GERALD S. NESSMANN in his capacity as elected director of Hospital Administrative District No. 4, representing the interests of the Inhabitants of the Tovra of Sebec, THE INHABITANTS OF THE TOWN OF MDNSON, and THE INHABITANTS OF THE TOWN OF SEBEC, both bodies corporate and politic, Plaintiffs,
HOSPITAL ADMINISTRATIVE DISTRICT NO. 4, Defendant.
ORDER GRANTING DEFENDANT'S MOTION TO
William R. Anderson, Justice
Gerald Nessmann, an elected board member of Defendant
Hospital Administrative District No, 4 (HAD4) from the Town
of Sebee, brought suit against HAD4 regarding its actions,
inactions, and the potential outcomes pertaining to a
seemingly impending merger with Eastern Maine Health Services
(now referred to as Northern Light Health). The inhabitants
of the Town of Sebec and the inhabitants of the Town of
Monson joined the suit and asserted their own claims.
parties are well familiar, on October 23, 2018, the Superior
Court sua sponte granted an ex parte
temporary restraining order in favor of Mr. Nessmann that
prevented HAD4's board of directors from voting on the
proposed merger plan on October 24, 2018. It soon became
clear that the temporary restraining order had been
improvidently granted and needed to be dissolved. The Court
dissolved the temporary restraining order and directed the
parties to brief whether Mr. Nessmann's request for a
preliminary injunction should be addressed or whether
HAD4's Motion to Dismiss the Complaint tor a failure to
state a claim should be addressed. Because the Motion to
Dismiss had the potential to dispose of the entire Complaint
and obviate the need to address the preliminary injunction,
the Court directed the parties to complete briefing on the
Motion to Dismiss. Though the Court indicated it would
schedule oral argument on the Motion to Dismiss, its analysis
of the operative Complaint and the briefs led it to conclude
that oral argument would be unnecessary; the Motion can be
decided on the briefs. The Court is now in a position to
render a decision on HAD4's Motion to Dismiss, which it
grants as detailed more below.
complaint can be dismissed if it "fail[s] to state a
claim upon which relief can be granted . . . ." M.R.
Civ. P. 12(b)(6). A motion to dismiss pursuant to Rule
12(b)(6) tests "the legal sufficiency of the
complaint"; the Court views the factual allegations in
the complaint "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."
Carey v. Bd. of Overseers of the Bar, 2018 ME 119,
¶ 29, 192 A.3d 589.
motion to dismiss for failure to state a claim, the Court
generally cannot consider documents outside the pleadings
without treating the motion as one for summary judgment.
See M.R. Civ. P. 12(b); see also Moody v. State
Liquor & Lottery Comm'n, 2004 ME 20, ¶ 8,
843 A.2d 43. However, the Court can consider "official
public documents, documents that are central to the
plaintiffs claim, and documents referred to in the complaint
. . . when the authenticity of such documents is not
challenged." Id. ¶ 11. When the Court does
consider such documents, those documents merge into the
pleadings. Id. ¶ 10. Plaintiffs attached a
number of documents to the Complaint that meet the
Moody exception and thus merge into the
a quasi-municipal corporation that was established by the
Maine Legislature in 1973 by Special and Private
(Compl. ¶ 1.) Its chartering legislation has been
amended several times since then. (Compl. ¶ 1.) As a
quasi-municipal corporation, HAD4 is subject to the Freedom
of Access Act (FOAA), which is codified at 1 M.R.S.
§§ 400-414. (Compl. ¶ 10.) HAD4 owns and
operates Mayo Regional Hospital in Dover-Foxcroft. (Compl.
¶ 2.) HAD4 is governed by a board of directors
consisting of nineteen directors, with each Member Town
electing from one to three directors. (Compl. ¶ 4.)
Gerald Nessmann has been a director representing the Town of
Sebec since 2011. (Compl. ¶ 5.)
to this case, HAD4 began investigating potential affiliation
options with a number of nearby healthcare providers in 2014
and 2015. (Compl. ¶ 13.) This led to HAD4 entering into
a first preliminary affiliation agreement with Eastern Maine
Health Services (now Northern Light Health). (Compl. ¶
14.) The goal of this affiliation has been to merge with EMHS
and amend the legislative Charter, which Plaintiffs allege
would allow transfer of all HAD4 assets to EMHS without any
compensation. (Compl. ¶ 33.) These assets are a key
aspect of the claims in this case because EMHS was in a
financially challenging situation in late 2018. (Compl.
¶ 17.) HAD4, on the other hand, enjoys a very good
credit rating and has no issue with accessing funding within
the limits of its Charter and general bond underwriting
parameters. (Compl. ¶ 18.) Over the years, HAD4 has
accumulated reserve funds which, as of September 30, 2018,
totaled more than $16, 000, 000. (Compl. ¶ 19.)
Plaintiffs contend these funds are assets of the Member
Towns. (Compl. ¶ 19.) The total net equity (book assets
minus book liabilities) of HAD4 as of September 30, 2018, was
roughly $28, 000, 000, which included the reserve funds.
(Compl. ¶ 20.)
the course of negotiations with EMHS, Mr. Nessmann has
articulated his concern over the alleged handing over of the
reserve funds to EMHS without consideration as part of the
merger. (Compl. ¶ 21.) He continued to express concerns
over the process. (Compl. ¶¶ 22-32.) On August 20,
2018, Mr. Nessmann requested information from HAD4 CEO Marie
Vienneau regarding a board confidentiality policy, the merger
negotiations with EMHS, and the anticipated amendment to the
Charter. (Compl. ¶ 34.) Including subsequent follow-ups,
Mr. Nessmann has not received any of the information he
requested. (Compl. ¶ 53.) As of the filing of the
Complaint, none of the directors had received copies of the
proposed merger plan or the proposed Charter amendment,
though they subsequently received copies because Mr. Nessmann
attached a draft copy to his affidavit supporting the
Opposition to the Motion to Dismiss. (Compl. ¶¶ 45,
54.) Mr. Nessmann initiated this case on October 23, 2018, in
an attempt to gain access to documents regarding the proposed
merger and to put a halt to the proposed merger.
Court will address the claims in the operative Amended
Complaint, filed on November 1, 2018, in two groups: those
claims brought by Gerald Nessmann, in his capacity as an
elected director of HAD4 representing the interests of the
Inhabitants of the Town of Sebec, and those claims brought by
the inhabitants of Sebec and Monson.
Gerald Nessmann's claims.
of the Complaint seeks inspection of HAD4's corporate
books and records pursuant to 13-B M.R.S. § 715 of the
Nonprofit Corporation Act. (Compl. ¶¶ 56-59.) HAD4
challenged Mr. Nessmann's ability to bring such a claim
because the Act expressly excludes a "political
subdivision or body politic and corporate of the State"
from the definition of a "corporation." 13-B M.R.S.
§ 102(4)(C). The enabling legislative Charter designated
HAD4 as a "body politic and corporate" P. &
S.L. 1973, ch. 76, § 1 (emergency, effective May 11,
1973); cf Town of Burlington v. Hosp. Admin. Dist.
No. 1, 2001 ME 59, ¶ 15, 769 A.2d 857 (regarding a
comparable hospital administration district, concluding that
a designation as a "body politic and corporate" in
the enabling legislation rendered the hospital administration
district a "political subdivision" for purposes of
FOAA). It appears plainly that the Nonprofit Corporation Act
does not apply to HAD4, and Mr. Nessmann conceded as much.
(Pl.s' Opp. to Mot. Dismiss 3.) Notwithstanding this