SAN ANTONIO (CN) – Habitat for Humanity San Antonio has sued Habitat for Humanity International in Federal Court, claiming HHI abandoned its “Christian principles” in pursuit of “lucrative commercial franchise agreements.” Habitat San Antonio says HHI has no right to demand 10% of the local chapter’s $6 million in annual contributions, and no right to force it to sign a franchise agreement regulating use of the “Habitat for Humanity” name.
The dispute over whether the two groups share “Christian principles” or a legal “affiliation” boils down to about $600,000 a year.
Habitat San Antonio claims that in 1978 it became the first local, grass-roots organization to adopt the HHI name, but never was an “affiliate,” as the new leaders of HHI insisted in 2006, after ousting previous directors.
Both groups claim they are based upon Christian principles. Habitat International grew out of Koinonia, a Christian farm community founded in 1942 in Americus, Ga., to improve race relations.
Habitat San Antonio was founded in 1976, as the San Antonio Fund for Humanity. Its founders sought advice from the Koinonia group. According to the lawsuit, “HFHI claims that HFHSA was its first ‘affiliate’ beginning in 1978.”
But Habitat San Antonio claims the “affiliation” never was formal, and that Habitat for Humanity International did not incorporate under that name until 1977.
Habitat San Antonio claims it has used the Habitat for Humanity name since 1982, with HHI’s knowledge and approval.
It claims that HGHI published an “Affiliate Covenant” in 2001, which “is not a contract,” but “a declaration of a belief in Christian principles.” It claims that HFHI has no right to dictate anything to HFHSA, including terms or conditions of the use of the Habitat for Humanity name. It also disputes the terms of the covenant that would require it to “tithe,” and send 10 percent of the donations it receives to HFHI.
“A ten percent royalty on HFHSA’s annual cash revenues would be approximately $600,000,” the suit states. Plaintiff claims that tithing “was never required,” and that both parties understood that.
Habitat San Antonio traces the roots of this dispute to 2005, when the board of HFHI “fired and locked out” its founders, Millard and Linda Fuller, on false allegations that Millard Fuller, then 69, had sexually harassed a subordinate.
Habitat San Antonio claims the dispute actually was caused because “Millard and Linda Fuller did not agree with the concept of changing HFHI from a faith-based organization to a commercial franchisor.” It claims that “Millard and Linda Fuller were unceremoniously fired and locked out of HFHI in 2005 so that HFHI could embark on the creation of lucrative commercial franchise agreements.”
Plaintiff is represented by Akin Gump Strauss Hauer & Feld. See complaint.