STATE OF i\trAINE BUSINESS AND CONSUMER COURT
Cumberland, ss. Location: Portland Docket No. BCD-CV-16-01 /
AB HOME HEALTHCARE, LLC and ABDULFATAH ALI
Plaintiffs
v.
NOBLE ELDER CARE, LLC, NOBLE HOME HEALTH CARE, INC. and MOHA.1\IIED A. HASSAN
Defendants
DECISION Ai"lD JUDGiVIENT
Th.is case came before the court for a jtu-y-waivecl trial June 15 and 16, 2016. Plaintiffs
and Defendants presented evidence in the form of sworn testimony and exhibits.
Joint Exhibits 1 through 28 were admitted into evidence by stipulation. ' The trial proceeded on the basis of the Plaintiffs' complaint. The Defendants'
counterclaims were withdrawn during the trial. After the Plaintiffs rested, the Defendants
moved for judgment. The motion was taken under advisement. After the close of the
evidence, counsel for the parties presented closing argument on legal and factual issues.
Based on the entire record, the comt hereby adopts the following findings of fact and
conclusions oflaw, and renders judgment as set forth below.
Findings and Couclusio11s
1. Plaintiff AB Home Healthcare, LLC ["ABHH"J is a Maine limited liability company
doing business in Portland and other communities in southern Maine. The business of ABHB
is to provide personal care and heal th services to patients in their homes through caregivers (
e1nployed by ABHH. Most of the patients served by ABHH are receiving services through the
State of Maine Medicaid program, known as MaineCare.
2. Plaintiff AbclLtlfatah AJi is the chief executive officer and member of ABHH. Mr. Ali
founded ABHH in 2010 under the name United Home Healthcare Service, LLC. Unitecl's name
was later changed to AB Home Healthcare, LLC.
3. At al] pertinent times, ABHH has provided home health serV1ces to its patients
through the State of Maine's Medicaid progTam, known as MaineCare. Typically, a
MaineCal'e patient is referred for services to a home health care agency like ABHH by a care
coordinator-an agency responsible for connecting MaineCare patients with the providers of
iwrvi~F.~. In the case of ABHH, many MaineCare referrals came through a cue coordinator
called Elder Independence of Maine (EIM). The EilvI referral process starts when EIM
contacts the home health care agency regarding the proposed referral of a patient. After the
home health care agency confirms its willingness to accept the patient, the referral is
completed; the patient is assigned a caregiver employed by the home health care agency, and
the cost of services is billed by the home health agency to the State MaineCare program.
,1,. In 2013, Mr. Ali invited Defendant Moluuned Hassan to join him in working at AB
Home Healthcare. Mr. Ali and Mr. Hassan come from similar backgrounds-both were born
in Somalia and both came to the United States while young. Both have earned bachelor's and
master's degrees, and both have worked hard to advance themselves.
5. Mr. Hassan became the general manager of ABHH, and was responsible for day-to
day operations, including overseeing the hiring of caregiver employees. As general manager,
Mr. Hassan was familiar with the employees of ABHH and also familiar with ABHH's
operations. j\ifr. Ali's focus was less on day-to-clay operations and more on business
development and regulatory matters. At some point in 2013 or 2014, Mr. Ali g·ranted Mr.
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Hassan a share of ownership in AB Home Healthcare. Also, at some point while working with
Mr. Ali at ABHH, Mr. Hassan signed a non-competition agreement. It appears to be l\fr. Ali's
practice to require ABHH employees to sign such agreements as a condition of continued
employment. The non-competition agreement signed by Mr. Hassan is not in evidence, but it
appears to have limited Mr. Hassan's ability to operate a home health care agency 'in
competition with ABHH.
6. In May 2014, .Mr. Hassan left ABHH and started his own home health caxe agency.
He created Defendant Noble Elder Ca.re, LLC ["NEC"] as a Maine limited liability company in
May 2014 and operated his business th.roug·h NEC for several months. In December 20H.,, Mr.
Hassan established Defendant Noble Home Health Care, Inc., [NHHCJ and transitioned the
home health care business to be operated under the aegis ofNHHC.
7. In July 2014, Mr. Ali and ABHH filed suit against NEC and Mr. Hassan on various
theories of liability, including breach of the non-competition agreement. See AB Home
Healthcare, LLC et al. v. Noble Elder Care, LLC et al., Me. Super. Ct., Cum. Cty., Docket No.
PORSC-CV-14-0S.'34. Mr. Hassan and NEC responded by denying liability m1d asserting
counterclaims. The case \Vas later transferred to the Business illld Consumer Docket. See AB
Home Healthcare, LLC et al. v. Noble Elder Care, LLC et al., Me. Bus. & Cons. Dkt., No. BCD-CV
14-051. The pru·ties were represented in that litigation by the same counsel who represent
them in the present case. In October 2014, the case was settled and terminated by means of a
stipulation of dismissal.
8. Dming the three months that the case was pending, a large number of ABHH's
employees left and began working for NEC. See Joint Ex. 25 (summary chart showing dates of
hire and termination for ABI-IH and NEC/NHHC employees. There was no evidence that Mr.
Hassan directly solicited any of these employees to switch from Mr. Ali's agency to his agency.
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9. The terms of settlement were memorialized in a written Settlement Agreement and
Release dated October 11, 2014 and entered into evidence at trial as Joint Exhibit 1.
10. The Settlement Agreement and Release was executed by wfr. Ali and Mr. Hassan
near the encl of a long meeting on October 11, 2016 at the Riverton Community Center in
Portland. The meeting was attended by Messrs. Ali and Hassan and also by members of the
Somali community in Portland. The dispute between Mr. Ali and Mr. Hassan became a matter
of concern to the community, and some of the leaders of the c01mnunity decided to convene the
meeting with the goal of resolving the dispute outside the coLU'ts.
11. Mr. Hassan te~tified that he was essentially forced into s1gnmg the Settlement
Agreement and Rclea:ie. He said that mrnit of the community members who attended the
meeting were either Mr. Ali's relatives or from his clan, and that they pressured him into
signing the Settlement AgTeement and Release. The evidence indicates that Mr. Ali came to
the meeting with a draft of the Settlement Agreement, and that over the course of the six-hour
meeting, which ended after midnight, Mr. Hassan was persuaded to sign it.
12. The Settlement Agreement clearly was prepared by the attorneys for one or both
sides, although it recites that it is to be deemed jointly drafted. It is one-sided in some
respects-for example, it provides for the release of Mr. Hassan's and NEC's claims against Mr.
Ali and ABHH, but not for a reciprocal release of ABHH's and Mr..Ali's claims. Also, the
damages provisions appear to focus on damages for breach by Mr. Hassan and NEC rather than
any breach by Mr. Ali and ABHH of their obligations. In other respects, it contains provisions
benefiting both sides. The provisions of benefit to Mr. Hassan permit him to continue
operating NEC in competition with ABHH, and call for Mr. Ali to pay Mr. Hassan a total of
$7,500. Some of the provisions of benefit to Mr. Ali prohibited Mr. Hassan from hiring ( (
employees who had worked at ABHH within the prior year and accepting as patients persons
who had been patients of ABHH within the prior year.
13. Although there is some evidence that Mr. Hassan did sign the Settlement
Agreement under some pressure, the Defendants did not plead duress and, at least prior to
trial, did not advance the argument that the agreement was voidable due to clmess. In fact, the
Defendants in their cotmterclairn sought to enforce the Settlement Agreement and Release
against Plaintiffs.
14. .i\foreover, even if the circrnnstances nnder which Mr. Hassan signed made the
agreement voidable, his actions after signing can only deemed to have ratified the Settlement
Agreement and Release. See Drinkwater v. Patten Realty Co1p., 563 A.2d 772, 771-75 (Me. 1989)
(voidable contract may be ratified by subsequent conduct). He agreed to the dismissal of the
case, including his and NEC's counterclaims; he accepted the $7,500 payment to buy out his
ownership interest in ABHH, and he later confirmed the validity of the agreement in
communications with Mr. Ali. See Joint Ex. 2•1•.
15. For these reasons, the October 11, 2014 Settlement Agreement and Release is
generally enforceable against the Defendants, although the enforceability of specific provisions
is discussed further below.
16. Moreover, althoug·h NHHC is not a named party to the Settlement Agreement and
Release, and in fact was created by Mr. Hassan in December 2014, after the Settlement
Agreement and Release was executed, the parties have stipulated that NHHC is a successor
entity to NEC, see Joint Final Pretrial Statement at paragrnph l(B), and the non-competition
provisions of the Settlement Agreement and Release are recited to be binding upon successors
of the named parties. SeeJoint Ex. 1 at 3.A, 3.B. Moreover, the Defendants' counterclaim filed
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111 this claim recites that the Defendants, including NHHC, are entitled to enforce the
Settlement Agreement and Release.
17. Paragraph .'3.B of the Settlement Agreement and Release prohibits Mr. Hassan and
NEC and their successors in interest from contacting, soliciting or engaging in any business or
employee relationship for !iM< months with any of ABHH's cmrent employees or with former
ABHH's employees who had left ABHH's employ with.in 12 months of the contact, solicitation
or engagement. Joint Ex. 1 at 3.
18. Plaintiffs presented no evidence that the Defendants contacted or solicited current
or former employees of ABHH. However, Plaintiffs did present evidence that, after the signing
of the Settlement Agreement and Release, NEC and later NHHC hired numerous employees
who were working at ABHH on or after the date of the agreement and within a year of thei.r
termination at ABHH, in violation of paragraph 3.B of the Settlement Agreement and Release.
See Joint Exs. 12, 20, 21, 25. According to Joint Exhibit 25, Defendants hired a total of 22
employees who had been employed at ABHH on or after October 11, 2014, within a year of
when they left ABHH's employ. As noted above, NEC had hired numerous employees away
from ABHH before the Settlement Agreement and Release was signed, and that practice
continued even after the date of the Settlement Agreement.
19. Because he was general manager of ABHH until May 2014t, Mr. Hassan clearly
knew all of the persons employed by ABHH during his time at ABHI-I, and knew that the
Settlement Agreement and Release prohibited his company from hiring those people until they
had been gone from ABHH's employ for at least a year. Joint Exhibit 25. On the other hand,
there is no evidence that he knew whom ABHH had hired after his clepartu~·e in May 2014.
20. Accordingly, the hiring by NEC or NHHC of employees within a year of their
departure from ABHH were shown to be knowing and willful breaches of the Settlement
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Agreement only when the employee's employment with ABHH overlapped with Mr. Hassan's
employment there. The clearest example of this situation involves a registered nurse, Susan
Giffin, who was employed at ABHH from August 2013 until March 2015 and was hired by
NHHC in September 2015. The resume she submitted to NI-IHC lists her employment at
ABHH, but lvlr. Hassan had to have known of it regardless, because they both worked at
ABHH during 2013-1':b until Mr. Hassan's departure.
21. Paragraph .'3.A of the Settlement Agreement and Release prohibits Mr. Hassan and
NEC and their successors in interest from contacting, soliciting or engage in any business
relationship for 2':I.• months with any of ABHI-I's patients "(current and within the past twelve
( 12) month period) of the elate of the contact, solicitation or engagement . . ." Joint Ex. I at 3.
Plaintiffs presented no evidence that the Defendants contacted or solicited any current or
former patients of ABHH. However, the evidence indicated that after October 11, 2014< Mr.
Hassan's companies-NEC and later NI-lliC-accepted at least 19 patients referred through
MaineCare within 12 months of their having been patients of ABHH. See Joint Ex. 27; see also
Joint Ex. 26. There was no evidence that the Defendants sought to have these patients referred
to NEC or NHHC, or knew before a referral that the patient in question would be referred.
22. Plaintiffs claim they are entitled to damages for each breach of the Settlement
Agreement and Release, according to the liquidated damages provision contained in paragraph
5.A of the Settlement Agreement. The operative provision is as follows:
In the event that Defendants breach any of the provisions of Paragraphs 3.A or 3.B at any time while they remain in effect, then, within thirty 30 calendar days of the occurrence of the breach, the Defendants shall pay to ABHH as liq uiclatecl damages, and not as a penalty, the amount of $10,000 per occurrence. The parties recognize that each client represents a different income figure for an agency, depending on the amount of services they require, just as each employee represents a different level of investment by an agency depending on their position, hours, etc. In light of this, the · $10,000 liquidated damages provision is arrived at by the parties, in a good faith effort to avoid the difficulty of calculating actual damages in the event of a breach by Defendants. The amount of liquidated damages is believed by al] sides to be an approximation of likely
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damages caused in the event of such a breach and they voluntarily agree that this figm-e shal] be used as a substitute for a calculation of actual damages in the event of such a breach.
Joint Ex. 1 at 5.
23. Paragraphs 3.A and S.B, the paragraphs referenced m the ]iqniclatecl damages
provision, · prohibit Mr. Hassan and NEC (and their successors, such as NHHC) from any
contact, solicitation or engag·ement of the patients and employees within the scope of
Paragraphs 3.A and 3.B respectively.
24. The Defendants challenge the validity of the liquidated damages prov1S1on at
parng-raph 5.A. ·w hether a liquidated damages provision is enforceable is a question of law.
"To be enforceable, a liquidated damages dause 111usl meet a two-part test. First, it must be
uvery difficult to estimate [the damages caused by the breach] accurately," and second, the
amount fixed in the agreement must be a reasonable approximation of the loss caused by the
breach." Sisters of Cluzrity Health System v. Farrago, 2011 ME 62, ,i 13, 21 A.sd 110, 115, citing
Raisin 1vfemorial Trnst v. Casey, 2008 ME 63, ,I 16, 945 A.2d 1211, 1215.
25. There are several problems with the liquidated damages provision in this case:
• because paragraphs 3.A and 3.B prohibit Mr. Hassan and NEC from contacting or
soliciting patients and employees of ABHH, as well as accepting them as patients or
hiring them as employees, paragraph 5.A would require Defendants to make a $10,000
payment in circumstances involving only contact that caused ABHH to suffer no loss or
damage at all as a result of the breach.
• because paragraphs S.A and s.B prohibit Hassan and NEC from hiring persons who had
already left ABHH's employ up to a year previously, and patients who already had
ceased to be served by ABHH up to a year previously, the liq ti.idated damages provision
would entitle ABHH to be paid in circumstances when it suffered no actual loss as a
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result of any action by NEC or Mr. Hassan, and therefore would have no entitlement to
actual damages. To illustrate, the nurse Susan Giffin left ABHH's employ in March
2015. There is no evidence that Mr. Hassan or NEC induced her to leave ABHH's
employ, but Plaintiffs still claim that they are owed $10,000 because NEC hired her six
months after she had left ABHH's employ. The situation is similar with patients-the
comt cannot determine whether the 19 MaineCare clients who were former ABHH
patients were cmrent or former patients of ABHH at the time they were referred to
NEC or NHHC. There is no evidence that Defendants contacted or solicited any of the
19, so the record is silent as to whether the Defendants caused ABHH to lose these
patients.
26. Thus, the liquidated damages provision calls for a substantial payment to ABHH in
circumstances that do not involve any actual loss or damage to ABHI-I clue to the breach. It
follows that the $10,000 liquidated damages amount cannot be said to be a reasonable
approximation of ABHH's actual loss or damage caused by the breach. Accordingly, the comt
declines to enforce the liq ltidated damages provisions of paragraph 5.A.
27. Plaintiffs have not proved any actual losses or damages caused by the breaches.
ABHH did submit a trial exhibit indicating that its annual gross revenues have fallen by about
$400,000 during the period since May 14. However, these are gross runounts, not net losses,
and the high level of competition in the market (there being abont 20 home health care business
in the Portland area) could be the cause.
28. However, because the Plaintiffs have proved multiple breaches of the Settlement
Agreement and Release, they are entitled to relief under two provisions of the Agreement.
29. First, paragraph 5.B of the Agreement entitles ABf-IH, in the event of a breach by
Mr. Hassan and/or NEC, to recover its legal fees incmrecl in the prior litigation between the
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parties, which the Agreement says were $20,000. Defendants challenge paragraph 5.B as
another liquidated damages provision, but the court views it otherwise. ABHH's $20,000 legal
cost is an expense that the parties agreed was actually incurred-it is not a figure akin to the
$10,000 liq uidatecl damages number that the parties intended to substitute for an actual loss or
expense. From a contractual standpoint, what paragraph 5.B reflects is the parties' agreement
that Mr. Hassan and NEC would not be liable for ABHH's leg·al costs in the prior case unless
they breached the Settlement Agreement, in which case they would be liable. Settlement
agreements often provide that released claims are resurrected and compensable in the event of a
breach of the settlement. This agreement is no different.
SO. Plaintiffs also seek an i1tjunction along the lines of the prohibition contained in the
Settlement Agreement and Release at paragraph 5.E. See Joint Ex. 1 at .3. Paragraph 5.E
provides that, in the event of any breach of paragraphs 3.A and 3.B, Mr. Hassan will not
operate NEC or any other business in competition with ABID-I within 50 miles of ABHH's
office, and will not be employed by any competitor of ABHH within 50 miles. At the closing
asgmnent, A.BI-II-I and Mr. Ali confirmed that they are asking the court to convert what is now
a contractual prohibition into an injunction prohibiting Mr. Hassan from operating any
business in competition with ABHH, thereby essentially shutting down NHHC, the business
Mr. Hassan is now operating. Mr. Hassan and NHHC oppose any award of injunctive relief
s 1. A middle grotmd between the injunction shutting down NHHC and no injunctive relief might be an injunction incorporating the prohibitions contained in paragraph 3.A and
3.E-barring Mr. Hassan and NHHC from contacting·, soliciting or engaging as patients or
employees any person who was a patient or employee of ABHH within the past year. Neither
side is asking for the court to adopt that middle ground, so the court will not consider it
further.
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32. The court declines to adopt ABI-II-I's request for injunctive relief, which would have
the effect of shutting down NHHC, for several reasons. First, the circumstances surrmmcling
the execution of the Settlement Agreement and Release raise equitable·defenses to injunctive
relief.-it is said that those who seek equity must do equity, and it does appear that Mr. Ali
arranged for Mr. Hassan to be pressured into signing the Settlement Agreement and Release.
N!r. Hassan's subsequent ratification of the agreement means that it remains enforceable, but
the court retains its discretionary authority to withhold injunctive relief. Also, both sides were
reluctant to share employee and patient information, and the injunction would be unworkable
unless Mr. Ali gave Mr. Hassan a complete list of patients and employees whom Mr. Hassan
could not accept or hire, and .Mr. Hassan's compliance could be reliably verified by Mr. Ali.
The discovery issues rnnning in both directions that preceded trial raise serious doubt as to
whether an injunction wonlcl be workable. Lastly, the passage of time is a relevant factor. This
action was filed in September 2015, nearly a year after the Settlement Agreement and Release
were signed, although it has moved quickly since coming into the Business and Consmner
Court in January 2016.
33. Because the Plaintiffs have proved multiple breaches of the Settlement Agreement
by NEC, NHHC and Mr. Hassan, paragraph 5.C of the Agreement entitles ABHH to recover
reasonable attorneys fees and court costs attributable to the breaches. However, because
Plaintiffs did not prevail on two important issues-enforcing the liquidated damages provision
and obtaining injtmctive relief-the award of attorney fees and costs will be for less than the
full amount requested. The fee affidavit filed by Plaintiffs' counsel for fees and costs billed
through June 16, 2016 indicates that the fees and incurred and costs incurred are generally
reasonable, but the court will reduce the total by .'30% to $19,0'14.55, to reflect the fact that
Plaintiffs did not fully prevail.
Il g,1,. The judgment amU'Cls both Plaintiffs judgment on the declaratory judgment claim
in Count I of the Complaint, but, on Count TI of the Complaint, awards only Plaintiff ABHH
judgment against the Defendants jointly and severally in the amount of $S9,0H.55 (the
$20,000 for the legal costs of the prior case and the $19,Q,H.55 partial fee award above). The
award is in favor of ABHH only because only ABHH is entitled to recover the $20,000 attorney
fees from the prior litigation, and because attorney VVeyrens' fee affidavit for time through the
trial lists only ABHH as the client.
It is hereby ORDERED:
1. Defendants' Motion for Judgment is denied.
2. Judgment is hereby r;ranted to Plaintiffs against Defendants on Count I of the
Complaint. The court hereby finds and declares that Defendants are in breach of the
Settlement Agreement and Release as set forth above.
s. Judgment is hereby granted on Count II of the Complaint to Plaintiff AB Home
Health Care, Inc. against Defendants Noble Elder Care, LLC, Noble Horne Health Care, Inc.,
and Mohamed A. I-Iassan, jointly and severally, in the amotmt of $39,04'1!.45, with prejudg·ment
and postjuclgment interest. Judgment is granted to Defendants on Count III of the
Complaint.
,1,. Plaintitfa are hereby awarded their costs as prevailing parties.
5. Defendants' counterclaims, having been voluntarily withdrawn during· trial, are
dismissed with prej uclice.
r ursuant to M .R. Civ. P. 79(a), the clerk is hereby directed to incorporate this Decision and Judgment by reference in the docket.
Dated July 6, 2016
Justice, Business and Consumer Court
~mered on the Docket '") - 8- Coples sent via Mail_ Electronlcally Llf 7" 12