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.