How a dispute with a former leader nearly sank the Fishtown Neighbors Association

For a volunteer neighborhood association, the biggest legal threat is usually a lawsuit-wielding developer who doesn't like a position the group takes against his project.

But the Fishtown Neighbors Association learned recently that a dispute with one of its own can be just as dangerous.

Up until Friday it looked like it could have tanked the organization.

FNA, one of the busiest neighborhood groups in the city, announced last weekend that it was suspending operations after its insurance carrier dropped it. Rates had skyrocketed following a 2015 lawsuit and resulting settlement with the association's former president, Jordan Rushie, who is a land-use attorney. On Friday the group obtained insurance from Hallmark Specialty Insurance Co.

"We will be back to normal operations next week," FNA president Ian Wilson said.

The group's premiums quadrupled from $1,200 to $4,800 after the lawsuit, underscoring how vulnerable civic groups can be to lawsuits — and how bitter relations can grow between neighbors. Court records from the two-year-old case read, at times, like a list of grievances a high school counselor might have to mediate between feuding students.

Rushie, 35, accused the group of defamation and excommunicating him from the Fishtown community. On a more personal level, he says he was targeted because his libertarian, gun-owning views weren't shared with other members.

"I do not care about anything that happens South of York Street," Rushie, who lives in Olde Richmond, said in an interview this week. "I gave them so many opportunities to retract. This was what they asked for. This is what they got." He would not say the amount of the settlement.

Fishtown board members, who would not discuss the case, argued in legal documents that they had good reason to be upset with Rushie: He helped a client of his apply for a business-improvement grant with FNA's backing, without discussing it with the board.

Jamie Ware, a board member named in the suit, summed up the situation in a February 2016 email, now a part of the court file, this way:

"The really stupid thing is that now the board and our lawyers have spend [sic] hundreds of thousands of hours on this — because we won't let Jordan play with us anymore."

The spat started in September 2014,  when Rushie, then FNA's director, helped a friend and client, Alanna Ralph, apply for a grant through a local nonprofit. Ralph, who owned Blush hair salon, wanted to resurface the business' exterior and install security cameras and lights.

Rushie copied the FNA business manager on the application seeking the funding from PTSSD, a nonprofit that distributes money from SugarHouse Casino to improve the neighborhood. He had not consulted board members about submitting the application, according to legal filings.

FNA board member Neil Brecher wrote in an email to other board members that he considered the application a conflict of interest that "poses a huge risk to the reputation as well as the 501c3 status of the organization. [Rushie] should have known that he'd made a 'mistake' and should have immediately withdrawn the illegal grant application. There's no mistaking what he was doing. He was deliberately defrauding the FNA."

The words illegal and defrauding would become the essence of Rushie's defamation case.

The grant application was withdrawn, and Rushie later resigned as president.

Rushie says animosity toward him grew fast after that, and he estimates he lost thousands of dollars in business. "What could be more defamatory than saying an attorney committed an illegal action?" he asked.

The neighborhood group has argued in court papers that their actions had nothing to do with personal vendettas, but rather Rushie's use of his board position "to seize a financial benefit for his private client to the potential detriment of the FNA."

Rushie has since moved his business out of Fishtown.

This summer another civic, Bella Vista Neighbors Association almost folded after a lawsuit sent their insurance premiums through the roof.

Jeff Hornstein, president of the Crosstown Coalition, is trying to set up a group insurance plan for the 100-some groups that would qualify by the end of the year. He says he hears constantly from leaders of small groups without insurance and larger ones worried about exposure should they be sued.

"You are never going to find a person with a house or a job who's going to be a volunteer and do this work in any neighborhood let alone a gentrifying neighborhood where developers are coming in, without that protection," Hornstein said.