Permits a plaintiff to recover directly against a third party defendant found to be liable to the defendant in certain actions

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 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 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.