A Flathead County District Court judge on Wednesday denied a request from Two Bears Family Center LLC for a preliminary injunction against the organization’s former fiscal agent, Northwest Montana United Way and its executive director, and further ordered the organization to vacate its suite at the Gateway Community Center by noon today.

According to Two Bear’s legal representative, Emily von Jenzten, with the Kaufman Vidal Hileman Ellingson law firm, the organization is temporarily relocating to an upstairs suite of a building south of Kalispell near the intersection of U.S. 93 South and 18th Street East. Two Bears, which offers services to families working toward reunification, including drug testing and supervised visits, will most likely remain at that location throughout the remainder of the year until a more permanent space is obtained.

“While it was not the result we had hoped for, Two Bears will be relocating, albeit on a bit of a faster timeline than had been desired,” von Jentzen said. “Two Bear’s priority right now is to complete their move with as little disruption to their clients as possible.”

On the other hand, Kimberly More with Crowley Fleck Law — legal representative for Northwest Montana United Way — said she is very pleased with the ruling.

“United Way believes that Judge Eddy’s ruling was correct and appropriate,” More said. She added that based on the ruling, she believes United Way will be able to “defend themselves vigorously” against claims made in the lawsuit.

A preliminary injunction prohibits action from a party while the underlying court case is being decided. They are typically issued at the request of a party — in this case Two Bears — whose operators are concerned the other party ­ — Northwest Montana United Way in this case — may take some action which would defeat the purpose of filing the lawsuit. However, District Court Judge Amy Eddy found there was not a significant enough showing to meet the “standard of irreparable harm” required to keep any injunction or restraining order in place for Two Bears.

The organization’s co-directors, Kim Kearney and Bernadette McDonald, filed a lawsuit last week against the local United Way branch and its executive director, Sharon “Sherry” Stevens, alleging wrongful termination, breach of fiduciary duty, breach of contract and other counts.

The core of the lawsuit points to an alleged “abrupt and unreasonable” termination of fiscal oversight from United Way and subsequent ousting of Two Bears by Stevens from its Gateway Community Center location where they served dozens of families in the Flathead Valley.

THE relationship between the Two Bears Family Center and United Way commenced in September 2018 when McDonald and Kearney asked if Stevens could assist in getting Two Bear on its feet. Stevens agreed to sponsor the organization and offered a space in Gateway for Two Bears to house its operations.

Under this arrangement, Two Bears operated as a program of United Way. And as its fiscal agent, United Way opened up a separate bank account with Glacier Bank for Two Bear’s operations and was able to contract directly with Montana Child and Family Services, employed the individuals who provided supervised visitation services for Two Bears, managed billing, payroll and more. According to McDonald, it was agreed upon — although not in writing — that this arrangement would remain until the organization was able to obtain its own tax-exempt status as a 501(c)3 nonprofit.

However, beginning in the summer of 2019, disputes between the two parties regarding billing and accounting emerged, brought about in part because of a change in billing practices with Child and Family Services, according to the findings of fact from the court hearing.

In August and September of 2019, Two Bears felt it was in good enough financial standing to operate separately from its fiscal agent and presented a timeline to Stevens, outlining steps for the organization to eventually transition out from under United Way. That timeline assumed Two Bears would be able to maintain its space in Gateway.

Stevens did not respond to the proposed timeline.

United Way instead wrote a letter to Two Bears on Sept. 16, which McDonald said they received on Sept. 17, indicating United Way would be promptly severing its fiscal agency relationship with the organization. The letter also indicated Two Bears would not be allowed to continue its services at Gateway Community Center, and was given three days to vacate the premises. As a result of the letter, McDonald testified that Two Bear was unable to perform vital services to clients for several days.

“When Two Bears isn’t in operation, families don’t see their children, babies are not walked by their mothers, people who are working to obtain and maintain their sobriety are not able to have that accountability or support during that process,” McDonald said at the hearing. “We scrambled.”

During the hearing, McDonald also testified that on Sept. 5, Two Bears employees did not receive their regularly scheduled pay checks. When confronted with why payroll had not been processed, Stevens said it was because the organization was operating at a large deficit of about $36,000, which McDonald and Kearney disputed.

And McDonald said although the co-directors asked multiple times for Stevens to provide documentation detailing such a deficit, it was never supplied.

But at the hearing, United Way introduced evidence prepared by its accountant, showing Two Bears had a deficit of about $19,693 at the time of the hearing. That figure didn’t include $16,744 in in-kind contributions that had been made by United Way on Two Bear’s behalf.

Carol Nelson, chair of Northwest Montana United Way Board of Directors, who testified for the organization, described the separation of the two organizations as a “business decision.”

“We just couldn’t afford to have that much debt from that program,” Nelson said.

Nelson also stressed that limited liability companies are not allowed to rent facilities at the Gateway Community Center, which is partially owned by United Way and is the home base for multiple nonprofits in the valley. According to Gateway’s most recently available IRS 990 tax form, the center’s purpose is to “provide facilities for nonprofit companies.”

According to McDonald, Two Bears became an LLC on Oct. 7 in order to obtain insurance so the organization could continue operations.

Regardless, Nelson stated that with the exception of Teletech - a company that owns a portion of the center - all other organizations in Gateway are nonprofits or operate under the umbrella of United Way.

A scheduling conference has been schedule for the two parties for Nov. 25, 2019. The purpose of the conference is to set deadlines for the remainder of the case.

Note: This article had previously labeled the subject organization as ‘Two Bear Family Center LLC,’ based on legal documents. However, the correct name for the organization is ‘Two Bears Family Center LLC.’ The organization is not affiliated with Two Bear Air or other related entities.

Reporter Kianna Gardner may be reached at 758-4407 or kgardner@dailyinterlake.com