BILL NUMBER: S5188

SPONSOR: SKOUFIS
 
TITLE OF BILL:

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

 
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 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.

 
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:

Senate

2003-2004: S.5006

2005-2006: S.7487

2007-2008: S.2065

2009-2010: S.2392

2011-2012: S.3761

2013-2014: S.555A

2015-2016: S.563

2017-2018: No Senate Same-As

2019-2020: No Senate Same-As

2021-2022: S5152, Referred to Judiciary

Assembly

2003-2004: A749

2005-2006: A1107

2007-2008: A6310

2009-2010: A2576

2011-2012: A630

2013-2014: A1002A

2015-2016: A251

2017-2018: A9031

2019-2020: A2373, Veteoed Memo. 287

2021-2022: A3486, Referred to Judiciary

 
FISCAL IMPLICATIONS:

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.