Locum Physician, P.C. v All City Family Healthcare Ctr., Inc.

[*1] Locum Physician, P.C. v All City Family Healthcare Ctr., Inc. 2010 NY Slip Op 50501(U) [26 Misc 3d 1241(A)] Decided on March 25, 2010 Supreme Court, Kings County Demarest, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on March 25, 2010
Supreme Court, Kings County

Locum Physician, P.C., Plaintiff,

against

All City Family Healthcare Center, Inc., Nasser F. Hassan, Syed Gardezi, Rosa Pokh and Emilie Auguste, Defendants.



29270/08



Attorney for Plaintiff:

Fredric Lewis, Esq.

7 Dey Street, 6th Floor

New York, NY 10007

Attorney for Defendant:

Alan Karmazin, Esq.

Baron Associates, P.C.

2509 Avenue U

Brooklyn, NY 11229

Carolyn E. Demarest, J.

Defendants All City Healthcare Center, Inc. ("All City"), Nasser Hassan, Syed Gardezi, Rosa Pokh, and Emilie Auguste (collectively, the "Defendants"), move, pursuant to CPLR § 3212, for an order granting them summary judgment dismissing the complaint of plaintiff Locum Physician, P.C. ("Plaintiff" or "Locum Physician"). For the reasons set forth below, Defendants motion for summary judgment is denied.

BACKGROUND

This is an action commenced by Locum Physician, P.C., a professional medical corporation which provides anesthesiology and related services to surgeons and physicians, to recover damages for breach of contract against the owners and operators of All City Healthcare [*2]Center, an ambulatory/outpatient surgical and medical facility in Brooklyn, New York. The Plaintiff corporation is owned and operated by Marina Galperin, a medical doctor licensed to practice in the State of New York. On March 27, 2008, the parties entered into an Anesthesia and Perioperative Services Agreement ("the Agreement"), which extended and renewed for five additional years the prior one year contract between the parties. Under the terms of the Agreement, Plaintiff was to provide full-time anesthesiology services to All City patients.

Throughout the life of the Agreement, Dr. Galperin hired and supervised additional anesthesiologists who provided their services during operative procedures at All City. According to Plaintiff, the number of anesthesiological related procedures at All City increased rapidly, from 1,380 in 2006, to 7,162 in 2007, to 9,741 in the portion of 2008 culminating with Plaintiff's termination. The gross income of Plaintiff's corporation increased rapidly as well, from $277,191 in 2006, to $934,185 in 2007, to $1,137,926 through September 18, 2008.

On September 12, 2008, after a series of incidents, which, according to Defendants, threatened the health and safety of All City patients, Defendant Auguste sent a memorandum to Dr. Galperin requesting that Locum Physician employ an additional anesthesiologist on hand, not assigned to a specific surgical suite, in order to assist during procedures.

On September 18, 2008, Defendants verbally notified Dr. Galperin that they were unilaterally terminating the Agreement by reason of Dr. Galperin planning on administering anesthesia to a large number of patients by herself, without seeking the help of another doctor, in direct contravention of the September 12th memorandum requesting that Dr. Galperin employ additional anesthesiologists. On September 22, 2008, a written notification of the verbal termination was sent to Dr. Galperin via certified mail. The written notification stated that there were several occasions during which patient care had been compromised under Dr. Galperin and Plaintiff's direction. It specifically recites a September 4, 2008 incident where the safety of two patients was allegedly compromised due to Dr. Galperin's poor technique and poor judgment. The letter also alleges that Dr. Galperin reported false facts, failed to use proper equipment, and failed to have a plan that would minimize the risk to patient safety. See Letter to Marina Galperin, dated September 22, 2008.

On October 21, 2008, Plaintiff filed this action alleging that the breach of contract between Plaintiff and All City was based on religious prejudice. The Amended Complaint, dated April 30, 2009, removed the cause of action for religious discrimination and alleged a breach of contract based on the termination notice provisions of the March 27, 2008 Agreement.

In their motion, Defendants argue that: (1) All City had the right to terminate the Agreement without cause at any time; (2) Plaintiff's conduct materially damaged the reputation and integrity of All City; and (3) Plaintiff's allegations regarding kickbacks are inconsequential to the language of the March 27, 2008 Agreement.

Plaintiff disagrees, arguing that: (1) Defendants violated the termination clause of the Agreement mandating 30 days prior written notice in the event of termination without cause by affording Plaintiff only one hour of oral notice; (2) Defendants violated the termination clause of the Agreement permitting immediate termination for cause by falsely alleging that Plaintiff provided substandard anesthesiology services; (3) Defendants wrongfully terminated the Agreement based in part upon Plaintiff's refusal to pay to Defendants kickbacks of a portion of [*3]Plaintiff's anesthesiology billings; and (4) Defendants wrongfully terminated the Agreement in order to take over Plaintiff's practice.

DISCUSSION

In order to obtain summary judgment, the movant must establish its cause of action or defense sufficiently to warrant a court's directing judgment in its favor as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. See Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; CPLR 3212[b]. Where the proponent of the motion makes a prima facie showing of entitlement to summary judgment, the burden shifts to the party opposing the motion to demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action. See Vermette v Kenworth Truck Co., 68 NY2d 714, 717 [1986].

According to section 9 of the Agreement, the parties have the right to "terminate [the] Agreement without cause any time [,] which termination shall be effective upon the giving 30 days written notice." In addition to the parties' right to terminate the Agreement without cause, section 9.1 of the termination clause states that the "Agreement shall terminate upon the occurrence of any of the following events, with such termination to be effective immediately upon the giving of such notice." Of specific relevance to this dispute is section 9.1.3, which references "[t]he conviction of any employee of the Corporation of any crime or the participation by any such employee in any conduct which has the potential to materially damage the reputation or integrity of the Center."

A.Termination Without Cause

Defendants argue that they had a right to terminate the Agreement with Locum Physician without cause at any time. It is well-established that when a contract affords a party the unqualified right to limit its life by notice of termination, that right is absolute and will be upheld in accordance with its clear and unambiguous terms. See Red Apple Child Dev. Ctr. v Cmty. Sch. Dists. Two, 303 AD2d 156, 157 [1st Dept 2003]; see also New York Telephone Co. v Jamestown Tel. Corp., 282 NY 365, 373 [1940]. In this context, the Court need not consider whether Defendants solicited kickbacks or terminated Plaintiff in order to take over Plaintiff's practice and patients. See Red Apple Child, 303 AD2d at 157 [1st Dept 2003], quoting Big Apple Car v City of New York, 204 AD2d 109, 111 [1st Dept 1994] ("A party has an absolute, unqualified right to terminate a contract on notice pursuant to an unconditional termination clause without court inquiry into whether the termination was activated by an ulterior motive").

However, Defendants have not made out a prima facie showing of entitlement to summary judgment under this theory because they have failed to comply with the notice provisions of the Agreement. Section 9 of the Agreement requires the terminating party to serve written notice 30 days prior to the date of termination. It is uncontested that All City verbally terminated the Agreement on September 18, 2008 and that written notice was not provided to Dr. Galperin until four days later. Despite the termination at will provision, Defendant is not permitted to simply ignore the other provisions of the contract. Instead, the Agreement must be "construed so as to give full meaning and effect to all of its provisions." See Vanship Holdings Ltd. v Energy Infrastructure Acquisition Corp., 65 AD3d 405 [1st Dept 2009] (quoting American Express Bank v Uniroyal, Inc., 164 AD2d 275, 277 [1st Dept 1990]). All words and phrases, in [*4]this case the 30 day notice provision, must be enforced in accordance with its plain meaning.

B.Termination For Cause

Defendants also argue that Dr. Galperin and her employees engaged in five acts of gross negligence and unprofessional conduct which materially damaged the reputation and integrity of the Center, thereby triggering section 9.1.3 of the Agreement which allows for immediate termination without notice.

Two of these incidents occurred before the parties entered into the March 27, 2008 Agreement.

On July 7, 2007, a patient came to All City for a urinary tract procedure only to wake up with a broken tooth next to her on a pillow. According to the affidavit of Defendant Hassan, Dr. Galperin failed to question the patient regarding any loose teeth, broke the tooth during the procedure, and more importantly, put the patient at risk for respiratory failure. On October 22, 2007, Dr. Galperin allegedly released a patient from All City after a foot procedure even though her arm was swollen from an injection. A few days later, the patient was admitted to a hospital with a condition that affected the veins and tissues near the skin surface. Defendant Hassan contends that this condition was a direct result of Dr. Galperin's failure to properly utilize a catheter during the procedure. See Affidavit of Nasser Hassan, dated March 25, 2009.

Plaintiff contends that Defendant's summary of the June 7, 2007 incident is incorrect. According to Dr. Galperin, the patient failed to mention in her pre-anesthesia assessment that she had recently undergone a root canal and that the tooth remained uncrowned, rendering the tooth excessively fragile. In any event, Plaintiff argues, there is no evidence that the tooth was broken during the procedure as opposed to sometime during recovery. Finally, Dr. Galperin contends that the patient was never in danger of respiratory failure. As to the October 22, 2007 procedure, Plaintiff argues that the catheter must have been properly utilized, or else the patient would never have been anesthetized. More importantly, Plaintiff contends that the patient never suffered from a swollen arm and did not complain about her arm until three or four months after the procedure. Furthermore, as Dr. Galperin points out, if her activities prior to March 27, 2008 Agreement did in fact threaten the lives of All City's patients, it is surprising that All City would extend the original employment agreement for an additional five years.

Defendants also refer to three incidents which took place after the parties entered into the March 27, 2008 Agreement. The first incident occurred on April 3, 2008, during which Dr. Galperin began to administer general anesthesia for a patient receiving a right knee arthroscopy. According to Dr. Sclafani, a board-certified orthopaedic surgeon, the patients blood oxygen level suddenly began to drop, at which point Dr. Galperin was unsuccessful at her attempts to intubate the patient, thus necessitating the help of Dr. Farag, another anesthesiologist. Dr. Farag allegedly repositioned the patient's intubation and was successful in raising the patient's oxygen level. During the arthroscopic procedure, however, the patient's oxygen levels began to fluctuate again, at which point Dr. Galperin requested the assistance of Dr. Farag for a second time, who was unable to assist because he had already started administering anesthesia medications to another patient.

The second incident, which took place in early August of 2008, allegedly involved a racially charged verbal dispute between Dr. Ilya Kozlov, an independent contractor employed by [*5]Plaintiff, and Emilie Auguste, an African American woman employed by All City as a nurse and center administrator. According to Defendant Hassan, Dr. Galperin was aware of the racially themed jokes and remarks made by Dr. Kozlov but never took them seriously, evidencing a failure by Dr. Galperin to act professionally and exercise good judgment. Dr. Kozlov resigned from Locum Physician on August 11, 2008.

The third incident occurred on September 4, 2008 during a left shoulder arthroscopy. According to Dr. Sclafani, a patient's saturation levels began to decrease after anesthesia had been administered, apparently due to an equipment malfunction. At this point, according to Ms. Auguste, Dr. Galperin began to bang on the anesthesia machine. After numerous requests to stop tampering with the equipment, and in the middle of a procedure, Dr. Galperin requested that a new machine be brought to the operating room. Soon after, Dr. Galperin allegedly had trouble ventilating the patient, requiring the help of a nurse and another doctor to correct the situation using a laryngeal mask airway device. Based on these incidents, Defendants allege that the measures taken by Dr. Galperin were detrimental to her own patients and those tended to by the other anesthesiologists who were required to render assistance to Dr. Galperin.

On September 12, 2008, Ms. Auguste sent Dr. Galperin a memorandum regarding the necessity of having a "full-time, free-hand" anesthesiologist in case of future medical emergencies. According to Hassan, Dr. Galperin signed and agreed to have available a free hand anesthesiologist available at all times. On September 18, 2008, Hassan contends that Dr. Galperin planned on administering anesthesia to "27 patients by herself without requesting additional anesthesiologists" to be present in direct contravention of the recent agreement between the parties regarding the use of the free hand anesthesiologist. After learning of these plans, Dr. Galperin and Locum Physician were terminated.

Plaintiff counters that Defendant Hassan's March 25, 2009 affidavit claiming gross negligence and poor judgment on behalf of Dr. Galperin is "replete with misstatements of fact and blatant falsehoods." See Affidavit of Marina Galperin, dated April 3, 2009. Dr. Galperin admits that both the April 3, 2008 and September 4, 2008 incidents involved a "difficult intubation," but points out that in approximately 7% of all attempted intubation anesthesiology procedures, anesthesiologists encounter a patient airway which for various reasons is difficult to intubate. In those cases where intubation is difficult, proper protocol dictates a request for assistance from another anesthesiologist and a second attempt at intubation. In both cases, Dr. Galperin requested the assistance of a second anesthesiologist, after which time the patients were successfully intubated and ventilated.

While Dr. Galperin also admits that Dr. Kozlov "had a sense of humor," she never heard him make any racial, ethnic, or disparaging remarks. At the same time, she never received any complaints about Dr. Kozlov's demeanor, attitude, or performance. According to Dr. Galperin, Dr. Kozlov resigned only after learning that he would be terminated by All City.

As to the April 3 incident, Dr. Galperin admits that she requested the help of Dr. Farag, another anesthesiologist, but contends that there is no custom or practice regarding calling for assistance from other anesthesiologists on duty. According to Dr. Galperin, the subsequent drop in the patients oxygen level was also common, and the procedure was thereafter uneventful. As to the September 4, 2008 incident, Dr. Galperin contends she was required to substitute anesthesia machines mid-procedure because an oxygen leak prevented a respiration bag from [*6]filling properly. Other than attempting to rectify the oxygen leak, Dr. Galperin contends she never handled the machine in an unprofessional manner.

While admitting that she and Hassan discussed the possibility of adding a "free-hand" anaesthesiologist not assigned to a specific surgical suite, Dr. Galperin contends this would have been impossible given the nature of the center and the volume of patients being served. Similarly, Dr. Galperin admits that she was planning on administering anesthesia to 27 patients on September 18, 2008, but contends this was reasonable given the nature of the procedures. According to Dr. Galperin, half of the patients required only local anesthetics or injections of medications and the other half were receiving sedatives, a procedure carried out for between 12 and 20 patients by each anesthesiologist in the facility per day.

Based upon the record, and construing the facts in a light most favorable to the Plaintiff, this Court concludes that the Plaintiff has raised triable issues of fact sufficient to preclude summary judgment. As to clause 9.1.3 of the Agreement allowing for immediate termination upon the occurrence of certain enumerated events, Plaintiff has raised a triable issue of fact as to whether or not the actions of

Dr. Galperin and Dr. Kozlov had the potential to materially damage All City's reputation. Specifically, issues of fact exist as to whether Dr. Galperin's actions put patients in danger, whether she exercised proper judgment in emergency situations, and whether she was aware of and/or condoned the alleged discriminatory remarks of Dr. Kozlov.

C. Waiver Provision

Finally, during oral arguments, Defendants argued that Plaintiff corporation waived the right to resort to the courts for relief. Section 4.1.9 of the Agreement states that "each physician agrees that upon termination, cancellation or expiration of this Agreement, each such physician shall resign as a member of the medical staff of the center and waive such physician's right to a hearing and appellate review." Although a party may in certain circumstances waive his or her right to judicial review, for example, where the waiver is explicit or where the waiver serves as some form of consideration, this Court declines to read section 4.1.9 so broadly. See Thrift Ass'ns Serv. Corp. v DeBuono, 255 AD2d 809, 813 [3rd Dep't 1998]; see also Whitehead v State Dep't of Mental Hygiene, 51 NY2d 781 [1980]. Adopting the broad meaning of the waiver provision advanced by the Defendant would essentially render the rest of the Agreement ineffective. Moreover, the provision, by its terms, relates to the rights of an individual physician employed by Plaintiff "Corporation" upon "cancellation or expiration" of the Agreement between the Plaintiff and Defendant "Center," and not to Plaintiff's right to seek to enforce the terms of the Agreement as against Defendants.

CONCLUSION

Accordingly, Defendants' motion for summary judgment is denied. The foregoing constitutes the Decision and Order of the Court.

ENTER,

J. S. C.