MACHIAS, Maine — The Maine Supreme Judicial Court has overturned an earlier decision out of Washington County Superior Court that pitted Dr. F. James Whalen against Down East Community Hospital for breach of contract.

In its ruling Tuesday, the court found in the hospital’s favor, stating that the evidence does not support Whalen’s claims.

Reached at his Machias office Wednesday, Whalen said the appeal and the ruling were moot points, since he had voluntarily left the hospital in May.

“It was an exhibition game,” he said of the appeal.

Whalen, an orthopedic surgeon, had been a member of the DECH staff for 30 years. DECH bylaws, the court ruled, appeared to have conflicting rules that indicated whether staff contracts should be offered every two years, or could be offered for shorter durations.

Whalen applied in 2006 for a two-year reappointment but was instead given a one-year appointment, based on low assessment scores, the appeal said. He did not contest that decision.

In 2007, Whalen again applied for reappointment but during that time the medical staff was investigating whether Whalen had improperly disclosed protected peer review data concerning a colleague to an investigator with the Maine Attorney General’s Office. Whalen was given a three-month staff appointment, pending the out-come of the investigation.

In February 2008, the CEO at the time, Wayne Dodson, noted that the investigation was on-going and Whalen was reappointed on a month-to-month basis.

The day after Dodson reappointed Whalen, the investigation wrapped up and Whalen’s privileges were suspended for 60 days for violating peer process confidentiality.

The hospital’s credentials committee met March 4 to consider Whalen’s reappointment and agreed not to recommend further reappointment.

A hearing was held, testimony was allowed by both sides, and the hearing committee supported the nonrenewal.

Whalen subsequently sued DECH for breach of contract in a lawsuit dated Aug. 13, 2008.

As a result of the ongoing process, his hospital privileges were terminated on Aug. 15, 2008.

Washington County Superior Court Justice Kevin Cuddy, ruling on the breach of contract suit, found on Feb. 9, 2009, that the hospital’s staff bylaws did not allow for staff appointments of less than two years. The court also ruled that Whalen’s privileges should be reinstated pending the appeal.

The Law Court, however, took three provisions within the bylaws and viewed them together, ruling that since reappointments of less than two years had been made for Whalen and not disputed, short-term extensions of his contract did not constitute a breach.

Whalen’s lawsuit is one of several against DECH, which has been plagued with problems and accused of poor leadership, inadequate care and overbilling.

The Centers for Medicaid and Medicare Services notified DECH on June 26 that the hospital no longer qualified for reimbursements because it had not corrected a litany of problems and deficiencies identified over the past two years.

That same day, DECH placed CEO Wayne Dodwell on administrative leave.

The hospital then was placed into receivership by a federal court order, with Brewer-based Eastern Maine Healthcare Systems set as its emergency operator.

The Machias hospital first came under scrutiny in January 2008, when Reid Emery, a former patient, checked out of the hospital and later was found dead in a nearby snowbank. Since then, other incidents led to state and federal investigations, including one earlier this year by CMS that found serious violations in emergency room and obstetrics department procedures. Despite several chances to address deficiencies, DECH failed to come into full compliance with CMS rules.

Reached for comment late Wednesday, DECH interim CEO Doug Jones said of the Law Court’s decision that he certainly wasn’t going to gloat about the ruling but “the hospital has been accused of a lot of things and we are certainly pleased to be cleared on this issue.”

Whalen said Wednesday that he and at least two other doctors who left DECH “would love to go back and support the hospital.”

But, he said, even under the EMHS direction, he senses there are no changes for the better.

“Until people see changes in the leadership and the board of trustees, we can’t go back,” he said. “The environment is unchanged.”

Jones said that a consulting firm has been hired to determine how to best restructure the board of trustees. He said the hospital will accept community input into any changes.