Assembly Bill A2576

                                BILL NUMBER:A2576                REPLACEMENT 5/21/10

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 OF BILL:  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 OF BILL:  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-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 Worker's
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 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 ease 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:
2009: A.2576/S.6310-A A.Judi/S.Codes
2007-08: A.6310/S.2065- A. Calendar/ S. Calendar
2005: A.11076/S.7487- A. Calendar! S. Codes
2004: A.7493/S.5006 A. Calendar/S. Codes
2003: A.7493/S.5006 A. Calendar/S. Codes

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:  None,

EFFECTIVE DATE:  This Act will take effect immediately and shall apply
to all judgments entered by plaintiffs on or after such date.