S555-2013 Actions

• Jan 9, 2013: REFERRED TO JUDICIARY

S555-2013 Memo

BILL NUMBER:S555

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:

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:

Section 1: Adds anew 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-defendant or third-party
defendant on a cause of action for contribution or indemnification.
Under certain circumstances where the plaintiff's 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-party defendant in those circumstances in
which the third-party claim would have been barred by Section 11 of
the Workers Compensation Law.

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 Workers' 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 on 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 substantive law of Workers'
Compensation. 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:

2011-2012 S.3761/A.630; 2009-2010 S.2392/A.2576; 2007-2008
S.2065/A.6310;
2005-2006 S.7487/A.11076; 2003-04 S.5006/A.7493

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

This Act will take effect immediately and shall apply to all judgments
entered by plaintiffs on or after such date.

S555-2013 Text

 S T A T E   O F   N E W   Y O R K
 
 
                                          555
 2013-2014 Regular Sessions
 I N  SENATE
 (PREFILED)
 January 9, 2013
 
 Introduced  by  Sen.  DeFRANCISCO -- read twice and ordered printed, and
 when printed to be committed to the Committee on Judiciary
 

AN ACT to amend the civil practice law and rules, in relation to permit
 ting a plaintiff to recover against a third party defendant in certain
 cases
 THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section 1. The civil practice law and rules is amended by adding a new
 section 1405 to read as follows:

 

S  1405. PERMITTING PLAINTIFF, AS JUDGMENT CREDITOR AGAINST DEFENDANT,
 TO RECOVER AND COLLECT  UNSATISFIED  JUDGMENT  OR  PORTION  OF  JUDGMENT
 AGAINST THIRD-PARTY DEFENDANT OR CO-DEFENDANT LIABLE FOR CONTRIBUTION OR
 INDEMNIFICATION.  (A) WHERE A PLAINTIFF HAS ENTERED A JUDGMENT AGAINST A
 DEFENDANT AND THE JUDGMENT REMAINS UNSATISFIED THIRTY DAYS AFTER IT  HAS
 BEEN  SERVED  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 FOR CONTRACTUAL OR COMMON LAW INDEMNIFICATION, THE PLAINTIFF-JUDGMENT
 CREDITOR MAY COLLECT ANY UNSATISFIED AMOUNT OF THE PLAINTIFF'S  JUDGMENT
 AGAINST  THE DEFENDANT FROM THE CO-DEFENDANT OR THIRD-PARTY DEFENDANT UP
 TO THE AMOUNT AWARDED ON THE CAUSE OF ACTION FOR CONTRIBUTION OR  INDEM
 NIFICATION.
 (B)  WHERE  THE  PLAINTIFF'S  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  FOR
 CONTRACTUAL  OR COMMON LAW INDEMNIFICATION WHICH HAS NOT BEEN REDUCED TO
 JUDGMENT, THE PLAINTIFF-JUDGMENT CREDITOR MAY ATTACH, OR TAKE AN ASSIGN
 MENT FROM THE DEFENDANT-JUDGMENT DEBTOR OF,  THE  CAUSE  OF  ACTION  FOR
 CONTRIBUTION  OR  INDEMNIFICATION,  AND PROSECUTE THE CAUSE OF ACTION IN
 THE PLAINTIFF'S OWN NAME  OR  IN  THE  NAME  OF  THE  DEFENDANT-JUDGMENT
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD03702-01-3
 
       S. 555                              2
 DEBTOR,  AND  RECOVER A JUDGMENT THEREIN FOR THE SAME AMOUNT OF CONTRIB
 UTION OR INDEMNIFICATION AS WOULD BE AWARDED TO  THE  DEFENDANT-JUDGMENT
 DEBTOR  IF  THE  DEFENDANT-JUDGMENT  DEBTOR  HAD  SATISFIED  PLAINTIFF'S
 ORIGINAL JUDGMENT IN FULL. SUCH REMEDY IS IN ADDITION TO ANY OTHER MEANS
 AVAILABLE  TO THE PLAINTIFF-JUDGMENT DEBTOR FOR ENFORCEMENT OF THE JUDG
 MENT. THIS SECTION SHALL NOT AUTHORIZE DIRECT RECOVERY AGAINST A  THIRD
 PARTY  DEFENDANT  IN  THOSE CIRCUMSTANCES IN WHICH THE THIRD-PARTY CLAIM
 AGAINST THAT  THIRD-PARTY  DEFENDANT  WOULD  HAVE  BEEN  BARRED  BY  THE
 PROVISIONS OF SECTION ELEVEN OF THE WORKERS' COMPENSATION LAW.
 

S  2.  This  act shall take effect immediately, and shall apply to all
 judgments entered by plaintiffs on or after such date.

*By contributing or voting you agree to the Terms of Participation and Privacy Policy and verify you are over 13.

Discuss!