Settlement reached in United Way lawsuit

Northwest Montana United Way and the organization’s former executive director have reached a settlement agreement with the founders of a nonprofit that sued United Way last fall, alleging United Way’s fiscal oversight over the nonprofit was abruptly terminated, among other allegations.

In late 2019, Two Bears Family Center LLC, which recently rebranded as Bear Logic Family Center, sued United Way and its former Executive Director Sherry Stevens. The complaint, lodged by Bear Logic founders and co-directors Kim Kearney and Bernadette McDonald, brought 15 counts against United Way and Stevens, including breach of contract and wrongful termination.

According to an email from Emily von Jentzen, legal representative for McDonald and Kearney, the parties recently reached a settlement and the case, which was filed in Flathead County District Court, should be dismissed shortly.

“My clients are relieved that with the end of this litigation their focus can return to providing much needed services to the community,” von Jentzen wrote.

Kim More, legal representative for Stevens and United Way, emphasized the settlement is not an admission by the United Way of any wrongdoing in the case and described the claims against her clients as “baseless.”

“The United Way is confident that it would have prevailed and the claims against it would have been dismissed as shown in our court filings. However, the legal process takes time and the United Way believes that the best way it can serve the community is to bring this matter to an end so that is can focus 100% of its attention to serving the community,” More said.

BEAR LOGIC, which helps families meet reunification requirements set forth by Child Protective Services, launched in 2018. Shortly after opening, McDonald and Kearney approached Stevens, asking for assistance in helping the organization gain its financial footings and obtain a tax-exempt status.

Stevens agreed to sponsor Bear Logic (then Two Bears Family Center) and offered a space in the Gateway Community Center in Kalispell for the organization base its operations. At that point, Bear Logic started operating under the umbrella of United Way, which became the organization’s fiscal agent — an arrangement the two parties verbally agreed would continue until Bear Logic could operate independently and as a nonprofit.

But beginning in the summer of 2019, disputes between the two parties regarding billing and accounting emerged, according to the lawsuit. At the time, Bear Logic felt it was in good enough financial standing to begin operating separately from United Way.

McDonald and Kearney said they made many attempts to discuss the possibility of this transition with Stevens, but alleged those attempts fell on deaf ears until she eventually told them Bear Logic was operating at a deficit. After this information was challenged by Bear Logic and McDonald and Kearney pushed for documented proof of the deficit, they received a letter stating United Way would be promptly severing its fiscal relationship with their organization and that Bear Logic must immediately vacate its suite at the Gateway Community Center.

During one court hearing in 2019, McDonald said Bear Logic was forced to vacate in a matter of days, which led to a disruption in their vital services and displaced clients. But during that same hearing, United Way leadership described the situation as a “business decision.”

Roughly two months after the lawsuit was filed, Stevens announced she was stepping down from her role with United Way after more than 30 years at the helm of United Way. She did so when the litigation was still pending and as other separate allegations of financial mismanagement against her began to surface from former employees and nonprofit organizations. Since then, a new executive director has been hired and the board has assumed a more active role in the day-to-day operations of United Way and the Gateway Community Center.

Bear Logic Family Center now operates out a new, permanent location at 119 East Idaho St. in Kalispell.

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