Court Opinion

ID: 4121228
Source: CourtListenerOpinion
Date Created: 2017-01-31 16:09:14.140498+00
Date Added: 2024-06-11T09:20:29.704852
License: Public Domain

MAINE	SUPREME	JUDICIAL	COURT	                                          Reporter	of	Decisions	
Decision:	 2017	ME	22	
Docket:	   And-16-68	
Argued:	   November	9,	2016	
Decided:	  January	31,	2017	
                                                                                             	
Panel:	       SAUFLEY,	C.J.,	and	ALEXANDER,	MEAD,	GORMAN,	JABAR,	HJELM,	and	HUMPHREY,	JJ.	
	
	
                              DANIEL	R.	LALONDE	
                                       	
                                      v.	
                                       	
                         CENTRAL	MAINE	MEDICAL	CENTER	
	
	
ALEXANDER,	J.	

          [¶1]		Central	Maine	Medical	Center	(CMMC)	has	filed	this	interlocutory	

appeal	 from	 an	 order	 of	 the	 Superior	 Court	 (Androscoggin	 County,	

MG	Kennedy,	 J.)	 denying	 CMMC’s	 motion	 to	 dismiss,	 based	 on	 a	 claim	 of	

immunity	pursuant	to	24	M.R.S.	§	2511	(2016),	a	complaint	brought	by	Daniel	

R.	Lalonde	seeking	indemnification	for	expenses	he	incurred	in	defense	of	an	

administrative	proceeding	initiated	by	the	Board	of	Licensure	in	Medicine	(the	

Board).		We	reach	the	merits	of	this	appeal,	determine	that	section	2511	of	the	

Maine	 Health	 Security	 Act	 does	 not	 render	 CMMC	 immune	 from	 Lalonde’s	

contractual	claim	for	reimbursement,	and	affirm	the	trial	court’s	order.		
2	

                                         I.		CASE	HISTORY	

         [¶2]	 	 The	 following	 facts,	 which	 we	 view	 as	 admitted	 for	 purposes	 of	

this	 appeal	 from	 a	 ruling	 on	 a	 M.R.	 Civ.	 P.	 12(b)(6)	 motion	 to	 dismiss,	 are	

drawn	 from	 Lalonde’s	 complaint.	 	 See	 Andrews	 v.	 Sheepscot	 Island	 Co.,	

2016	ME	68,	¶	2,	138	A.3d	1197.	

         [¶3]	 	 CMMC	 is	 a	 nonprofit	 corporation	 which	 operates	 an	 acute	 care	

hospital	 with	 its	 principal	 place	 of	 business	 in	 Lewiston.	 	 Lalonde	 is	 a	

physician	 licensed	 to	 practice	 in	 Maine.	 	 He	 became	 employed	 by	 CMMC	 in	

June	 2005	 under	 a	 “Physician	 Employment	 Agreement”	 drafted	 by	 CMMC.		

The	 employment	 agreement	 provided	 that	 CMMC	 could	 terminate	 Lalonde’s	

employment	with	or	without	cause.		On	June	21,	2012,	CMMC	notified	Lalonde	

that	it	was	terminating	his	employment	without	cause.		

         [¶4]	 	 On	 August	 6,	 2012,	 CMMC,	 referencing	 24	M.R.S.	 §	 2506	 (2016),	

notified	 the	 Board	 that	 it	 had	 terminated	 Lalonde’s	 employment	 “because	 of	

concerns	 about	 his	 clinical	 competence	 and	 behavior”	 as	 an	 employee	 of	

CMMC.1		As	a	result	of	CMMC’s	report,	the	Board	initiated	an	investigation	of	

Lalonde.	

     1		The	Maine	Health	Security	Act,	at	24	M.R.S.	§	2506	(2016),	requires	that	a	health	care	provider	

report	to	the	appropriate	board	or	authority	when	it	terminates	an	employee	for	reasons	related	to	
the	employee’s	clinical	competence	or	unprofessional	conduct.			
                                                                                       3	

      [¶5]	 	 CMMC’s	 corporate	 bylaws	 provide	 that	 CMMC	 will	 indemnify	

present	 or	 former	 employees	 for	 attorney	 fees	 and	 costs	 associated	 with	

defending	a	court	or	administrative	action	arising	out	of	events	pertaining	to	

their	employment	with	CMMC:	

      This	corporation	shall	in	all	cases	indemnify	any	person	who	was	
      or	is	a	party	.	.	.	to	any	threatened,	pending	or	completed	action,	
      suit,	 or	 proceeding,	 whether	 civil,	 criminal,	 or	 administrative,	 by	
      reason	of	the	fact	that	that	person	was	a[n]	.	.	.	employee	or	agent	
      of	 the	 corporation,	 against	 expenses,	 including	 attorney	 fees	 .	 .	 .	
      actually	and	reasonably	incurred	by	the	person	in	connection	with	
      such	action,	suit	or	proceeding;	provided	that	no	indemnification	
      shall	 be	 made	 for	 any	 person	 with	 respect	 to	 any	 matter	 unless	
      the	 Board	 of	 Trustees	 .	 .	 .	 determines	 that	 that	 person	 acted	 in	
      good	faith	in	the	reasonable	belief	that	his	or	her	actions	were	in	
      the	best	interests	of	the	corporation	.	.	.	.	
	
      [¶6]		Independent	of	any	rights	conferred	by	the	bylaws	or	employment	

contracts	 of	 a	 nonprofit	 corporation,	 the	 Maine	 Nonprofit	 Corporation	 Act,	

13-B	M.R.S.	§§	101-1406	(2016),	at	section	714(2),	provides	that:		

      [an]	employee	or	agent	of	a	corporation	[who]	has	been	successful	
      on	 the	 merits	 or	 otherwise	 in	 defense	 of	 any	 action,	 suit	 or	
      proceeding	 [to	 which	 he	 was	 made	 a	 party	 by	 reason	 of	 his	
      employment],	.	.	.	shall	be	indemnified	against	expenses,	including	
      attorneys’	 fees,	 actually	 and	 reasonably	 incurred	 by	 him	 in	
      connection	therewith.		
      	
      [¶7]		In	November	2012	and	April	2014,	Lalonde	requested	that	CMMC	

indemnify	 him	 for	 all	 expenses,	 including	 attorney	 fees,	 incurred	 during	 the	

pendency	of	the	Board’s	proceeding.		CMMC	declined	the	requests.		On	July	11,	
4	

2014,	the	Board	notified	Lalonde	that	it	had	dismissed	the	complaint	against	

him.	 	 Lalonde	 again	 requested	 indemnification	 from	 CMMC.	 	 In	 April	 2015,	

CMMC’s	Board	of	Trustees	determined	that	it	would	not	indemnify	Lalonde.			

	         [¶8]		On	May	7,	2015,	Lalonde	filed	a	complaint	against	CMMC	seeking	a	

judgment—pursuant	to	either	the	Nonprofit	Corporation	Act	or	the	corporate	

bylaws	 of	 CMMC—awarding	 him	 attorney	 fees	 and	 costs	 incurred	 in	 his	

defense	 of	 the	 administrative	 proceeding	 initiated	 by	 the	 Board.	 	 CMMC	

moved	to	dismiss	Lalonde’s	complaint,	arguing	that,	pursuant	to	section	2511	

of	 the	 Maine	 Health	 Security	 Act,	 24	 M.R.S.	 §§	 2501-2988	 (2016),	 CMMC	 is	

absolutely	 immune	 from	 civil	 liability	 for	 making	 its	 report,	 pursuant	 to	

section	2506,	to	the	Board.2			

          [¶9]	 	 After	 a	 hearing,	 the	 court	 agreed	 with	 CMMC	 that,	 pursuant	 to	

section	 2511,	 CMMC	 is	 absolutely	 immune	 from	 civil	 liability	 for	 reporting	

Lalonde’s	 termination	 to	 the	 Board.	 	 However,	 the	 court	 determined	 that	

Lalonde	 was	 not	 claiming	 damages	 from	 CMMC	 for	 making	 a	 report	 to	 the	

Board.	 	 Instead,	 the	 court	 concluded,	 he	 was	 seeking	 the	 enforcement	 of	 a	

     2	
      	 CMMC	 alternatively	 argued	 that	 the	 court	 should	 dismiss	 the	 complaint	 on	 the	 basis	 that	
Lalonde	 will	 be	 unable	 to	 prove	 his	 allegations	 because	 he	 relies	 on	 information	 contained	 in	
confidential	and	privileged	records.		The	court	declined	to	reach	the	issue,	concluding	that	matters	
outside	 the	 complaint,	 including	 the	 admissibility	 of	 evidence,	 are	 not	 considered	 on	 a	 motion	 to	
dismiss	for	failure	to	state	a	claim.		Because	the	provability	of	Lalonde’s	claims	is	not	inextricably	
tied	 to	 the	 issue	 of	 immunity,	 we	 decline	 to	 consider	 the	 issue	 on	 this	 interlocutory	 appeal.	 	 See	
Clifford	v.	MaineGeneral	Med.	Ctr.,	2014	ME	60,	¶	75,	91	A.3d	567.	
                                                                                    5	

contractual	 or	 statutory	 right	 to	 indemnification,	 and	 the	 allegation	 that	

CMMC	 reported	 Lalonde’s	 termination	 to	 the	 Board,	 thus	 triggering	 the	

Board’s	 actions	 against	 Lalonde,	 was	 not	 an	 essential	 fact	 of	 his	

indemnification	 claim.	 	 Thus,	 the	 court	 denied	 CMMC’s	 motion	 to	 dismiss,	

concluding	that	Lalonde’s	claims	were	not	barred	by	CMMC’s	immunity	under	

section	2511	of	the	Maine	Health	Security	Act.		This	appeal	followed.	

                               II.		LEGAL	ANALYSIS	

A.	   Interlocutory	Appeal.	

      [¶10]		CMMC’s	interlocutory	appeal	is	not	barred	by	the	final	judgment	

rule	 because	 CMMC	 asserts	 a	 claim	 of	 immunity	 pursuant	 to	 section	 2511.		

Interlocutory	appeals	are	allowed	from	orders	denying	motions	to	dismiss	or	

motions	for	summary	judgment	when	the	asserted	basis	for	the	motion	is	the	

complete	 or	 qualified	 immunity	 of	 the	 defendant	 from	 suit.	 	 See	 Estate	 of	

Fortier	v.	City	of	Lewiston,	2010	ME	50,	¶	1,	997	A.2d	84;	Knowlton	v.	Attorney	

General,	2009	ME	79,	¶	10,	976	A.2d	973;	Wilcox	v.	City	of	Portland,	2009	ME	

53,	¶	11,	970	A.2d	295;	Hawkes	v.	Commercial	Union	Ins.	Co.,	2001	ME	8,	¶	6,	

764	A.2d	258.	
6	

B.	    Denial	of	Motion	to	Dismiss	

	      [¶11]		An	affirmative	defense	of	immunity	may	be	raised	by	a	motion	to	

dismiss	 for	 failure	 to	 state	 a	 claim.	 	 M.R.	 Civ.	 P.	 8(c);	 see	 Munjoy	 Sporting	

&	Athletic	Club	v.	Dow,	2000	ME	141,	¶	17,	755	A.2d	531.		When	we	review	a	

trial	 court’s	 denial	 of	 a	 motion	 to	 dismiss	 for	 failure	 to	 state	 a	 claim	 upon	

which	 relief	 can	 be	 granted,	 we	 view	 the	 facts	 alleged	 in	 the	 complaint	 as	 if	

they	 were	 admitted	 and	 in	 the	 light	 most	 favorable	 to	 the	 plaintiff.		

See	Andrews,	 2016	ME	 68,	 ¶	 8,	 138	A.3d	 1197;	 see	 also	 Moody	 v.	 State	 Liquor	

&	Lottery	Comm’n,	2004	ME	20,	¶	7,	843	A.2d	43	(stating	that	when	reviewing	

a	ruling	on	a	motion	to	dismiss,	the	complaint	is	examined	“in	the	light	most	

favorable	 to	 the	 plaintiff	 to	 determine	 whether	 it	 sets	 forth	 elements	 of	 a	

cause	 of	 action	 or	 alleges	 facts	 that	 would	 entitle	 the	 plaintiff	 to	 relief	

pursuant	to	some	legal	theory”).		

       [¶12]		Section	2511(1)	of	the	Health	Security	Act	grants	immunity	from	

civil	liability	to	a	“health	care	provider,”	such	as	CMMC,	“for	making	any	report	

or	 other	 information	 available	 to	 any	 board,”	 such	 as	 the	 Medical	 Board.		

See	also	 24	 M.R.S.	 §	2502(1),	 (2)	 (2016).	 Specifically,	 24	 M.R.S.	 §	2511(1)	

states:	
                                                                                     7	

      Any	 person	 acting	 without	 malice,	 any	 physician,	 podiatrist,	
      health	care	provider,	health	care	entity	.	.	.	and	any	entity	required	
      to	report	under	this	chapter	are	immune	from	civil	liability:	
         1.	 	Reporting.		 For	 making	 any	 report	 or	 other	 information	
      available	 to	 any	 board,	 appropriate	 authority,	 professional	
      competence	 committee	 or	 professional	 review	 committee	
      pursuant	to	law.	
	
      [¶13]		The	specific	terms	of	section	2511	give	CMMC	immunity	from	any	

suit	 claiming	 harm	 by	 defamation,	 slander,	 breach	 of	 contract,	 interference	

with	 an	 expectancy,	 or	 any	 other	 cause	 of	 action	 seeking	 damages	 or	 other	

remedies	 based	 on	 CMMC’s	 report	 to	 the	 Board.	 	 The	 focus	 of	 Lalonde’s	

complaint	is	not	CMMC’s	report	to	the	Board,	but	rather	Lalonde’s	defense	in	

an	 administrative	 action	 before	 a	 professional	 licensing	 board	 and	 CMMC’s	

bylaws	that	entitle	an	employee	to	reimbursement	for	defense	costs.		

      [¶14]	 	 To	 obtain	 relief	 under	 a	 contractual	 indemnification	 theory,	

Lalonde	 must	 prove	 that	 (1)	 he	 and	 CMMC	 had	 a	 legally	 binding	 contract,	

(2)	CMMC	 breached	 a	 material	 term	 of	 the	 contract,	 and	 (3)	 CMMC’s	 breach	

caused	 him	 to	 suffer	 damages.	 	 See	 Tobin	 v.	 Barter,	 2014	 ME	 51,	 ¶¶	 9-10,	

89	A.3d	1088.		Lalonde’s	complaint	satisfies	each	of	the	required	elements.		It	

asserts	that	(1)	CMMC’s	bylaws	created	a	legally	binding	contract	between	the	

hospital	 and	 Lalonde;	 (2)	 CMMC	 breached	 the	 contract’s	 indemnification	

clause;	and	(3)	CMMC’s	breach	caused	him	to	incur	financial	loss.		See	Whalen	
8	

v.	 Down	 East	 Cmty.	 Hosp.,	 2009	 ME	 99,	 ¶	 9,	 980	A.2d	 1252	 (stating	 that	

hospital	bylaws	may	create	a	valid,	enforceable	contract	between	the	hospital	

and	its	staff	physicians).			

      [¶15]		To	prevail	on	a	theory	of	statutory	indemnification	under	section	

714(2)	of	the	Nonprofit	Corporation	Act,	Lalonde	must	prove	that	(1)	he	was	

an	 employee	 of	 CMMC,	 (2)	 CMMC	 is	 a	 nonprofit	 hospital,	 (3)	 he	 successfully	

defended	 an	 action	 brought	 against	 him	 by	 reason	 of	 his	 employment	 with	

CMMC,	and	(4)	he	incurred	expenses	as	a	result	of	defending	the	action.		See	

13-B	 M.R.S.	 §	714(2).	 	 Based	 on	 the	 facts	 recounted	 above,	 Lalonde’s	

complaint	 satisfies	 each	 of	 the	 required	 elements	 of	 section	 714(2).	 	 The	

CMMC	 bylaws,	 however,	 are	 more	 favorable	 to	 Lalonde,	 because	 the	 bylaws	

do	 not	 condition	 payment	 on	 a	 successful	 defense	 and	 consequently	 allow	

payment	during,	rather	than	after,	the	proceeding.			

      [¶16]	 	 Because	 CMMC’s	 bylaws	 are	 more	 favorable	 to	 Lalonde	 on	 his	

contract	theory	of	recovery,	and	because	the	record	is	unclear	as	to	whether	

the	 Board’s	 dismissal	 of	 the	 complaint	 was	 a	 decision	 based	 on	 a	 successful	

defense	 of	 the	 claim	 or	 on	 some	 other	 grounds	 that	 might	 not	 generate	

liability	 for	 indemnification	 pursuant	 to	 section	 714(2),	 we	 limit	 further	

discussion	to	application	and	interpretation	of	the	CMMC	bylaws.			
                                                                                         9	

      [¶17]	 	 To	 generate	 liability	 for	 indemnification,	 the	 bylaws	 do	 not	

require	evidence	of	the	cause	of	an	action	or	investigation,	only	that	a	board	

action	 or	 investigation	 regarding	 an	 employee	 occurred.	 	 While	 the	 Board’s	

action	against	Lalonde	was	prompted	by	a	report	made	by	CMMC,	and	Lalonde	

alleged	that	fact,	perhaps	unnecessarily,	in	his	complaint,	Lalonde’s	complaint	

does	 not	 seek	 to	 hold	 CMMC	 civilly	 liable	 for	 its	 report.	 	 Therefore,	 section	

2511	 is	 inapplicable.	 	 The	 CMMC	 bylaws	 create	 an	 indemnification	

responsibility	regardless	of	the	cause	of	the	investigation	and,	in	effect,	create	

a	contractual	exception	to	section	2511	immunity	when	CMMC	may	initiate	or	

assist	an	action	before	the	Board	that	involves	one	of	its	employees.	

      [¶18]		That	the	CMMC	bylaws	create	a	contractual	exception	to	section	

2511	 immunity	 becomes	 more	 apparent	 when	 one	 recognizes	 that	 section	

2511(3)	 extends	 immunity	 to	 any	 activity	 “assisting	 the	 board,	 authority	 or	

committee	 in	 carrying	 out	 any	 of	 its	 duties	 or	 functions	 provided	 by	 law.”		

See	24	M.R.S.	§	2511(3).		To	the	extent	that	CMMC	would	likely	be	called	upon	

to	 provide	 information	 or	 assistance	 in	 most	 investigations	 or	 actions	

regarding	 its	 employees,	 the	 indemnification	 clause	 in	 the	 CMMC	 bylaws	

would	 be	 rendered	 meaningless	 if	 section	 2511	 were	 read,	 as	 CMMC	 argues	

that	section	2511	should	be	read,	to	bar	contractual	indemnification	any	time	
10	

CMMC	initiates,	participates	in,	or	assists	an	action	or	investigation	regarding	

one	of	its	employees.		

         [¶19]		Viewing	the	complaint	in	the	light	most	favorable	to	Lalonde,	the	

allegations	 in	 the	 complaint	 are,	 as	 a	 matter	 of	 law,	 sufficient	 to	 overcome	 a	

Rule	12(b)(6)	motion,	because	they	state	the	elements	of	a	cause	of	action	and	

facts	that	would	entitle	Lalonde	to	relief	pursuant	to	some	legal	theory.		Thus,	

CMMC	is	not	immune	from	Lalonde’s	action	for	indemnification	for	the	costs	

of	his	defense.	

         The	entry	is:	

                            Judgment	affirmed.	
	
	     	     	     	      	      	
	
Michael	 R.	 Poulin,	 Esq.	 (orally),	 Skelton,	 Taintor	 &	 Abbott,	 Auburn,	 for	
appellant	Central	Maine	Medical	Center	
	
Christopher	 C.	 Taintor,	 Esq.	 (orally),	 Norman,	 Hanson	 &	 DeTroy,	 LLC,	
Portland,	for	appellee	Daniel	R.	Lalonde	
	
	
Androscoggin	County	Superior	Court	docket	number	CV-2015-78	
FOR	CLERK	REFERENCE	ONLY