Northwest Montana United Way Executive Director Sherry Stevens has responded to a lawsuit filed against the agency by a Whitefish man who provided the collateral that allowed United Way to complete the $2.3 million purchase of Gateway Community Center in 2015.

Regarding the agency’s failure to initially respond to the lawsuit, Stevens said she doesn’t remember being served with documents related to the complaint, according to court documents. She also asserted she failed to read the court document and said a developmentally disabled man who acts as the agency’s courier mistakenly did not deliver the information to United Way’s attorney, Grant Snell of the Crowley Fleck law firm.

Summerfield Baldridge filed the lawsuit in Flathead District Court in May against Northwest Montana United Way and Westside CCC Inc., the corporation that holds the asset of the former mall property, stating his agreement with the agencies was to expire within two years, with return of security interest and interest owing paid to Baldridge.

“The security interest has not been returned and interest owing has not been paid to Baldridge within two years,” the complaint stated. “As a result, Baldridge has suffered damages.”

Baldridge said he was solicited by United Way to first establish a money-market account for $600,000 with Glacier Bank, and then allow the bank to use the account as security for repayment of the loan Westside CCC secured to buy 100,643 square feet of the former Gateway West Mall building. The agreement was signed Sept. 31, 2015. That property is now the Gateway Community Center, a hub for 18 nonprofit groups.

In court documents filed earlier this month, Stevens said “I do not recall ever having been formally served with a summons or complaint in this lawsuit.

“At some time around May 4, 2018, I recall having a friendly conversation with a man at our office about the positive contributions to the community by United Way, and all the progress and positive improvements to the Gateway Community Center. At the end of the conversation, the man handed me a document and told me I needed to give it to our attorney.”

Stevens said at that time she was working with attorney Grant Snell, with Crowley Fleck, on a variety of different matters.

“I assumed that the delivered document pertained to one of these matters, but I did not read it,” Stevens said.

She said she put the letter in a large white envelope and placed a sticky note on the outside with Grant Snell’s name on it. She said she gathered other documents that needed to be delivered to Snell and placed them into the same envelope before telling her staff to deliver it to Crowley Fleck.

“Our courier is a developmentally disabled man who is usually quite accurate in his deliveries, but on a few occasions he has made deliveries to the wrong address or otherwise mishandled a delivery,” Stevens said. “Apparently, as the result of human error, the large, white envelope was not received by our legal counsel.”

Stevens said United Way’s failure to respond to Baldridge’s lawsuit was not a willful act. She said the first she knew of the lawsuit was when a Daily Inter Lake reporter contacted her about the suit.

In the court document filed Sept. 7, Stevens also said United Way didn’t breach the contract. It asserts that the agreement between Baldridge and United Way didn’t end in two years.

United Way also contended in its response that Baldridge’s pledged funds were not to be released until $100,000 increments of the principal were paid down by United Way on its underlying loan, and no interest payments were due until 30 days after the entire amount of Baldridge’s funds were released by the bank.

“Rather, it continues in force until such time as the full amount of the pledged funds have been released in full by Glacier Bank. To date, United Way has paid down over $150,000 of principal,” the response indicated.

The lawsuit also alleged the defendants, their employees, officers or agents, “represented to Baldridge that [they] were in the process of obtaining grants and other charitable contributions that would render the use of Baldridge’s money-market account as security for the underlying loan unnecessary,” and that the money-market account would be released as collateral for the loan no later than the end of 2017.

Baldridge stated in his complaint that United Way and Westside CCC “knew or should have known at the time the representation regarding the ‘bridge’ aspect of the agreement was made that it was either false or defendants were ignorant of the veracity of the statement which is false.

“In other words, the defendants could not and had no reasonable basis to reasonably guarantee that the arrangement would be a ‘bridge’ arrangement which would expire within two years of the parties’ agreement,” the complaint noted.

Volunteers, businesses, service groups and builders have invested more than $1 million in materials and in-kind work for building improvements over the past several years at the center.

A hearing is scheduled on the matter at 1:30 p.m. Tuesday, Nov. 20.

Reporter Scott Shindledecker may be reached at 406-758-4441 or sshindledecker@dailyinterlake.com.