NY State Senate Bill S6081

Archive: Last Bill Status - Vetoed by Governor

Introduced
In Committee
On Floor Calendar
- Passed Senate
- Passed Assembly
Delivered to Governor
Vetoed by Governor

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Actions

view actions (12)

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Dec 20, 2019	vetoed memo.282
Dec 17, 2019	delivered to governor
Jun 20, 2019	returned to senate passed assembly ordered to third reading cal.487 substituted for a2372
Jun 19, 2019	referred to judiciary delivered to assembly passed senate ordered to third reading cal.1785 committee discharged and committed to rules
May 16, 2019	referred to judiciary

Votes

S6081 (ACTIVE) - Details

See Assembly Version of this Bill:: A2372
Law Section:: General Obligations Law
Laws Affected:: Rpld & add §15-108, Gen Ob L
Versions Introduced in Other Legislative Sessions:: 2009-2010: A2579
2011-2012: A625
2013-2014: A1085
2015-2016: A244
2017-2018: A1415, A9028
2021-2022: A3024
2023-2024: A1739

S6081 (ACTIVE) - Summary

Provides, in tort cases where one defendant has settled, that remaining defendants must elect, prior to trial, whether to reduce liability by the amount of the settlement or by the amount of the equitable share of damages delegated to the settler in the verdict.

S6081 (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S6081

SPONSOR: HOYLMAN
 
TITLE OF BILL:

An act to amend the general obligations law, in relation to settlements
in tort actions; and to repeal section 15-108 of such law relating to
release or covenant not to sue

 
JUSTIFICATION:

Section 15-108 of the General Obligations Law sets forth what happens
when a personal injury or wrongful death plaintiff releases from liabil-
ity one or more, but fewer than all, of the alleged tortfeasors.
Although the statute was enacted to encourage settlements, most commen-
tators have concluded that it generally rewards nonsettlors at the
expense of seniors and that, by doing so, it actually discourages
settlement.

The key feature of the statute, and the feature most criticized by the
statute's detractors, is that it rewards defendants who do not settle
and can penalize plaintiffs and defendants who do. It does this by

allowing the non-settlor to reduce its liability to the plaintiff by the
greatest of: (I) the amount that plaintiff received in settlement, (2)
the amount that plaintiff was stipulated to receive in settlement, and
(3) the settling tortfeasor's "equitable share" of the damages. The
first two alternatives are almost always equivalent, usually leaving the
non-settlor with the choice of an "amount paid" reduction or an "equita-
ble share" reduction.

This benefits the non-settlor in two ways. First, in those instances in
which the settling tortfeasor's payment turns out to exceed what the
trier of fact later determines to be the settlor's equitable share of
the damages, the non-settlor benefits by the difference between those
two sums. The second benefit accorded to the non-settlor is that the
risk of settlor's solvency, formerly borne by the non-settlor, is now
eliminated. The non-settlor is able to deduct settlor's equitable share
whether or not settlor actually could have paid such sum. By virtue of
these features, the non-settlor often obtains windfall reductions of
liability, usually albeit not always at the plaintiffs expense.

In 1986, the Law Revision Commission proposed that the non-settling
tortfeasor obtain a reduction of only the "amount" paid by a settling
tortfeasor, unless the settlement was itself made in "bad faith."  Such
plan was modeled upon section 4 of the 1955 Uniform Contribution amongst
Tortfeasors Act. This proposal goes too far in the other direction and
treats non-settlors unfairly. The non-settlor's liability would be
effectively increased by virtue of a settlement to which the non-settlor
did not accede and which the non-settlor was powerless to prevent. More-
over, this proposal would inevitably spawn litigation over whether
particular settlements were made in good faith.

This bill would allow the non-settlor the same alternatives as currently
exist, but require that the choice be made before, rather than after,
trial. The non-settlor still would get to choose whether it will reduce
its liability to plaintiff by the amount of the settlor's payment to
plaintiff or by the amount of the settlor's equitable share of the
damages. The difference is that because the non-settlor would have to
make the choice before the verdict was rendered, there would be an added
incentive to a defendant to settle, rather than to sit back and choose
the "best of both worlds." So as to avoid disputes, selection would be
effective only if made in writing or on the record in open court. If the
non-settlor failed timely to make an election and thus "defaulted", he
or she thereby would be presumed to have elected an "equitable share"
credit.

The statute is vague as to which agreements will trigger its operation.
Currently, it requires a formal release to be exchanged.  The courts,
however, have ignored this requirement. Under this proposal, the statute
would be triggered by the occurrence of a "settlement", thus codifying
the case law.

The current statute also is ambiguous as to the manner in which the
non-settlors' liability is calculated in those, instances in which the
plaintiff reaches settlement with more than one tortfeasor. This
proposal, consistent with recent Court, of Appeals decisions, adopts the
"aggregate," rather than "pick and-choose," method of calculation.

Neither GOL § 15-108 nor CPLR Article 16 (the "limited liability" law,
which partially abrogates the general rule of joint and several liabil-
ity) specifies the interrelationship between those provisions.  There
are a number of logically tenable methods in which the statute could be
applied to a given fact pattern; selection of one such method rather
than another could conceivably make hundreds of thousands of dollars'
difference to the parties. The instant measure precisely delineates the
manner in which the two statutes would operate, essentially codifying
the approach adopted in In Re Brooklyn Navy Yard Asbestos, 971 F.2d 831
(2nd Cir. 1992).

The statute has been construed by the courts to render the settling
defendant immune from contribution claims but not from indemnity claims.
Because, as a practical matter, it often is difficult to distinguish a
contribution claim from a claim for common law indemnity, it is not
uncommon for a defendant who thinks that he or she has "bought peace" to
be rudely surprised with a successful indemnity claim. This serves as
yet another disincentive to settle.  This bill would apply the statute
to common law indemnification, but not to contractual indemnification.
Public employees could, however, seek common law indemnification: But,
while rendering the settlor immune from common law indemnity claims,
this measure would not otherwise displace the rule set forth in Riviello
v. Wale/ron, 47 N.Y.2d 297 (1979). Riviello held that a non-settlor who
stands vicariously liable for a settling defendant's wrong is entitled
to an "amount paid" credit, but cannot claim an "equitable share" cred-
it.  An "equitable share" apportionment in such a case would result in a
total elimination of the nonsettlor's liability, thereby defeating the
purpose of vicarious liability.

This bill would allow a tortfeasor, upon settlement with the plaintiff,
also to "buy" the plaintiffs claims against one or more other tortfea-
sors. There are many cases in which this option would streamline the
litigation and induce quicker settlements. The current statute is silent
as to the manner in which a structured settlement should be valued for
its purposes. This measure would require structured settlements to be
valued in terms of their cost.

Finally, we note that the instant measure has been modified slightly
from past versions. A new provision has been added (see, proposed
I5-108(a)(4)), which would precisely specify the mariner in which
settlement would be credited towards and reduce a non-settlor's liabil-
ity in actions governed by Article 50-A or 50-B of the Civil Practice
Law and Rules in which the future damages are paid periodically. This is
a matter not currently addressed by any statute, and it has caused
confusion. To resolve that confusion, this measure would require the
settlement credit to be apportioned pro rata between past and future
damages.

This measure, which would have no fiscal impact on the State, would take
effect on the thirty-first of January next succeeding the date on which
it shall have become a law and shall be applicable to any action
commenced on or after such effective date.

 
LEGISLATIVE HISTORY:

2017-18 - A.9028 - Third Reading Calendar
2015-16: A.244/S.1605 A.Cal./S.Judi
2014; A.1085/S.887 - A.Cal./S.Judi
2013: A.1085/S.887 - A.Judi/S.Judi
2012; A.625/S.3766 - A. Judi/S. Judi
2011; A.625/S.3766 - A. Cal/S. Cal
2010; A.2579-A - A. Judi
2009; A.2579/S.2390 - A. Cal/S.Judi
2008; A.9157/S.7482 - A.Cal/SRules
2007; A.9157 - A. Judi
2003-04; A.7881/S.2829 - PA/S.Rules
2001-02; A.7346/S.3975 - PA/S.Judi
1999-00; A.7160/S.3395 - PA/S.Judi
1997-98; A.7037/S.2786-A - PA/S.Cal
1995-96; A.7742/S.4517 - A. Judi/S.Judi
1993-94; A.11834/S.8175-A - A. Judi/S.Rules

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
January 1st next succeeding the date on which it shall have become a law
and apply only to actions and proceedings commenced on or after such
date.

S6081 (ACTIVE) - Bill Text download pdf


                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6081

                       2019-2020 Regular Sessions

                            I N  S E N A T E

                              May 16, 2019
                               ___________

Introduced  by  Sen. HOYLMAN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Judiciary

AN ACT to amend the general obligations law, in relation to  settlements
  in  tort actions; and to repeal section 15-108 of such law relating to
  release or covenant not to sue

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Section 15-108 of the general obligations law is REPEALED
and a new section 15-108 is added to read as follows:
  § 15-108. SETTLEMENTS IN TORT ACTIONS. (A) EFFECT OF SETTLEMENT. (1) A
SETTLEMENT REACHED WITH ONE OF TWO OR MORE PERSONS  WHO  ARE  LIABLE  OR
CLAIMED  TO BE LIABLE IN TORT FOR THE SAME INJURY OR WRONGFUL DEATH DOES
NOT DISCHARGE ANY OTHER  TORTFEASOR  FROM  LIABILITY  UNLESS  ITS  TERMS
EXPRESSLY  SO PROVIDE, EXCEPT THAT EACH OF THE REMAINING TORTFEASORS MAY
CHOOSE TO REDUCE HIS OR HER LIABILITY TO THE PLAINTIFF  OR  CLAIMANT  BY
THE  STATED  SETTLEMENT  AMOUNT, THE CONSIDERATION ACTUALLY PAID, OR THE
SETTLING TORTFEASOR'S EQUITABLE SHARE OF THE DAMAGES AS DETERMINED UNDER
ARTICLE FOURTEEN OF THE CIVIL PRACTICE LAW AND RULES.
  (2) WHEN MORE THAN ONE PERSON SETTLES WITH A  PLAINTIFF  OR  CLAIMANT,
EACH  OF  THE  REMAINING  TORTFEASORS  MAY  CHOOSE  TO REDUCE HIS OR HER
LIABILITY TO THE PLAINTIFF OR  CLAIMANT  BY  THE  TOTAL  OF  ALL  STATED
SETTLEMENT AMOUNTS, THE TOTAL CONSIDERATION ACTUALLY PAID FOR ALL OF THE
SETTLEMENTS,  OR THE TOTAL OF THE SETTLING TORTFEASORS' EQUITABLE SHARES
OF THE DAMAGES AS DETERMINED UNDER ARTICLE FOURTEEN OF THE  CIVIL  PRAC-
TICE LAW AND RULES.
  (3)  THE  CHOICE  AUTHORIZED BY THIS SUBDIVISION SHALL BE MADE IN OPEN
COURT OR IN A WRITING SUBSCRIBED ON BEHALF OF THE PARTY SEEKING TO LIMIT
LIABILITY, AND SHALL BE MADE PRIOR TO THE FIRST OPENING STATEMENT OF THE
TRIAL UNLESS THE PARTY MAKING THE ELECTION ONLY LATER BECOMES AWARE THAT
A SETTLEMENT HAS OCCURRED. IN THE LATTER EVENT, THE  ELECTION  SHALL  BE
MADE  AS  SOON  AS  REASONABLY  PRACTICABLE  AFTER  THE PARTY MAKING THE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD01264-01-9

S. 6081                             2

ELECTION IS APPRISED OF THE SETTLEMENT OR SETTLEMENTS IN ISSUE, AND,  IF
FEASIBLE,  PRIOR  TO THE RETURN OF A VERDICT. IN THE ABSENCE OF SPECIFIC
AND TIMELY ELECTION OTHERWISE, A PARTY LIMITING LIABILITY WILL BE DEEMED
TO  HAVE ELECTED REDUCTION IN THE TOTAL AMOUNT OF THE EQUITABLE SHARE OR
SHARES OF ALL SETTLING TORTFEASORS.
  (4) FOR PURPOSES OF CALCULATING THE REDUCTION OF LIABILITY UNDER  THIS
SUBDIVISION IN A CASE WHERE A REMAINING TORTFEASOR IS SUBJECT TO A PERI-
ODIC  PAYMENT JUDGMENT PURSUANT TO ARTICLE FIFTY-A OR ARTICLE FIFTY-B OF
THE CIVIL PRACTICE LAW AND RULES, THE MANNER IN WHICH SUCH REDUCTION  IS
EFFECTED  SHALL  DEPEND  ON  THE  TYPE OF CREDIT CHOSEN BY THE REMAINING
TORTFEASORS.
  (A) IN THOSE INSTANCES IN WHICH THE REMAINING TORTFEASOR  HAS  ELECTED
PURSUANT TO PARAGRAPH ONE OF THIS SUBDIVISION TO RECEIVE A CREDIT EQUIV-
ALENT  TO THE AMOUNT OR AMOUNTS WHICH THE PLAINTIFF OR CLAIMANT RECEIVED
IN SETTLEMENT, THE CREDIT PROVIDED BY THIS SUBDIVISION SHALL BE  RATABLY
APPORTIONED  BETWEEN  THE  PAST  DAMAGES OF THE PLAINTIFF AND THE FUTURE
DAMAGES. THIS SHALL  BE  DONE  BY  DETERMINING  THE  RATIO  BETWEEN  THE
PLAINTIFF'S  PAST  DAMAGES  AND  THE PLAINTIFF'S TOTAL DAMAGES, AND THEN
APPORTIONING THAT SAME PERCENTAGE OF THE SETTLEMENT TOWARDS  PAYMENT  OF
THE  PLAINTIFF'S  PAST  DAMAGES.  THE REMAINDER OF THE SETTLEMENT CREDIT
WOULD BE CREDITED TOWARDS, AND WOULD THUS REDUCE, THE PLAINTIFF'S FUTURE
DAMAGES.
  FOR PURPOSES OF THE APPORTIONMENT OF  THE  SETTLEMENT  CREDIT  BETWEEN
PAST  AND  FUTURE  DAMAGES,  THE  RATIO  BETWEEN  PAST DAMAGES AND TOTAL
DAMAGES WILL BE PREMISED UPON THE AMOUNTS  OF  DAMAGES  AWARDED  BY  THE
TRIER  OF FACT AFTER ADJUSTMENT HAS ALREADY BEEN MADE FOR ALL OTHER SET-
OFFS, CREDITS AND REDUCTIONS OTHERWISE DICTATED BY  SUBDIVISION  (A)  OF
SECTION  FIVE  THOUSAND  THIRTY-ONE,  OR SUBDIVISION (A) OF SECTION FIVE
THOUSAND FORTY-ONE OF THE CIVIL  PRACTICE  LAW  AND  RULES,  AND  BEFORE
CONSIDERATION  OF  ANY  OF THE CALCULATIONS DICTATED BY SUBDIVISION (B),
(C), (D) OR (E) OF SUCH SECTIONS.
  (B) IN THOSE INSTANCES IN WHICH THE REMAINING TORTFEASOR  HAS  ELECTED
PURSUANT  TO  PARAGRAPH  ONE OF THIS SUBDIVISION TO RECEIVE AN EQUITABLE
SHARE CREDIT, EACH OF THE PLAINTIFF'S AWARDS FOR PAST  DAMAGES  AND  FOR
FUTURE   DAMAGES  AS  REMAIN  AFTER  ALL  OTHER  SET-OFFS,  CREDITS  AND
REDUCTIONS OTHERWISE DICTATED BY SUBDIVISION (A) OF SECTION  FIVE  THOU-
SAND THIRTY-ONE OR SUBDIVISION (A) OF SECTION FIVE THOUSAND FORTY-ONE OF
THE CIVIL PRACTICE LAW AND RULES SHALL BE REDUCED BY THE SETTLOR'S EQUI-
TABLE SHARE OF THE TOTAL CULPABILITY.
  (B)  LIABILITY OF SETTLING TORTFEASOR. EXCEPT AS OTHERWISE PROVIDED IN
SUBDIVISION (F) OF THIS SECTION, A SETTLEMENT BETWEEN THE  PLAINTIFF  OR
CLAIMANT AND A TORTFEASOR RELIEVES SUCH TORTFEASOR FROM LIABILITY TO ANY
OTHER PERSON FOR CONTRIBUTION OR INDEMNIFICATION.
  (C)  WAIVER  OF  CONTRIBUTION AND INDEMNIFICATION. EXCEPT AS OTHERWISE
PROVIDED IN SUBDIVISIONS (D) AND (F) OF THIS SECTION, A  TORTFEASOR  WHO
HAS  SETTLED  WITH  THE  PLAINTIFF  OR CLAIMANT SHALL NOT BE ENTITLED TO
CONTRIBUTION OR INDEMNIFICATION FROM ANY OTHER PERSON.
  (D) SETTLING TORTFEASOR'S LIMITED RIGHT TO CONTRIBUTION OR  INDEMNIFI-
CATION.  NOTWITHSTANDING  THE  PROVISIONS  OF  SUBDIVISION  (C)  OF THIS
SECTION, A TORTFEASOR WHO HAS ENTERED INTO A SETTLEMENT WITH A PLAINTIFF
OR CLAIMANT MAY SEEK CONTRIBUTION  OR  INDEMNIFICATION  FROM  ANY  OTHER
TORTFEASOR  IF,  IN  CONSIDERATION FOR SUCH SETTLEMENT, THE PLAINTIFF OR
CLAIMANT HAS RELEASED FROM LIABILITY THE PERSON  OR  PERSONS  FROM  WHOM
CONTRIBUTION  OR INDEMNIFICATION IS SOUGHT. CONTRIBUTION OR INDEMNIFICA-
TION SHALL BE AVAILABLE PURSUANT  TO  THIS  SUBDIVISION  EXCEPT  TO  THE
EXTENT THAT IT IS ESTABLISHED BY THE PARTY OR PARTIES FROM WHOM CONTRIB-

S. 6081                             3

UTION  OR  INDEMNIFICATION  IS SOUGHT THAT THE AMOUNT PAID IN SETTLEMENT
WAS NOT REASONABLE.
  (E)  RELATIONSHIP  WITH  ARTICLE SIXTEEN OF THE CIVIL PRACTICE LAW AND
RULES. IF A PERSON SEEKS TO LIMIT LIABILITY PURSUANT TO BOTH SUBDIVISION
(A) OF THIS SECTION AND ARTICLE SIXTEEN OF THE CIVIL  PRACTICE  LAW  AND
RULES,  THE  LIMITATION SHALL BE MADE BY DETERMINING THE PERCENTAGE THAT
THE PLAINTIFF'S OR CLAIMANT'S NON-ECONOMIC LOSS BEARS TO  SUCH  PERSON'S
TOTAL  LOSS,  AND  THEN  APPLYING  THE SAME PERCENTAGE OF THE SETTLEMENT
CREDIT TO THE PLAINTIFF'S OR  CLAIMANT'S  NON-ECONOMIC  LOSS.  A  PERSON
WHOSE  LIABILITY  IS  REDUCED UNDER THIS SECTION SHALL BE ENTITLED TO AN
ADDITIONAL REDUCTION OF LIABILITY PURSUANT TO  ARTICLE  SIXTEEN  OF  THE
CIVIL  PRACTICE LAW AND RULES, BUT ONLY TO THE EXTENT THAT SUCH PERSON'S
REMAINING LIABILITY FOR NON-ECONOMIC  LOSS  EXCEEDS  THE  LIMITATION  OF
LIABILITY, IF ANY, ESTABLISHED BY SUCH ARTICLE.
  (F)  EXEMPTIONS.  NOTHING CONTAINED IN THIS SECTION SHALL BE CONSTRUED
TO AFFECT OR IMPAIR:
  (1) ANY CLAIM FOR INDEMNIFICATION IF, PRIOR TO THE ACCIDENT OR  OCCUR-
RENCE ON WHICH THE CLAIM IS BASED, THE PARTY SEEKING INDEMNIFICATION AND
THE PARTY FROM WHOM INDEMNIFICATION IS SOUGHT HAD ENTERED INTO A WRITTEN
CONTRACT  IN  WHICH  THE  LATTER  HAD  EXPRESSLY AGREED TO INDEMNIFY THE
FORMER FOR THE TYPE OF LOSS SUFFERED; OR
  (2) A CLAIM FOR INDEMNIFICATION BY A PUBLIC EMPLOYEE, INCLUDING INDEM-
NIFICATION PURSUANT TO SECTION FIFTY-K OF THE GENERAL MUNICIPAL  LAW  OR
SECTION SEVENTEEN OR SECTION EIGHTEEN OF THE PUBLIC OFFICERS LAW.
  (G) SETTLEMENTS WITHIN THE SCOPE OF THIS SECTION. AN AGREEMENT BETWEEN
A  PLAINTIFF  OR  CLAIMANT  AND  A PERSON WHO IS LIABLE OR CLAIMED TO BE
LIABLE IN TORT SHALL BE DEEMED A SETTLEMENT FOR  THE  PURPOSES  OF  THIS
SECTION ONLY IF:
  (1)  THE  AGREEMENT COMPLETELY OR SUBSTANTIALLY TERMINATES THE DISPUTE
BETWEEN THOSE PARTIES;
  (2) THE PLAINTIFF OR CLAIMANT RECEIVES,  AS  PART  OF  THE  AGREEMENT,
MONETARY CONSIDERATION GREATER THAN ONE DOLLAR; AND
  (3) SUCH SETTLEMENT OCCURS PRIOR TO ENTRY OF A JUDGMENT.
  (H)  VALUATION OF STRUCTURED SETTLEMENTS. WHERE THE MONETARY CONSIDER-
ATION FOR A SETTLEMENT INCLUDES ONE OR MORE PAYMENTS  WHICH  ARE  TO  BE
MADE  MORE  THAN ONE YEAR AFTER THE DATE OF THE SETTLEMENT, THE VALUE OF
SUCH FUTURE PAYMENTS SHALL, FOR PURPOSES  OF  SUBDIVISION  (A)  OF  THIS
SECTION,  BE  DEEMED  TO  BE THE SETTLING TORTFEASOR'S COST IN PROVIDING
SUCH PAYMENTS.
  § 2. This act shall take effect on the thirty-first  of  January  next
succeeding  the  date  on which it shall have become a law, and shall be
applicable to any action commenced on or after such effective date.

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The New York State Senate

senate Bill S6081

Sponsored By

Archive: Last Bill Status - Vetoed by Governor

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Votes

Jun 19, 2019 - floor Vote

Floor Vote: Jun 19, 2019

Jun 19, 2019 - Rules committee Vote

Rules Committee Vote: Jun 19, 2019

S6081 (ACTIVE) - Details

S6081 (ACTIVE) - Summary

S6081 (ACTIVE) - Sponsor Memo

S6081 (ACTIVE) - Bill Text download pdf

Comments

senate Bill S6081

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Sponsored By

Brad Hoylman-Sigal

Archive: Last Bill Status - Vetoed by Governor

Your Voice

Actions

Votes

Jun 19, 2019 - floor Vote

Floor Vote: Jun 19, 2019

Jun 19, 2019 - Rules committee Vote

Rules Committee Vote: Jun 19, 2019

S6081 (ACTIVE) - Details

S6081 (ACTIVE) - Summary

S6081 (ACTIVE) - Sponsor Memo

S6081 (ACTIVE) - Bill Text download pdf

Comments