# State of Maine v. Silber

> Superior Court of Maine · November 5, 2018

URL: https://www.frixlaw.com/law-library/cases/10811536

## Case

- **Court:** Superior Court of Maine
- **Decided:** November 5, 2018
- **Precedential status:** Unpublished
- **Opinion:** Opinion
- **Judges:** William R. Stokes
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

STATE OF MAINE SUPERIOR COURT
KENNEBEC, SS CIVIL ACTION
DOCKET NO. CV-2017-209

STATE OF MAINE,
DEPARTMENT OF HEALTH
AND HUMAN SERVICES,
Plaintiff DECISION AND JUDGMENT

V.

WILLIAM SILBER, M.D.,
Defendant

INTRODUCTION AND PROCEDURAL BACKGROUND
Before the court for decision are the respective motions for summary
judgment filed by the Department of Health and Human Services ("DHHS" or
"Department") and Dr. William Silber, M.D. in this dispute involving the collection
of a $10,000 fine assessed against Northern Maine Ambulatory Endoscopy Center
("NMAEC"), a dissolved corporation that was solely owned by Dr. Silber. The
parties agree that there are no genuine issues of material fact. They differ, however,
on the question of which party is entitled to judgment as a matter of law.
DHHS commenced this action against Dr. Silber by the filing of a one-count
complaint on November 28, 2017 alleging breach of contract as a result of Dr.
Silber's failure to pay $10,000 owed to the Department by NMAEC. Dr. Silber filed
a timely answer on December 8, 2017. On May 4, 2018, DHHS filed its Motion for
Summary Judgment supported by the affidavits of Sarah Taylor and Beth Ketch. Dr.
Silber objected to the Department's summary judgment request and moved for
summary judgment in his favor on July 27, 2018. His motion was supported by the
affidavit of Attorney Christopher Taintor, Esq. Both parties have filed reply
memoranda, with the last one being received by the court on August 30, 2018. The
parties have waived oral argument on the motions.
The undisputed material facts are taken from the summary judgment record
and are summarized below.
FACTS
On December 9, 2009, Dr. Silber signed a "MaineCare/Medicaid Provider
Agreement" on behalf of NMAEC as the named "Provider." Dr. Silber signed the
Provider Agreement as "CEO." On December 7, 2009, he also signed a
"Disclosure of Ownership and Control Interest Statement," listing himself as the
sole owner of NMAEC. Beth Ketch, an official of DHHS, signed the Provider
Agreement on February 5, 2010 on behalf of the Department.
Section D (3) of the Provider Agreement is entitled: "Liability of Provider
for Debts Owed to the Department." In accordance with Section 0(3)(b) "[t]he
Department may collect any debts, including overpayments, through offset or
recoupment against amounts owed by the Department to the Provider, or any
other method of collecting debts, consistent with relevant statutory and
regulatory provisions, including 22 M.R.S.A. §1714-A."
Of particular significance in this case is the language of Section 0(3) (c)
which states:
The liability for debts owed to the Department by the Provider is
enforceable against the Provider, including any person who has an
ownership or control interest in the Provider, and against any
officer, director or member of the Provider who, in that capacity, is
responsible for any control or any management of the funds or
finances of the Provider.

2
NMAEC was a "healthcare facility" within the meaning of the Rules
Governing the Reporting of Sentinel Events" as promulgated by the Division of
Licensing and Regulatory Services of DHHS. A 'sentinel event" includes "[a]n
unanticipated death ... unrelated to the natural course of the patient's illness
or underlying condition ...." A healthcare facility, such as NMAEC, is required
to notify the "Sentinel Event Team" (SET) within DHHS of a sentinel event "by
the next business day after the event occurred or by the next business day after
the facility discovers that the event occurred ...." A healthcare facility that fails
to report a sentinel event as required by the rules is subject to a financial
penalty of not more than $10,000, payable to the State of Maine.
In a letter dated September 11, 2013, Dr. Silber was notified by the
Director of the Division of Licensing and Regulatory Services that a financial
penalty of $10,000 was being assessed against NMAEC because it failed to
report a sentinel event involving the death of a patient. Dr. Silber sought an
administrative hearing to contest the imposition of the fine. That hearing was
rescheduled several times at Dr. Silber's request. Ultimately, it was scheduled
for September 15, 2014. A few days before the hearing, Attorney Taintor
entered his appearance for Dr. Silber. His request to postpone the hearing was
denied.
The hearing was held as scheduled. In a "Recommended Decision" dated
November 6, 2014, the hearing officer recommended that the Commissioner of
DHHS find that NMAEC had failed to timely report a sentinel event that
occurred on July 10, 2013. With respect to the financial penalty, the hearing
officer did not make any recommendation because "[t]here was no evidence
presented as to what factors were considered in determining the amount."

3
In a "Final Decision" dated December 23, 2013, the Commissioner
accepted the recommendation that NMAEC failed to report a sentinel event, but
did not accept the recommendation regarding the $10,000 fine. Rather, the
Commissioner found that the $10,000 civil penalty was appropriate and was
not '"grossly disproportional' to the provider's undisputed complete failure to
report an undisputable sentinel event."
After receiving the "Final Decision," Attorney Taintor contacted Dr. Silber
and discussed with him, via email, the next course of action. With respect to
filing a Rule SOC appeal, Attorney Taintor suggested that the only reason not to
file such an appeal was if NMAEC was insolvent and "we are convinced that the
Department would never try to collect the fine from Dr. Silber personally."
Attorney Taintor expressed uncertainly as to whether DHHS could seek to
collect the fine from Dr. Silber, but he indicated that he would call DHHS and try
to find out.
There is no dispute that on January 16, 2015, Attorney Taintor called
DHHS and was referred to and spoke with Sarah Taylor, the Assistant Director,
Medical Facilities within the Division of Licensing and Regulatory Services. In
,r 7 of the Defendant's Statement of Additional Facts (DSAF), Dr. Silber asserts
that Attorney Taintor "contacted the Maine Department of Health and Human
Services to ask whether the Department regarded the fine that had been levied
against NMAEC as being enforceable solely against the corporation, or whether
the Department might seek to enforce the fine against Dr. Silber personally."
Attorney Taintor's sworn affidavit was cited as the record reference. DHHS has
given a "qualified" response to that additional fact as follows: "Attorney Taintor
asked Ms. Taylor if the Sentinel Event statute or rules require the penalty to be
paid by the facility or the individual." DHHS cited to Taintor's Affidavit ,r 17 and

4
Exhibit 7 attached thereto, which is a two-line email Sarah Taylor wrote to
other officials within DHHS on January 16, 2015 confirming that she spoke with
Attorney Taintor and that "[h]e asked if the SE statute/rules require the CMP to
be paid by the facility (which is now defunct) or the individual."
Similarly, in ,r 8 of the Defendant's Statement of Additional Facts, Dr.
Silber has asserted that Attorney Taintor "explained to Sarah Taylor, ... that he
was deciding whether to seek judicial review of the Final Decision of the
Commissioner." Attorney Taintor's affidavit is again cited. In response, DHHS
denied this statement as follows: "Sarah Taylor does not mention discussing
judicial review of the Commissioner's decision in her emails memorializing her
discussions with Attorney Taintor." In support of this denial DHHS cited to the
Taintor affidavit, ,r,r 17-18 and Exhibits 7 & 8 attached thereto. Exhibit 8 is an
email from Sarah Taylor to other DHHS officials and reads as follows:
Chris Taintor had called last week regarding the SE financial
penalty and if it would be levied against the corporation or the
physician. I have been in touch with Renee about this. She
determined that NMAE [sic] is/was a corporation and that the rules
indicate that the financial penalty is against the facility- in this case
the corporation. I spoke to Chris and let him know this. I asked
him if the corporation had gone through bankruptcy - he is not
sure. I asked him to find out and if it filed bankruptcy, to get us
bankruptcy paperwork. Chris said that the corporation is insolvent
- has no assets, etc.

Dr. Silber maintains that the Department has not "properly controverted"
the additional statements in ,r,r 7 & 8 as required by M.R.Civ.P. 56(h)(2) & (3)
because it has not refuted the factual statements but has merely referred to the
contents of Ms. Taylor's emails.

5
Furthermore, DHHS denied ,r,r 10, 12 and 13 of the statement of
additional facts submitted by Dr. Silber. Those statements of additional facts
read as follows:
10. The attorney for NMAEC and Dr. Silber explained to Ms.
Taylor that if DHHS would not seek to enforce the fine against
Dr. Silber personally, he would not prosecute an appeal of the
Final Decision. Taintor Affidavit ,r 14.

12. In reliance on Sarah Taylor's representation that the fine that
had been imposed against NMAEC was enforceable only
against NMAEC, and not against Dr. Silber personally, the
attorney for NMAEC and Dr. Silber chose not to prosecute a
Rule SOC Petition for Review. Taintor Affidavit ,r,r19-22.

13. The reliance by Dr. Silber's and NMAEC's counsel on Sarah
Taylor's representations - that DHHS had the authority to
enforce the fine only against the corporation, and not against
Dr. Silber personally - was reasonable. Taintor Affidavit
,r,r12, 13, 23.

The denials by DHHS to these statements were made without any record
citation. Although Sarah Taylor submitted an affidavit as part of the
Department's initial motion for summary judgment, nothing in that affidavit
addresses the additional statements of fact submitted by Dr. Silber in support
of his motion for summary judgment, particularly her telephone contacts with
Attorney Taintor in January, 2015.
The court agrees with Dr. Silber that the Department has not properly
controverted his statements of additional facts as made in ,r,r 7,8,10, 12 and 13
as required by M.R.Civ.P. 56(h). A party replying to an opposition to a motion
for summary judgment shall respond to any additional facts by admitting,
denying or qualifying such additional facts "and unless a fact is admitted, shall

6
support each denial or qualification by a record citation as required by
paragraph (4) of this rule." Paragraph (4) provides that facts in an opposing
statement of material facts, if supported by record citations as required by this
rule, shall be deemed admitted unless properly controverted." Rule 56(e)
provides that when a motion for summary judgment is made, "an adverse
party may not rest upon the mere allegations or denials in that party's
pleading, but must respond by affidavits or as otherwise provided in this rule,
setting forth specific facts showing that there is a genuine issue for trial."
With respect to ,r,r 7 and 8 of the additional statement of facts, the
Department responded with a qualification and a denial respectively, and in
each instance cited to Ms. Taylor's emails. The problem with those responses,
however, is that they do not controvert the statements of fact asserted in the
affidavit of Attorney Taintor. Ms. Taylor's emails are part of the summary
judgment record, but they are only her summary and memorialization of what
she and Attorney Taintor spoke about. They do not controvert or refute the
statement of facts contained in ,r,r 7 & 8. Accordingly, those facts must be
deemed to be admitted.
Even assuming that ,r,r 7 & 8 have been "properly controverted," the
statement of additional facts in ,r,r 10, 12 and 13 clearly were not. The denials
include no record citation and there is no affidavit evidence controverting
those statements of fact. Thus, those statement of facts must be taken as
admitted.
From the summary judgment record, it appears that Attorney Taintor
drafted a Rule SOC petition for review of the Final Decision of the
Commissioner but never filed it on behalf of NMAEC and Dr. Silber. They are,

7
of course, jurisdictionally barred from doing so now. Mutty v. Department of
Corrections, 2017 ME 7, ,r 8, 153 A.3d 775.
DHHS sent letters to Dr. Silber on January 22, 2015 and May 31, 2016
seeking collection of the $10,000 financial penalty assessed against NMAEC.
The financial penalty remains unpaid.
SUMMARY JUDGMENT STANDARD OF REVIEW
"The function of a summary judgment is to permit a court, prior to trial, to
determine whether there exists a triable issue of fact or whether the question[s]
before the court [are] solely ... of law." Bouchard v. American Orthodontics, 661
A.2d 1143, 1144 (Me. 1995). "A trial court properly grants summary judgment for
the movant if there is no genuine issue of material fact and the moving party is
entitled to judgment as a matter of law." Beaulieu v. Aube Corp., 2002 ME 79, ~ 14,
796 A.2d 683 (citing Stanton v. University ofMaine Sys., 2001 ME 96, ~ 6,773 A.2d
1045). A "material fact" is one that can affect the outcome of the case, and a genuine
issue exists when there is sufficient evidence for a fact-finder to choose between
competing versions of the facts. Lougee Conservancy v. City-Mortgage, Inc., 2012
ME 103, ~ 11, 48 A.2d 774.
DISCUSSION
The Department contends that it is entitled to judgment as a matter of
law on the basis of Section D (3)(c) of the Provider Agreement that authorizes
it to enforce the collection of a debt owed to it against the owner of the provider,
in this case Dr. Silber as the sole owner of NMAEC.
Dr. Silber counters that he is entitled to judgment as a matter of law
because: (1) DHHS cannot enforce collection of the fine against him personally
since he was not a party to the Provider Agreement; (2) the fine or financial
penalty assessed against NMAEC is not a "debt" within the meaning of the

8
Provider Agreement, and; (3) the Department's attempt to collect the fine from
Dr. Silber personally should be barred on the basis of equitable estoppel.
A. The Breach of Contract Claim Under Section D (3)(c) of the
Provider Agreement
Dr. Silber argues that he cannot be personally liable for the debt of
NMAEC because he was never personally a party to the Provider Agreement
and that to hold him personally liable under Section D (3)(c) required his
separate explicit consent to be bound individually. The court disagrees.
The cases relied upon by Dr. Silber in support of his contention are not
on point with the facts of this case. Dr. Silber signed the Provider Agreement as
CEO of NMAEC, the provider. Dr. Silber also signed and submitted the
Disclosure of Ownership and Control Interest Statement. He knew that by
seeking to become a provider and participate in the MaineCare/Medicaid
program he was potentially personally liable for a debt of NMAEC to the
Department. He gave his consent to be bound by Section D (3) ( c) by signing the
Provider Agreement and certifying that he was the sole owner of NMAEC.
Mueller v. Penobscot Valley Hosp., 538 A.2d 294, 299 (Me. 1988) did not
involve language similar to Section D (3) (c) nor did the defendant in that case
sign an agreement containing such language. Similarly, in McCarthy v. Azure, 22
F.3d 351,356, 358-59 (1st Cir. 1994) the court could find "no overt indication"
that it was intended that the defendant be individually subject to arbitration
when he signed an arbitration agreement in his corporate capacity only. Here,
there is clear and overt evidence in Section D (3) (c) that the owner of NMAEC ­
Dr. Silber - and the Department knew and intended that as the sole owner of
the provider, Dr. Silber could be personally responsible for his company's debt
to the Department. See also Stroll v. Epstein, 818 F.Supp. 640, 643-44 (S.D.N.Y.
1993) (intention of parties was that defendant was acting in representative

9
capacity only); Fleming & Assoc., L.L.P. v. Barton, 425 S.W.3d 560, 576 (Tex. App.
2014) (agent may consent to liability in addition to principal and that consent
may be express or can arise fro m the circumsta nces). In short, the court finds
that Dr. Silber and DHHS intended that he be bound in his individual capacity
in accordance with Section 0(3) (c) when he signed the Provider Agreement.
Further, Dr. Silber contends that Section D (3) (c) is a guaranty contract
and a separate agreement binding him personally should have been executed.
See Top Line Distributors, Inc. v. Spickler, 525 A.2d 1039 (Me. 1987); Bunker v.
Ireland, 17 A. 706 (Me. 1889). Neither of the cases cited involved the specific
language of Section D (3)(c) of the Provider Agreement whereby Dr. Silber, by
signing the agreement, also agreed that the Department could enforce
collection of debts owed to it by NMAEC against him personally as the owner of
the provider.
B. Is a Civil Penalty/Fine a Debt?
Dr. Silber argues that the $10,000 financial penalty imposed by the
Commissioner for the sentinel event violation is not a "debt" within the
meaning of Section D (3)(c) of the Provider Agreement. Rather, he contends
that the word "debt" means only a "MaineCare-related debt." Defendant's
Memorandum at 11. The court disagrees.
Dr. Silber goes to great lengths to create an ambiguity around the word
"debt" when, in the court's view, none exists at least in the context of the
$10,000 financial penalty. Section D (3)(b) of the Provider Agreement states:
"The Department may collect any debts, including overpayments, through
offset or recoupment against amounts owed by the Department to the Provider,
or any other method of collecting debts, consistent with the relevant statutory
and regulatory provisions, including 22 M.R.S.A. §1714-A." (emphasis added).

10
Title 22 M.R.S. §1714-A (l)(B) provides that "Debf' is defined to include "any
amount of money that is owed to the Department as a result of: (3) The
assessment of fines and sanctions." The term "provider" is defined in section
1714-A(l)(H) to mean "a person [including a corporation] reimbursed by the
department for the provision of healthcare services."
The phrase "any debts" and the specific reference to section 1714-A
makes it clear that debts as used in Section D (3) (b) & (c) of the Provider
Agreement includes fines and sanctions imposed against a provider and owed
to the Department. To construe the term "debt" as suggested by Dr. Silber
would require the court to re-write the Provider Agreement in a manner clearly
at odds with its plain meaning.
C. Should the Department be Equitably Estopped?
Dr. Silber contends that the Department should be equitably estopped
from asserting a claim against him in his individual capacity for collection of the
$10,000 civil penalty as a result of the sentinel event violation.
In john F. Murphy Homes, Inc. v. State, 2017 ME 67, ,r 22, 158 A,3d 921,
the Law Court addressed the issue of granting summary judgment in the
context of a claim of equitable estoppel.
Summary judgment, although characterized as entitlement
to judgment as a matter of law, may be granted in actions involving
claims for equitable relief, such as Murphy Homes's equitable
estoppel claim, when '(1) there is no genuine issue of material fact
affecting either the equitable claims or the equities to be
considered in deciding to take action, and (2) the opponent of the
motion has been afforded sufficient opportunity to present
affidavits or other sworn evidence and legal argument.'

Quoting Hutz v. Alden, 2011 ME 27, ,r 11, 12 A.3d 1174.

11
There is no question that the Department has been given sufficient
opportunity to present affidavits or other sworn evidence in opposition to Dr.
Silber's motion for summary judgment on the basis of equitable estoppel. Dr.
Silber must present "clear and satisfactory" evidence demonstrating the
following: "(1) the governmental official or agency made misrepresentations,
whether misleading statements, conduct, or silence, that induced the party to
act; (2) the party relied on the government's misrepresentations to his or her
detriment; and (3) the party's reliance was reasonable." State v. Brown, 2014
ME. 79, ,r14, 95 A.3d 82 citing Dep't. ofHealth & Human Servs. V. Pelletier, 2009
ME 11, ,r 17, 964 A.2d 630. Equitable estoppel against the government "should
be sparingly used; "should be viewed with caution;" and is not to be applied
against the government to the same extent as it might be applied to a private
party. See, e.g, Mathieu v. Comm'r of Human Servs., 562 A.2d 686, 689 (Me.
1989); Pelletier, 2009 ME. 79, ,r 19; Hart v. County ofSagadahoc, 609 A.2d 282,
284 (Me. 1992). See also T. Comm'r ofHealth & Human Servs., 2012 ME 13, ,r 10,
36 A.3d 888.
The Law Court has advised that when analyzing a claim of equitable
estoppel against a governmental entity, the court should consider "the totality
of the circumstances, including the nature of the particular governmental
entity, the particular governmental function being discharged, and any
considerations of public policy arising from the application of estoppel to the
governmental function." Town of Union v. Strong, 681 A.2d 14, 19 (Me. 1996).
See also State v. Brown, 2014 ME 79, ,r14. "Whether the facts of a case give rise
to an estoppel is a question oflaw for the court." Id; Brown, 2014 ME 79, ,r 16.
Based on the summary judgment record, the court finds that it is
undisputed that Attorney Taintor contacted Dr. Silber after receiving the Final

12
Decision of the Commissioner. His email to Dr. Silber makes it clear that the
issue he needed to resolve, before deciding whether to recommend the filing of
a Rule SOC petition for judicial review, was whether the Department would seek
to enforce the $10,000 civil penalty against Dr. Silber personally. That was the
specific reason Attorney Taintor called DHHS on January 16, 2015 and spoke to
Ms. Taylor. Ms. Taylor's email confirms that Attorney Taintor was inquiring as
to whether the penalty "was to be paid by the facility (which is now defunct) or
by the individual."
The uncontroverted material fact is that Attorney Taintor explained to
Ms. Taylor that he was making this inquiry because "he was deciding whether
to seek judicial review of the Final Decision of the Commissioner." DSAF, 1{1{ 7
& 8. Moreover, it is uncontroverted that Attorney Taintor "explained to Ms.
Taylor that if DHHS would not to seek to enforce the fine against Dr. Silber
personally, he would not prosecute an appeal of the Final Decision." DSAF, 1f 11.
It is uncontroverted that after consulting with other officials within DHHS, Ms.
Taylor informed Attorney Taintor on January 21, 2015 "that the fine ran only
against NMAEC, and not against Dr. Silber personally." DSAF, 1f 11. It is
uncontroverted that Attorney Taintor and Dr. Silber relied on Ms. Taylor's
representation "that the fine . . . was enforceable only against NMAEC" in
making the decision not to file a timely Rule SOC petition for judicial review of
the Final Decision. DSAF, 1f 12. Finally, it is uncontroverted that Attorney
Taintor's reliance on Ms. Taylor's representation "that DHHS had the authority
to enforce the fine only against the corporation, and not against Dr. Silber
personally was reasonable." DSAF, 1f 13.
Considering the totality of the circumstances in this case, the court
concludes that the summary judgment record supports a finding of equitable

13
estoppel against DHHS in its claim against Dr. Silber in his individual capacity.
This case is the uncommon one where the party asserting a claim of equitable
estoppel has presented clear and satisfactory evidence that the elements of
estoppel have been met.
1
Here, Ms. Taylor s explanation that the civil penalty was enforceable only
against NMAEC, and not against Dr. Silber personally, was incorrect because it
did not consider Section D (3)(c) of the Provider Agreement. Attorney Taintor
relied on that misleading assurance, to his client's detriment, in deciding not to
file a timely Rule SOC petition for judicial review of the Final Decision. Finally,
in this case it is uncontroverted that Attorney Taintor's reliance was
reasonable. The remedy is that the Department is estopped from asserting a
claim against Dr. Silber in his individual capacity for collection of the $10,000
civil penalty imposed on NMAEC as a result of the sentinel event violation. See
Chrysler Credit Corp. v. Bert Cote s L/A Auto Sales, 1998 ME 53, ,r 27, 707 A.2d
1

1311.
CONCLUSION
The entry is:
Plaintiff's (DHHS) Motion for Summary Judgment is DENIED.
Defendant's (Silber) Motion for Summary Judgment is GRANTED.
The Clerk is directed to incorporate this Order into the docket of this case
by reference in accordance with M.R.Civ.P. 79(a).

Dated: November 5, 2018

Justice, Maine Superior Court

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10811536. Public record. Not legal advice.