On June 21, 2019, the New York State Assembly passed two proposed bills (both of which had previously passed the Senate), which if signed into law can significantly expand exposure in medical malpractice and other personal injury matters by effectively doing away with the statute of limitations in many instances, and significantly restricting the protections afforded by General Obligations Law §15-108.
Direct Recovery from Third-Party Defendant
2019 Assembly Bill 2373/2019 Senate Bill 6522 adds a new CPLR §1405 to Article 14, which would permit plaintiffs to recover unsatisfied judgments against third-party defendant(s) or co-defendant(s) liable in contribution or indemnification to a first-party defendant where either: (1) the first-party defendant has entered a judgment against a third-party defendant(s) or co-defendant(s); or (2) the plaintiff attaches or takes an assignment from the first-party defendant of that defendant’s cause of action for contribution or indemnification and prosecutes it in the name of the first-party defendant.
Thus, under this proposed provision, a plaintiff can effectively enforce a judgment against any other party named in the suit, regardless of whether or not the plaintiff could have brought a direct action against them. This provision specifically precludes plaintiffs from bringing post-judgment enforcement actions against their employers (who are immune from a direct action pursuant to Workers Compensation Law § 11); however, it does not contain any similar exceptions for other instances where a plaintiff is barred from suing a third-party defendant directly, such as where the statute of limitations for a direct action had expired or where the plaintiff failed to comply with a condition precedent to suit such as serving a timely notice of claim. Thus, so long as the plaintiff commences a timely action against a single defendant, and this defendant brings a third-party action, then it is effectively as if the plaintiff brought a timely action against all defendants and third-party defendants.
While this provision can theoretically impact every single multiparty tort action if passed into law, its impact will be felt particularly strongly in general liability cases where the original tortfeasor is insolvent or minimally solvent and later brings a third-party contribution action against a medical provider on a theory that the provider somehow exacerbated the original injury. While the plaintiff might be time-barred from bringing a medical malpractice action directly, this provision may provide a basis for the plaintiff to seek to enforce the judgment against the medical provider to the extent that the original tortfeasor cannot satisfy the judgment, in the same way as if the plaintiff had commenced a timely action against the provider. It will also have an impact in cases involving municipalities which otherwise could not have been sued directly by the plaintiff because of the shorter statute of limitations and notice of claim requirements.
Revision of General Obligations Law § 15-108
2019 Assembly Bill 2372/ 2019 Senate Bill 6081 revise General Obligations Law §15-108 to now require that when a defendant settles with the plaintiff, the non-settling defendant(s) must decide prior to opening statements whether they elect to reduce their liability to the plaintiff by the stated amount of the settlement, the consideration actually paid, or the settling tortfeasor(s)’ equitable share of the damages.
Currently this provision allows a defendant to reduce its liability in essentially this same manner, however the defendant does not have to make this election until after trial, when the percentage of fault the jury assigned to the settling defendant is established. The current version of the statute allows the defendant to elect the option which provides for the greatest reduction. As revised, this election must be made either prior to opening statements (or as soon as reasonably practicable after the party making the election becomes aware of the settlement), at a point when a defendant does not know which election will result in a greater reduction. If a defendant fails to make a timely election, by default the defendant will be deemed to have elected a reduction in the total amount of the equitable share or shares of all settling tortfeasors.
When combined, both of these provisions, if signed into law, can significantly expand exposure in medical malpractice and other personal injury matters.
Legislative Update is published by the Appellate Practice Group of Martin Clearwater & Bell LLP to inform clients about significant legal developments. This publication is intended for general information only and should not be used for specific action without obtaining legal advice. If you would like further information about the services of Martin Clearwater & Bell LLP, please contact Barbara D. Goldberg, Head of the Appellate Practice Group, at (212) 916-0989 or goldbb@mcblaw.com, or Gregory A. Cascino, Of Counsel, at (516) 712-3146 or gregory.cascino@mcblaw.com.