United Way, financial backer settle lawsuit

Northwest Montana United Way and a Whitefish man who provided loan collateral to complete the $2.3 million purchase of Gateway Community Center in 2015 are working out a settlement, according to court records.

Summerfield Baldridge and the United Way resolved their dispute and are in the process of finalizing a settlement, according to a court filing Nov. 19.

Both agreed that a stipulation for dismissal with prejudice will be filed by Dec. 7. Terms of the settlement have not been disclosed.

Earlier this year, Baldridge sued 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.

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. 30, 2015. That property is now the Gateway Community Center, a hub for 18 nonprofit groups.

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

A hearing had been scheduled on the matter Nov. 20.

Northwest Montana United Way Executive Director Sherry Stevens said in a court document filed Sept. 7 that United Way didn’t breach the contract. It asserts the agreement between Baldridge and United Way didn’t end in two years. Numerous attempts to reach Stevens were unsuccessful.

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.

The lawsuit 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.

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.

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