Tokarski v. Wildfang

When a director acted in a way that was clearly prohibited by the governing documents, or failed to take an action that was clearly required by the governing documents, a factfinder could find that the director acted with reckless disregard to the corporation's best interest, as that interest has been defined by the corporation's governing documents, and, thus, with reckless disregard to the attendant breach of fiduciary duty. WSB Investments, LLC v. Pronghorn Devel. Co., LLC, 269 Or App 342, 362 (2015).

Defendants, Creekside Homeowners Association, Inc. (HOA) appealed a judgment denying their motion to strike  under  ORS  31.150 in favor of Plaintiffs, members of the HOA. On appeal, Defendants argued that Plaintiffs were unable to prove a prima facie case in support of their claims of alleged misuse of reserve account funds. Defendants furthermore contended that Plaintiffs “seek to deprive [D]efendants’ constitutional right to petition the government, namely the right to pursue litigation on its behalf.” Plaintiffs responded alleging that their claims did not arise out of ORS 31.150. Additionally, Plaintiffs argued that Defendants admitted to using account funds for litigation. When a director acted in a way that was clearly prohibited by the governing documents or failed to take an action that was clearly required by the governing documents, a factfinder could find that the director acted with reckless disregard to the corporation's best interest, as that interest has been defined by the corporation's governing documents, and, thus, with reckless disregard to the attendant breach of fiduciary duty. WSB Investments, LLC v. Pronghorn Devel. Co., LLC, 269 Or App 342, 362 (2015). As such, the Court found that the Plaintiffs satisfied the burden of proving a prima facie case. Affirmed