Lalonde v. Cent. Me. Med. Ctr.

Citation155 A.3d 426
Decision Date31 January 2017
Docket NumberDocket: And–16–68
Parties Daniel R. LALONDE v. CENTRAL MAINE MEDICAL CENTER
CourtSupreme Judicial Court of Maine (US)

Michael R. Poulin, Esq. (orally), Skelton, Taintor & Abbott, Auburn, for appellant Central Maine Medical CenterChristopher C. Taintor, Esq. (orally), Norman, Hanson & DeTroy, LLC, Portland, for appellee Daniel R. Lalonde

Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.

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.

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.

[¶ 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, 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 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.

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:

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 v. Down East Cmty. Hosp. , 2009 ME 99, ¶ 9, 980 A.2d 1252 (stating that hospital bylaws may create a valid, enforceable contract...

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