Family claims Willard ski resort underpays rent

PHOTOGRAPHER: Justin Mason

The Kosowsky family claims trust was the foundation of a relationship between them and the operators of Willard Mountain, which leases 50 acres of their land.

For three generations, the Kosowskys have allowed the small ski resort in Greenwich to use their property for its base lodge and a number of its trails. In exchange, the shareholders of Willard Mountain Inc. agreed to pay 3 percent of its total sales to the family over the duration of a 99-year lease signed in 1958.

But in June 2008, Lynda Keyes learned her family was receiving only a fraction of the agreed-upon rent, based on her interpretation of the lease. Company President Charles “Chic” Wilson told her that he had submitted sales records from the mountain and a parallel company he established — Willard Development Inc. — so that it appeared as though both were paying the amount stipulated under the lease agreement, according to a lawsuit filed by the family in September 2010.

The family claims both of the companies were and continue to pay a fraction of the rent payments stipulated in the lease. And they believe the Wilson violated an inherent trust that existed between them and the resort for years.

“We’re saddened by all this because we had such a wonderful relationship,” she said.

But Michael Catalfimo, an attorney representing Wilson and his two companies, argues his clients have paid their fair share of rent and possibly even more. He said the discrepancy in the rent calculations arose after the 2006 change in ownership from Phillip and Josephine Kosowsky to their children, Keyes and Phillip Kosowsky Jr.

“The original landlords interpreted the lease in way that is different than how their children are interpreting it,” he said.

No immediate impact

The lawsuit won’t impact this season or the immediate future of Willard, which began making snow Friday. The mountain is expected to open later this month.

The Kosowskys are suing the mountain, the development company and Wilson, claiming the 1958 contract was breached because of a failure to pay rent. The lawsuit also asks for unspecified damages, a termination of the lease and to have the company vacate the property immediately.

The lawsuit has since wended its way through the legal system for more than a year. On Thursday, the state Supreme Court’s Appellate Division reversed a number of lower court rulings and allowed the Kosowskys to proceed forward with some of their claims against Wilson and his companies.

The initial lawsuit claims Wilson established the development company in 1996 to operate certain services at the mountain, including the ski school, rental shop, bar and restaurant.

Both companies regularly reported an annual income figure to the Kosowsky family, along with a rent calculation.

For instance, Wilson claimed the gross income of the mountain and development company to be $607,067 and paid the landowners $18,212, according to the lawsuit.

After an audit of the ski resort’s books, the Kosowsky family determined the gross income to be more than $1.3 million in 2007.

Catalfimo said the land owners are trying to charge Wilson for revenue that was never included in the original lease agreement. He said Wilson never tried to deceive his landlords and was forthright with the money they were owed.

“We feel confident in our position,” he said. “There’s a long period of custom and practice between the landlord and the tenant with respect to what the lease means.”

Keyes said her family doesn’t want to impact the operation of the mountain and only wants what was promised in the lease.

She said they were always on good terms with Wilson, and even attempted to work out an agreement with him for months after the discrepancy was revealed.

Wilson hadn’t read over the latest court ruling and declined comment about the ongoing litigation. He did claim the ski resort has more than 275 acres and uses only a fraction of the Kosowskys’ parcel — about 33 acres — for its operations.

“That’s the area in dispute,” he said.