NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A251
SPONSOR: Weinstein (MS) TITLE OF BILL: An act to amend the civil practice law and rules, in
relation to permitting a plaintiff to recover against a third party
defendant in certain cases
PURPOSE OF BILL:
This bill would add a new Section 1405 to the Civil Practice Law and
Rules (CPLR) to expressly permit a plaintiff, as judgment creditor
against defendant, to recover and collect an unsatisfied judgment or
portion of a judgment directly against a third-party defendant found
liable for contribution or indemnification.
SUMMARY OF PROVISIONS OF BILL:
Section 1: Adds a new Section 1405 to the CPLR to permit a plaintiff to
recover and collect an unsatisfied judgment or a portion of a judgment
against a third-party defendant or co-defendant, when a plaintiff has
entered judgment against a defendant which is unsatisfied thirty days
after service on the defendant-judgment debtor, and where judgment has
been entered in favor of the defendant-judgment debtor against a co-de-
fendant or third-party defendant on a cause of action for contribution
or indemnification. Under certain circumstances where the plaintiffs
judgment remains unsatisfied thirty days after it has been served on the
defendant-judgment debtor, and where the defendant-judgment debtor has a
cause of action for contribution or indemnification which has not been
reduced to judgment, then the plaintiff-judgment creditor may attach, or
take an assignment from the defendant-judgment debtor of the cause of
action for contribution or indemnification and prosecute the action in
the plaintiff's own name or in the name of the defendant-judgment
debtor. Direct recovery, however, is not authorized against a third-par-
ty defendant in those circumstances in which the third-party claim would
have been barred as a result of the exclusivity provisions contain in
the Workers' Compensation Law whereby employee may not recover against
employer.
Section 2: The effective date for this Act is immediately, and shall
apply to all judgments entered by plaintiffs on or after such date.
EXISTING LAW:
Section 1401 of the CPLR provides, with certain exceptions under the
General Obligations Law and the Worker's Compensation Law, that two or
more persons who are subject to liability for damages for the same
personal injury, injury to property or wrongful death, may claim
contribution among them whether or not an action has been brought or a
judgment has been rendered against the person from whom contribution is
sought. Section 1403 of the CPLR provides that a cause of action for
contribution may be asserted in a separate action or by cross-claim,
counter-claim or third-party claim in a pending action.
JUSTIFICATION:
A plaintiffs recovery of a judgment that ultimately comes from a third
party defendant should not depend on the fortuity of the solvency of the
defendant/third party plaintiff. Accordingly, this measure would allow a
plaintiff to recover on a judgment for contribution or indemnification
directly against the third-party defendant, whether or not the
defendant/third party plaintiff has satisfied the underlying judgment
for which contribution or indemnification is sought. Thus, in the case
where a defendant/third party plaintiff is insolvent and is unable to
pay the judgment to the plaintiff, the plaintiff could still seek to
recover directly that portion of the judgment, as determined by the
principles of contribution and indemnification, owed by the third party
defendant to the defendant/third party plaintiff. This measure would not
alter in any way the exclusivity provisions of the Workers' Compen-
sation, to the extent that actions by employee against employer are
typically barred. The 1996 Omnibus Worker's Compensation Reform Act
already limits claims for contribution and indemnification against an
employer to only those cases involving "grave injuries." In cases where
there are not grave injuries the employer is not liable as a matter of
substantive law, and therefore this measure would not affect such
employers at all.
LEGISLATIVE HISTORY:
2014:A.1002-A/S.555-A - A. Calendar/S.Rules
2013:A.1002-A/S.555-A - A. Calendar/S.Judiciary
2011-12: A.630/S.3761 - A. Judi/S. Codes
2009-10: A.2576/S.6310-A - A. Judi/S. Codes
2007-08: A.6310/S.2065 - A. Calendar/ S. Rules
2006: A.1076/S.7487 - A. Calendar/ S. Codes
2003-04: A.7493/S.5006 - A. Calendar/S. Codes
2002: A.7342/S.3574 - A. Calendar/S. Rules
2001: A.7342/S.3574 - A. Calendar/S. Codes
2000: A.10422-A. Calendar
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
EFFECTIVE DATE:
This Act will take effect immediately and shall apply to all judgments
entered by plaintiffs on or after such date.
