A nonprofit organization that provides low-income housing is seeking sanctions against a Freeland group and the group’s attorney over an alleged frivolous lawsuit.
The Low Income Housing Institute, commonly known as LIHI, is asking for more than $90,000 in attorneys’ fees from Freeland Concerned Citizens LLC and its attorney, Randal Thiel of Bellevue. It’s unclear if other defendants in the lawsuit will follow suit.
In documents filed Thursday, LIHI claims that Freeland Concerned Citizens’ lawsuit was frivolous under RCW 4.84.185, which allows defendants to recover the cost of attorneys. In addition, LIHI argues that Thiel should be sanctioned under Court Rules 11 because his “conduct in signing off on these baseless allegations is outrageous and unbefitting of the profession.”
“FCC and Mr. Thiel cannot be permitted to file an obviously meritless lawsuit, make incendiary allegations based on literally nothing, and walk away without consequences,” LIHI’s motion for sanctions states. “From the very outset of this case, the LIHI Defendants warned them of the remedies Washington State offers to defendants forced into baseless litigation — an award of attorneys’ fees through both RCW 4.84.185 and CR 11. The LIHI Defendants have now shouldered tens of thousands in legal fees and have had their plans to develop affordable housing on Whidbey Island delayed for months.”
On July 15, Freeland Concerned Citizens filed a complaint in Island County Superior Court after the county commissioners awarded a $1.5 million grant to LIHI to aid in the purchase of Harbor Inn in Freeland, which the nonprofit plans to convert into a shelter and affordable housing project.
The lawsuit originally named LIHI, the Island County Board of Commissioners, Commissioner Janet St. Clair, Commissioner Melanie Bacon, LIHI Harbor Inn LLC, Lucky Bones LLC and the state Department of Commerce as defendants. The individual commissioners and the Department of Commerce were later dropped from the suit.
On the Secretary of State website, governors in Freeland Concerned Citizens are identified as Davide Adams, Gary Wray and Vicki McFarland.
The group’s complaint alleges that the proposed project is in violation of county code and that the commissioners violated the state Open Public Meetings Act through a lack of transparency that denied residents “any reasonable notice and voice in the matter.”
After losing a motion for a preliminary injunction and before a hearing on the defendants’ motion to dismiss, Freeland Concerned Citizen voluntarily dismissed its lawsuit without prejudice in early September. Superior Court Judge Carolyn Cliff ruled that she retained jurisdiction to consider sanctions if requested by the defendants.
In its motion for sanctions, LIHI claims that Freeland Concerned Citizens had no legal or factual claims of any kind, but asserted “only vague conspirational suggestions of insufficient disclosure or unspecified code violations.” Much of the original complaint focuses on allegations of violations of the Open Public Meetings Act, which don’t apply to non-governmental entities.
In addition, LIHI claimed that Freeland Concerned Citizens and Thiel made allegations they must have known were “salacious and false.” They accused LIHI, for example, of being accountable for a man’s death at the facility when the man was actually a holdover motel guest who had heart problems.
“Despite lacking a single fact about the incident other than someone had died, FCC and Mr. Thiel chose to cynically exploit this man’s death and smear the LIHI defendants to manufacture urgency in support of a baseless motion for a preliminary injunction,” the motion states.
LIHI was represented by Scott Pritchard and Michael Rubin of the Seattle firm Stoel Rives. According to filings in the case, Pritchard’s normal rate is $500 an hour, but he charged LIHI $450 an hour. Rubin charged LIHI $369 an hour.
Under LIHI’s request, Freeland Concerned Citizens and Thiel would split the $93,438 in attorney’s fees.
Wray and Thiel did not immediately respond to requests for comment.
