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Board responds to lawsuit over Community Giveaway House

Less than a week after holding what it called a successful reopening of the Havre Community Giveaway House, a group responded to a lawsuit that claims it has no authority to operate the charity — in a battle between two boards that each say they represent the charity.

A press release sent out by Roberta Beute, chair of the board that reopened the North Havre location of the Giveaway House Saturday, April 20, said that more than 90 people attended the reopening from 8 a.m. to 5 p.m.

The charity was founded about 1970 by Ruth Nystrom and Ann Friesen, who both have since died, to provide donated clothing and other items free of charge to people in the region.

The Giveaway House had been closed since mid-January, at least, but the group chaired by Beute reopened the house for operation on Saturdays, with donations of items taken at the location, 1058 2nd St. N., weekday afternoons, the release said. People with emergencies can call Sheila Forshee, listed as a director, treasurer and authorized representative of the board, at 262-4842.

Board answers lawsuit

The reopening of the charity was a few days after another group sent a lawsuit to court alleging the group which includes Beute and Forshee had no authority to form a board for the nonprofit corporation. The lawsuit also alleges they filed a false report in March with the Montana Secretary of State listing themselves as the board of the corporation and have "injured and caused damage to (the Giveaway House)."

The lawsuit, filed as Community Give-A-Way House Inc., a Montana nonprofit corporation, versus the individuals on the corporation's board listed in the March annual report, asks the court to find that the plaintiffs are the officers and directors of the corporation; that the North Havre property has been used by the corporation for charitable purposes, as is required by the deed giving the corporation the property; that Forshee has no ownership or control the property; that the defendants must return all Giveaway House property to the plaintiffs, including the keys to the North Havre house; and asks for punitive damages and court costs for the plaintiffs.

In her answer to the complaint, Beute, as chair of her board and representative of the other defendants, cites the March annual report and other documents listing the members of her board as the charity's board and Forshee as the authorized agent of the board.

The documents Beute cites, including the March annual report, lists Ursula Brese, Beute, Forshee, Rebecca Wolcott and Jacob Wolcott as the directors of the corporation, and Brese as president, Vickie Niederegger as vice president, Beute as secretary, Forshee as treasurer and Kelly Ann Damson as "other" for officers.

Those are the individuals listed as defendants in the lawsuit, prepared by Missoula attorney Tyler Gernant.

In her answer to the complaint, Beute says the plaintiffs are not the board of the charity.

"Tyler R. Gernant does not represent this Corporation," Beute writes in her answer.

The board she represents also is in the process of amending the articles of incorporation and the bylaws of the nonprofit corporation, Beute writes in her answer.

The founding of a charity

The charity, founded about 1970 by Nystrom and Friesen originally, was a home-grown operation, volunteer-driven and primarily operated out of the North Havre residence.

In 1989, Nystrom, who was Forshee's grandmother, incorporated the charity, and in 1999 she and her husband, Karl Nystrom, signed the property in North Havre over to the corporation, to revert back to her family and heirs if the corporation ever failed to use it for charitable purposes.

After both of the founders had died, the charity was on its last legs in 2008, and its operators said they were about to close it.

Forshee and others, including Sue Markley, stepped in to rejuvenate the charity, and kept it operating through the end of last year.

Board clashes, splits

By that time, members of the board started to clash.

Markley, who was the nonvoting vice president of the board at that time, told the Havre Daily News in January that she and others had formed a committee to ask Forshee and Damson, who were the nonvoting treasurer and president, respectively, of the board, to step down.

According to the bylaws of the corporation, only the directors of the board are voting members. The officers were not listed as directors.

The directors of the corporation, listed by Forshee in its 2012 annual report, were Jolene Ophus, Bernice Campbell and Judy Litzinger.

Markley said she and other board members had discovered problems including Forshee letting the nonprofit's federal tax-exempt status lapse by not filing required paperwork, letting the insurance for the charity's van lapse, not paying the premiums on the liability insurance for the house and not paying the property taxes. Forshee also had changed the locks on the house so the other board members and volunteers could not get in, Markley said.

Forshee, who was the board treasurer at the time, told the Havre Daily then that the board and volunteers had not been following the bylaws established by her grandmother, and she had had to reorganize the board and change the the locks.

She said she had started the process to have the corporation's federal tax-exempt status reinstated.

According to minutes of the meeting of Markley's group — taken by Beute, who was a member of that committee — by its Jan. 20 meeting Forshee had explained what had happened with most of the complaints, including saying she was and had been providing liability insurance on the building through the agency for which she is the broker, and had taken actions to correct any issues that were correctly identified, although the group agreed to leave the van uninsured until reorganization was complete.

According to the minutes, Markley resigned her position with the board at the Jan. 20 meeting.

In a letter dated Jan. 24, Beute wrote that the charity was under reorganization and was closed, asking people with keys or paperwork related to the Giveaway House to return them, and that "all previous persons listed as officers, members, and Directors have been disassociated with the (nonprofit corporation) at this time."

New competing boards are formed

On Feb. 8, the directors listed in last year's annual report, Ophus, Campbell and Litzinger, signed a document reorganizing the board.

In that document, the directors removed Forshee and Damson from office, accepted the resignations of officers Faye James and Edith Anderson and director's Litzinger and Campbell, and elected Markley, Ophus, Janet Tams, Jim Howendobler and Paula Case as the directors, with Markley elected president, Ophus vice president and Tams secretary-treasurer.

The lawsuit says Forshee was notified of the actions of the directors following the signing of the document.

Then, in March, Forshee's group filed an addendum to the corporation's annual report, listing the new directors and officers — who are named as the defendants in the lawsuit.

That board scheduled an organizational meeting for March 14.

Claims of 'ultra vires' actions

The complaint filed by Markley's board says the committee that met Jan. 20 was improperly formed and had no authority to act for the corporation because it was not appointed by directors of the board and that the defendants have been represented to the public as agents of the Giveaway House by the filing of a "'False Annual Report.'"

The lawsuit also alleges that the group is representing Forshee as the owner and director of the North Havre house because the IRS had revoked the nonprofit status of the corporation when it was Forshee's failure to file paperwork that caused the revocation. The group had continued to use the property for charitable work, as required by the deed, until Forshee changed the locks on the property, the suit says.

The lawsuit asks the court to declare the actions of Forshee's board "ultra vires" — outside of the power or authority of the board or corporation — declare that the actions have caused damage to the nonprofit and were done maliciously, as the group had been notified that board was reorganized Feb. 8, and therefore the plaintiffs are entitled to punitive damages.

 

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