectly.”

The commissioners’ policy states, in part, “Commissioners shall work for the common good of the public and not for any private or personal interest and shall assure fair and equal treatment of all persons, claims and transactions coming before the Commission.” It also states, “The members of the Commission shall refrain from abusive conduct, personal charges or verbal attacks upon the character or motives of other Commission members, the staff or the public.”

Callaghan said the legislation is the ruling law and that the commission lacks the authority “to regulate the behavior of commission members as the ethics policy purports to do and there is no basis upon which to imply such authority.”

A second subject is the attempted removal of Ness for attempting to sell his software to Gunstock, as well as alleged disruptive, demeaning, and intimidating behavior.

“It does not appear that the Commission considered a motion to engage counsel to address the conduct of Commissioner Ness,” Callaghan wrote. “Instead, it appears that two Commissioners requested counsel to prepare the report.”

He continued, “It remains unclear how the Commission vote to review the legality of the ethics policy was transformed into a report on a single commissioner or what authority existed to investigate that commissioner. … Importantly, Mr. Ness was not interviewed by counsel prior to issuance of the report. … It is common practice when conducting investigations to speak with the subject of the complaint, but this did not occur.”

Ness maintained, “[N]o conflict of interest transaction occurred because there were no instances, conversations, meetings, or requests in which I was involved relating to operating features or information, terms of use, pricing, platform integration or any other activities on my behalf of any substance relating to the alleged sale or licensing of the software platform. All of these foregoing activities would involve the mere ‘solicitation’ of sale. Further, without solicitation and agreement on terms, no ‘sale’ can occur. A sale would also require a vote by the GAC.”

Callaghan wrote, “It appears from legal invoices that a member of the Commission sought legal advice in November 2020 on the right to remove or discipline a Commissioner. In June 2021 counsel was consulted about the ‘huge’ requests for information made by Mr. Ness and how to ‘constrain Ness.’ … There is a troubling timeline that suggests it was designed to punish Commissioner Ness for asking difficult questions and requesting financial and other records in the performance of his duties and responsibilities as a Commissioner.”

Ness concurred: “The questions I posed in the summer of 2021, which are a matter of public record, requested information regarding financial and operational information. None of those questions were unreasonable.”

Kiedaisch countered by saying, “The facts are quite simple and documented in the GAC monthly meeting minutes. Well before but immediately after Ness’s appointment, he came out against the ski school and management and began efforts to sell his ski school software. Simultaneously, he became abusive to ski instructors and ski patrollers. Ness was asked repeatedly to stop and reminded about the no self-serving provision in the statutes and GAC ethics policy. Ness refused and there was a vote of no confidence by four GAC commissioners and he was turned over to the delegation for removal.”

The legal invoices indicate that the commissioners attempted to prevent representatives Michael Sylvia and Norm Silber from participating in Ness’ dismissal hearings, contacting the state Attorney General’s Office in an effort to disqualify them. Later, they expanded the request to disqualify those in Silber’s “voting block” — those who tended to vote with Silber on issues.

Kiedaisch said of Callaghan’s report, “The document released to the GAC and subsequently to the public is simply one lawyer’s opinion. In that opinion he contradicts the opinion of Attorney Quarrels and Attorney Steve Nix. Nix was chairman of the GAC when the ethics document was drafted and adopted unanimously before Ness came on the board.”

He continued, “This effort by Ness is nothing more than an effort to redirect the facts. The GAC and GMR evidence against Ness has never been made public because Sylvia denied it at the Sept 9 hearing.”

Minutes of that meeting, in which the county delegation took up Ness’ removal, indicate that Sylvia, as delegation chair, did not allow any testimony that might have supported the complaints against Ness. Sylvia said that the original complaint and Ness’ written response denying the charges were sufficient to make a decision, and the delegation concluded that there was insufficient evidence to remove Ness from his position.

According to Kiedaisch, after that decision, Sylvia recessed the meeting and took Kiedaisch into the hall to ask for his resignation.

Sylvia later drafted a memo saying the Ness incident raised “grave concerns and possible questions of criminal activity. … The question for the delegation to consider is if the actions by Commissioners Kiedaisch, Gallagher, and McLear rises [sic] to the level of removal for cause….”

That memo prompted the three commissioners to initiate the lawsuit seeking an injunction to prevent the delegation from removing them. The other two commissioners voted against entering into the lawsuit.

Callaghan, in reviewing the record, wrote, “Our preliminary conclusion is that it was an aggressive attempt to significantly delay a removal hearing, control how the hearing would be conducted, and preclude certain members of the delegation from participating in a hearing.”

Callaghan concluded, “There is insufficient evidence at this time to determine whether the suit was patently unreasonable despite being unsuccessful in securing inductive relief. The filing sought to prevent the removal of certain commissioners by preventing a hearing on their removal and to control who could sit in judgment when a hearing was held.”

With two newly appointed commissioners, who were more closely aligned with delegation members, the Gunstock Area Commission voted to withdraw the lawsuit.

As to settling the dispute between the two bodies, Callaghan wrote, “additional information is needed to fully assess why the litigation was filed, what was known as to the likelihood of success, and what other steps have been taken in the name of the GAC against others. Upon that review a determination can be made on whether the suit was patently unreasonable.”

“As this preliminary report states, other documentary and testimonial evidence has not been received or collected,” Ness said. “The collection of that information will assist in the production of a conclusive and final report as requested by the delegation.”