Fried v. Straussman

• Decision Date: 07 May 1975
• Citation: 82 Misc.2d 121,369 N.Y.S.2d 591
• Parties: Allan FRIED and Maxine H. Fried, Plaintiffs, v. Edward STRAUSSMAN and George Straussman, co-partners, etc., Defendants.
• Court: New York Supreme Court

Page 591

369 N.Y.S.2d 591

82 Misc.2d 121

Allan FRIED and Maxine H. Fried, Plaintiffs, v. Edward STRAUSSMAN and George Straussman, co-partners, etc Defendants.

Supreme Court, Nassau County.

May 7, 1975.

Harry Kamer, Brooklyn, for plaintiffs.

Meyer, English & Cianciulli, P.C., Mineola, for defendants.

MEMORANDUM

ALEXANDER BERMAN, Justice.

Plaintiffs, husband and wife, are physicians who number among their patients approximately 50 residents of a proprietary Nursing Home and Health Related Facility known as Grace Plaza of Great Neck. In this action, they seek a permanent injunction restraining the proprietors of Grace Plaza from denying them access to these patients.

Grace Plaza accommodates approximately 214 aged and infirm people, of whom 167 occupy the first three floors which constitute the Health Related Facility portion, and the balance of 47 occupy the Nursing Home portion of the building on the fourth floor.

Defendants claim that they have an absolute right to exclude from their privately owned facility any persons they deem undesirable. Furthermore, it is their contention, in any event, that they have done so with good cause in that plaintiffs have failed to comply with certain policies established by them, have made excessive numbers of visits to their patients, have been intransigent, uncooperative and abrasive in their attitude toward management and have unduly interfered with the operation of their facility.

Grace Plaza was constructed by defendants George Straussman and Edward Straussman, partners and co-administrators of this institution which was opened on or about May 15, 1972. They retain a consulting physician on a part time basis, and a full time director of nurses, all as required by the New York State Hospital Code.

The average age of the resident patients is 85 years. Some of them are ambulatory and others are bedridden, but all of plaintiffs' patients and residents are entitled to receive Medicare benefits under Public Law 89--97 of the 89th Congress (H.R. 6675, July 30, 1965, cited as the 'Social Security Amendments of 1965.' Most of these residents are also recipients of Medicaid benefits.

This facility operated under a Certificate of Approval issued by the Public Health Council of the State of New York, and pursuant to Sec. 700.3 of the State Hospital Code, is required to 'comply with all pertinent Federal laws and regulations enacted pursuant thereto, applicable State law, including the Public Health Law, and the Mental Hygiene Law and Codes, rules and regulations enacted pursuant thereto . . .'

The disputes between the administrators of Grace Plaza and plaintiff, in part, concerned several so-called policies established by defendants, as follows: (a) policy disapproving of xeroxed doctor's orders; (b) policy limiting to 30 the number of patients that each doctor could treat in the facility; (c) policy of referral for consultants' services such as podiatrists; and (d) policy against admission of physicically or mentally unsuitable persons. Defendants claim that plaintiffs refused to comply with these policies, in that they continued to xerox doctors' orders; in that they objected to a limit on the number of patients that they could treat at the facility; that they engaged a consulting podiatrist on one occasion in violation of the policy that such consultant should meet with management's prior approval; and that on one occasion, plaintiff, Dr. Allan Fried, certified that a certain patient was eligible for admission in violation of their policy.

In addition to the policy disputes, defendants maintain, inter alia, that plaintiffs visited their patients far in excess of their needs; that plaintiff, Dr. Allan Fried, interfered with management, in that on one occasion, he unnecessarily called the police to investigate an incident involving an employee of Grace Plaza with a patient, in opposition to management's disposition of the matter; and that plaintiffs generally disputed and resisted many of the suggestions of management, conducted themselves in an unfriendly and hostile manner toward defendants, and complained constantly about the way in which the facility was managed.

These conflicts culminated in a confrontation on February 4, 1975, when defendants refused to admit plaintiffs. Defendants thereupon notified all of plaintiffs' patients, or their designated relatives, of the suspension of plaintiffs' privileges, suggesting that they designate other personal physicians, or, in the alternative, that they remove from the facility if they insisted that plaintiffs remain as their physicians. This action ensued and a temporary injunction was sought and granted, enjoining defendants from interfering with plaintiffs' access to their patients at Grace Plaza, pending the determination thereof.

Defendants argue that the complaint fails to state a cause of action, citing the Leider case, 11 N.Y.2d 205, 227 N.Y.S.2d 900, 182 N.E.2d 393 (seq.). They contend that the established law of the State of New York is that a proprietary hospital, or other similar privately owned facility, has an absolute right to terminate the privilege of a physician practicing in such facility.

The Court of Appeals in Leider v. Beth Israel Hospital Assn. (supra) which involved a physician who sought to enjoin the hospital from depriving him of privileges to treat future private patients, whom he might arrange to be admitted thereto, held:

'His exclusion from the staff and the 'off-service' privileges, incident to staff membership, including the privileges to care for private patients in the hospital, rested entirely in the discretion of the board of trustees . . . Consequently, the denial to the plaintiff of future courtesy privileges following the termination of his annual employment constituted no legal wrong.' (Emphasis supplied.)

A similar rationale was expressed in Halberstadt v. Kissane, 31 A.D.2d 568, 294 N.Y.S.2d 841, concerning a physician who sought reinstatement to the medical staff of a private hospital. Also, in Salter v. Psychological Association, 14 N.Y.2d 100, 248 N.Y.S.2d 867, 198 N.E.2d 250, which involved a private association, the Court held that it would not interfere with the right of such a private organization to restrict its membership. The Court, in that case, rejected the contention of plaintiff that the defendant association was 'so nearly an arm of the State itself that equal protection and due process constitutional requirements made it unlawful for it to reject qualified and certified applicants.' (Page 103, 248 N.Y.S.2d page 869, 198 N.E.2d page 251).

The cases cited above dealt, however, with situations in which there was no substantial State involvement. As defined in Jacobson v. N.Y. Racing Assn., 41 A.D.2d 87, 91, 341 N.Y.S.2d 333, the criterion for a finding of State action is 'whether the State or Federal government had 'become so involved in the conduct of these otherwise private bodies that their activities are also the activities of these governments, and performed under their aegis' . . . As in many cases of constitutional issues, State action is a calculation of degree of State intervention or presence; when the State moves into the private domain, it brings with it the burdens borne by the State, as well as the benefits obtained.' (Citations omitted.) On appeal, the Jacobson decision (supra), was modified (33 N.Y.2d 144, 350 N.Y.S.2d 639, 305 N.E.2d 765), but the Court of Appeals, in its decision, reiterated the doctrine of State action in this strong language:

'This general principle that the arbitrary action of a private association is not immune from judicial scrutiny has, for example, been applied in instances of a private hospital arbitrarily denying a licensed physician staff privileges (e.g., Greisman v. Newcomb Hosp., 40 N.J. 389, 192 A.2d 817; see, generally, Ann., Physician, Surgeon--Hospital Exclusion, 37 A.L.R.3d 645, 661--663; contra, Leider v. Beth-Israel Hosp. Assn., 11 N.Y.2d 205, 227 N.Y.S.2d 900, 182 N.E.2d 393; but see Public Health Law, § 2801--b, subd. 1, effectively limiting the Leider case), and a medical society's arbitrary exclusion of a licensed physician where there is a showing of 'economic necessity' for membership and 'monopoly power' over the profession (e.g., Falcone v. Middlesex County Med. Soc., 34 N.J. 582, 591, 597, 170 A.2d 791; see, also, Matter of Salter v. New York State Psychological Assn., 14 N.Y.2d 100, 106--107, 248 N.Y.S.2d 867, 871--872, 198 N.E.2d 250, 252--253 (recognizing the rule that admission was compellable but denying relief on the facts); see, generally, Ann., Professional Society--Membership, 89 A.L.R.2d 964; Note, Judicial Control of Actions of Private Associations, 76 Harv.L.Rev 983, 1087--1095). The situation before us is sufficiently analogous to warrant adaptation of this principle.

'On this view, the interesting 'state action' question need not be reached or decided. We note, however, that as a limit on the reach of the Fourteenth Amendment, the 'state action' doctrine is alive and well.' (p. 150, 350 N.Y.S.2d p. 643, 305 N.E.2d p. 768) (Emphasis supplied.)

In the case of proprietary Nursing Homes and Health Related Facilities such as here, State action is not merely marginally involved, but, in fact, the industry is immersed in State action. Care for the aged is a matter of vital concern to the State. The health and welfare of a large percentage of the population is directly affected. The concern of the State is expressed in Article 28 of the Public Health Law of the State of New York, Sec. 2800 thereof captioned 'Declaration of policy and statement of purpose':

'Hospital and related services including health-relat service of the highest quality, efficiently provided and properly utilized at a reasonable cost, are of vital concern to the public health. In order to provide for the protection and promotion of the health of the inhabitants of the state, pursuant to section three of article...