I am not an attorney and therefore cannot give legal advice or interpret law, so this is just my opinion based on personal experience.
What a mess! I would go back to the law itself, read it very carefully, and do just what it says. Here's a link to the statutes - http://legislature.maine.gov/legis/statutes/23/title23sec3101.html Scroll through the statutes that follow by clicking the arrow in the upper right hand corner of that page.
First of all, you say you are "supposed to be" a statutory road association. Is there any record of the initial meeting being called by warrant issued by a notary as required under section 3101 paragraph 2? And were the owners of every parcel of land "benefited" by the road notified of the initial meeting? If not, you may not actually be a legitimate statutory road association.
The statute mentions bylaws, but I'm not sure it actually requires you to have bylaws. It looks like each place where bylaws are mentioned in the statutes, there is an alternative to how the action in question may be handled. I do know that some road associations (particularly smaller ones) seem to function just fine without bylaws. The statute does say that each parcel represents one vote unless otherwise specified in your bylaws, so if you do not have bylaws stating that more than one vote is allowed, then no parcel should get two votes.
As for whether proxy voting or absentee ballots are required, see the recent post on this forum entitled "Attorney Mary Denison's Opinion on Proxies and Absentee Ballots." In short, the statute says they "may" be allowed, not they "must" be allowed (section 3101 paragraph 4.) Voting is by a majority of members present OR... (section 3101 paragraph 5.) My view is that if members can't be bothered to show up for a meeting once a year, they are trusting those who do show up to make the decisions for them. If most of your members are paying at the rate determined at the meeting, without objection, they are expressing that trust.
Your biggest problem is the lawsuit. If there is no record of a vote of the membership to take the matter to Court instead of filing a Notice of Claim, I don't see how the membership can be forced to pay the bill. There should have been a dollar amount approved in the budget before making such a large expenditure. Section 3101, paragraph 7, lists the specific immunities of a commissioner, board, or lot owner. I don't see the cost of a lawsuit in that list.
On the other hand, section 3102 talks about the commissioner's or board's power to recover an owner's proportion of labor, materials, or money through civil action. It specifically says, "the decision to bring that civil action may be made by the commissioner or board or as otherwise provided for in the road association's bylaws." So it would appear your board member may have had the authority to decide to bring suit without consulting the membership, unless your bylaws say otherwise. In that case, the statute also provides for recovery of costs of suit and reasonable attorney fees - (but that would have to be included in your lawsuit as part of the claim. Once the Court has made its decision, you can't go back and say you forgot to ask to recover your attorney fees.)
The question is, does a member's "proportion" under section 3102 include the cost of repairing damage done by that owner? That may or may not also be addressed in your bylaws. Some associations state in their bylaws that repairs of damage over and above normal wear and tear will be billed to the member who caused the damage. If that is NOT in your bylaws or in your association's "formula" for determining each member's share of the cost, you may not be able to assess one member for the whole cost of the damage. Under section 3101 paragraph 5, it would not be considered "fair and equitable" to charge one member $500 more than any other member unless your formula or your bylaws contain a provision for recovery for damage that applies to EVERY member who causes damage. Also, under section 3102 you cannot assess one member for more than 1% of his property's municipal evaluation in any calendar year. While I don't think that would prohibit forcing a person to pay the cost to repair the damage he did, over and above his annual assessment, you couldn't declare his assessment itself to be $500 if the value of his property was under $50,000.
Lawsuits can get phenomenally expensive. I hope your board member doesn't attempt to recover the cost from the association by filing another lawsuit! If he threatens to do so, I would strongly suggest looking into getting the services of a professional mediator instead. Or you could try putting it to a vote of the membership and see if they will have mercy on that board member by agreeing to chip in on the cost, and accept it as a lesson learned. If it goes to court again, it could cost both parties more in attorney fees than either of them will gain.