Judge overturns decision regarding Concordia University property

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A judge has overturned a ruling made late last year regarding Concordia University’s old campus in Portland. It’s just the latest ruling in an ongoing $302 million lawsuit over the closed school.

Last December, Multnomah County Circuit Court Judge Eric Dahlin struck down a “lis pendens” on the Concordia property. A lis pendens is a notice that a property is associated with a pending lawsuit. In January – a month after making his initial decision – Dahlin reversed himself after obtaining more information from lawyers. The new decision allows the lis pendens to remain in place.

The original decision to remove lis pendens could have made it easier to sell the 13-acre property, but Dahlin said keeping the notice in place for the property would not completely prevent a sale.

The Concordia University campus in northeast Portland on Feb. 10, 2020, the day faculty, staff and students learned the 115-year-old private college was closing.

Rob Manning/OPB

Dahlin wrote in a message to attorneys that lis pendens “is simply constructive notice to the world that there is a dispute relating to the underlying property so that prospective buyers can take it into account when deciding whether to buy or not property”.

In 2020, following the closure of Concordia Portland, the technology company HotChalk sued the university and others connected to it. HotChalk had managed the school’s online programming before it closed, helping Concordia become Oregon’s largest private university before it closed. In its lawsuit, HotChalk argues that the former university and others connected to it owe money for breach of contract, fraud and other allegations. Around the time HotChalk filed the lawsuit, it also filed a lis pendens on the Northeast campus in Portland.

Along with Concordia Portland, HotChalk is suing the Lutheran Church Missouri Synod, the organization that oversees the Concordia university system, including the former Portland campus; the Lutheran Church Extension Fund, a nonprofit financial institution that supports Synod organizations through loans and other financial assistance; and others, such as the individual members of the Board of Regents of Concordia Portland.

One of the defendants, the Lutheran Church Extension Fund, or LCEF, is the current owner of the Portland property following a foreclosure sale last summer.

In court papers, the LCEF said the lis pendens made it more difficult to sell the property, by creating a “cloud” over its title.

He also argued that HotChalk had no direct involvement with the property itself to justify maintaining lis pendens.

Judge Dahlin initially agreed during last year’s hearing. But HotChalk’s lawyers wrote to Dahlin following the ruling noting that the tech company had included in its complaint the request to reverse any “fraudulent” transfers from Concordia Portland to its partners, including the LCEF which bought the property – meaning his lawsuit has an interest in the property itself.

“Put simply, HotChalk’s lawsuit against LCEF is inextricably tied to ownership,” Gabe Weaver, a HotChalk attorney, wrote in an email to Dahlin.

Dahlin noted that even without the lis pendens over the property, anyone interested in buying the old campus would be aware of the litigation if they did “even a modicum of due diligence.”

Another issue raised at last December’s hearing has yet to be resolved.

HotChalk’s attorneys have sought documents from the Synod of the Lutheran Church of Missouri in hopes of proving it played a role in Concordia Portland’s closure. In its legal complaint, HotChalk said the Missouri Synod and the Concordia University System as a whole objected to Portland campus services for LGBTQ students.

The synod had refused to hand over all relevant documents – court discussions suggest there are more than 2,000 – saying it should not have to reveal internal church communications.

In the final court hearing, Dahlin ordered the synod to hand him 25 random documents for him to review privately to get more context about the types of documents involved. An attorney representing the synod said Dahlin reviewed those documents. In a sealed hearing next month, Dahlin will meet with church attorneys to get more context about the documents he read.

A trial date for the case has yet to be set. During the December hearing, Dahlin and his lawyers discussed the possibility of scheduling it for 2023.

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