Darlene Justus, a member of the Tempe Woman’s Club, said she joined the organization to help save its historic clubhouse, which was recently put on the market.
Paulina Pineda, Arizona Republic
The Tempe Woman’s Club is suing its embattled president, claiming she misrepresented her intentions when she purchased the club’s historic meeting hall on prime land in downtown Tempe.
Jody Loren purchased the adobe building near Mill Avenue and 13th Street — the center of the club’s community service efforts for eight decades — for $250,000 in 2017 and now looks to sell it, along with adjacent property, for $2 million to $4 million.
Loren used her position on the board to coerce members, most of whom are in their 70s, to sell the building after the club found itself in a financial mess, owing nearly $19,000 in back taxes and fees, according to the lawsuit filed April 18 in Maricopa County Superior Court.
Loren purchased the building for personal financial gain under the pretense of helping the club right its finances, attorney Robert Moon, who is representing the club’s newly-elected board of directors, says in the court filing.
The lawsuit looks to return ownership of the property to the club, and seeks payments for damages and attorney’s fees.
“It’s a shame that this organization has existed at this location for so long and this is what it has come to,” Moon told The Arizona Republic.
Loren and two attorneys representing her did not respond requests for comment.
Loren, a licensed real-estate agent, previously told The Republic that her intention in purchasing the building was “to assist the club in a horrible crisis they didn’t even know existed.
Lawsuit: President used ‘deception and concealment’ to purchase clubhouse
The lawsuit alleges Loren used her position on the Tempe Woman’s Club board and as a real-estate agent to persuade the women into selling her the building well below market value.
The filing says that Loren led board members, through “deception and concealment,” to believe the clubhouse would foreclose if they didn’t sell, and that the club’s only option was for her to purchase the building.
Loren failed to disclose that tax liens are subject to redemption rights, meaning property owners have the right to save the property from foreclosure by paying back the lender, according to the lawsuit.
Club members agreed to sell to Loren, through her company, Tempe Club House LLC, in April 2017, after learning about the back taxes.
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Minutes from an April 5, 2017, board meeting show Loren offered to provide $27,000 as a down payment, which would give the club enough money to repay its debts, and then $525 in monthly installment for 10 years, with a balloon payment of $160,000 at the end.
The full cash value of the clubhouse was nearly $1.2 million at the time, according to Maricopa County Assessor’s Office records.
Loren was vice president at the time and was later elected president.
The filing says Loren’s purchase of the clubhouse was not in the club’s best interest and was a conflict of interest because she served on the executive board and was personally profiting from the sale.
“She owed a duty of loyalty, a duty of honesty, and a duty to act in the best interests of TWC and its members,” according to the lawsuit.
Historic club house up for sale
Loren operated the club house as an event space, and has told The Republic she put it up for sale, in part, because it became too expensive.
In that time, she had purchased a neighboring home for $340,000.
She is advertising the sale of the clubhouse and home under the name Mill on Mill.
The properties are listed on residential and commercial property websites for between $2 million and $4 million.
The lawsuit alleges Loren promised that the woman’s club could freely use the meeting hall for five years, but that meetings there have been canceled since January.
The lawsuit also names women who served on the board under Loren. They include Loren’s business partner, Cathy Pippen, as well as Diane Callahan, Dominique Garside, Yolanda Daniels and Mary Ann Wolf for aiding Loren and “assisting her in acquiring and maintaining ownership of the clubhouse property.”
The suit asks that Loren and the other woman discontinue acting as officers of the club.
None of the women responded to The Republic’s request for comment.
A fight for control
The club stands divided.
A group of members interested in saving the club house, after reviewing the club’s bylaws, say Loren was successfully ousted as president in a February vote.
They have since elected Marsha Patton as president and pursued the lawsuit.
Patton said the new board isn’t backing down, and has received support from residents and community groups.
However, Loren still claims the club’s presidency.
“Some members have decided to take this club and make it their own, unlawfully at that, without authority,” Loren wrote in an email to members on May 1.
Loren hired an attorney who sent a letter to club members threatening to sue, saying Patton’s election was not valid and that Loren and her board remain in power.
The lawsuit against Loren says the club’s bylaws allow members to remove an officer or director for failing to fulfill their duties and that state law allows corporate directors to be removed from office for fraud or criminal conduct.
“We feel we’re the true Tempe Woman’s Club and she (Loren) has a rogue group,” Patton said.
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