Odrich v. Trustees of Columbia University

193 Misc. 2d 120, 747 N.Y.S.2d 342, 2002 N.Y. Misc. LEXIS 1176
CourtNew York Supreme Court
DecidedSeptember 5, 2002
StatusPublished
Cited by1 cases

This text of 193 Misc. 2d 120 (Odrich v. Trustees of Columbia University) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Odrich v. Trustees of Columbia University, 193 Misc. 2d 120, 747 N.Y.S.2d 342, 2002 N.Y. Misc. LEXIS 1176 (N.Y. Super. Ct. 2002).

Opinion

OPINION OF THE COURT

James A. Yates, J.

Petitioners Marc Odrich and Steven Odrich are New York licensed physicians, and board certified ophthalmologists who [121]*121held faculty appointments at respondent Columbia University’s College of Physicians and Surgeons from 1992 and 1993, respectively, through June 30, 2001. In conjunction with their status as faculty members, they were afforded hospital privileges at New York-Presbyterian Hospital. Respondents have terminated petitioners’ faculty appointments and hospital privileges because of their refusal to pay a “Dean’s Tax” of 10% of all their practice income, from whatever source derived, to the school’s faculty practice plan. Half of this assessment is paid to the department of ophthalmology to further its programs and the other half is paid to the dean of the medical school to be used, in the dean’s discretion, to further programs within the school. Petitioners complain that the demanded “tax” constitutes an illegal fee-splitting arrangement under Education Law § 6531.

Background

From 1992-1993 to March 1998 petitioners held part-time faculty appointments at the medical school while engaging in private practice in Riverdale, New York. As such, they participated in the clinical teaching program, without salary or employment benefits, and enjoyed hospital privileges. During this time, their part-time faculty appointments were continuously renewed and they were not required to pay a Dean’s Tax.

In March 1998, the petitioners joined the full-time faculty of the College of Physicians and Surgeons of Columbia University. Petitioners were each appointed to the position of assistant professor of clinical ophthalmology which carried certain teaching, research and administrative duties and responsibilities to the school and required performance of clinical services as well. They gave up their private practice. The terms of their employment were specified in a letter, dated March 10, 1998, signed by Stanley Chang, chair of the department of ophthalmology. The school purchased certain equipment from petitioners and, according to the letter agreement, assumed responsibility for the lease to their office as well as the expenses of their practice, including overhead and salaries for their support staff. They were paid a salary with a fixed minimum base salary as well as a “clinical bonus.” The salary, consisting of a base pay of $40,000 and a “clinical supplemental” of $110,000 to Marc Odrich and $135,000 to Steven Odrich, included compensation for both teaching and clinical [122]*122assignments. Petitioners received fringe benefits and were included in the school’s health and pension plans. All income derived from their practice was billed through, and collected by, the University according to its own fee schedule.

The arrangement was viewed by the parties as being mutually beneficial since, “The Medical School benefitted by gaining an off-site clinical location for its teaching program; and Petitioners benefitted by their promotion to full-time faculty with guaranteed incomes, financial development of their practice by the Medical School, and the absence of financial risk.” (Respondents’ answer, Thomas Q. Morris affidavit, dated Jan. 23, 2002, 3.)

While working as full-time faculty members and practicing through the clinic, a “Dean’s assessment of 5% and a Departmental assessment of 5% of gross revenues from clinical services” was paid to the college. (Verified petition, exhibit C, letter agreement, dated Mar. 10, 1998, at 2, 4.)

At the time of petitioners’ move to full-time association with the school, the ophthalmology department was in the process of forming a faculty practice plan. (See Not-For-Profit Corporation Law § 1412.) As such, the March 10th agreement provided for an expiration on October 1, 1998 or earlier, upon execution of superseding documents with the anticipated establishment of a practice plan, Columbia Ophthalmology Consultants (COC). Somewhat incongruously, the letter agreement also provided that petitioners had the right to “resume [their] former relationship with the University and the Department” if they left the full-time faculty within the “first two years of this agreement.” (Verified petition, exhibit C, letter agreement, dated Mar. 10, 1998, at 2,1} 5.)

COC was incorporated in July 1998 as a university faculty practice corporation. Although no new documents were executed by the parties, the arrangement with the department continued, but control of the clinical practice was assumed by COC, apparently on the same terms as specified in the March 1998 letter agreement. In accordance with the parties’ understanding, petitioners were reappointed to full-time faculty positions for the year July 1, 2000 to June 30, 2001. (Verified petition, exhibit F, appointment letters from R. Keith Walton, secretary to the University, to petitioners, dated Sept. 13, 14, 2000.)

In the fall of 2000, a little more than two years after petitioners had joined COC, the parties made arrangements for petitioners to resign from the plan and to resume private [123]*123practice. Patients were to be advised of the separation and given their choice to continue to be treated by either petitioners or COC. Petitioners repurchased the assets and equipment of their practice for approximately $140,000. As well, they reassumed responsibility for the remaining term of the lease to their office space — due to expire in September 2003.

Petitioners expressed a desire to continue affiliation with the school and the hospital. There is a disagreement about what, if anything, was understood by the parties in this regard. On October 26, 2000, petitioners each wrote to respondent Chang who serves as both chair of the department and president of COC: “Please accept my resignation from Columbia Ophthalmology Consultants effective January 1, 2001. Please note that I would like to continue practicing ophthalmology at Columbia University and remain a member of the Columbia Faculty.” (Respondents’ answer, exhibits 4, 5, resignation letters, dated Oct. 26, 2000.)

On February 6, 2001, in a letter signed by Dr. Chang and respondent Thomas Q. Morris, interim dean of the college, Steven Odrich was advised:

“At your request and as an exception to University policy, your full-time faculty appointment was changed to a part-time appointment, effective January 1, 2001. The reason for the exception is that you are a glaucoma specialist and your experience and abilities, which are needed to train residents and fellows, as well as to care for certain patients of the Department’s clinical practice, are not covered by other faculty members of the Department at this time.”

By letter of the same date, Marc Odrich was told:

“At your request and as an exception to University policy, your full-time faculty appointment was changed to a part-time appointment, effective January 1, 2001. The reason for the exception is that you have become the Medical Director of VISX, Inc. and you will be devoting most of your time to the company.”

In the same letters, both petitioners were advised:

“You will provide such teaching, research and administrative duties and responsibilities as shall be assigned to you from time to time by the Dean of the Faculty of Medicine and the Department Chair. * * *
[124]

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Related

Odrich v. Trustees of Columbia University
308 A.D.2d 405 (Appellate Division of the Supreme Court of New York, 2003)

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Bluebook (online)
193 Misc. 2d 120, 747 N.Y.S.2d 342, 2002 N.Y. Misc. LEXIS 1176, Counsel Stack Legal Research, https://law.counselstack.com/opinion/odrich-v-trustees-of-columbia-university-nysupct-2002.