BLUM v. DRUCKER (1997)

In an action, inter alia, to recover damages for breach of contract, (1) the defendants Jeffrey P. Drucker, Gary L. Krupp, Jeffrey P. Drucker, M.D., P.C., Drucker & Krupp, Ltd., Drucker & Genuth, M.D.'s, P.C., Solomon Genuth, and South Shore Imaging Associates, appeal from so much of an order of the Supreme Court, Nassau County (DiNoto, J.), dated September 24, 1996, as denied that branch of their motion which was for summary judgment dismissing the complaint insofar as asserted against them and, (2) the plaintiffs cross-appeal, as limited by their brief, from so much of the same order as denied their motion to dismiss the affirmative defenses interposed by the appellants-respondents.

ORDERED that the order is reversed insofar as appealed from, on the law, the branch of the appellants-respondents' motion which was for summary judgment dismissing the complaint is granted, the complaint is dismissed insofar as asserted against them, and the action against the remaining defendant is severed;  and it is further,

ORDERED that the order is affirmed insofar as cross-appealed from;  and it is further,

ORDERED that the appellants-respondents are awarded one bill of costs.

The plaintiffs seek, inter alia, enforcement of a contract to pay profit distributions calculated, in part, on referrals they and other doctors made to the appellants-respondents' practice.   Since this agreement between the parties was illegal because it violated Federal Medicare law (42 U.S.C. § 1320a-7b), was against public policy, and was proscribed by regulations enacted by the Secretary of the United States Department of Health and Human Services (42 C.F.R. 1001.952[d] ), it is unenforceable (see, Long Meadow Assocs. v. City of Glen Cove, 203 A.D.2d 262, 610 N.Y.S.2d 57;  Little Princess Truck Rentals v. Pergament Distribs., 143 A.D.2d 179, 531 N.Y.S.2d 812;  Nursing Home Consultants v. Quantum Health Servs., 926 F.Supp. 835, affd. 112 F.3d 513, 1997 WL 232130;  Modern Medical Labs. v. Smith-Kline Beecham Clinical Labs., 1994 WL 449281, 1994 U.S. Dist Lexis 11525 [N.D. Ill.];  Medical Dev. Network v. Professional Respiratory Care/Home Med. Equip. Servs., 673 So.2d 565 [Fl.] ).

In light of this determination, the parties' remaining contentions are academic.

MEMORANDUM BY THE COURT.