Three dentists file complaint against Delta Dental of Missouri
November 26, 2014
— Three Missouri dentists, including an ADA Board member, filed a complaint against Delta Dental of Missouri, alleging the nonprofit has been operating under an improperly adopted set of bylaws and is refusing to conduct an annual meeting this year as required by state law.
Dr. Mark Zust, ADA 6th District trustee, along with Drs. Matt Niewald and Douglas Wyckoff — all of whom are enrolled providers of Delta Dental of Missouri — filed a "Verified Petition for Declaratory and Injunctive Relief" complaint on Nov. 18 in the St. Louis County Circuit Court.
In the complaint, which is used to initiate a lawsuit, the plaintiffs also accuse the defendant of implementing "structural changes in its business practices that are harmful to its dentist-members" such as engaging in a "profit maximizing approach" that cut members' reimbursement rates and compensation.
"We, and others, believe that the original mission of Delta Dental has been lost in favor of profits," said Dr. Zust.
Citing the ongoing litigation, Delta Dental of Missouri President David Haynes declined to comment on specific issues raised by the plaintiff. However, he said the plaintiffs have no case.
"We believe this case has no merit and we will defend our position vigorously," Mr. Haynes said.
According to the complaint, the plaintiffs say Delta Dental of Missouri "improperly" adopted a new set of bylaws in 2010 because the members did not approve those bylaws. In their complaint, the plaintiffs maintain that Delta has failed to follow to a 1995 Missouri law that requires member approval to amend the bylaws of a nonprofit organization with membership.
"If … the 2010 bylaws were not properly enacted, and if Delta Dental has not had a properly constituted board since defendant began following the 2010 bylaws, then all actions and decisions taken by the board of Delta Dental since 2010 could not be valid or legitimate," according to the complaint. The 2010 bylaws changed the number of board members from 19 to 13.
Other issues raised by the plaintiffs in the complaint include:
- Delta Dental "seeks to improperly pack its board with appointees who would serve terms longer than is authorized" by both 1991 and 2010 bylaws.
- Delta Dental "substantially increased compensation to its management" at a time when reimbursement rates to members was cut.
- Delta Dental opened offshore bank accounts "for unknown purposes in Turks and Caicos."
In addition, both 1991 and 2010 bylaws require Delta Dental to host an annual meeting to elect members to fill vacancies on the board. The 1991 bylaws require the annual meeting and election of board members to be held between April 1 and June 30.
"In an unprecedented move, Delta Dental announced that it would not hold an annual meeting in 2014, and that the election of directors (members of the board) would be by mail ballot," Dr. Zust said. "I believe that Delta Dental made this decision in an attempt to maintain control of the board by its existing board members."
According to the complaint, this year's "annual meeting and the mail-in voting for director election are being delayed until April 2015."
Dr. Zust said the he and the other plaintiffs hope to "force Delta Dental to have an annual meeting in 2014 and hold the election of directors."
Since the complaint was filed, a judge is seeking compromise and for both parties to bring back to the court an agreement at a future hearing, Dr. Zust said.