Third Party Practice TPP Contribution Indemnification
NYP TP Practice, Contribution & Indemnification
Third-Party Practice (TPP) (Impleader) : What is it?
Procedural device used by ∆ to join another party alleged to be liable in whole or in part to ∆ for damages that ∆ may have to pay π.
TPP : How does ∆ implead another party?
1) File: Summons & TP complaint with the county clerk (and pay fee for index number)
2) Serve: Summons & TP complaint and all prior pleadings on the TP∆ within 120 days of the Filing.
TPP : How long does TP∆ have to respond?
TP∆'s time limit for ANSWERING is the same that would apply to an ordinary. Thus—
20 Days: If TP∆ was served personally, he would have 20 days to serve his answer.
30 Days: If TP∆ was served with any other means, he would have 30 days to serve his answer.
TPP: On whom must the TP∆ serve his Answer?
TP∆ must serve his Answer on ∆, π, and all other parties who have appeared in the action (e.g., other TP∆s, if any)
TPP: Can π assert a claim directly against a TP∆?
YES: Once the TP∆ is joined, π may amend her complaint to assert a claim directly against the TP∆
As of right: π may amend as of right if she does so within 20 days after π was served with the TP Answer.
Court's discretion: After 20 days, π may amend her complaint to assert a claim directly against the TP∆, but to do so she must make a motion with the court, which motion must be granted.
Statute of Limitations: For S/L purposes, π's added claim against the TP∆ is treated as interposed on the date the TP∆ was impleaded (i.e., when ∆ Filed the impleader papers with the county clerk) provided that π's claim against TP∆ is based on the same transaction or occurrence as ∆'s impleader claim.
Indemnity: What is it, and when is it available?
Indemnity Defined: Indemnity allows one party to shift 100% of its liability to another party. It is available in the following situations—
By contract: Such as were a subcontractor agrees to indemnify its general contractor against any losses
Products liability: Such as when a retailer held liable for sale of defective product can seek indemnity from manufacturer
Vicarious liability: E.g., owner of a car against the negligently driving owner
1) What is it?
2) When does a right of contribution exist?
1) Sharing of loss among multiple tortfeasors who were all actual participants to a tort
2) Whenever a TP∆ breached a duty in tort which contributed to or aggravated the damages for which ∆ may be held liable to π
Is contribution allowed for intentional torts? (hint: MS vs. NY)
MS RULE: Contribution is not available where nature of conduct is intentional wrongdoing
NY RULE: Contribution allowed in all tort cases—including intentional torts
How can ∆ assert claim for Contribution (or indemnity)?
CROSS-CLAIMS, if π joined all tortfeasors
IMPLEAD TP∆s if π omitted a tortfeasor
***Separate suit is the LEAST DESIRABLE, because findings of fact and apportionment of fault are NOT BINDING in separate suit
CONTRIBUTION. Comparative Degrees of Fault
1) Can ∆ require joint tortfeasors to contribute more than their share of the judgment?
2) Can π require a tortfeasor to pay an amount in excess of his share of the judgment?
1) NO: the party from whom contribution is sought can't be required BY THE ∆ to pay more than his/her share of fault
2) YES: under joint and several liability, the π can make ANY liable ∆ pay the full amount of the judgment
WORKERS' COMPENSATION CASES
Can a TP seek contribution or indemnity from a π's employer? (hint: MS vs. NY)
NY: ONLY IF π sustained a GRAVE INJURY
MS: TP NEVER has a right to contribution or indemnity against π's employer
WORKERS' COMPENSATION CASES
What qualifies as a "Grave" injury?
Total loss of an arm, leg, hand, foot, nose, ear or index finger (but NOT a thumb)
Total loss of multiple fingers or toes
Total deafness or blindness
Paraplegia or quadriplegia
Severe facial disfigurement
Brain damage causing total disability
SETTLEMENT OF CASES INVOLVING MULTIPLE TORTFEASORS
1) What is the reduction formula?
2) What is the impact on ∆'s right to contribution?
3) What is the impact on ∆'s right to indemnity?
1 REDUCTION FORMULA—any judgment for π against a non-settling tortfeasor must be reduced by the LARGER of
a) amount of the settlement, OR
b) the SETTLING tortfeasor's share of fault
2 CONTRIBUTION claims cannot asserted by or against a settling tortfeasor
3 INDEMNITY claims MAY be asserted by or against a settling tortfeasor
CPLR ARTICLE 16 modifies the law of joint and several liability in personal injury claims.
1) What does the Rule provide?
2) What are the Rule's exceptions
1 THE RULE In a personal injury case is that a joint tortfeasor can be required to pay only his share of NON-ECONOMIC damages if his percentage of fault is ≤ 50 %
2 EXCEPTIONS tortfeasors will be jointly and severally responsible for ALL damages (including non-economic) EVEN IF their share of fault is ≤ 50% if they
a) acted with intent or reckless disregard OR
b) released a hazardous substance into the environment OR
c) were the driver or owner of a motor vehicle (other than police and fire-fighter vehicles)