Wednesday, October 14, 2026
By Mark Jurkowitz | Outer Banks Voice on May 22, 2024
Two weeks after the Dare County Commissioners terminated their housing partnership with Coastal Affordable Housing (CAH) and voted to return $35 million in state housing funds, an attorney for CAH principal Jordan Hennessy wrote to Dare Commissioner candidate Katie Morgan accusing her of “false and defamatory statements” and threatening litigation if the matter is not resolved “immediately and satisfactorily.”
Morgan is not currently a Dare Commissioner, but she is running as the Democratic challenger to incumbent Republican Commissioner and Board Chair Bob Woodard in this year’s local elections. She has been a vocal critic of the county’s partnership with CAH in their housing efforts.
The initial April 23 correspondence from Hennessy attorney Craig Schauer listed four statements about Hennessy and CAH that he characterized as “false and defamatory.” It also blamed Morgan for the county’s April 9 cancellation of the housing partnership, writing that, “Due to your public mischaracterizations of Coastal Affordable Housing and Mr. Hennessy, the Dare County Board of Commissioners have terminated negotiations with Coastal Affordable Housing and returned the $35 million loan from the State.”
That letter specified two “remedies” to resolve the situation. One called for Morgan to post a public retraction of the “false accusations” concerning Hennessy and Coastal Affordable Housing and another required her to donate $5,000 to the Community Care Clinic of Dare “as a gesture of your support for the local community.”
If these steps weren’t agreed to, the letter stated, “Mr. Hennessy and Coastal Affordable Housing will file suit against you.”
In an email to the Voice, Morgan stated that “This letter has caused me immense anxiety along with undue emotional and financial stress for me and my family…As I am currently running an active campaign, my intention has always been to highlight what I believe are poor decisions and partnerships made by our local officials. The fact that I am being singled out as the sole party responsible for all Dare County Commissioners to vote unanimously to send the money back is laughable.”
Neither Hennessy nor Schauer responded to requests for comment prior to the deadline for this story. Hennessy, a former aide to State Senator Bill Cook, is prominently involved in a number of local issues. Aside from his role with CAH, he is a top officer at EJE Dredging, which owns and operates the Miss Katie Dredge, and is also a member of the Coastal Resources Commission.
That April 23 letter triggered a series of exchanges between Schauer and Morgan Attorney L. Phillip Hornthal, III. On April 30, Hornthal wrote that Morgan “steadfastly denies that she has made any defamatory comments, and that most of the comments you reference are directed at Dare County and not Mr. Hennessy…She believes your clients are attempting to chill her free speech and prevent her from asking tough questions about the business of Dare County…”
Hornthal did say that Morgan is “willing to consider correcting her statement that your clients have ‘billed’ Dare County $5,000,000 to date,” since the pre-development contract between Dare County and CAH indicated that CAH would be eligible for up to five million in expenses, but had only invoiced the county for about $664,000 to date.
On May 2, Schauer responded by stating that to resolve the matter, Morgan had to issue a correction and apology, along with a video of her doing so, using language Schauer included in that letter. The statement and video, he said, “must be posted on Ms. Morgan’s Facebook account (both her campaign and personal page) and Instagram account, as well as any other social media accounts on which she made the defamatory statements.”
That produced a May 6 letter from Hornthal in which he outlined a response that Morgan would be willing to make, stating that it would be “a social media post correcting her earlier post concerning the $5 million payment by Dare County…in the form of a written post,” but not in a video format. It would include a statement that she is not aware of any “unlawful” actions by Hennessy or CAH.
Hornthal added that “if a lawsuit is filed, we believe that the claims will be summarily dismissed and your client ordered to pay Ms. Morgan’s attorney’s fees.”
In her email to the Voice, Morgan said that she has heard nothing further from Schauer or Hennessy since then, adding that “I am totally willing to do the post outlined by my lawyer. I have intentionally been waiting to see what their lawyer said before I do it…I’ve never been in this type of situation before and it is paralyzing.”
Comments
Rusty
That is the most ridiculous and frivolous nuisance lawsuit I have ever heard of. If I got a letter like that from a lawyer, the only reason I would be “paralyzed” would be because I was laughing so hard.
disgruntled
I’m impressed, refusing the 35mil. loan was a very noble thing for all who voted to do so, if Katie Morgan led the charge, then kudos to her!
Will Coastal Affordable Housing still exist now that the money is gone? I think Hennessy has shown the dredging contracts deserve some scrutiny.
RicknKDH
Honestly, I was on the fence about voting for Katie and but now, this is a vote for change. Bye Bye Bob!
Just Another Mike
Like it or not, words matter and the freedom to express opinions has bounds. You simply can’t make something up about a person or company, pass it along as fact and think that’s okay, whether the person or company is reputable or not. She admitted that her statement about them invoicing Dare County $5M was a fabrication. Period. Did that one misrepresentation of fact lead to the vote and subsequent termination of the contact with the company. That’s a matter for a judge or jury to determine. As a matter of law, she admitted to defaming the company when she admitted to misrepresenting the amount billed to Dare County. The question is, did it actually harm the company. Again, that would be the question that a legal process would answer. Whatever people’s personal feeling are about the persons involved or the company, if you’re running for office and playing loose with the facts to advance an agenda, there may be consequences. It’s not frivolous or without merit. If I were her, make the video. She already admitted to it. If this goes to a lawsuit, she’s already lost because the cost to defend yourself may be considerable.
Wondering
Who chose the photos that accompanied this article? Kudos to them. One face unsmiling and in shadow, reddish in hue, and the other brightly lit and with a cheerful smile.
I mostly agree with commenter Ed about the state of local journalism. Occasionally however there is an article like this one that shows an investigative spirit. More please!
WindyBill
Poor little baby boy didn’t get his desert. So it’s tantrum time. Who will the legitimate business be who backs the fund to pay that charity. My contribution is ready.
kdh backseat reviewer
Shake down on Bourbon Street.
Do this or that or I will be forced to sue.
Can these two not meet in private and come to a resolution without standing on a soap box and announcing it? Oh, that’s right. That is called communication. My bad
Jon
Ms. Morgan’s lawyer could do Dare County a great service if Mr. Hennessy decides to sue, which is to depose Mr. Hennessy under penalty of perjury with rest to his role in drafting the legislation in question and his business dealings via CAH with the County. Then get it released as public record–which I imagine many Dare County citizens would like to read!
Kitty Hawker
Hennessy has opened the door to investigation. His own attorney made comments about his adept handling of the dredging partnership to benefit the county. So let’s take a close look at the details of the Dredge negotiations and the Coastal Affordable Housing contracts and invoices. What about an audit of the monies? Who drafted the legislation for both partnerships ? What about the handling and payments of taxpayer dollars ? What are the total costs of billings ? What about all the questions that were raised at the public meetings ? Why target a young female because she asking questions ?
No real answers . No accountability.
Freenusa
Thank you Kitty Hawker. Be non-compliant, do not bend a knee to any thing JH demanded. A contribution is nice but he is wrong, I believe most people realize it was not about affordable housing but about the payoff to the connected. Where us Keith Kidwell 🦗 🦗🦗🦗
Freenusa
We need a statement from the DCBOC. Did they base their vote to end the contract with CAH and send the $35M back to NC because of what Katie said? I find that laughable. Stand strong Katie.
charlie
I hope he keeps going after Katie.. Then when he is deposed he will have to answer truthfully or risk perjury.. This could get real interesting…