On June 21, 2019, the New York State Assembly passed two proposed bills (both which had previously passed the Senate), which if signed into law would have significantly expanded exposure in medical malpractice and other personal injury matters by revising CPLR Article 14 to allow plaintiffs to recover directly from third-party defendants against whom they do not have a direct action, and restricting the protections afforded by General Obligations Law §15-108. Both proposed revisions have just been vetoed by Governor Cuomo, and the statutes remain unchanged.
Proposed Revision of CPLR Article 14 to allow Direct Recovery from Third-Party Defendants
2019 Assembly Bill 2373/2019 Senate Bill S6522, if signed into law, would have revised CPLR Article 14 to 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 would have been able to 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 that party, or whether the statute of limitations on the direct action had expired.This proposed bill was vetoed by Governor Cuomo on December 26, 2019, and Article 14 remains unchanged.
Proposed Revision of General Obligations Law § 15-108
2019 Assembly Bill 2372/ 2019 Senate Bill 6081, if signed into law, would have revised General Obligations Law §15-108 to 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 amount of the settlement is known and the percentage of fault the jury assigned to the settling defendant is established. This allows the defendant to elect the option which provides for the greatest reduction. The proposed revision was to require that this election 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 did not know which election would result in a greater reduction.
On December 20, 2019 Governor Cuomo vetoed the proposed revisions to GOL § 15-108, and the statute remains unchanged. January 7, 2020 Governor Cuomo Vetoes 2 Proposed Bills Which Would Have Significantly Expanded Liability in Medical Malpractice and Other Personal Injury Actions
Legislative Update is published by the Appellate Practice Group of Martin Clearwater & Bell LLP to inform clients about significant
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