278 P.3d 133
Or. Ct. App.2012Background
- Plaintiffs Goodsell, Haphey, and 15840 Pilot Drive, LLC (plaintiffs) and John Schibel (plaintiff) are members of Eagle-Air Estates HOA and have longstanding litigation with other members and directors.
- The HOA is a nonprofit corporation formed in 1991 governing a planned community of 12 lots, with multiple plaintiffs and defendants serving on the HOA board at different times.
- In March 2010, plaintiffs sought judicial removal of certain HOA directors under ORS 65.327(1) for alleged fiduciary breaches and related misconduct.
- Defendants argued that removal under ORS 65.327(1) was inapposite to HOA directors because Article III, section 5 of the bylaws (and ORS 94.640(6)) provide the exclusive removal mechanism.
- The trial court granted dismissal, concluding that ORS 65.327(1) conflicted with the HOA bylaw and was not applicable.
- The Court of Appeals reversed, holding that the bylaw removal provisions are nonexclusive and that ORS 65.327(1) supplements them, with the cross-appeal dismissed as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ORS 65.327(1) applies to HOA directors alongside the bylaw removal provision. | Goodsell contends no exclusive conflict exists; ORS 65.327(1) supplements. | Harp/Morgan/Lindner contend the bylaw removal is exclusive and precludes ORS 65.327(1). | ORS 65.327(1) supplements, not exclusive to, bylaw removal. |
| Whether amendments to ORS 65 and ORS 94 in 2003 altered the relationship between statutory and bylaw removal. | 65.327(1) remains applicable; amendments do not preclude judicial removal. | 2003 amendments imply potential preemption by 94.x provisions. | 2003 amendments do not preclude ORS 65.327(1) applicability. |
| Whether there is a true conflict between ORS 65.327(1) and ORS 94.640/bylaws, making one controlling. | No conflict; mechanisms are complementary. | There is a conflict that should control in favor of bylaws. | No conflict; both mechanisms are complementary. |
Key Cases Cited
- Morgan v. Goodsell, 198 Or.App. 385 (2005) (recounted prior attempts to invoke 65.327(1))
- Morgan v. Goodsell, 198 Or.App. 533 (2005) (reversed den., 339 Or. 406, 122 P.3d 65 (2005))
- Morgan v. Goodsell, 220 Or.App. 329 (2008) (further appellate discussion on removal)
- Eagle-Air Estates Homeowners Assn. v. Harp, 234 Or.App. 218 (2010) (context of HOA governance and removal)