Staying with the story
The Springfield News-Sun has followed the developments at Tri-County Community Action for months, including stories examining audits and law suits filed as the agency struggles financially.
A new federal lawsuit has been filed in the battle over a Logan County transportation building previously run by Tri-County Community Action.
The property, 315 W. Auburn Ave. in Bellefontaine, is used as a hub for transportation programs serving the elderly and disabled. It has been the subject of a months-long legal battle between a local bank and the Federal Transit Administration, both of which claim to control the deed.
Liberty National Bank has been trying to foreclose on the property since August. It claims the owner, Tri-County Community Action agency, defaulted on two mortgages when the non-profit agency folded last year.
But the bank’s case was dragged into federal court when the Federal Transit Administration and its state arm the Ohio Department of Transportation, claimed they owned it because the building there was build using federal grant money.
Liberty National agreed to dismiss its suit in January but did so only so the bank could file a new complaint.
In the new suit filed Feb. 6, the bank seeks not only to sever the federal government’s claims to the property so it can foreclose, but also seeks judgment against former Tri-County director Denise Birt and former board president Bob Notestine. The suit claims those two negligently misrepresented the property and took out illegal mortgages.
Because the building was built using federal stimulus money, it was not allowed to be mortgaged. A notice stating that limitation was supposed to be included on the deed, but wasn’t added until 2014, the lawsuit claims.
In 2012, Birt and Notestine signed a $275,000 mortgage agreement with Liberty National followed by a second agreement for $25,000 in 2013.
The lawsuit claims they, “failed to disclose the terms of the Grant Contract and Master Agreement,” with the government, and Liberty National, “would not have loaned money to Tri-County but for the representations or if it was aware of the terms.”
Notestine served as president of the non-profit board for nine years and said he trusted Birt’s leadership. The organization grew from about a $675,000 budget to more than $6 million during Birt’s tenure, Notestine said.
He said Birt told him the agreements he signed on behalf of the board were lines of credit, not mortgages.
“I don’t think the board is guilty of anything except trying to do a good job,” Notestine said. “We had legal counsel that we paid… I’m sure we were advised on this.”
Birt could not be reached for comment.
The lawsuit asks the court to cancel the Transit Administration’s claim on the property; “quiet” any challenges to Liberty’s title; remove the deed restriction preventing liens against property; award a $25,000 judgment against Tri-County, Birt and Notestine; and foreclose all liens allowing the property to be sold at Sheriff’s sale.
The board and its members were covered by liability insurance, Notestine said, and he is waiting to hear from legal counsel about the next steps.
Transportation services in Logan County are still being run out of the building, but are now being overseen by RTC Industries.
Supervisor Russ Foust previously said the county is working on contingency plans if the building is foreclosed.
About the Author