Kansas Appeals Court Reverses Dentists’ Win in Delta Dental of Kansas Governance Fight

Edited by Dentaltown staff

The Kansas Court of Appeals has reversed a district court ruling that voided governance changes adopted by Delta Dental of Kansas’ board over the objections of its dentist-elected directors. The court sent the dentists’ remaining claims back for further proceedings.

The April 17 decision in Troilo v. Yager, No. 128,771, concerns a derivative lawsuit brought by Mark P. Troilo and Christopher Leiszler, dentist members of Delta Dental of Kansas. They challenged amendments to the nonprofit’s articles of incorporation and bylaws that its board adopted Dec. 11, 2020.

Delta Dental of Kansas is a nonprofit dental service corporation formed in 1972 under the Kansas Nonprofit Dental Service Corporation Act. That law requires a 10-member board. The state’s executive branch appoints six directors, two named by the governor and four by the insurance commissioner, and member dentists elect the other four. According to the court, Delta Dental has practicing agreements with about 95% of licensed dentists in Kansas.

Beginning in 2019, the two dentists proposed amendments that addressed dentist reimbursement rates and the policies used to set them. Delta Dental’s management told the board it believed the proposals threatened the company’s viability. At the December 2020 meeting, the board instead adopted its own amendments, which two appointed directors had developed with counsel. The amendments were not provided to the full board beforehand or listed on the agenda. All six appointed directors voted for them, and all four elected directors voted against.

Sedgwick County District Judge William S. Woolley ruled that Delta Dental’s pre-amended articles required member approval of amendments, so the board lacked the power to adopt them on its own. He did not find that the directors breached their fiduciary duties, but he found the procedures they used inequitable. He ordered Delta Dental to refile its pre-amended articles with the Kansas Insurance Commissioner.

The appeals panel found the district court misread the articles, which it said did not require member approval of amendments to the articles. It also reversed the court’s equitable relief, finding the dentists had no separate claim in equity once the district court found no breach of fiduciary duty. The panel upheld the dismissal of the four elected directors from the case.

The dentists did win on one threshold question. The panel agreed they had standing to bring the derivative action and had shown that a pre-suit demand on the board would have been futile.

The court remanded the dentists’ claims about the substance of the 2020 amendments, the legality of the bylaw amendments, and whether the procedures used to adopt them rendered any of the changes illegal, invalid, or unenforceable. Judge Cline wrote the unpublished opinion for a panel that also included Judges Isherwood and Coble.

Troilo has said the case is now headed to the Kansas Supreme Court, with oral argument expected Nov. 2. The court had not yet posted its docket for its Nov. 2–6 argument week.

Sources:
Kansas Court of Appeals, Troilo v. Yager, No. 128,771, memorandum opinion, April 17, 2026: searchdro.kscourts.gov/128771.pdf
Kansas Judicial Branch, Supreme Court Dockets: kscourts.gov/Supreme-Court-Dockets