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Glassman v ProHealth Ambulatory Surgery Ctr., Inc. (2010 NY Slip Op 04660)

Argued May 4, 2010; decided June 3, 2010 Glassman v Pro Health Ambulatory Surgery Ctr., Inc., 55 AD3d 538, reversed. APPEARANCES OF COUNSEL Rivkin Radler LLP, Uniondale (Evan H. Krinick, Cheryl F. Korman, David A. Manko, Stuart
M. Bodoff and Benjamin P. Malerba, III, of counsel), and Friedman Kaplan Seiler & Adelman LLP, New York City, for appellants. Littler Mendelson, P.C., New York City (David M. Wirtz, Barbara A. Gross and Meredith L. Bronfman of counsel), for respondent. Susan C. Waltman, New York City, for Greater New York Hospital Association, amicus curiae.
Greenberg Traurig, LLP, Albany (Cynthia E. Neidl of counsel), and Greenberg Traurig, LLP, New York City (Francis J. Serbaroli of counsel), for New York State Association of Ambulatory Surgery Centers, Inc., amicus curiae.
{**14 NY3d at 900} OPINION OF THE COURT Memorandum. The judgment appealed from and the October 2008 order of the Appellate Division brought up
file:///C|/Users/Peter/Desktop/NY/1/2010_04660.htm[4/21/2013 11:45:04 AM] Glassman v ProHealth Ambulatory Surgery Ctr., Inc. (2010 NY Slip Op 04660)
for review should be reversed, with costs, and the matter remitted to Supreme Court for further proceedings in accordance with this memorandum.
Even assuming that the provision of the employment contract allowing defendant [*2]to collect fees emanating from plaintiff's off-site anesthesiology services is inconsistent with 10 NYCRR
401.2 (b), which provides that "[a]n operating certificate shall be used only by the established operator for the designated site of operation," we conclude that the provision is merely malum prohibitum and, therefore, enforceable in this breach of contract action (see Lloyd Capital Corp. v Pat Henchar, Inc., 80 NY2d 124, 127-128 [1992]; see also Charlebois v Weller Assoc., 72 NY2d 587 [1988]). Forfeitures by operation of law are disfavored, and allowing parties to escape their contractual obligations, freely entered into, "is especially inappropriate where there are regulatory sanctions and statutory penalties in place to redress violations of the law" (Lloyd Capital Corp., 80 NY2d at 128).
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