Superior Court justice finds Ben Hall Sr. in contempt, orders payment

Mr. Hall was told to pay $80,392 to the Martha’s Vineyard Camp Meeting Association by Nov. 20 or face additional sanctions in the 13-year-old case.

The side alley by the Island Theater. — Photo by Sam Moore

“The time for legal shenanigans is over,” Superior Court Justice Cornelius J. Moriarty II wrote in a sternly worded decision issued Nov. 2 in Dukes County Superior Court that found Ben Hall Sr. and Lucky 7 Realty Trust, a trust owned by Mr. Hall and his sons, Ben Jr. and Brian, in contempt for “failure and refusal to comply with a clear and unequivocal order of the Appeals Court dated July 29, 2013.”

Judge Moriarty ordered Mr. Hall to pay the Martha’s Vineyard Camp Meeting Association (MVCMA) $80,392 for legal fees the MVCMA incurred in the lengthy appeals process of a case that originated 13 years ago. The court ordered Mr. Hall to deliver a cashier’s check for that amount to the MVCMA by 2 pm on Nov. 20.

In a footnote to his order, the judge noted that Mr. Hall had previously testified that the “court could put him in jail before he would pay one dime” as “predictive of an intent to engage in further contemptuous and obstructionist behavior.”

Judge Moriarty continued, “Such a chosen course would be regrettable, because this court is prepared to utilize all measures at its disposal to ensure compliance with the orders of the court.”

“Sham,” “shell game,” and “contemptuous and obstructionist behavior” are just a few of the choice words the judge chose to describe the tactics used by Mr. Hall and family attorney Ben Hall Jr., in issuing his 10-page decision.

Bad smell

The legal saga between the Hall family and the MVCMA began in May 2002, when Seagate Inc., a holding company for Hall family real estate assets, filed a civil suit against the MVCMA and Pauline Gregory. The complaint contended that a tenant of Ms. Gregory’s, a Chinese restaurant, had an exhaust fan that encroached on Hall property, an alley between the two properties, and the smell from the restaurant was hurting business at the Island Theater. The suit also claimed that a corner of Ms. Gregory’s building encroached on Hall property. The exhaust ductwork was rerouted by Ms. Gregory to mitigate any potential nuisance and encroachment.
“While the claim against Ms. Gregory may have had some merit, the claim against MVCMA was frivolous, because a landlord is not legally responsible for the trespass and nuisance acts of the tenant where Ms. Gregory owns the physical structure and MVCMA only owns the land it is on,” MVCMA attorney Daniel Larkosh, who represented the defendants throughout the case, told The Times.

Following various legal twists and turns, on Oct. 15, 2011, summary judgement, which occurs when the facts are not in dispute by both sides, was granted in favor of the MVCMA.

On Oct. 25, 2011, according to the finding of facts by Judge Moriarty, the Halls substituted Lucky 7, another family holding company, as the plaintiff in place of Seagate. On Jan. 13, 2012, Lucky 7 filed a notice of appeal with the Appeals Court.

A sham

On July 29, 2013, the Appeals Court ordered Benjamin L. Hall and Lucky 7 Realty Trust to pay the MVCMA $38,400 for legal fees and costs. Mr. Hall refused to pay the order, leading the MVCMA to file a complaint of contempt against him on April 24, 2014.

The case was set for preliminary discovery on Oct. 3, 2014.

Exactly nine minutes after the Oct. 3 contempt trial began, Mr. Hall recorded an “Assignments of Leases, Rents, Contracts and Approvals,” which assigned $25 million of Lucky 7’s income to other Hall trusts and corporations in a series of property transactions. The Assignment was purportedly executed on Jan. 3, 2008, but not notarized until the day of the trial.

In his decision, Judge Moriarty wrote, “In exchange for the Assignment, Hall Associates Series LLC/Seagate 1 Series purportedly guaranteed to pay a promissory note that Lucky 7 had guaranteed to pay to Seagate. The promissory note was allegedly secured by a mortgage and security agreement. The note and mortgage were not introduced into evidence, and there is no credible evidence of any payments having been made toward the note. The court is persuaded the note and mortgage securing it are a sham.”

Lucky 7 continued to divest itself of holdings. In December 2014, Hall properties in Oak Bluffs and Edgartown were transferred into different family trusts. The same month, Ben Hall Jr. alleged he hadn’t received notice of a scheduled December trial date, and sought a continuance until late February 2015, which would also allow him to take a planned monthlong vacation in Florida.

The delayed trial was to begin on April 10, 2015. On April 3, Ben Hall Jr. filed a “Suggestion of Bankruptcy,” and the same day, Lucky 7 divested itself of 11 properties scattered among the three down-Island towns, to various trusts. The trustees of all the trusts are Ben Hall, Ben Hall Jr., and Brian Hall.

Evidence is clear

Judge Moriarty wrote, “From the date of the Order issued through the present, Lucky 7 has been annually paid hundreds of thousands of dollars in rent for its properties, but has paid nothing toward the Order.”

“Hall maintains that his failure to pay the Order of the Appeals Court is due to the fact that Lucky 7 has not funds from which to pay. The Court is not so persuaded,” Judge Moriarty wrote in his decision. “Since the date of the Order of Appeals Court, Lucky 7 has had ample income and assets with which to pay, but has simply refused to do so. The real reason, as demonstrated by his sworn testimony, rests with his personal antipathy toward the MVCMA’s counsel. As a result, he has engaged in a shell game in order to put Lucky 7’s assets beyond the reach of its creditors.”

Judge Moriarty said the order of the Appeals Court “is clear and unequivocal. It is likewise clear that Hall has disobeyed the Order … this Court finds by clear and convincing evidence that Hall is in contempt of the Order.”

“It’s been a never-ending process for my clients, and the litigation has been frivolous from its inception, and the Court of Appeals agrees,” Mr. Larkosh said. “Awarding my client attorney’s fees is a rarely imposed sanction. The court has to find that there’s no merit at all in the Halls’ position. All of it over a strip of land behind the movie theater that you would have to walk sideways to go down.”

On Wednesday, Ben Hall Jr. left a voicemail with The Times saying he had not seen Judge Moriarty’s decision issued on Nov. 2.