NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2373
SPONSOR: Dinowitz 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 plaintiffs 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 Worker's Compensation Law.
Protects the ability of a plaintiff-judgement creditor to enforce their
rights against a third-party pursuant to this legislation by preserving
the ability for plaintiff-judgement creditor to pursue a judgement or
cause of action against a third party even if such claim or cause of
action is extinguished in the bankruptcy of a defendant-judgement
debtor.
Section 2: This shall take effect immediately, and shall apply to all
unexpired judgements that have not been fully satisfied as of the date
of enactment.
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 plaintiff's 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 bill also seeks
to protect the ability of an injured plaintiff to collect a judgement in
the event a defendant-judgement debtor's cause of action or judgement
against a 3rd party wrongdoer is extinguished in bankruptcy, leaving the
plaintiff with no remedy to collect their judgment.
This measure would not alter in any way the substantive law of the Work-
ers' 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
employees at all.
LEGISLATIVE HISTORY:
2017-2018- A.9031
2015-2016 - S.563/A.251;
2013-2014 - S.555A/A.1002A;
2011-2012 - S.3761/A.630;
2009-2010 - S.2392/A.2576;
2007-2008 - S.2065/A.6310;
2005-2006 - S.7487/A.11076;
2003-2004 - S.5006/A.7493;
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
EFFECTIVE DATE:
This Act will take effect immediately, and shall apply to all unexpired
judgments that have not been fully satisfied as of the date of enact-
ment.
STATE OF NEW YORK
________________________________________________________________________
2373
2019-2020 Regular Sessions
IN ASSEMBLY
January 22, 2019
___________
Introduced by M. of A. DINOWITZ -- read once and referred to the Commit-
tee 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:
1 Section 1. The civil practice law and rules is amended by adding a new
2 section 1405 to read as follows:
3 § 1405. Permitting plaintiff, as judgment creditor against defendant,
4 to recover and collect unsatisfied judgment or portion of judgment
5 against third-party defendant or co-defendant liable for contribution or
6 indemnification. (a) Where a plaintiff has entered a judgment against a
7 defendant and the judgment remains unsatisfied thirty days after it has
8 been served on the defendant-judgment debtor, and where judgment has
9 been entered in favor of the defendant-judgment debtor against a co-de-
10 fendant or third-party defendant on a cause of action for contribution
11 or for contractual or common law indemnification, the plaintiff-judgment
12 creditor may collect any unsatisfied amount of the plaintiff's judgment
13 against the defendant from the co-defendant or third-party defendant up
14 to the amount awarded on the cause of action for contribution or indem-
15 nification.
16 (b) Where the plaintiff's judgment remains unsatisfied thirty days
17 after it has been served on the defendant-judgment debtor, and where the
18 defendant-judgment debtor has a cause of action for contribution or for
19 contractual or common law indemnification which has not been reduced to
20 judgment, the plaintiff-judgment creditor may attach, or take an assign-
21 ment from the defendant-judgment debtor of, the cause of action for
22 contribution or indemnification, and prosecute the cause of action in
23 the plaintiff's own name or in the name of the defendant-judgment
24 debtor, and recover a judgment therein for the same amount of contrib-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01267-01-9
A. 2373 2
1 ution or indemnification as would be awarded to the defendant-judgment
2 debtor if the defendant-judgment debtor had satisfied plaintiff's
3 original judgment in full. Such remedy is in addition to any other means
4 available to the plaintiff-judgment debtor for enforcement of the judg-
5 ment. This section shall not authorize direct recovery against a third-
6 party defendant in those circumstances in which the third-party claim
7 against that third-party defendant would have been barred by the
8 provisions of section eleven of the workers' compensation law, and does
9 not otherwise permit a plaintiff to bring a cause of action against a
10 third party if such third party was the plantiff's employer at the time
11 of the incident or injury.
12 § 2. This act shall take effect immediately, and shall apply to all
13 judgments entered by plaintiffs on or after such date.
