After the Ambridge Event Center denied business to an LGBT group in 2015, its owners say the negative publicity drove business away for good.
But in a recent lawsuit, the Portland, Ore., business says it it was only following orders from the church that owned the event space, which had inserted a "morals clause'" in their contract that forbade the center from hosting "offensive" events.
Now the business is suing for more than $2 million in compensation from Holy Rosary Church and says it violated both state law and the contract the two parties had agreed to.
A lawyer for the church told The Oregonian it would not comment on pending litigation.
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Ambridge Event Center signed a contract with Holy Rosary Church in 2012 to rent out a large space to be held for conventions, weddings or other events, according to the lawsuit which was obtained and posted by The Oregonian.
But in 2015, a Portland chapter of PFLAG (Parents and Friends of Lesbians and Gays) asked to host their annual party in the center. The event center, bound by the "morals clause," said in the suit it told the organization they would not be able to have the event in the center.
The morals clause in the contract, a copy of which was provided in the suit, forbade the renter from using the space for anything "offensive or disreputable" to the church. In particular, the plaintiff says the church "was explicit in prohibiting Ambridge from renting out the Event Center to members of or groups affiliated with the LGBTQ community," reported Courthouse News.
The event center says in the lawsuit that their rejection of the PFLAG group resulted in negative publicity that seriously hurt their business.
"Ambridge's image suffered from this revelation. Even businesses and government entities that had previously scheduled events with Ambridge who were not affiliated with the LGBTQ community but had equity-driven internal policies, refused to work with Ambridge after reading or hearing about the discriminatory policy involved in its employment relationship with the Church," the lawsuit says.
The business did attempt damage control, and manager Alan Peters called the leader of the PFLAG chapter a few days later to apologize, reported The Oregonian.
"As an organization we seek to engage in meaningful dialog and conversation. We came together to resolve an issue in our community," Edwards said at the time, according to the paper. "Moving forward I think Ambridge is going to be a much stronger business because of this."
According to the lawsuit, the center then hired an openly gay man named Gary Sorrels as an event coordinator. It was a few weeks after the hiring that the business says the church unceremoniously served them a lease termination notice. In the lawsuit, the business called the move "retaliation" for the hire.
The business is no longer operating. But now Holladay Investors, which was doing business as the event center, is suing the church for breach of contract, breach of faith and violation of state discrimination laws.
The business says the church refused to meet with the group by "failing to exercise any effort, best or otherwise, to reach an amicable and mutually agreeable solution" as required by the contract.
It also says the church violated state law ORS 659A.421, which forbids people from refusing to rent space based on "race, color, religion, sex, sexual orientation, national origin, marital status, familial status or source of income."
There are some exceptions, however. A religious institution like Holy Rosary could choose to deny business if "the use of facilities is closely connected with or related to the primary purposes of the church ... and is not connected with a commercial or business activity that has no necessary relationship to the church or institution," The Oregonian reported.
The suit asks for about $2.4 million in damages, fees and compensation from the church.