In the case of Morelia Group-DE, L.L.C. v. Weidman, 2023-Ohio-386, an appellate court held that a business sufficiently alleged a “set of facts” that, if proven true, may trigger the limited R.C. 2744.03(A)(6)(b) statutory immunity exception afforded to a township trustee as the complaint alleges that the trustee’s “personal animus” toward the business’s chief executive officer (“CEO”) was the true motivation behind the allegation that the trustee tortiously interfering with the business relationship between the business and township by voting against the business’s proposal to purchase township property.
In this case, the business argued that (1) the trustee harbors personal animus against the business because of the CEO’s prior refusal to pay kickbacks to the trustee, and that this personal animus was the true motivation behind the trustee’s objections to the business’ offer to purchase township property and (2) the other two trustees viewed the offer favorably and, but for the trustee’s objection, the township would have voted to accept the offer. In response, the trustee argued that the trustee had “reasonable justification” to oppose the offer including, but not limited to, relying upon the legal advice of the law director as evidenced by the actual township minutes. The appellate court agreed with the business.
In support of its decision in favor of the business, the appellate court explained that:
At the pleading stage, we are constrained to credit as true [the business’s] factual allegations. [The business] has alleged a personal history of bad feelings between [the business] and [the trustee], which permits an inference that [the trustee] harbored an intent to harm [the business] professionally by sabotaging [the business’s] business opportunity. Following the “no set of facts” standard, we conclude that [the business] has set forth sufficient allegations to pierce [the trustee’s] statutory immunity.
Although reasonable justification for [the trustee’s] actions may ultimately serve to disprove malice or bad faith, [the business] pled that [the trustee’s] opposition to the purchase offer was pretextual and that despite the purported justification for [the trustee’s] opposition, the other township trustees were in favor of accepting [the business’s] offer. Because we are unable to take judicial notice of the contents of the October 3 meeting minutes as conclusively proving the truth of the disputed contents, we are unable to credit as fact [the trustee’s] claim of justification. Because we must, at the pleading stage, make all favorable inferences against the moving party, we infer from [the business’s] claim that the other trustees favored [the business’s] offer and that [the trustee’s] purported justifications were invalid and pretextual grounds upon which to refuse to consider the offer.
2023-Ohio-386 at ¶¶ 31-32.
NOTE: As explained by the appellate court, the outcome in this case was dictated by the facts pled in the complaint and the ultimate outcome may be much different once the case proceeds further through the litigation process.
To read this case, click here.
Authors: Matthew John Markling and the McGown & Markling Team.
Note: This blog entry does not constitute – nor does it contain – legal advice. Legal jurisprudence is like the always-changing Midwestern weather. As a result, this single blog entry cannot substitute for consultation with a McGown & Markling attorney. If legal advice is needed with respect to a specific factual situation, please feel free to contact a McGown & Markling attorney.