National Church Residences Prevails in Trial Over Sale of 4 Low-Income Housing Projects in Washington

We would like to congratulate client National Church Residences on winning a trial in Spokane Superior Court in May arising from the “Year-15” disposition of four low-income housing tax credit apartment complexes near Spokane, Washington.

National Church was the sole general partner in each of the four limited partnerships that owned the projects. Plaintiff Whitewater Creek was a co-developer of the projects. At the end of the 15-year tax credit compliance period, the limited partners of the partnerships directed National Church to sell the projects. Whitewater Creek desired to buy the projects but was not selected as the buyer by the limited partners.

After the projects were sold to a third party, Whitewater Creek sued National Church, delaying the sales for almost two years, claiming that National Church and the limited partners had an oral agreement that Whitewater was a general partner with the right to purchase the projects. Whitewater also claimed that National Church had violated its general partner duties by presenting offers from other bidders to the limited partners, and that National Church colluded with the chosen purchaser to deprive Whitewater of the properties. Whitewater sought to block the sale and to obtain damages for lost profits.

Judge Michael Price found that there was no oral agreement and that Whitewater was not a partner in the limited partnerships. He also found that there was no breach of fiduciary duty or collusion. He dismissed all of Whitewater’s claims.

National Church, a mission and faith-based nonprofit with headquarters in Ohio, provides affordable housing assistance to seniors and owns and/or operates approximately 300 affordable housing complexes in states throughout the U.S.

Partners David Goodnight and Scott Pritchard tried the case and led the team, which included partners Rachel Groshong, who played a lead role in discovery, and Joseph McCarthy; attorneys Harrison Owens and Bill Dempsey; and paralegal Heidi Wilder.