Jackson v. HCA Mgmt. Servs., LP, 2026 NCBC 69.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
BUNCOMBE COUNTY 23CVS005013-100
JEFF JACKSON, Attorney General,
ex rel. DOGWOOD HEALTH TRUST,
Plaintiff,
ORDER AND OPINION ON CROSSv. MOTIONS FOR SUMMARY
JUDGMENT AND MOTION TO
MH MASTER HOLDINGS LLLP, EXCLUDE
Defendant.
1. THIS MATTER arises from the alleged breach of an Amended and
Restated Asset Purchase Agreement (APA) by Defendant MH Master Holdings LLLP
(HCA). 1 When HCA acquired Mission Hospital in 2019, it promised that it would
“not discontinue the provision of” certain services for ten years. The Attorney General
alleges that HCA breached the APA by discontinuing the provision of some of these
services in 2023.
2. Before the Court are (1) the Attorney General’s Motion for Partial
Summary Judgment (the Attorney General’s Motion), (ECF No. 141 [Pl.’s Mot.]);
(2) HCA’s Motion for Summary Judgment (HCA’s Motion; and with the Attorney
General’s Motion, the Cross-Motions for Summary Judgment), (ECF No. 142 [Def.’s
Mot.]); and (3) HCA’s Motion to Exclude Plaintiff’s Expert, Dr. Kia Parsi (the Motion
1 HCA Healthcare, Inc. is the ultimate corporate parent of MH Master Holdings LLLP. (Am. Compl. ¶ 7, ECF No. 50; Def.’s Answer & Countercls. Pls.’ Am. Compl., Answer ¶ 7, ECF No. 55.) The APA permits MH Master Holdings LLLP to “incorporate ‘HCA’ into any . . . naming, branding and marketing[.]” (Am. Compl. Ex. 1 § 7.10, ECF No. 50.1.) The Court refers to Defendant as HCA in this opinion.
to Exclude; and with the Cross-Motions for Summary Judgment, the Motions), (ECF
No. 147 [Mot. Excl.]).
3. After considering the Motions, briefs, exhibits filed with respect to the
Motions, oral arguments of counsel at a hearing on the Motions, and other relevant
matters of record, the Court GRANTS in part and DENIES in part the Attorney
General’s Motion, GRANTS in part and DENIES in part HCA’s Motion, and
DENIES HCA’s Motion to Exclude.
North Carolina Department of Justice, by Brian Rabinovitz, Llogan R.
Walters, Daniel P. Mosteller, Danielle Wilburn Allen, Daniel T. Wilkes,
Allyson S. Barkley, and Marc D. Brunton, for Plaintiff Attorney General
Jeff Jackson ex. rel. Dogwood Health Trust.
Latham & Watkins, LLP, by Nathan A. Sandals and Chase A. Chesser;
Kirton McConkie, by Allen Gardner; and Roberts & Stevens, PA, by
Phillip T. Jackson, John Noor, and David Hawisher, for Defendant MH
Master Holdings, LLLP.
Earp, J.
I. FACTUAL AND PROCEDURAL BACKGROUND
4. The Court does not make findings of fact when ruling on motions for
summary judgment but instead “summarizes the relevant evidence of record, noting
both the facts that are disputed and those that are uncontested, to provide context
for the claims and the [m]otions.” Aym Techs., LLC v. Rodgers, 2019 NCBC LEXIS
64, at *2 (N.C. Super. Ct. Oct. 16, 2019) (citing Hyde Ins. Agency, Inc. v. Dixie Leasing
Corp., 26 N.C. App. 138, 142 (1975)).
A. The APA and Asset Sale
5. On 30 August 2018, HCA, Mission Health System, Inc. (Mission Health),
Dogwood Health Trust (Dogwood), 2 and other signatories executed an agreement
providing for HCA’s acquisition of Mission Health’s assets. The acquisition included
Mission Hospital, a healthcare facility located in Asheville, North Carolina. (Pl.’s
Resp. Opp’n Def.’s Mot. Partial Summ. J. Ex. 2 [Initial Agmt.], ECF No. 93.3.)
6. Section 7.13(a) of the Initial Agreement specified that HCA would “not
discontinue the provision of the services set forth on Schedule 7.13(a)” absent an
applicable exception. The services included (i) “[e]mergency and [t]rauma
services generally consistent with the current Level II Trauma Program with
emergency services for pediatrics and adults, ground/air medical transport services
and forensic nursing services”; and (ii) “[o]ncology [s]ervices – inpatient and
outpatient cancer services, radiation therapy, surgery, chemotherapy, and infusion
services.” (Initial Agmt.; Def.’s Br. Supp. Mot. Summ. J. Ex. 11 [Initial Agmt.
Schedule], ECF No. 145.12.) By letter dated 1 September 2018 and pursuant to
N.C.G.S. § 55A-12-02(g), 3 Mission Health notified the Attorney General’s Office of the
2 Dogwood is a North Carolina non-profit corporation that has the right to enforce HCA’s
obligations under Section 7.13 of the APA. (See Am. Compl. Ex. 1 §§ 1.1, 13.13(b), ECF No. 50.1; Pl.’s Br. Supp. Mot. Ex. 16, ECF No. 144.16.)
3 N.C.G.S. § 55A-12-02(g) provides the following:
A charitable . . . corporation shall give written notice to the Attorney General
30 days before it sells, leases, exchanges, or otherwise disposes of all, or a
majority of, its property if the transaction is not in the usual and regular course
of its activities . . . . The Attorney General may require an additional 30-day
period to review the proposed transaction by providing written notice to the Initial Agreement (the Notice). (Pl.’s Resp. Opp’n Def.’s Mot. Partial Summ. J. Ex. 4,
ECF No. 93.5.)
7. The Attorney General reviewed the Initial Agreement, conducted an
investigation, and ultimately required several changes, but no changes were made to
Section 7.13(a) and Schedule 7.13(a). (Def.’s Br. Supp. Mot. Summ. J. Ex. 17, ECF
No. 145.18; Am. Compl. Ex. 1 [APA], ECF No. 50.1; Initial Agmt.; Initial Agmt.
Schedule.) Based on the resulting Amended and Restated Asset Purchase Agreement
(APA), the Attorney General issued a letter of nonobjection on 16 January 2019,
approving the transaction. (Def.’s Br. Supp. Mot. Summ. J. Ex. 18, ECF No. 145.20.)
8. The APA was executed on or about 31 January 2019. (See Am. Compl.
¶ 29, ECF No. 50; Def.’s Answer & Countercls. Pl.’s Am. Compl. [Answer &
Countercls.], Answer ¶ 29, , ECF No. 55; Def.’s Mot. Partial Summ. J. Ex. 20, ECF
No. 71.20.) Thereafter, Mission Health changed its name to ANC Healthcare, Inc.
(ANC) and began winding down. (Dep. ANC Healthcare, Inc. [ANC Dep.] 44:13–45:5,
46:7–47:20, ECF No. 165.)
B. The Key Terms
9. In section 7.13(a) of the APA, HCA agreed that:
[u]nless otherwise consented to in writing by the Advisory Board for a
period of ten (10) years immediately following the Closing Date, [HCA]
shall not discontinue the provision of the services set forth on
Schedule 7.13(a) . . . at the Mission Hospital Campus
Facility . . . subject to Force Majeure making the provision of such
services impossible or commercially unreasonable[.] . . . From and after
charitable or religious corporation prior to the expiration of the initial notice
period. During this 30-day period, the transaction may not be finalized.
N.C.G.S. § 55A-12-02(g).
such ten (10)-year period, unless otherwise consented to in writing by
the Advisory Board, [HCA] shall continue the provision of each Mission
Hospital / CarePartners Service at the Mission Hospital Campus
Facility . . . subject to Force Majeure making the provision of such
services impossible or commercially unreasonable . . . until such time as
a Contingency is finally determined to have occurred in accordance with
Section 7.13(d)[.]
(APA § 7.13(a) (emphasis added).)
10. As stated above, Schedule 7.13(a) of the APA includes:
• Emergency and Trauma services generally consistent with the
current Level II Trauma Program 4 with emergency services for
pediatrics and adults, ground/air medical transport services and
forensic nursing services[; and]
• Oncology Services – inpatient and outpatient cancer services,
radiation therapy, surgery, chemotherapy, and infusion services.
(APA Schedule 7.13(a).) The APA does not define the phrase “shall not discontinue”
or the term “provision.”
11. In addition to Section 7.13(a) and its schedule, the parties refer to
Section 7.13(c) of the APA in their arguments. That section provides:
Unless otherwise consented to in writing . . . for a period of ten (10)
years immediately following the Closing Date, [HCA] shall not sell or
close any of the Material Facilities 5 unless Force Majeure makes the
continued operation by [HCA] of the Material Facilities impossible or
commercially unreasonable[.] . . . From and after such ten (10)-year
period, unless otherwise consented to in writing . . . [HCA] shall not
close any Material Facility . . . until such time as a Contingency is
finally determined to have occurred[.]
(APA § 7.13(c).)
4 To be designated as a Level II Trauma Center under North Carolina law, a hospital must
meet the criteria “defined in the ‘American College of Surgeons: Resources for Optimal Care of the Injured Patient.’ ” 10A N.C. Admin. Code 13P.0901(3) (2026).
5 The “Material Facilities” include Mission Hospital. (See APA § 1.1.)
12. The APA defines “Contingency” in relevant part as “the active medical
staffs of the applicable Material Facility not having qualified, available physicians
and/or clinical staff that are in good standing and are necessary for [HCA] . . . to
provide such Mission Hospital / CarePartners Service or continue such operation[.]”
(APA § 1.1.)
13. If the Attorney General determines that Dogwood has failed to exercise
its right to enforce HCA’s obligations under Section 7.13(a) of the APA, he must first
notify Dogwood of his determination. (See APA § 13.13(b); Pl.’s Br. Supp. Mot. Ex.
16, ECF No. 144.16.) If Dogwood does not take appropriate action to enforce HCA’s
obligations within forty (40) days of receiving the notice, the Attorney General has
the right to enforce HCA’s obligations on Dogwood’s behalf. (APA § 13.13(b).)
C. The Lawsuit
14. On 14 December 2023, the Attorney General initiated this action on
Dogwood’s behalf, 6 asserting two breach of contract claims against HCA for allegedly
discontinuing the provision of certain (i) emergency and trauma services and
(ii) oncology services at Mission Hospital. (See generally Compl., ECF No. 3.)
15. On 26 April 2024, the Attorney General filed an Amended Complaint
containing additional factual allegations but asserting the same claims for relief.
6 The parties dispute whether the Attorney General properly notified Dogwood of Defendant’s
noncompliance with the APA as a prerequisite for bringing suit. (See APA § 13.13(b); Am. Compl. ¶ 204; Answer & Countercls., Affirm. Defenses ¶ 11.) However, neither party raised this issue with respect to the Motions, so the Court does not address it. HCA filed its Answer and Counterclaims on 6 May 2024. 7 (See generally Am. Compl.;
Answer & Countercls.)
16. The Attorney General alleges that “Mission Hospital’s once efficient and
orderly emergency department is now significantly degraded and unable to meet
patients’ needs” due, in part, to staffing levels that are inadequate to meet the
requirements of a Level II Trauma Program and the inconsistent offering of surgical
otolaryngology services. (Am. Compl. 3, 22, 27, 33–34.) The Attorney General further
alleges that Mission Hospital’s oncology services have degraded since the acquisition
because it has no medical oncologists to monitor initial chemotherapy treatments
(“first starts”) and it has eliminated complex hematology services for adult patients
with blood cancers, among other reasons. (Am. Compl. ¶¶ 168, 182–85.) The
Attorney General relies on affidavits from some of Mission Hospital’s patients and
providers, (see Am. Compl. Exs. 3–23, ECF Nos. 50.3–.23), as well as findings by
governmental agencies, (see Am. Compl. Ex. 25, Dep’t Health & Human Servs. Ctrs.
Medicare & Medicaid Servs. Stmt. Deficiencies [Stmt. Deficiencies], ECF No. 50.25). 8
HCA denies the Attorney General’s allegations. (See generally Answer & Countercls.)
7 The Court dismissed HCA’s Counterclaims with prejudice on 6 December 2024. (Order & Opinion Mot. Dismiss Countercls. & Partial Mot. Dismiss Request Attys.’ Fees, ECF No. 97); Stein ex rel. Dogwood Health Tr. v. MH Master Holdings, LLLP, 2024 NCBC LEXIS 152, at *16 (N.C. Super. Ct. Dec. 6, 2024).
8 The Statement of Deficiencies was issued after an investigation of Mission Health’s emergency department to determine its compliance with the Centers for Medicare and Medicaid Services’ (CMS) Conditions of Participation. (Stmt. Deficiencies 1); see 42 C.F.R. §§ 482.1–.104 (2026). The investigation resulted in a finding of “Immediate Jeopardy (IJ) to patients’ health and safety” as a result of incidents that occurred in 2022 and 2023, among other reasons. (Stmt. Deficiencies 1, 7, 9.)
17. On 26 July 2024 and prior to the end of discovery, HCA moved for partial
summary judgment on the meaning of the words “shall not discontinue” in section
7.13(a) of the APA. (Def.’s Mot. Partial Summ. J., ECF No. 69.) The Court
determined that the words were ambiguous and denied the motion. (See Order &
Opinion Def.’s Mot. Partial Summ. J., ECF No. 133); Jackson ex rel. Dogwood Health
Tr. v. MH Master Holdings LLLP, 2025 NCBC LEXIS 43, at *13–15 (N.C. Super. Ct.
Apr. 16, 2025).
18. Following the close of discovery, on 27 October 2025, the Attorney
General filed a Motion for Partial Summary Judgment requesting that the Court
(i) adopt his interpretation of Section 7.13(a) and (ii) determine that HCA breached
the APA by discontinuing the provision of certain oncology services at Mission
Hospital. (Pl.’s Mot.) On the same day, HCA filed a Motion for Summary Judgment
requesting that the Court (i) adopt its interpretation of Section 7.13(a) and
(ii) determine that it did not breach the APA with respect to the provision of either
emergency and trauma services or oncology services. (Def.’s Mot.; Def.’s Br. Supp.
Mot. Summ. J. [Br. Supp. Def.’s Mot.] 24, 26, ECF No. 145.) HCA also filed its Motion
to Exclude the testimony of Dr. Kia Parsi, the Attorney General’s expert, concerning
services provided at Mission Hospital in 2023. (Mot. Excl.; Def.’s Br. Supp. Mot. Excl.
Pl.’s Expert, Dr. Kia Parsi Ex. 1 [Parsi Initial Report], ECF No. 148.1.)
19. The Motions were fully briefed, and the Court held a hearing on the
Motions on 11 February 2026, at which all parties were represented by counsel. (Am.
Notice Hearing, ECF No. 160.) The Motions are ripe for disposition.
II. LEGAL STANDARD
20. Summary judgment is appropriate “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and that any party is
entitled to a judgment as a matter of law.” N.C. R. Civ. P. 56(c). “A genuine issue of
material fact is one that can be maintained by substantial evidence.” Daughtridge v.
Tanager Land, LLC, 373 N.C. 182, 186–87 (2019) (citation modified). “Substantial
evidence is such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion and means more than a scintilla or a permissible inference.” Id.
at 187 (citation modified).
21. The party seeking summary judgment on the opposing party’s claim
bears the initial burden to establish the absence of a genuine issue of material fact.
James H.Q. Davis Tr. v. JHD Props., LLC, 387 N.C. 19, 23 (2025) (quoting Liberty
Mut. Ins. Co. v. Pennington, 356 N.C. 571, 579 (2002)). Ordinarily, a movant may
satisfy this burden by showing that “an essential element of the opposing party’s
claim does not exist, cannot be proven at trial, or would be barred by an affirmative
defense, or by showing through discovery that the opposing party cannot produce
evidence to support an essential element of [the] claim[.]” Dobson v. Harris, 352 N.C.
77, 83 (2000) (citations omitted). “If the movant successfully makes such a showing,
the burden then shifts to the nonmovant to come forward with specific facts
establishing the presence of a genuine factual dispute for trial.” Halikierra Cmty.
Servs. LLC v. N.C. Dep’t of Health & Hum. Servs., 385 N.C. 660, 663 (2024) (quoting
Pennington, 356 N.C. at 579).
22. A party who seeks summary judgment in its favor with respect to its
own claims “must show that there are no genuine issues of fact, that there are no
gaps in [its] proof, that no inferences inconsistent with [its] recovery arise from the
evidence, and that there is no standard that must be applied to the facts by the jury.”
Parks Chevrolet, Inc. v. Watkins, 74 N.C. App. 719, 721 (1985).
23. The Court “may not resolve issues of fact and must deny the motion if
there is a genuine issue as to any material fact.” Forbis v. Neal, 361 N.C. 519, 524
(2007) (citing Singleton v. Stewart, 280 N.C. 460, 464 (1972)); Gaynoe v. First Union
Direct Bank, N.A., 2001 NCBC LEXIS 8, at *14 (N.C. Super. Ct. Jan. 18, 2001) (“The
judge’s function is not to weigh the evidence and determine the truth of the matter
but to determine whether there is a genuine issue for trial.” (citation modified)).
When deciding the motion, the Court must consider the evidence in the light most
favorable to the non-moving party. Belmont Ass’n, Inc. v. Farwig, 381 N.C. 306, 310
(2022) (quoting Dalton v. Camp, 353 N.C. 647, 651 (2001)).
24. As this Court has previously observed, “summary judgment is a drastic
remedy that should be granted cautiously.” A-1 Pavement Marking, LLC v. APMI
Corp., 2009 NCBC LEXIS 16, at *8 (N.C. Super Ct. June 26, 2009) (citing First Fed.
Sav. & Loan Ass’n v. Branch Banking & Tr. Co., 282 N.C. 44, 51 (1972)). “Where the
slightest doubt exists as to the merits of the motion, it should be denied.” Id. at *9
(citation omitted).
III. ANALYSIS
A. The Cross-Motions for Summary Judgment
25. “The elements of a claim for breach of contract are (1) existence of a valid
contract and (2) breach of the terms of the contract.” Wells Fargo Ins. Servs. USA,
Inc. v. Link, 372 N.C. 260, 276 (2019) (citation modified); Johnson v. Colonial Life &
Accident Ins. Co., 173 N.C. App. 365, 369 (2005) (quoting Poor v. Hill, 138 N.C. App.
19, 26 (2000)).
26. The parties do not dispute the existence of a valid contract. Rather, the
Cross-Motions for Summary Judgment address two main issues with respect to
breach: (i) the scope of HCA’s obligations given the language of the APA and
(ii) HCA’s compliance with those obligations. The Court analyzes each issue in turn.
1. Section 7.13(a)
27. “The goal of contract interpretation is to ascertain the intent of the
parties when the contract was made.” Harris v. Ten Oaks Mgmt., LLC, 2023 NCBC
LEXIS 90, at *10 (N.C. Super. Ct. July 31, 2023) (citing Morrell v. Hardin Creek, Inc.,
371 N.C. 672, 681 (2018)). “Intent is derived not from a particular contractual term
but from the contract as a whole.” State v. Philip Morris USA Inc., 363 N.C. 623,
631–32 (2009) (citation omitted).
28. “When the parties use clear and unambiguous terms, the contract
should be given its plain meaning, and the court can determine the parties’ intent as
a matter of law.” 42 E., LLC v. D.R. Horton, Inc., 218 N.C. App. 503, 513 (2012)
(quoting Alaimo Fam. Chiropractic v. Allstate Ins. Co., 155 N.C. App. 194, 197 (2002)).
In that event, “the court cannot look beyond the terms of the contract to determine the intentions of the parties.” Lynn v. Lynn, 202 N.C. App. 423, 431 (2010) (citation
omitted).
29. If, however, the contract is ambiguous, interpretation of the contract is
a question of fact. See Recurrent Energy Dev. Holdings, LLC v. SunEnergy1, LLC,
2017 NCBC LEXIS 18, at *27 (N.C. Super. Ct. Mar. 7, 2017) (quoting Variety
Wholesalers, Inc. v. Salem Logistics Traffic Servs., LLC, 365 N.C. 520, 525 (2012)). A
contract is ambiguous if its language is “fairly and reasonably susceptible to either of
the constructions asserted by the parties.” Gay v. Saber Healthcare Grp., L.L.C., 271
N.C. App. 1, 7 (2020) (citation omitted). While not dispositive, “[t]he fact that a
dispute has arisen as to the parties’ interpretation of the contract is some indication
that the language of the contract is, at best, ambiguous.” Id. (citation omitted).
“[W]hether the language of a contract is ambiguous is a question of law[.]” Morrell,
371 N.C. at 680.
30. In the event contract language is ambiguous, the parties may introduce
extrinsic evidence “not to contradict, but to show and make certain what was the real
agreement between the parties.” See Galloway v. Snell, 384 N.C. 285, 288 (2023)
(quoting Root v. Allstate Ins. Co., 272 N.C. 580, 590 (1968)); Brown v. Ginn, 181 N.C.
App. 563, 567 (2007) (“Extrinsic evidence may be consulted when the plain language
of the contract is ambiguous.” (citations omitted)); Inland Am. Winston Hotels, Inc. v.
Crockett, 212 N.C. App. 349, 354 (2011) (citation omitted). If the extrinsic evidence
conflicts, however, an issue of material fact exists, and summary judgment should
not be granted. See Variety Wholesalers, 365 N.C. at 524–25 (determining that summary judgment was improper where extrinsic evidence supported both parties’
interpretations of ambiguous contract); Galloway, 384 N.C. at 288 (“If a written
contract is ambiguous, the contract’s meaning and effect is a factual question[.]”).
31. Importantly, “[c]ourts are not at liberty to rewrite contracts for the
parties. We are not their guardians, but the interpreters of their words. We must,
therefore, determine what they meant by what they have said—what their contract
is, and not what it should have been.” In re Estate of Sharpe, 258 N.C. App. 601, 607
(2018) (quoting Penn v. Standard Life Ins. Co., 160 N.C. 399, 402 (1912)); Morrell,
371 N.C. at 682 (“Courts must enforce the contract as written; they may not, under
the guise of construing an ambiguous term, rewrite the contract or impose liabilities
on the parties not bargained for and found therein.” (citation modified)).
32. Section 7.13(a) of the APA states that HCA “shall not discontinue the
provision of the services set forth on Schedule 7.13(a)” for ten years after the closing
date of the transaction. (APA § 7.13(a) (emphasis added).) The parties disagree on
the interpretation of this key language.
a. “Shall Not Discontinue”
33. Each of the parties posits a reasonable interpretation of the phrase
“shall not discontinue.” See MH Master Holdings LLLP, 2025 NCBC LEXIS 43,
at *13–15. Accordingly, the Court turns to the extrinsic evidence to determine
whether it is consistent with respect to the intent of the contracting parties such that
summary judgment would be appropriate. It is not.
34. The Attorney General argues that the phrase “shall not discontinue”
requires HCA to continuously provide, at least at pre-acquisition levels, the same
services set forth in Schedule 7.13(a) that Mission Hospital provided at the time of
the acquisition. (See Br. Supp. Pl.’s Mot. Partial Summ. J. [Br. Supp. Pl.’s Mot.] 8–
10, 14–16, ECF No. 143.) The Attorney General also contends that a service may be
constructively discontinued if it is so inadequately provided that patients will not or
cannot utilize it. (See Br. Supp. Pl.’s Mot. 29; Resp. Def.’s Mot. Summ. J. [Br. Opp’n
Def.’s Mot.] 13, ECF No. 156.)
35. In support of his position that HCA is required to provide the services
on Schedule 7.13(a) at no less than pre-acquisition levels, the Attorney General cites
extrinsic evidence including HCA’s agreement with the Notice, which states that “a
critical part of the transaction is the obligation of [HCA] to safeguard (and improve)
the current operations and services of Mission [Hospital].” (Notice 17 (emphasis
added); Tierney Email to Esposito, Sep. 1, 2018, ECF No. 93.6 (“[HCA is] good with
the [N]otice.”).)
36. The Attorney General also cites a statement made in January 2018 by
Dr. John Ball, then-chair of Mission Health’s Board, which was attached to the Notice
and poses the following question concerning Mission Health’s future: “what approach
minimally maintains and ideally expands our safety net and health transformation
capabilities[?]” (Dr. John Ball’s Stmt. Directors Bd. Retreat 1, ECF No. 144.4
(emphasis added).) 9 The Attorney General cites a similar statement that Dr. Ball
9 HCA contends that Dr. John Ball’s 2018 statements are inadmissible hearsay but offers
little support for its objection. (See Def.’s Opp’n Pl.’s Mot. Partial Summ. J. 11 n.2, ECF No. made on 29 August 2018: “[t]he [APA] provides the best chance for the clinical
programs, services, and facilities to continue throughout the region . . . with the
quality, access, and affordability that the people of this region have come to expect of
us.” (Stmt. John R. Ball, MD, JD – Mission Health Sys. Bd. Directors 2, ECF
No. 144.4 (emphasis added).)
37. Further, the Attorney General cites a letter Dr. Ball provided to the
Attorney General’s office in January 2019, in which he states that “[t]he Mission
Board firmly believed – and still believes – that the partnership between Mission and
HCA is essential to Mission’s continuing ability to operate at least at its current level.”
(Br. Supp. Pl.’s Mot. Ex. 6, at NCAG_0000090521, ECF No. 144.6 (emphasis added).)
38. In addition, the Attorney General relies on a series of emails sent
between August 20 to 22, 2018 by Dr. Ronald Paulus, Mission Health’s then-CEO, to
one of HCA’s representatives, Chuck Hall, when negotiating language regarding the
services HCA would be required to maintain under the forthcoming initial APA:
[T]he two things [the Mission Health] Board cares about are: 1) the size
of the foundation; and 2) that the services available today at Mission
Hospital are going to be here for at least 10 years.
I have to have some reference to services being generally consistent with
those services provided as of signing.
154); N.C. R. Evid. 802; cf. Maxwell Foods, LLC v. Smithfield Foods, Inc., 2025 NCBC LEXIS 66, at *14 n.4 (N.C. Super. Ct. June 5, 2025) (“[Plaintiff] does not do enough to develop its arguments, resting on conclusory assertions of inadmissibility rather than meaningful analysis.”).
We have been going back and forth most substantively about whether
the list is illustrative or literal. I made it illustrative, then you deleted that. I added back “generally consistent with” and then you used those
same words but neutered their meaning. We each have been doing so
for understandable reasons – you don’t want ill-defined mandates in
case there is an argument about “well that meant this” and I have been
trying to “keep services as they essentially are today” knowing that it is impossible to ever define such a list.
The reality on my end is that all discussion internally – with the
[Mission Health] Board, with management, etc. has been based upon
“Mission Hospital as we know it will continue as we know it for at least ten years, unless the Advisory Board agrees otherwise.” This was an
essential underlying aspect of even beginning discussions with HCA. I
would have never gotten [the Mission Health Board] to move
otherwise[.]
With that said, my revisions do the following:
1. I’ve accepted that you are unwilling to have the list be a
general description (which is what has been our
understanding from the beginning). That’s incredibly painful
and I may be criticized widely, but if we don’t trust one
another, we shouldn’t do the deal.
3. I’ve taken out the parentheses and e.g., modifiers, to reflect
that this is now a literal list. I’m trusting you that the myriad
of obvious things that aren’t listed (e.g., general x-ray, etc.)
will be continued out of common sense.
The very first question I’m going to be asked by the [Mission Health]
Board tomorrow at 4 pm is “do we have agreement on the protected
services list”, and I will have to give them an honest answer. They will ask me to personally reassure them that “this protects Mission Hospital as we know it.”
(Def.’s Mot. Partial Summ. J. Ex. 10 [Paulus Emails], ECF No. 71.10 (emphasis
added).)
39. Finally, the Attorney General points to HCA’s own internal documents,
including compliance trackers (“Post-Close Commitment Checklists”), as well as
attestations of service, all referring to HCA’s continuous provision of services. The
compliance trackers describe as a requirement that HCA “[c]ontinue services
currently provided at Mission’s primary Asheville hospital[.]” (Br. Supp. Pl.’s Mot.
Ex. 1, ECF No. 144.1; Br. Supp. Pl.’s Mot. Ex. 10, ECF No. 144.10 (30 August 2019
email explaining that the commitment checklists were provided to the HCA team in
conjunction with the deal closing.).) The attestation of service is an annual audit form
by which the CEO of Mission Hospital attested that the services in Schedule 7.13(a)
“were continuously offered . . . for Mission Hospital” for the year. (See Br. Supp. Pl.’s
Mot. Exs. 12–13, ECF Nos. 144.12–.13.) Summaries of Key Post-Closing Covenants
included in the APA state that HCA “will not discontinue any services currently
provided at [Mission Hospital].” (Br. Supp. Pl.’s Mot. Ex. 2, ECF No. 144.2.)
40. HCA responds that nothing in the APA requires it to provide the same
quality or quantity of services that Mission Hospital provided at the time of the
acquisition. (Def.’s Opp’n Pl.’s Mot. Partial Summ. J. [Br. Opp’n Pl.’s Mot.] 14, ECF
No. 154.) Instead, HCA contends that the phrase “shall not discontinue” requires
only that it refrain from completely eliminating a Schedule 7.13(a) service. (Br. Opp’n
Pl.’s Mot. 17; Br. Supp. Def.’s Mot. 27–28.)
41. In support of its position, HCA points to the declaration of Chadd
Tierney, HCA’s lead negotiator with respect to the APA. (Br. Opp’n Pl.’s Mot. 16.) In
his declaration, Tierney asserts that Mission Health “conceded that Schedule 7.13(a)
would comprise a literal and exclusive list of the specific service lines . . . without
reference to any particular levels or volume of any particular service.” (Br. Opp’n Pl.’s
Mot. Ex. 33 [Tierney Decl.] ¶ 27, ECF No. 146.13 (emphasis added).)
42. Characterizing Mr. Tierney’s affidavit as “self-serving,” the Attorney
General argues that the Tierney affidavit should not be considered as competent
evidence upon which to award summary judgment. (See Br. Opp’n Def.’s Mot. 7
(citing N.C. Farm Bureau Mut. Ins. Co. v. Herring, 385 N.C. 419, 426 (2023) (“[T]he
party with the burden of proof, who moves for summary judgment supported only by
his own affidavits, will ordinarily not be able to meet these requirements and thus
will not be entitled to summary judgment.” (emphasis omitted))).)
43. HCA relies on the same emails from Dr. Paulus to Mr. Hall that the
Attorney General cites, but it reads them as evidence that the parties understood
Schedule 7.13(a) to be a “literal list of services that must not be ceased entirely.” (Br.
Opp’n Pl.’s Mot. 16–17 (emphasis added).) HCA argues that Dr. Ball’s statements
confirm that Mission Health “did not expect the status quo to continue at Mission[,]”
given his assertion that the initial agreement provided the “best chance for the clinical
programs, services, and facilities to continue throughout the region[.]” (Br. Opp’n
Pl.’s Mot. 12.) HCA concludes that, at best, a genuine issue of material fact exists as to the meaning the contracting parties intended this term to have. (Br. Opp’n Pl.’s
Mot. 14.)
44. The Court agrees that, when the extrinsic evidence is considered, there
are inconsistencies that eliminate the possibility of judgment on this issue at this
stage of the litigation. See Variety Wholesalers, 365 N.C. at 524–25. The phrase
“shall not discontinue” is ambiguous because this language is “fairly and reasonably
susceptible to either of the constructions” the parties assert. See Gay, 271 N.C. at 7
(citation omitted); MH Master Holdings LLLP, 2025 NCBC LEXIS 43, at *9–15. The
APA does not define this language, and both parties have presented evidence to
support their respective interpretations. HCA argues, however, that the Attorney
General is equitably estopped from asserting his interpretation of the phrase, so
before reaching a conclusion, the Court considers this argument.
b. Equitable Estoppel
45. HCA contends that the Attorney General is equitably estopped from
asserting his view that the phrase “shall not discontinue” means that HCA is required
to maintain the Schedule 7.13(a) services at pre-acquisition levels because the
Attorney General knew that the contracting parties did not intend to impose quality
or quantity standards yet did not attempt to clarify the ambiguity before approving
the transaction. (Br. Supp. Def.’s Mot. 32–34; Def.’s Reply Br. Supp. Mot. Summ. J.
[Reply Def.’s Mot.] 14–16, ECF No. 158.) In support of its argument, HCA points to
an email between employees of the Attorney General’s Office that was written during
the Attorney General’s review of the transaction. (Br. Supp. Def.’s Mot. 32–33.) In the email, Jennifer Harrod—a lawyer on the Attorney General’s team—tells other
members of the team that “the [Mission Health] board thinks [HCA] has agreed to
maintain current hospital services at current levels. That’s not what the APA says,
and [HCA] says it would not have agreed to do this.” (Br. Supp. Def.’s Mot. Ex. 28,
ECF No. 146.8 (emphasis added).)
46. At the hearing, the Attorney General argued that Ms. Harrod’s
statement is consistent with the Attorney General’s position that the APA requires
HCA to provide only the scheduled services at “current levels,” not all the hospital’s
services. In any event, the Attorney General maintains that HCA has not explained
how his subordinate’s understanding of the contracting parties’ agreement
constitutes his misrepresentation or concealment of material facts, or how HCA relied
to its detriment on his office’s internal understanding, such that equitable estoppel
would prevent him from advancing his interpretation of the APA here. (Br. Opp’n
Def.’s Mot. 17.)
47. HCA replies that “(1) the Attorney General falsely represented his
interpretation of the [amended] APA . . . to [HCA] and [Mission Health] before
issuing his Non-Objection letter; (2) [HCA] relied on that representation (and NonObjection) to close on the transaction; and (3) [HCA] was prejudiced by that reliance
because it operated under the [amended] APA consistent with that interpretation to
this day.” (Reply Def.’s Mot. 14–16; see also Br. Supp. Def.’s Mot. 32–34.) HCA
further contends that applying the doctrine of equitable estoppel against the Attorney General in these circumstances will not impair the exercise of the Attorney General’s
governmental powers. (Reply Def.’s Mot. 14.)
48. As evidence that the Attorney General’s office made HCA aware of the
Attorney General’s understanding, HCA refers to “talking points” prepared by Ms.
Harrod in preparation for a meeting with HCA. (Reply Def.’s Mot. 15.) The talking
points state, in relevant part, “[e]ven now, the [Mission Health] board believes that
HCA has committed to maintaining the current level of services at all six
hospitals . . . even though the [initial asset purchase agreement] says no such thing.”
(Br. Supp. Def.’s Mot. Ex. 1, ECF No. 145.2.)
49. Generally, to establish the defense of equitable estoppel, one must show
that “the party sought to be estopped: ‘(1) misrepresented or concealed material facts;
(2) intended that such misrepresentation or concealment be acted upon by the other
party; and (3) had knowledge, actual or constructive, of the true facts.’ ” Syro Steel
Co. v. Hubbell Highway Signs, Inc., 108 N.C. App. 529, 532 (1993) (quoting Neal v.
Craig Brown, Inc., 86 N.C. App. 157, 163–64 (1987)). In addition, “[t]he party
asserting the defense must have (1) a lack of knowledge and the means of knowledge
as to the real facts in question; and (2) relied upon the conduct of the party sought to
be estopped to [its] prejudice.” Chapel H.O.M. Assocs., LLC v. RME Mgmt., LLC, 256
N.C. App. 625, 627–28 (2017) (quoting Friedland v. Gales, 131 N.C. App. 802, 807
(1998)).
50. Reliance by the party asserting estoppel must be justified. See Silwal v.
Akshar Lenoir, Inc., 292 N.C. App. 274, 288 (2024) (quoting Bourne v. Lay & Co., 264 N.C. 33, 37 (1965)); Lockerman v. S. River Elec. Mbrshp. Corp., 250 N.C. App. 631,
643 (2016) (quoting Dallaire v. Bank of Am., N.A., 367 N.C. 363, 369 (2014)).
“However, where the estoppel is based upon a subsequent inconsistent position, it is
not necessary that the party to be estopped be aware of the falsity of the
representation when made.” Meacham v. Montgomery Cnty. Bd. of Educ., 59 N.C.
App. 381, 387 (1982) (citation modified).
51. North Carolina courts “have not sanctioned the use of estoppel against
governmental agencies to the same extent as [it is] used against private individuals
or private corporations.” Hayes v. Town of Fairmont, 130 N.C. App. 125, 128 (1998)
(citing Henderson v. Gill, 229 N.C. 313, 316 (1948)); N.C. Dep’t of Env’t Quality v.
TRK Dev., LLC, 259 N.C. App. 597, 604 (2018) (citation omitted). “A governmental
entity may be estopped in a particular instance only if it is necessary to prevent a loss
to another and the estoppel will not impair the exercise of governmental powers.”
Kings Mt. Bd. of Educ. v. N.C. State Bd. of Educ., 159 N.C. App. 568, 577 (2003)
(citation omitted); TRK Dev., LLC, 259 N.C. App. at 604 (citation omitted).
52. Importantly, “[a] trial court may only grant a summary judgment
motion based on the doctrine of estoppel ‘where there is but one inference that can be
drawn from the undisputed facts of a case.’ ” Tuckett v. Guerrier, 149 N.C. App. 405,
412 (2002) (quoting Keech v. Hendricks, 141 N.C. App. 649, 653 (2000)). If the
evidence raises a permissible inference that estoppel applies, “but there are other
inferences to be drawn from the evidence to the contrary, estoppel is a question of fact[.]” Meachan v. Montgomery Cnty. Bd. of Educ., 47 N.C. App. 271, 278 (1980);
Tuckett, 149 N.C. App. at 412 (quoting Keech, 141 N.C. App. at 653–54).
53. The Court agrees with HCA that the application of equitable estoppel in
this action would not impair the exercise of the Attorney General’s governmental
powers to approve or disapprove the transaction pursuant to section 55A-12-02(g) of
the North Carolina General Statutes. Instead, through its estoppel defense, HCA
intends to bar the Attorney General from asserting his interpretation of the phrase
“shall not discontinue.” As such, the application of estoppel affects the Attorney
General’s ability to enforce the APA, which is a right afforded by contract, not a
governmental power. (See APA § 13.13(b)); TRK Dev., LLC, 259 N.C. App. at 607 (use
of estoppel improper where government agency would be barred from enforcing Solid
Waste Management Act); City of Raleigh v. Fisher, 232 N.C. 629, 635 (1950) (use of
estoppel improper where city would be barred from enforcing zoning ordinance); Cnty.
of Wake v. N.C. Dep’t of Env’t & Nat. Res., 155 N.C. App. 225 (2002) (applying estoppel
to government agency in contractual dispute).
54. Nevertheless, the Court concludes that it would be improper to grant
HCA summary judgment on the basis of equitable estoppel. Among other reasons, it
is not clear on this record that the Attorney General agreed with his subordinate’s
reading of the relevant language. And, while it appears in “talking points,” the record
is not clear that the information was ever relayed to HCA. It is also not clear that
HCA relied on the Attorney General’s purported misrepresentation when it agreed to
the terms of the APA. Even so, whether HCA’s reliance on the Attorney General’s purported misrepresentation is justified is more properly resolved by a factfinder
after evidence is presented. See MH Master Holdings LLLP, 2025 NCBC LEXIS 43,
at *15–16; see also Gore v. Myrtle/Mueller, 362 N.C. 27, 39 (2007) (citing Forbis, 361
N.C. at 527–28) (noting that determining reliance is an issue of fact for estoppel
purposes).
55. Therefore, for purposes of HCA’s Motion, the Court shall not estop the
Attorney General from advancing his interpretation of the term “shall not
discontinue,” an interpretation that conflicts with HCA’s interpretation. Accordingly,
the Cross-Motions for Summary Judgment are DENIED to the extent they concern
an interpretation of this phrase.
c. “Provision”
56. To recap, the APA states that HCA “shall not discontinue the provision
of the services set forth on Schedule 7.13(a).” (APA § 7.13(a) (emphasis added).) HCA
contends that the word “provision” means only that it is required to provide the
“infrastructure”—that is, the facilities, staff, and equipment—necessary for
physicians to provide Schedule 7.13(a) services at Mission Hospital, if they choose to
do so. (Br. Supp. Def.’s Mot. 26–30; Br. Opp’n Pl.’s Mot. 29–30.) In support of its
position, HCA reasons that only a medical provider can provide medical services. It
argues that “a hospital is not a physician—it is not a person at all. As a result, a
hospital provides services by making space, equipment, staff, and other resources
available so that a credentialed provider can care for willing patients.” (Reply Def.’s
Mot. 7–8.)
57. The Attorney General responds that the term “provision” requires HCA
to do all things necessary to provide the services listed in Schedule 7.13(a), not just
to supply the infrastructure necessary for physicians who might choose to use it. (See
Br. Supp. Pl.’s Mot. 9–10, 26; Reply Def.’s Opp’n Pl.’s Mot. Partial Summ. J. [Reply
Pl.’s Mot.] 14, ECF No. 157; Br. Opp’n Def.’s Mot. 3–9.)
58. The Attorney General also contends that Section 7.13(c)—which
requires that HCA “not sell or close” Mission Hospital for ten years after the
acquisition absent an applicable exception—would be superfluous if Section 7.13(a)
merely required HCA to provide facilities for the provision of services. (Br. Supp. Pl.’s
Mot. 16–17; APA § 7.13(c).) He argues that inclusion of the Contingency provision in
Section 7.13(a) proves that, at least for the first ten years after the acquisition, the
lack of sufficient physicians or clinical staff would not excuse HCA from providing
Schedule 7.13(a) services. (Br. Supp. Pl.’s Mot. 21.)
59. On this point, HCA responds that the requirements of Sections 7.13(a)
and (c) are complementary and that neither provision renders the other superfluous.
(Br. Opp’n Pl.’s Mot. 20–21.) Specifically, HCA argues that Section 7.13(a) controls
how it uses Mission Hospital and other facilities, while Section 7.13(c) requires only
that it refrain from disposing of the facilities. (Br. Opp’n Pl.’s Mot. 20–21.)
60. After consideration, the Court agrees with the Attorney General. The
term “provision” means “the act or process of providing.” Provision, MerriamWebster, https://www.merriam-webster.com/dictionary/provision (last visited July
20, 2026). The term “provide,” in turn, means “to supply or make available.” Provide, Merriam-Webster, https://www.merriam-webster.com/dictionary/provide (last visited
July 20, 2026). As such, the APA requires that HCA not discontinue supplying or
making Schedule 7.13(a) services available to Mission Hospital’s patients. It is
unreasonable, then, to interpret the APA as merely requiring HCA to provide the
infrastructure for Schedule 7.13(a) services and to leave a determination regarding
whether the services are actually provided to third-party physicians. If HCA wanted
a different result, it should have said so.
61. Therefore, the Court shall GRANT the Attorney General’s Motion
concerning interpretation of the word “provision.”
2. Schedule 7.13(a)
62. Schedule 7.13(a) lists the “[i]npatient and outpatient services” to which
Section 7.13(a) refers. (APA Schedule 7.13(a).) These services include “Emergency
and Trauma services generally consistent with the current Level II Trauma
Program with emergency services for pediatrics and adults, ground/air medical
transport services and forensic nursing services” and “Oncology services –
inpatient and outpatient cancer services, radiation therapy, surgery, chemotherapy,
and infusion services.” (APA Schedule 7.13(a).)
a. Oncology Services
63. The Attorney General’s Motion focuses on HCA’s alleged
discontinuation of (1) complex hematology services for adult patients with blood
cancers, and (2) initial chemotherapy treatments (first starts). The Court addresses
each service below.
i. Complex Hematology Services
64. As a threshold matter, the Attorney General argues that the term
“Oncology Services” is broad and encompasses the subcategory of complex hematology
services for adult patients with blood cancers. (Br. Supp. Pl.’s Mot. 31 & n.7; Reply
Pl.’s Mot. 12.) HCA disagrees and contends that hematology services were
specifically discussed and excluded from the services listed in Schedule 7.13(a). (Br.
Opp’n Pl.’s Mot. 25–26.)
65. The term “Oncology Services” is “fairly and reasonably susceptible” to
including the treatment of blood cancers. On the other hand, the treatment of blood
cancers could fall under the heading of hematology, rather than oncology. Looking at
the words in context does not help. The specific terms that follow the general term
“Oncology Services” (“inpatient and outpatient cancer services, radiation therapy,
surgery, chemotherapy, and infusion services”) do not identify the types of cancers
included by organ or body part but rather describe services common to cancers
generally. Thus, whether the contracting parties intended for “Oncology Services” to
include or exclude services for adult patients with complex blood cancers is unclear
based on the language of the contract alone.
66. Turning to extrinsic evidence of the parties’ intent, HCA points to
evidence that the word “hematology” was removed from the services listed on
Schedule 7.13(a) during negotiations. (Br. Opp’n Pl.’s Mot. 25.) Specifically, a July
2018 draft of Schedule 7.13(a) listed “hematology/oncology” services together as part
of the “Mission Cancer Clinical Program,” but the word “hematology” is absent from
the final Schedule. (Br. Opp’n Pl.’s Mot. 25. Compare APA Schedule 7.13(a) (omitting “hematology” from final schedule), with Br. Supp. Def.’s Mot. Ex. 24, ECF No. 146.4
(listing “hematology/oncology” in draft schedule).)
67. HCA also points to the Rule 30(b)(6) deposition testimony of Neil Luria,
the CEO and “Chief Wind-Down Officer” of ANC Healthcare, Inc., concerning
Schedule 7.13(a):
Q. Did seller understand that if a service didn’t make the list, there was
no guarantee HCA would provide it post-closing?
A. Yes.
Q. So seller understood at the time of closing the [APA] that Schedule
7.13(a) was a literal list of the services that HCA promised to provide
going forward?
A. Yes.
Q. All right. So this is seller’s draft of what it wanted, initially, in
Schedule 7.13(a), correct?
A. Yes.
Q: And if we take just a quick peruse of it, it’s clear that a lot of requested
services -- a lot of services that seller initially requested make it on to -7.13(a) didn’t make it. Right?
A. Yes.
Q. Hematology did not make it onto the ultimate Schedule 7.13(a), did
it?
A. That is correct.
Q. Now, seller could have put [its] foot down and said, “If hematology
does not continue post acquisition, we don’t have a deal” -- but, that
didn’t happen. Right?
A. That’s correct.
(ANC Dep. 22:13–22:22, 25:01–26:14.)
68. Luria was designated to testify about “ANC Healthcare, Inc.’s
understanding and interpretation of the APA on January 31, 2019 and its basis for
such understanding and interpretation.” (Notice Taking Dep. ANC Healthcare, Inc.,
ECF No. 164.) Luria testified that the former Mission Health changed its name to
ANC Healthcare, Inc. as a result of the transaction so that it would be known as ANC
during its wind-down. (ANC Dep. 48:4–24.) 10
69. The Attorney General contends that ANC’s understanding of the APA is
irrelevant because it was not involved in negotiating the APA and came into existence
only to wind down the entity. (Br. Supp. Pl.’s Mot. 25 & n.6.) Conversely, HCA
argued during the hearing that naming ANC Healthcare, Inc. in the deposition notice
was appropriate because that is the name by which the former Mission Health, the
seller, became known after the transaction closed.
70. Luria testified that he understood Mission Health and ANC to be the
same entity on January 31, 2019, and he also understood that both were referenced
as “Seller.” (See ANC Dep. 10:6–9, 47:4–20.) Thus, to the extent the Attorney
10 The Court takes judicial notice of the Restated Articles of Incorporation filed by Mission
Health System, Inc. with the North Carolina Secretary of State on 31 January 2019, the closing date of the transaction. See N.C. R. Evid. 201; Worley v. Ormond, 2024 NCBC LEXIS 82, at *14 n.6. (N.C. Super. Ct. June 11, 2024). The Articles change the name of Mission Health System, Inc. to ANC Healthcare, Inc. effective 1 February 2019.
General’s argument is that Luria did not testify on behalf of Mission Health (now
ANC), it is not supported by the evidence. 11 However, there is merit to the Attorney
General’s argument that Mr. Luria was never asked directly for the seller’s
interpretation of the language at issue in this case. Consequently, in Mr. Luria’s
testimony both sides can find support, or at least not conflict, with their respective
positions.
71. HCA next relies on Mr. Tierney’s declaration. Tierney, one of HCA’s
lead negotiators for the deal, testified that Mission Health “sought to include
hematology as a listed service on Schedule 7.13(a). We removed that service . . .
because Mission had not historically provided hematology services on a consistent
basis. Seller accepted this deletion[.]” (Tierney Decl. ¶ 28.) Further, HCA argues,
the hospital has not discontinued complex hematology services for adult patients with
blood cancers because it has provided the service to at least four patients since 2023.
(Br. Opp’n Pl.’s Mot. 25–26; Dep. Martin Palmeri [Palmeri Dep.] 325:6–24, ECF
No. 146.14; Dep. Hillary Rosenfeld 147:2–148:16, ECF No. 144.23.)
72. In response, the Attorney General argues that emails from Mission
Health’s chief negotiator, Dr. Paulus, prove that “[e]ven a ‘literal list’ of
services [would] still be comprised of several unstated component services[,]” such
that the APA’s failure to expressly list “hematology services” does not indicate that
11 Similarly, the Attorney General’s argument during the hearing that Mr. Luria was not
personally present during contract negotiations is unavailing. Mr. Luria was designated to testify on behalf of ANC, not in his personal capacity. Notably, he testified that he prepared for the deposition by conferring with Mr. Paulus, who was the lead negotiator for the seller with respect to the language at issue. (ANC Dep. 10:12–21.)
those services are excluded. (Br. Opp’n Def.’s Mot. 11; Paulus Emails,
at MISSION0000063117 (“I’m trusting you that the myriad of obvious things that
aren’t listed . . . will be continued out of common sense.”).) The Attorney General also
cites to Dr. Paulus’ email stating that, in negotiating the APA, he had been “trying to
‘keep services essentially as they are’ ” and points out that those services included
complex hematology services. (See Br. Opp’n Def.’s Mot. 11; Paulus Emails, at
MISSION0000063117; see also Aff. Martin Palmeri [Palmeri Aff.], ECF No. 50.10;
Palmeri Dep. 325:6–9 (testifying that complex hematology services existed prior to
the acquisition).)
73. In addition, in response to an inquiry from the Attorney General in June
2023 regarding the hospital’s medical staff, HCA provided a count of its physicians
credentialed in oncology and included within the subspecialties
“Hematology/Oncology,” suggesting that it recognized that at least some hematology
services were included under the oncology umbrella. (Br. Supp. Pl.’s Mot. Ex. 30,
ECF No. 144.30.)
74. The Attorney General also references Mission Health’s current website,
which lists “blood cancer” services as part of its oncology program, to support his
argument that “Oncology Services” is a broad term that both Mission Health and
HCA understood in 2019 to include hematology services. (Br. Opp’n Def.’s Mot. 11
n.2.)
75. As for the four patients who were treated, the Attorney General
responds that they were exceptions who were in extremis and their treatment is not evidence that the service continued to be provided to the patient population as a
whole. (Reply Pl.’s Mot. 12–13.)
76. The Court concludes that the extrinsic evidence is not conclusive with
respect to the meaning of “Oncology Services” and, therefore, judgment with respect
to an interpretation of the term would not be proper at this stage. As HCA contends,
removal of the term “hematology” from the schedule indicates that the parties to the
APA may not have intended for Schedule 7.13(a) to cover complex hematology
services for blood cancers. On the other hand, Dr. Paulus’ emails support the
Attorney General’s argument that Mission Health and HCA understood Schedule
7.13(a) to encompass services that were not expressly listed. And, after hearing all
the evidence, a fact-finder could conclude that use of the term “hematology/oncology”
in the draft schedule could have meant, contrary to HCA’s argument, that the parties
recognized an overlap between the two and decided that it was not necessary to use
the word hematology.
77. As for HCA’s argument that it has complied with the APA even if
“Oncology Services” is read to include hematology services, the Court again concludes
that summary judgment is not appropriate on this record. (See Br. Opp’n Pl.’s Mot.
25–26; Br. Supp. Def.’s Mot. 23, 37.) Harkening back to its earlier argument
regarding the interpretation of “shall not discontinue,” HCA contends that it did not
discontinue complex hematology services because it provided the services to at least
four patients in 2023. (Br. Opp’n Pl.’s Mot. 26; Palmeri Dep. 325:6–24.) The Attorney
General responds that the instances in which HCA actually provided hematology services were “extremely limited” exceptions, and such services were otherwise
unavailable at Mission Hospital by the end of 2023. (Reply Pl.’s Mot. 12–13.) Because
the Court cannot interpret the term “shall not discontinue” as a matter of law at this
stage, it cannot enter judgment on whether HCA complied or failed to comply with
the APA by providing complex hematology services to these few patients in 2023.
78. Therefore, the Cross-Motions for Summary Judgment are DENIED to
the extent they request that the Court determine as a matter of law based on this
record whether (a) “Oncology Services” includes complex hematology services for
adult patients, and (b) HCA breached the APA by discontinuing the provision of these
hematology services.
ii. Initial Chemotherapy Treatments
79. The Attorney General contends that HCA breached the APA in 2023 by
discontinuing the provision of initial chemotherapy treatments (first starts), which
must be monitored by an oncologist. (Br. Supp. Pl.’s Mot. 31–38; Palmeri Dep. 77:12–
18.) Specifically, the Attorney General argues that after (i) the Messino oncology
group, with which Mission Health had a professional services agreement, left, and
(ii) Dr. Michael Burke, a medical oncologist who was employed by the hospital,
resigned, HCA had no mechanism in place to ensure that first starts were
continuously provided at pre-acquisition levels. (See Br. Supp. Pl.’s Mot. 8–10, 31–
38; Br. Supp. Pl.’s Mot. Ex. 26, ECF No. 144.26 (HCA’s response to Attorney General’s
inquiry regarding coverage following Dr. Burke’s resignation).) The Attorney
General concludes that the proof is in the numbers: 128 new cancer patients were seen by Mission-employed oncologists in December 2022, but only 10 were seen in
December 2023. (See Br. Supp. Pl.’s Mot. 35–36; Updated Correspondence Data
Rosenfeld Dep. 1, ECF No. 144.27.)
80. The Attorney General also presents the affidavit of Dr. Albert Quiery, a
hematologist who was recruited by HCA to “rebuild” the oncology program after the
Messino group ended its contractual relationship with Mission Hospital. (Br. Supp.
Pl.’s Mot. 34–35; Aff. Albert T. Quiery, Jr., MD, MSc, FACP [Quiery Aff.] ¶ 9, ECF
No. 50.2.) Quiery testifies that he was unable to retain the oncologists he recruited
for Mission Hospital “due to unresolved practice issues,” including but not limited to
staffing issues that he characterizes as rising to the level of “concerns regarding
patient safety.” (Quiery Aff. ¶ 11.) In addition, he describes what he calls a
“maladaptive management style” of hospital administrators and decries what he
believes is a “fundamental lack of understanding of cancer services.” (Quiery Aff.
¶ 11.)
81. HCA responds by again reprising its argument that “shall not
discontinue” means only that it must not eliminate a service altogether. It argues
that the hospital does, in fact, have a medical oncologist from the Hope Women’s
Cancer Center on staff who is capable of monitoring first starts. In addition, HCA
contends that the Attorney General has presented no evidence that any patient
sought their first chemotherapy treatment at Mission and was refused that service.
(Br. Opp’n Pl.’s Mot. 29–30; Reply Def.’s Mot. 22–23.)
82. The Court concludes that the record does not support summary
judgment concerning HCA’s compliance with respect to initial chemotherapy
treatments. As stated above, the term “shall not discontinue” remains ambiguous.
Even if HCA’s interpretation were to prevail, the record contains conflicting evidence
regarding whether the provision of initial chemotherapy treatments was eliminated
in 2023. (See Palmeri Aff. ¶ 28; Palmeri Dep. 324:3–16, 327:7–328:12; Pl.’s Br. Opp’n
Def.’s Mot. Partial Summ. J. Ex. 12, ECF No. 93.13 (text message from Chad Patrick,
former CEO of Mission Hospital, to Dr. Palmeri stating, “[t]he Monday after
Thanksgiving won’t be able to start new pts.”). But see Br. Supp. Pl.’s Mot. Ex. 32,
ECF No. 144.32 (letter from then president of HCA Healthcare, Inc.’s North Carolina
Division, Greg Lowe, stating that first chemotherapy treatments “may take place in
another department of the hospital” after the departure of Mission Hospital’s last
employed oncologist).) And, although Dr. Palmeri testified that there were patients
who needed the service and were unable to receive it at Mission Hospital in 2023, he
also testified that in certain circumstances, the service was available in the inpatient
setting. (Palmeri Dep. 324:3–16, 327:7–328:12.)
83. Thus, while it appears that the volume of new chemotherapy patients
dropped significantly in late 2023 after the Messino group and Dr. Burke left, and
while Dr. Quiery’s affidavit raises significant questions regarding why the hospital’s
relationships with those physicians ended, the Court cannot conclude on this record
as a matter of law that the services were, in fact, “discontinued.”
84. Therefore, the Cross-Motions for Summary Judgment are DENIED to
the extent the Attorney General requests that the Court determine as a matter of law
that HCA breached the APA by discontinuing the provision of initial chemotherapy
treatments, and to the extent HCA requests that the Court determine that it complied
with the Oncology Services provision of the APA.
b. Emergency and Trauma Services
85. Like Oncology Services, the APA contains no express reference to
metrics that must be satisfied for HCA to be in compliance. However, unlike
Oncology Services, Schedule 7.13(a) specifies that HCA must provide emergency and
trauma services “generally consistent with the current Level II Trauma Program.”
To determine whether HCA has met this obligation, one must understand what is
required by the “current Level II Trauma Program.”
86. The American College of Surgeons’ (ACS) criteria for verification as a
Level I, II, or III Trauma Center include Type I and II standards. (See Def.’s Br.
Supp. Mot. Summ. J., Ex. 25 [2022 ACS Manual], ECF No. 146.5; Am. Coll. Surgeons,
Resources for Optimal Care of the Injured Patient 2014 (2014) [2014 ACS Manual].) 12
12 The Court takes judicial notice of the 2014 and 2022 ACS Manuals pursuant to North
Carolina Rule of Evidence 201. The Court also takes judicial notice of the contents of the ACS website. See N.C. R. Evid. 201; McGriff Ins. Servs. v. Hudson, 2023 NCBC LEXIS 4, at *24 n.6 (N.C. Super. Ct. Jan. 17, 2023).
The Court observes that the ACS periodically publishes updated manuals, with the most recent manuals having been published in 2014 and 2022. See Meera Kotagal et al., The COT at 100: Setting the Standard for Quality Programs, Am. Coll. of Surgeons (May 1, 2022), https://www.facs.org/for-medical-professionals/news-publications/news-and-articles/bulletin/ 2022/may-2022-volume-107-number-5/the-cot-at-100-setting-the-standard-for-qualityprograms/; see also Trauma Verification, Review, and Consultation Program, Am. Coll. of Surgeons, https://www.facs.org/quality-programs/trauma/quality/verification-review-andconsultation-program/ (last visited July 20, 2026).
A hospital will not become or remain designated at any level if it is determined that
the hospital is non-compliant with any Type I standard or more than three Type II
standards. (2022 ACS Manual, at ix; 2014 ACS Manual 159.) Although the ACS’
criteria “do not constitute a standard of care and are not intended to replace the
medical judgment of [a] physician or health care professional in individual
circumstances[,]” (2022 ACS Manual, at i), these criteria exist to “ensure
that . . . trauma centers are available to provide high quality definitive care.” (2014
ACS Manual 1–2, 7, 158 (“The goal of this and previous revisions is to set appropriate
standards for the optimal care of the trauma patient . . . and verify that quality
outcomes are present[.] The American College of Surgeons’ (ACS’) . . . program
validates the resources needed for high-quality care at trauma centers.”); see also
2022 ACS Manual, at v (“ACS Quality Programs are developed according to a fourpart framework used to evaluate and improve quality of care, consisting
of . . . infrastructure needed to deliver high-quality, high-value care[.]”).)
87. Both parties cite the 2022 ACS Manual at various times in the record,
and neither cite the 2014 ACS Manual. (See, e.g., Am. Compl. ¶ 45; Br. Supp. Def.’s
Mot. 9 n.3, 18 n.8.) However, as the APA requires that HCA maintain emergency
and trauma services generally consistent with Mission Hospital’s current Level II
Trauma Program, that is, the Level II Trauma Program in existence at the time of
the transaction, it would appear that the 2014 ACS Manual—not the 2022 ACS
Manual—is the relevant one. See Kotagal et al., supra note 12.
88. Nevertheless, the differences in language between the two manuals are
not significant for the standards at issue. For example, one Type II standard requires
that the “patient-to-nurse ratio in the ICU not exceed two to one[.]” (2014 ACS
Manual 183.) The same standard in the 2022 ACS Manual is that “the patient-tonurse ratio in the ICU must be 1:1 or 2:1, depending on patient acuity as defined by
the hospital policy for ICU nursing staffing.” (2022 ACS Manual 60.) Another Type
II standard states that “[t]rauma centers must be able to provide the necessary
human and physical resources (physical plant and equipment) to properly administer
acute care consistent with their level of verification.” (2014 ACS Manual 164; see also
2022 ACS Manual 3 (“In all trauma centers, the institutional governing body, hospital
leadership, and medical staff must . . . provide the necessary human and physical
resources to properly administer trauma care consistent with the level of
verification[.]”).) One Type I standard requires that an otolaryngology surgeon be
“promptly available.” (2014 ACS Manual 76, 83.) The same standard in the 2022
ACS Manual is that “Level I and II trauma centers must have continuous
availability” of an otolaryngology surgeon. (2022 ACS Manual 61.)
89. The Attorney General alleges that HCA breached the APA because the
quality of the emergency and trauma services provided by Mission Hospital
“degraded” (a) in part from a lack of adequate nursing staff and (b) because HCA
failed to offer surgical otolaryngology (ENT) services on a consistent basis. (Am.
Compl. ¶¶ 45–48, 85–87, 206–215.)
90. HCA responds that it is improper to conflate regulatory findings with
breach of contract and, in any event, (i) the APA does not require Mission Hospital to
maintain a particular patient-to-nurse staffing ratio (and even if it did, Mission
Hospital’s staffing grids are designed to meet the ratio set out by the American
College of Surgeons); (ii) any variations in staffing resulted from “universal
challenges” caused by the coronavirus pandemic; 13 (iii) the Attorney General offers
no admissible evidence that Mission Hospital did not consistently offer surgical ENT
services; and (iv) Mission Hospital retained its designation as a Level II Trauma
center throughout 2023. (Br. Supp. Def.’s Mot. 29–31, 35–36.)
91. On the last point, the Attorney General replies that HCA’s compliance
with the APA cannot be determined based on Mission Hospital’s status as a Level II
Trauma Center because North Carolina’s renewal process for that designation
happens only once every four years. (Br. Opp’n Def.’s Mot. 12–13, 19–20.) The
Attorney General further argues that CMS’ finding of immediate jeopardy reflects
the fact that, by 2023, the quality of services provided by Mission Hospital had
degraded to the degree that it would have been “impossible for Mission to provide
emergency and trauma services generally consistent with the Level II Trauma
Program in place at the time of the transaction.” (Br. Opp’n Def.’s Mot. 19–20.) The
Attorney General maintains that “[t]he problem . . . is not the violation of unstated
[quantity and quality] metrics, but the fact that without sufficient staff, HCA cannot
13 Despite HCA’s mention of COVID, neither party argued that the force majeure clause in
the APA applies.
safely provide care to its [emergency and trauma services] patients.” (Br. Opp’n Def.’s
Mot. 13.)
92. The Court first addresses HCA’s motion with respect to the Attorney
General’s allegation that HCA breached the APA by not offering surgical ENT
services “24 hours per day every day of the year.” (Am. Compl. ¶ 86.) HCA responds
that, while it may have had lapses in surgical ENT coverage, its coverage was
“generally consistent” with the Level II Trauma Program. HCA also asserts that the
Attorney General has not come forward with any evidence of its alleged
noncompliance. (See Br. Supp. Def.’s Mot. 35.) After reviewing the sizeable record in
this case, the Court agrees that the Attorney General has not identified such
evidence. 14
93. “Summary judgment should be granted in favor of the defendants if the
record shows the absence of evidence tending to support an essential element of the
plaintiff’s claim.” Brown v. City of Greensboro, 137 N.C. App. 164, 166–68 (2000)
(dismissing claim where plaintiff “neither alleged nor presented evidence” supporting
her discrimination claim). “When a plaintiff fails to produce any evidence of an
14 The Court is aware of an article that originally ran in the Asheville Watchdog and is cited
in the Complaint, but not for its content about ENT services. (Compl. ¶ 180 n.172.) According to the article, seven doctors from Asheville Ear, Nose & Throat decided to stop providing medical or surgical ENT services at Mission in January 2022. It says nothing about conditions in 2023. The article is hearsay to the extent it would be used to evidence a lack of ENT services. Rankin v. Food Lion, 210 N.C. App. 213, 220 (2011) (“[N]ewspaper articles are inadmissible hearsay to the extent that they are introduced to prove the factual matters asserted therein.” (citation omitted)).
If other evidence exists, the Attorney General has not identified it. As this Court has previously stated, “[i]t is not the Court’s ‘job to sift through the record and make [the Attorney General’s] case for him.’ ” Brewster v. Powell Bail Bonding, Inc., 2020 NCBC LEXIS 27, at *9 (N.C. Super. Ct. Mar. 11, 2020) (citation omitted).
essential element of her claim, the trial court’s grant of summary judgment is proper.”
Hill v. West, 189 N.C. App. 189, 193 (2008) (citation omitted).
94. Accordingly, HCA’s Motion shall be GRANTED to the extent the
Attorney General alleges that HCA breached the APA by failing to offer the surgical
ENT services required to maintain its Level II designation.
95. The Court next addresses the Attorney General’s assertion that, by
2023, HCA’s staffing, particularly its patient-to-nurse ratio, was not “generally
consistent with the current Level II Trauma Program.” Both the 2014 and the 2022
ACS Manuals contain staffing ratios that had to be met for the hospital to satisfy
Level II Trauma Program requirements. The 2014 ACS Manual states that a trauma
center’s “patient-to-nurse ratio in the ICU must not exceed two to one[.]” (2014 ACS
Manual 183; see also 2022 ACS Manual 60 (“In all trauma centers, the patient-tonurse ratio in the ICU must be 1:1 or 2:1, depending on patient acuity[.]”).) In
addition, the 2014 ACS Manual requires that, “[t]rauma centers must be able to
provide the necessary human and physical resources (physical plant and equipment)
to properly administer acute care consistent with their level of verification.” (2014
ACS Manual 164; see also 2022 ACS Manual 3 (“In all trauma centers, the
institutional governing body, hospital leadership, and medical staff must . . . provide
the necessary human and physical resources to properly administer trauma care
consistent with the level of verification[.]”).)
96. While disavowing the notion that his claim for breach turns on HCA’s
failure to satisfy any particular metric, the Attorney General also argues that, at least at some points in 2023, HCA’s staffing ratios did not meet these ACS standards.
Concerning patient-to-nurse ratios in the Intensive Care Unit, one Mission Hospital
employee testified that “[t]he patient-to-nurse ratio used to be 2 to 1 at a maximum.
. . . Now the patient-to-nurse ratio is often 3 to 1[.]” (Aff. Mark Klein, R.N. [Klein
Aff.] ¶ 17, ECF No. 50.13.) Another Mission Hospital employee testified that, in the
ICU, “patient-to-nurse ratios of 3 to 1 are not uncommon. It is also not uncommon
for acute patients that require a patient-to-nurse ratio of 1 to 1 to instead be staffed
2 to 1. Ratios exceed appropriate levels every day.” (Aff. Hannah Drummond
[Drummond Aff.] ¶ 9, ECF No. 50.5.)
97. The same Mission Hospital employees testified that, in December 2023,
patient-to-nurse ratios in the Emergency Department exceeded those that existed at
the time the transaction closed in 2019. (See Klein Aff. ¶¶ 16, 38–40 (“Prior to the
purchase of Mission Hospital by HCA, the ER had patient-to-nurse ratios of 3-1. Now
there are routinely patient-to-nurse ratios of 4-1 plus hallway patients. . . . The
[Internal Processing Area] (IPA) is new in the last year and was not a feature of
Mission prior to HCA’s purchase. In the IPA, there can be 20 to 40 patients and only
1 or 2 nurses to manage them.”); Drummond Aff. ¶¶ 14–15 (“Patient-to-nurse ratios
[in the IPA] can get as bad as 30 to 1. . . . Some mornings begin with 0 nurses
available in the IPA for patient care.”).
98. These employees’ affidavits correspond with observations made by both
the Attorney General’s expert, Dr. Kia Parsi, and CMS in its Statement of
Deficiencies. Specifically, Dr. Parsi stated that Mission Hospital’s 2023 staffing plan was the lowest he had ever seen for “any emergency department, let alone a Level II
Trauma Center[.]” (Parsi Initial Report 12–13.) Similarly, in the Statement of
Deficiencies, CMS found that Mission Hospital’s “emergency department staff failed
to ensure adequate nursing staff was available to provide and monitor the delivery of
assessments, care, and treatments in the emergency department.” (Stmt.
Deficiencies 167, 173–79.)
99. Mission Hospital’s employees testified that, because of staffing
inadequacies, by 2023, the hospital could no longer provide emergency and trauma
services that were “adequate” or conformed to “general standards of care.” (See
Drummond Aff. ¶ 20; Klein Aff. ¶ 51; see also Aff. Tucker Richards ¶¶ 3, 5–9, 12–15,
19, ECF No. 50.12; Aff. Scott Joslin, M.D. ¶¶ 11–13, 15, 20, 22–24, ECF No. 50.8.)
Dr. Parsi concluded that “it is not possible for an [emergency department] to have
that low a staffing plan and provide adequate care.” (Parsi Initial Report 13.) CMS
concluded that Mission Hospital did not “meet the emergency needs of patients in
accordance with acceptable standards of practice.” (Stmt. Deficiencies 309.)
100. In sum, given its patient-to-nurse staffing ratios, it appears that by 2023
Mission Hospital had difficulty always providing emergency and trauma services that
were consistent with the Level II Trauma Program. However, the language of the
APA does not require that such services always be provided. Instead, the contract
requires that Mission Health provide emergency and trauma services generally
consistent with the Level II Trauma Program, and what the contracting parties
meant by “generally consistent” is not clear.
101. It is also unclear that HCA’s ratios would have jeopardized its Level II
designation. HCA presents the testimony of Melanie Wetmore, then-Chief Nursing
Officer for Mission Hospital, who testified that, at least in Mission Hospital’s ICU,
staffing ratios only exceeded Level II Trauma program standards in 2023 “less than
four times a month[.]” (Dep. Melanie Wetmore 39–40, 48:12–51:8, ECF No. 146.20;
Br. Supp. Def.’s Mot. 35; Reply Def.’s Mot. 17.) According to HCA, “[s]uch deviations
are permitted by ACS standards, which categorizes nurse-to-patient staffing ratios
as Type II standards for which a finding of program noncompliance is not automatic.”
(Reply Def.’s Mot. 17; Br. Supp. Def.’s Mot. 9 n.3, 18 n.8; 2014 ACS Manual 159, 183;
2022 ACS Manual, at ix, 60.) Still, a fact-finder could conclude that missing this
staffing ratio approximately four times a month—or 48 times a year—is not
“generally consistent” with Level II Trauma Program requirements. 15
102. Accordingly, issues of fact remain that preclude summary judgment
with respect to whether HCA has satisfied its obligation to provide emergency and
trauma services “generally consistent” with the current Level II Trauma Program.
The Court shall therefore DENY HCA’s Motion with respect to the emergency and
trauma services provision.
15 Standard dictionary definitions do not add much value. “Generally” is defined to mean “in disregard of specific instances and with regard to an overall picture; as a rule[;] usually[.]” See Generally, Merriam-Webster, https://www.meriam-webster.com/dictionary/generally (last visited July 20, 2026). “Consistent” means “marked by harmony, regularity, or steady continuity[;] free from variation or contradiction[.]” Consistent, Merriam-Webster, https://www.merriam-webster.com/dictionary/consistent (last visited July 20, 2026). Thus, “generally consistent” means that, as a rule, Mission Health’s nurse-to-patient ratio was usually free from variation from Level II trauma program requirements.
B. HCA’s Motion to Exclude
103. HCA moves to exclude the expert testimony of Dr. Kia Parsi, a
physician, professor, and Executive Director of the Texas A&M University Rural and
Community Health Institute (RCHI), whose testimony is presented by the Attorney
General to support the Attorney General’s position that HCA breached the APA with
respect to Mission Hospital’s provision of both (i) emergency and trauma services and
(ii) oncology services.
104. The Court evaluates a motion to exclude expert testimony under Rule
702 of the North Carolina Rules of Evidence, “which is now ‘virtually identical to its
federal counterpart and follows the Daubert standard for admitting expert
testimony.’ ” Loyd v. Griffin, 2023 NCBC LEXIS 34, at *6 (N.C. Super. Ct. Mar. 6,
2023) (citation omitted); Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993).
105. To be admissible under Rule 702, expert testimony must satisfy a threepart test for relevance, competence, and, reliability: “(1) expert testimony must be
based on specialized knowledge that will assist the trier of fact, (2) the expert must
be qualified by ‘knowledge, skill, experience, training, or education,’ and (3) the
testimony must be reliable.” Loyd, 2023 NCBC LEXIS 34, at *6–7 (quoting N.C. R.
Evid. 702(a)); State v. McGrady, 368 N.C. 880, 889–90 (2016). North Carolina courts
may seek guidance from federal case law when evaluating the admissibility of expert
testimony. McGrady, 368 N.C. at 887–88.
106. Under Rule 401, evidence is relevant if it has “any tendency to make the
existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” N.C. R. Evid. 401.
Expert testimony is relevant if it meets the “minimum standard for logical relevance”
under Rule 401 and “provide[s] insight beyond the conclusions that jurors can readily
draw from their ordinary experience.” McGrady, 368 N.C. at 889 (citation omitted).
Relevance under Rule 401 is a “low bar” to admissibility. State v. Triplett, 368 N.C.
172, 175 (2015).
107. Expert testimony is reliable if “(1) [t]he testimony is based upon
sufficient facts or data[,]” (2) “[t]he testimony is the product of reliable principles and
methods[,]” and (3) “[t]he witness has applied the principles and methods reliably to
the facts of the case.” N.C. R. Evid. 702(a)(1)–(3). “[T]he requirement that expert
opinions be supported by ‘sufficient facts or data’ means that the expert considered
sufficient data to employ the methodology.” Pope v. Bridge Broom, Inc., 240 N.C. App.
365, 374 (2015) (citation modified). An expert need not consider all available facts or
data for his opinion to be based upon sufficient facts or data. Miller v. Carolina Coast
Emergency Physicians, LLC, 382 N.C. 91, 105 (2022). Further, “experts may rely on
data and other information supplied by third parties, even if the data were prepared
for litigation by an interested party. Unless the expert’s opinion is too speculative, it
should not be rejected as unreliable merely because the expert relied on the reports
of others.” Pope, 240 N.C. App. at 374 (citation modified). “[A]s a general rule,
questions relating to the bases and sources of an expert’s opinion affect only the
weight to be assigned that opinion rather than its admissibility.” Id. (citation
omitted).
108. “The precise nature of the reliability inquiry will vary from case to case
depending on the nature of the proposed testimony. In each case, the trial court has
discretion in determining how to address the three prongs of the reliability test.”
McGrady, 368 N.C. at 890 (citing Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152–
53 (1999)). Importantly, “the focus of the trial court’s inquiry must be solely on the
principles and methodology used by the expert, not the conclusions that they
generate.” Loyd, 2023 NCBC LEXIS 34, at *7 (citation modified); Daubert, 509 U.S.
at 595.
109. “[A]n expert may not testify as to ‘whether legal conclusions should be
drawn or whether legal standards are satisfied.’ ” Intersal, Inc. v. Wilson, 2024 NCBC
LEXIS 18, at *11, *16 (N.C. Super. Ct. Feb. 1, 2024) (quoting HAJMM Co. v. House
of Raeford Farms, Inc., 328 N.C. 578, 587 (1991)). Instead, “the expert may testify to
the underlying factual premise.” Id. (citation modified); see Potts v. KEL, LLC, 2019
NCBC LEXIS 61, at *8–9 (N.C. Super. Ct. Sep. 27, 2019) (citations omitted)
(“Whether conduct was grossly negligent is a legal conclusion that the trier of fact
must draw from the evidence, not a proper subject of expert testimony.”). Ultimately,
whether to grant or deny a motion to exclude is within the trial court’s sound
discretion. See Miller v. Carolina Coast Emergency Physicians, LLC, 277 N.C. App.
449, 474 (2021) (citing Crocker v. Roethling, 363 N.C. 140, 143 (2009)).
110. Dr. Parsi opines that, under HCA’s leadership, (i) “Mission Hospital had
significantly degraded emergency and trauma services and created an Emergency
Department that was not capable of providing safe and timely healthcare expected of a Level II Trauma Center”; and (ii) “Mission Hospital’s outpatient and inpatient
oncology services significantly degraded.” (Parsi Initial Report 2–3; Rebuttal Report
Kia Parsi, M.D. [Rebuttal Report], ECF No. 148.3.) HCA contends that Dr. Parsi’s
testimony should be excluded because it is both irrelevant and unreliable. (Def.’s Br.
Supp. Mot. Excl. [Br. Supp. Mot. Excl.] 4, ECF No. 148.) For the reasons stated below,
the Court disagrees.
1. Relevance
111. HCA first contends that the Court should exclude Dr. Parsi’s testimony
because it is irrelevant. (Br. Supp. Mot. Excl. 4.) HCA argues (i) Dr. Parsi did not
review the APA before issuing his reports and uses the wrong standard to determine
whether a breach occurred; and (ii) Dr. Parsi does not use an objective measure for
determining whether a Schedule 7.13(a) service was “discontinue[d]” when he opines
that the services provided by Mission Hospital’s Emergency Department “degraded.”
(Br. Supp. Mot. Excl. 7–9.)
112. The Attorney General responds that Dr. Parsi’s report is relevant
because it provides insight on critical facts in dispute: “how and to what
degree . . . Mission’s emergency and trauma services . . . degraded over time after
HCA’s acquisition of Mission.” (Pl.’s Resp. Mot. Excl. [Br. Opp’n Mot. Excl.] 8–9, ECF
No. 151.) The Attorney General further contends that the fact that Dr. Parsi “does
not answer the ultimate question of whether a breach occurred” is appropriate
because “[t]hat judgment is for the Court.” (Br. Opp’n Mot. Excl. 9.)
113. The Court agrees with Plaintiff that Dr. Parsi’s opinions are relevant.
Dr. Parsi’s extensive experience as a medical practitioner and in hospital
administration is undisputed. He draws on this experience to conclude that both
Mission Hospital’s emergency and trauma services and its oncology services
“significantly degraded” in 2023—both with respect to the services themselves, as
well as with respect to the facilities, equipment, and ancillary staff necessary to
provide those services. (See generally Parsi Initial Report; Rebuttal Report.) Dr.
Parsi’s testimony bears on facts the Court must consider when determining whether
HCA complied with the APA. That Dr. Parsi does not opine on the meaning of the
term “discontinue” or whether HCA breached the contract is not determinative. Any
such opinion would fall outside his province as an expert. See Intersal, 2024 NCBC
LEXIS 18, at *16.
114. In short, the standard for relevance is low. It has been met here.
2. Reliability
a. Sufficient Facts or Data
115. Whether Dr. Parsi’s testimony is reliable requires additional analysis
under Rule 702. HCA contends that Dr. Parsi’s reports should not be considered
because they are “not based on sufficient facts or opinions.” (Br. Supp. Mot. Excl. 12.)
According to HCA, Dr. Parsi’s opinions “simply regurgitate[] anecdotal reports of
purported events at Mission . . . without acknowledging—or even reviewing—
contradictory deposition testimony[.]” (Br. Supp. Mot. Excl. 12–13.)
116. The Attorney General responds that “Dr. Parsi relied upon a wide range
of sources” in forming his opinions and that he is only required to base his testimony on “sufficient facts or data, not upon all the facts or data in existence[.]” (Br. Opp’n
Mot. Excl. 14–15 (quoting Miller, 382 N.C. at 105).)
117. The Court agrees with the Attorney General. Dr. Parsi’s reports reflect
that he relied on numerous sources in forming his opinions, including (i) affidavits
from patients and providers at Mission Hospital; (ii) affidavits from EMS personnel
who transported patients to, or monitored patient wait times at, Mission Hospital’s
emergency department; (iii) the 2023 Statement of Deficiencies from the North
Carolina Department of Health and Human Services and the Centers for Medicare
and Medicaid Services (CMS), concluding that patients’ health and safety were in
“Immediate Jeopardy” at Mission Hospital; (iv) a position statement from the
American Academy of Emergency Medicine (AAEM) on patient-to-nurse staffing
ratios in emergency departments; and (v) HCA’s own internal documents concerning
wait times for Mission Hospital’s emergency department. (Parsi Initial Report 23;
Rebuttal Report 16–18; see also Am. Compl. Exs. 3–23, 25, ECF Nos. 50.3–.23, .25.)
118. The listed sources provide sufficient data for Dr. Parsi to reach his
opinions. See, Loyd, 2023 NCBC LEXIS 34, at *8–9 (expert opinion based on, in part,
deposition testimony, letters of intent, and financial documents was based on
sufficient facts or data for expert to conduct damages analysis); Brakebush Bros.,
Inc. v. Certain Underwriters at Lloyd’s of Lond. – Novae 2007 Syndicate Subscribing
to Pol’y with No. 93PRX17F157, 2024 NCBC LEXIS 137, at *7–13 (N.C. Super. Ct.
Oct. 16, 2024) (expert opinion admissible in insurance dispute where expert “reviewed
hundreds of documents . . . including financial information, the actual repair and replacement cost information, invoices, spreadsheets, [and] specifications”); Golden
Triangle #3, LLC v. RMP-Mallard Pointe, LLC, 2024 NCBC LEXIS 48, at *13 (N.C.
Super. Ct. Mar. 15, 2024) (observing that the “sufficient facts or data” analysis is
“quantitative rather than qualitative”).
119. The reliability of the sources Dr. Parsi considered may affect the weight
of his testimony. See Pope, 240 N.C. App. at 374. However, Dr. Parsi’s reliance on
third-party information, even if prepared by Plaintiff for litigation, does not render
his testimony inadmissible. See id.; Maxwell, 2025 NCBC LEXIS 66, at *14–15 (“That
[defendant’s expert] formed [his] opinions by applying his expertise to facts and
information provided by [defendant] is normal, not disqualifying.” (quoting
Brakebush, 2024 NCBC LEXIS 137, at *11)). Accordingly, the Court shall not exclude
Dr. Parsi’s opinions on this basis.
b. Reliable Principles and Methods
120. HCA next contends that Dr. Parsi’s reports should be excluded because
his opinions are not based on a reliable methodology. (Br. Supp. Mot. Excl. 13–14.)
HCA maintains that Dr. Parsi reached his conclusion that Mission Hospital’s
emergency and trauma services and its oncology services “significantly degraded”
without explaining the objective measure by which he reached this conclusion. (Br.
Supp. Mot. Excl. 14.) In short, HCA argues that Dr. Parsi’s opinions are not reliable
because they are not based “on reliable sources or any apparent methodology,” and
Dr. Parsi “simply relied on what [Plaintiff] provided to him and did not seek out any additional documents or data to review.” (Def.’s Reply Br. Supp. Mot. Excl. [Reply
Mot. Excl.] 7–8, ECF No. 152.)16
121. The Attorney General responds that Dr. Parsi used reliable resources
when forming his opinions including (i) information and findings from the
government’s Immediate Jeopardy determination, (ii) the AAEM’s recommended
patient-to-nurse ratio, and (iii) academic literature concerning emergency
department patient outcomes. (Br. Opp’n Mot. Excl. 16–19.) The Attorney General
contends that Dr. Parsi then used “his knowledge and understanding of hospital
operations” to evaluate Mission Hospital’s performance against the data and
standards established in these resources. (Br. Opp’n Mot. Excl. 18–19.) The Attorney
General maintains that experiential expertise has been recognized as reliable, and
that Dr. Parsi’s testimony should not be scrutinized using the standard of reliability
applied to scientific testimony. (Br. Opp’n Mot. Excl. 19–20.)
122. The Court concludes that Dr. Parsi’s opinions are based on a reliable
methodology and that he applied that methodology to the facts of the instant case
appropriately. That Dr. Parsi relied on his experience in the field is not a bar to the
admissibility of his opinions. See Bitler v. A.O. Smith Corp., 400 F.3d 1227, 1235
(10th Cir. 2004) (affirming trial court’s decision that “personal experience, training,
method of observation, and deductive reasoning” constituted reliable methodology
even if not replicable); accord Kumho Tire, 526 U.S. at, 150 (“Engineering testimony
16 HCA also contends that Dr. Parsi’s testimony fails to meet the standard for admissibility
under Rule 403. (Reply Mot. Excl. 11–13.) The Court does not address this argument because it was raised for the first time in HCA’s reply. See Business Court Rule 7.7 (“A reply brief must be limited to matters newly raised in the responsive brief.”).
rests upon scientific foundations. In other cases, the relevant reliability concerns
may focus upon personal knowledge or experience. There are many different kinds
of experts, and many different kinds of expertise.” (citation modified)).
123. Dr. Parsi is a physician, professor, and Executive Director of the Texas
A&M University Rural and Community Health Institute (RCHI). He has over
twenty-seven years of clinical experience. (Parsi Initial Report 1.) He has extensive
experience in hospital administration, including responsibility for developing a
hospital system’s Level 2 Trauma Service Line. (Parsi Initial Report 1, App. B, B-2–
3.) As RCHI’s Executive Director, he leads a team of experts that evaluates federal
and state healthcare regulations and quality and safety initiatives. (Parsi Initial
Report 1.)
124. In sum, Dr. Parsi has extensive experience relevant to the matters at
issue in this case. His experience and opinions reflect familiarity with the standards
governing hospital systems and the resources needed to ensure the effective delivery
of care. As such, Dr. Parsi may reliably use his personal experience to evaluate
Mission Hospital’s performance. See United Therapeutics Corp. v. Liquidia Techs.,
Inc., 2025 NCBC LEXIS 91, at *19–22 (N.C. Super. Ct. July 29, 2025) (holding that
expert testimony relying on expert’s experience was admissible where testimony was
“guided by [expert’s] deep understanding” of relevant “regulations, process[es], and
procedures,” and expert “held several director roles” relevant to his testimony).
125. Accordingly, the Court shall DENY without prejudice HCA’s motion to
exclude Dr. Parsi’s opinions. Nothing herein limits the Court’s ability to further
evaluate the admissibility of Dr. Parsi’s conclusions at a trial of this matter.
IV. CONCLUSION
126. WHEREFORE, the Court GRANTS in part and DENIES in part the
Motions as follows:
a. HCA’s Motion for Summary Judgment is GRANTED in part and
DENIED in part. To the extent the Attorney General claims
that HCA breached the APA by failing consistently to offer
surgical otolaryngology services, HCA’s Motion for Summary
Judgment is GRANTED. In all other respects, HCA’s Motion is
DENIED.
b. The Attorney General’s Motion for Summary Judgment is
GRANTED in part and DENIED in part. To the extent the
Attorney General argues that the term “provision” requires HCA
to take all steps necessary to actually provide the services set
forth in Schedule 7.13(a), the Attorney General’s Motion is
GRANTED. In all other respects, the Attorney General’s Motion
for Summary Judgment is DENIED.
c. The Motion to Exclude is DENIED without prejudice.
SO ORDERED, this the 27th day of July, 2026.
/s/ Julianna Theall Earp
Julianna Theall Earp
Special Superior Court Judge
for Complex Business Cases