A01085 Summary:

BILL NOA01085
 
SAME ASSAME AS S00887
 
SPONSORWeinstein (MS)
 
COSPNSRAbinanti, Montesano, Weprin
 
MLTSPNSRGottfried
 
Rpld & add S15-108, Gen Ob L
 
Provides, in tort cases where one defendant has settled, that remaining defendants must elect, prior to trial, whether to reduce liability by the amount of the settlement or by the amount of the equitable share of damages delegated to the settler in the verdict.
Go to top

A01085 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A1085
 
SPONSOR: Weinstein (MS)
  TITLE OF BILL: An act to amend the general obligations law, in relation to settlements in tort actions; and to repeal certain provisions of such law relating thereto   JUSTIFICATION: Section 15-108 of the General Obligations Law sets forth what happens when a personal injury or wrongful death plaintiff releases from liabil- ity one or more, but fewer than all, of the alleged tortfeasors Although the statute was enacted to encourage settlements, most commen- tators have concluded that it generally rewards non-seniors at the expense of seniors and that, by doing so, it actually discourages settlement. The key feature of the statute, and the feature most criticized by the statute's detractors, is that it rewards defendants who do not settle and can penalize plaintiffs and defendants who do. It does this by allowing the non-senior to reduce its liability to the plaintiff by the greatest of: (1) the amount that plaintiff received in settlement, (2) the amount that plaintiff was stipulated to receive in settlement, and (3) the settling tortfeasor's "equitable share" of the damages. The first two alternatives are almost always equivalent. usually leaving the non-settlor with the choice of an "amount paid" reduction or an "equitable share" reduction. This benefits the non-settlor in two ways. First, in those instances in which the settling torrfeasor's payment turns out to exceed what the trier of fact later determines to be the senior's equitable share of the damages, the non-settlor benefits by the difference between those two sums. The second benefit accorded to the non-settler is that the risk of settlor's solvency, formerly borne by the non-settlor, is now elimi- nated. The non-settlor is able to deduct settlor's equitable share whether or not settler actually could have paid such sum. By virtue of these features, the non-settlor often obtains windfall reductions of liability, usually albeit not always at the plaintiffs expense. In 1986, the Law Revision Commission proposed that the non-settling tortfeasor obtain a reduction of only the "amount" paid by a settling tortfeasor, unless the settlement was itself made in "bad faith." Such plan was modeled upon section 4 of the 1955 Uniform Contribution mongst Tortfeasors Act. This proposal goes too far in the other direction and treats non-settlors unfairly. The non-senior's liability would be effec- tively increased by virtue of a settlement to which the non-settlor did not accede and which the non-settlor was powerless to prevent. Moreover, this proposal would inevitably spawn litigation over whether particular settlements were made in good faith. This bill would allow the non-settlor the same alternatives as currently exist, but require that the choice be made before, rather than after, trial. The non-settlor still would get to choose whether it will reduce its liability to plaintiff by the amount of the senior's payment to plaintiff or by the amount of the senior's equitable share of the damages. The difference is that because the non-settlor would have to make the choice before the verdict was rendered, there would be an added incentive to a defendant to settle, rather than to sit back and choose the "best of both worlds." So as to avoid disputes, selection would be effective only if made in writing or on the record in open court. If the non-settlor failed timely to make an election and thus "defaulted", he or she thereby would be presumed to have elected an "equitable share" credit. The statute is vague as to which agreements will trigger its operation. Currently, a requires a formal release to be exchanged, The courts, however, have ignored this requirement. Under this proposal, the statute would be triggered by the occurrence of a "settlement", thus codifying the case law. The current statute also is ambiguous as to the manner in which the non-settlers' liability is calculated in those instances in which the plaintiff reaches settlement with more than one tortfeasor. This proposal, consistent with recent Court of Appeals decisions, adopts the "aggregate," rather than "pick and-choose," method of calculation. Neither GOL § 15-108 nor CPLR Article 16 (the "limited liability" law, which partially abrogates the general rule of joint and several liabil- ity) specifies the interrelationship between those provisions. There are a number of logically tenable methods in which the statute could be applied to a given fact pattern; selection of one such method rather than another could conceivably make hundreds of thousands of dollars difference to the parties. The instant measure precisely delineates the manner in which the two statutes would codifying the approach adopted in In Re Brooklyn Navy Yard Asbestos, 971F.2d 831 (2nd Cir.1992). The statute has been construed by the courts to render the settling defendant immune from contribution claims but not from indemnity claims. Because as a practical matter, it often is difficult to distinguish a contribution claim from a claim for common law indemnity, it is not uncommon for a defendant who thinks that he or she has "bought peace" to be rudely surprised with a successful indemnity claim. This serves as yet another disincentive to settle. This bill would apply the statute to common law indemnification, but not to contractual indemnification. Public employees could, however, seek common law indemnification. But, while rendering the senior immune from common law indemnity claims, this measure would not otherwise displace the rule set forth in Riviello v. Wale/ron, 47 N.Y.2d 297 (1979). Riviello held that a non-settlor who stands vicariously liable for a settling defendant's wrong is entitled to an "amount paid" credit, but cannot claim an "equitable share" cred- it. An "equitable share" apportionment in such a case would result in a total elimination of the non-settlor's liability, thereby defeating the purpose of vicarious liability. This bill would allow a tortfeasor, upon settlement with the plaintiff, also to "buy" the plaintiffs claims against one or more other tortfea- sors. There are many cases in which this option would streamline the litigation and induce quicker settlements. The current statute is silent as to the manner in which a structured settlement should be valued for its purposes. This measure would require structured settlements to be valued in terms of their cost. Finally, we note that the instant measure has been modified slightly from past versions. A new provision has been added (see, proposed § 15-108(a)(4)), which would precisely specify the manner in which settle- ment would be credited towards and reduce a non-settlor's liability in actions governed by Article 50-A or 50-B of the Civil Practice Law and Rules in which the future damages are paid periodically. This is a matter not currently addressed by any statute, and it has caused confusion. To resolve that confusion, this measure would require the settlement credit to be apportioned pro ram between past and future damages. This measure, which would have no fiscal impact on the Staid, would take effect on the thirty-first of January next succeeding the date on which it shall have become a law and shall be applicable to any action commenced on or after such effective date.   LEGISLATIVE HISTORY: 2012; A.625/S.3766- A. Judi/S. Judi 2011; A.625/S.3766 - A. Cal/S. Cal 2010: A.2579-A -A. Judi 2009; A.25796.2390- A. Cal/S.Judi 2008: A.9157/S.7482 - A.Cal/S.Rules 2007; A.9157/ 5.7482 -PA/S.Rules 2003-04: A.78311 S.2829 PA/S.Rules 2001-02;A.734615.3975 - PA/S,Judi 1999-00; A.7160/S.3395 PA/S.Judi 1997-98;A:1037/S.2786-A PA/S.Cal 1995-96; A.7742/S.4517 - A.Judi/S.Judi 1993-94; A.11334/S.3175-A - A. Judi/S.Rules   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.   EFFECTIVE DATE: January 1st next succeeding the date on which it shall have become a law and apply only to actions and proceedings commenced on or after such date.
Go to top

A01085 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          1085
 
                               2013-2014 Regular Sessions
 
                   IN ASSEMBLY
 
                                       (Prefiled)
 
                                     January 9, 2013
                                       ___________
 
        Introduced  by  M. of A. WEINSTEIN, ABINANTI -- Multi-Sponsored by -- M.
          of A. GOTTFRIED -- read once and referred to the Committee on  Judici-
          ary
 
        AN  ACT to amend the general obligations law, in relation to settlements
          in tort actions; and to repeal certain provisions of such law relating

          thereto
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Section 15-108 of the general obligations law is REPEALED
     2  and a new section 15-108 is added to read as follows:
     3    § 15-108. Settlements in tort actions. (a) Effect of settlement. (1) A
     4  settlement reached with one of two or more persons  who  are  liable  or
     5  claimed  to be liable in tort for the same injury or wrongful death does
     6  not discharge any other  tortfeasor  from  liability  unless  its  terms
     7  expressly  so provide, except that each of the remaining tortfeasors may
     8  choose to reduce his or her liability to the plaintiff  or  claimant  by
     9  the  stated  settlement  amount, the consideration actually paid, or the

    10  settling tortfeasor's equitable share of the damages as determined under
    11  article fourteen of the civil practice law and rules.
    12    (2) When more than one person settles with a  plaintiff  or  claimant,
    13  each  of  the  remaining  tortfeasors  may  choose  to reduce his or her
    14  liability to the plaintiff or  claimant  by  the  total  of  all  stated
    15  settlement amounts, the total consideration actually paid for all of the
    16  settlements,  or the total of the settling tortfeasors' equitable shares
    17  of the damages as determined under article fourteen of the  civil  prac-
    18  tice law and rules.
    19    (3)  The  choice  authorized by this subdivision shall be made in open
    20  court or in a writing subscribed on behalf of the party seeking to limit

    21  liability, and shall be made prior to the first opening statement of the
    22  trial unless the party making the election only later becomes aware that
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03217-01-3

        A. 1085                             2
 
     1  a settlement has occurred. In the latter event, the  election  shall  be
     2  made  as  soon  as  reasonably  practicable  after  the party making the
     3  election is apprised of the settlement or settlements in issue, and,  if
     4  feasible,  prior  to the return of a verdict. In the absence of specific

     5  and timely election otherwise, a party limiting liability will be deemed
     6  to have elected reduction in the total amount of the equitable share  or
     7  shares of all settling tortfeasors.
     8    (4)  For purposes of calculating the reduction of liability under this
     9  subdivision in a case where a remaining tortfeasor is subject to a peri-
    10  odic payment judgment pursuant to article fifty-A or article fifty-B  of
    11  the  civil practice law and rules, the manner in which such reduction is
    12  effected shall depend on the type of  credit  chosen  by  the  remaining
    13  tortfeasors.
    14    (A)  In  those instances in which the remaining tortfeasor has elected
    15  pursuant to paragraph one of this subdivision to receive a credit equiv-

    16  alent to the amount or amounts which the plaintiff or claimant  received
    17  in  settlement, the credit provided by this subdivision shall be ratably
    18  apportioned between the past damages of the  plaintiff  and  the  future
    19  damages.  This  shall  be  done  by  determining  the  ratio between the
    20  plaintiff's past damages and the plaintiff's  total  damages,  and  then
    21  apportioning  that  same percentage of the settlement towards payment of
    22  the plaintiff's past damages. The remainder  of  the  settlement  credit
    23  would be credited towards, and would thus reduce, the plaintiff's future
    24  damages.
    25    For  purposes  of  the  apportionment of the settlement credit between
    26  past and future damages,  the  ratio  between  past  damages  and  total

    27  damages  will  be  premised  upon  the amounts of damages awarded by the
    28  trier of fact after adjustment has already been made for all other  set-
    29  offs,  credits  and  reductions otherwise dictated by subdivision (a) of
    30  section five thousand thirty-one, or subdivision  (a)  of  section  five
    31  thousand  forty-one  of  the  civil  practice  law and rules, and before
    32  consideration of any of the calculations dictated  by  subdivision  (b),
    33  (c), (d) or (e) of such sections.
    34    (B)  In  those instances in which the remaining tortfeasor has elected
    35  pursuant to paragraph one of this subdivision to  receive  an  equitable
    36  share  credit,  each  of the plaintiff's awards for past damages and for

    37  future  damages  as  remain  after  all  other  set-offs,  credits   and
    38  reductions  otherwise  dictated by subdivision (a) of section five thou-
    39  sand thirty-one or subdivision (a) of section five thousand forty-one of
    40  the civil practice law and rules shall be reduced by the settlor's equi-
    41  table share of the total culpability.
    42    (b) Liability of settling tortfeasor. Except as otherwise provided  in
    43  subdivision  (f)  of this section, a settlement between the plaintiff or
    44  claimant and a tortfeasor relieves such tortfeasor from liability to any
    45  other person for contribution or indemnification.
    46    (c) Waiver of contribution and indemnification.  Except  as  otherwise
    47  provided  in  subdivisions (d) and (f) of this section, a tortfeasor who

    48  has settled with the plaintiff or claimant  shall  not  be  entitled  to
    49  contribution or indemnification from any other person.
    50    (d)  Settling tortfeasor's limited right to contribution or indemnifi-
    51  cation. Notwithstanding  the  provisions  of  subdivision  (c)  of  this
    52  section, a tortfeasor who has entered into a settlement with a plaintiff
    53  or  claimant  may  seek  contribution  or indemnification from any other
    54  tortfeasor if, in consideration for such settlement,  the  plaintiff  or
    55  claimant  has  released  from  liability the person or persons from whom
    56  contribution or indemnification is sought. Contribution or  indemnifica-

        A. 1085                             3
 

     1  tion  shall  be  available  pursuant  to  this subdivision except to the
     2  extent that it is established by the party or parties from whom contrib-
     3  ution or indemnification is sought that the amount  paid  in  settlement
     4  was not reasonable.
     5    (e)  Relationship  with  article sixteen of the civil practice law and
     6  rules. If a person seeks to limit liability pursuant to both subdivision
     7  (a) of this section and article sixteen of the civil  practice  law  and
     8  rules,  the  limitation shall be made by determining the percentage that
     9  the plaintiff's or claimant's non-economic loss bears to  such  person's
    10  total  loss,  and  then  applying  the same percentage of the settlement
    11  credit to the plaintiff's or  claimant's  non-economic  loss.  A  person

    12  whose  liability  is  reduced under this section shall be entitled to an
    13  additional reduction of liability pursuant to  article  sixteen  of  the
    14  civil  practice law and rules, but only to the extent that such person's
    15  remaining liability for non-economic  loss  exceeds  the  limitation  of
    16  liability, if any, established by such article.
    17    (f)  Exemptions.  Nothing contained in this section shall be construed
    18  to affect or impair:
    19    (1) any claim for indemnification if, prior to the accident or  occur-
    20  rence on which the claim is based, the party seeking indemnification and
    21  the party from whom indemnification is sought had entered into a written
    22  contract  in  which  the  latter  had  expressly agreed to indemnify the

    23  former for the type of loss suffered; or
    24    (2) a claim for indemnification by a public employee, including indem-
    25  nification pursuant to section fifty-k of the general municipal  law  or
    26  section seventeen or section eighteen of the public officers law.
    27    (g) Settlements within the scope of this section. An agreement between
    28  a  plaintiff  or  claimant  and  a person who is liable or claimed to be
    29  liable in tort shall be deemed a settlement for  the  purposes  of  this
    30  section only if:
    31    (1)  the  agreement completely or substantially terminates the dispute
    32  between those parties;
    33    (2) the plaintiff or claimant receives,  as  part  of  the  agreement,
    34  monetary consideration greater than one dollar; and

    35    (3) such settlement occurs prior to entry of a judgment.
    36    (h)  Valuation of structured settlements. Where the monetary consider-
    37  ation for a settlement includes one or more payments  which  are  to  be
    38  made  more  than one year after the date of the settlement, the value of
    39  such future payments shall, for purposes  of  subdivision  (a)  of  this
    40  section,  be  deemed  to  be the settling tortfeasor's cost in providing
    41  such payments.
    42    § 2. This act shall take effect on the thirty-first  of  January  next
    43  succeeding  the  date  on which it shall have become a law, and shall be
    44  applicable to any action commenced on or after such effective date.
Go to top