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Lawsuit against Lake Corp tossed

Election focus of complaint

A Clackamas County Circuit Court judge threw out a lawsuit charging fraud in elections at the Lake Oswego Corporation, siding with the corporation in claims filed by three of its shareholders last year.

The trio - Doug Oliphant, Doug Reiter and Jerry Stubblefield - charged that the Lake Corp oppressed them in corporate elections in May 2005.

They originally filed their lawsuit on behalf of the Concerned Shareholders, a group of lakefront shareholders who have rivaled Lake Corp leaders for control of the board of directors since October 2004. The group filed suit about six months after their tallies in elections didn't match the official count and their candidates were not elected. Other claims about election procedures were made.

In the ruling made Nov. 20, Judge Robert Herndon said he found 'no general issues of material fact' in the case. He called evidence against the Lake Corp 'based on supposition and speculation, not fact or reasonable inference.'

In conclusion, he said, 'There is a complete lack of evidence of any oppressive conduct by any individual defendant.'

Stuart Brown, attorney for the plaintiffs, disagreed with the ruling.

'The standard is a reasonable juror could find that the vote count was manipulated. Jerry Stubblefield's vote count showed two Concerned Shareholders elected,' he said. 'The judge didn't see it that way, what he's saying is you have no direct evidence that any of the directors intentionally manipulated the vote count.'

Lake Corp officials said the ruling affirms what they've said all along: The lawsuit lacked evidence to support its principal claims.

'To me it's a clear indication that the lawsuit is without merit,' said Bill Wiley, director of the Lake Corp.

'I think all of our shareholders would like to put it behind us and get on with the business of managing the lake,' he said.

Brown said he wasn't sure whether the Concerned Share-holders would appeal. Though he thought the suit could have success in an appellate court, he said the shareholder group needs to re-evaluate its goals before going forward and may drop the litigation.

'Maybe it's more important to keep the group together to press for meaningful change rather than keep the litigation going just to prove a point,' he said. 'There have been some changes for the better and I think the worst thing we could do is split up the Concerned Shareholder group.'

Brown said so far the group has been effective in advocating for semi-open board meetings at the Lake Corp, minutes of those meetings, more attention to lake issues and a neutral vote counter at elections.

'At this point one of the things we have to do as the Concerned Shareholders is to sit down and evaluate what we want,' Brown said.

Wiley said he thought relations had improved between Lake Corp shareholders since disputes first began between corporate officials and the Concerned Shareholders.

'I think we have a lot in common and I'm glad there's some feeling that we can come together,' he said.

Pointing toward safety and aesthetic issues, as well as water quality topics, Wiley said Lake Corp shareholders share the same goals.

Whether the plaintiffs will be asked to reimburse the corporation for attorney fees is an open question at this time. Wiley estimated costs could exceed $50,000 after insurance payments.

The lawsuit has been in the court, in various forms, for nearly a year, following repeat requests by the Concerned Shareholders for a recount in the 2005 election. Initially, the suit made claims that ranged from self-dealing by corporate officials to a failure to protect shareholders from city pollution and notify them of potential health hazards.

In May, and again in September, rulings in Clackamas County Circuit Court whittled the original lawsuit down to the narrow claim charging election fraud, which was dismissed by Herndon.