Third Party Practice, Contribution, and Indemnification

Question 1

What is impleader?

Answer 1

It allows a D to bring in a 3P as another D - alleging that the 3P is liable in whole or part to D for the damages D might have to pay P.

Question 2

When can D implead a 3rd Party?

Answer 2

Any time after D serves the answer.

Question 3

What is the formal procedure for impleader?

Answer 3

File a summons and third party complaint, serve the third party within 120 days of filing, serve the original P as well.

Question 4

When must TPD serve his answer?

Answer 4

Same timeframe as a regular defendant.

Question 5

Once TPD is joined, who may he sue and who may sue him?

Answer 5

The original P may sue the TPD directly, and TPD may sue P directly on a counterclaim.

Question 6

What is the benefit to P of directly suing the TPD?

Answer 6

P will be able to enforce any judgment against TPD.

Question 7

When must P sue the TPD?

Answer 7

Within 20 days from the date TPD is joined or with court permission.

Question 8

How does impleader impact the S/L of the claim?

Answer 8

P’s action against TPD will be timely if it is within the S/L on the date P amended the complaint.

Question 9

If the S/L has already run on the date P amended the complaint to include the TPD, can P still sue the TPD?

Answer 9

The claim against TPD will relate back to the date the TPD was implead if:

1. P’s claim against TPD arises from the same T/O underlying the claim, and
2. P’s claim against TPD would have been timely on the date TPD was implead.

Question 10

When is indemnification implied by law?

Answer 10

In a products liability case, a retailer who is sued for selling a defective product is entitled to indemnity from the manufacturer.

In NY, a car owner found vicariously liable for the negligence of someone else driving their car with permission is entitled to indemnity from the driver for damages he is forced to pay the victim.

Question 11

Can parties contract to indemnification clauses?

Answer 11

Yes.

Question 12

If defendants are jointly and severally liable, can P ever recover more than the judgment?

Answer 12

No - joint and severable liability only allows P to collect the entire judgment from one of them (and let the defendants settle how to distribute it between themselves).

Question 13

Are all tortfeasors allowed to seek contribution?

Answer 13

Yes, in NY. The multi-state rule is that intentional tortfeasors cannot seek contribution.

Question 14

What are the three ways a defendant can seek contribution from others?

Answer 14

1. by cross-claiming against a co-defendant,
2. by impleading an outsider as a TPD,
3. by suing an outsider in a separate action

Question 15

What is the equal shares formula?

Answer 15

The minority of states use this formula to determine how co-defendants should split the judgment: divide it equally by the number of co-defendants.

Question 16

What is the comparative degrees of fault rule?

Answer 16

NY and majority of states use this formula for purposes of defendants seeking contribution.
Based on each defendant’s percentage of fault, the defendant who pays the entire judgment can seek that percentage amount from each of the other defendants.

Question 17

If P cannot recover from a third party, but that third party is responsible for P’s injuries, can D seek contribution from that third party?

Answer 17

Yes - even if P can’t recover from a third party, D might be able to if that person breached a duty in tort that either contributed to or aggravated P’s damages.

Question 18

Can a defendant recover from P’s employer if P received workers compensation?

Answer 18

Multi-state rule: No - a third party has no right of contribution or indemnity against P’s employer if P is entitled to workers compensation.

NY: generally a third party will not be able to sue an employer who has paid P workers compensation, but the third party CAN seek contribution if P suffered “grave injury.”

Question 19

What is considered “grave injury” for purposes of overriding worker’s compensation ban on seeking contribution from employers (NY rule)?

Answer 19

Death
TOTAL loss of an appendage, nose, ear, or index finger 
TOTAL loss of hearing or vision
Loss of multiple fingers or toes
Paraplegia or quadraplegia
Severe facial disfigurement
Brain damage causing total disability

Question 20

If P’s injuries from D’s negligence were aggravated by medical malpractice, what is the S/L for D to bring a contribution claim against the doctor?

Answer 20

6 years from the date D paid the judgment. Because the claims is for contribution it gets the contribution S/L - not the medical malpractice S/L.

Question 21

What happens to the other tortfeasors when one settles with the plaintiff in a case involving multiple?

Answer 21

The final judgment will be reduced based on the Reduction Formula = the larger of the amount of settlement or the settling tortfeasor’s adjudged fault.

Question 22

If D settles for MORE than he is eventually found at fault for - what happens to the judgment in a case involving multiple tortfeasors?

Answer 22

The judgment will be reduced by D’s settlement amount, which means P will end up with the entire judgment, and the other tortfeasors will end up paying less than their shares.

Question 23

If D settles for LESS than he is eventually found at fault for - what happens to the judgment in a case involving multiple tortfeasors?

Answer 23

The judgment will be reduced by D’s fault percentage. The other defendants will end up paying their share, and P will take less than the actual judgment.

Question 24

If a tortfeasor settles, can he be sued or sue for contribution?

Answer 24

No - if a tortfeasor settles, he cannot sue for contribution, and he is immune from suit for contribution.

Question 25

If a tortfeasor settles, can he sue or be sued for indemnity?

Answer 25

Yes - settlement has no effect on indemnification claims.

Question 26

What is CPLR Art. 16?

Answer 26

It modifies the harshness of joint and several liability for tortfeasors who are adjudged less than 50% at fault for non economic damages.

Question 27

In a personal injury claim where a joint tortfeasor is less than 50% at fault, how does Art. 16 affect recoverability from that tortfeasor?

Answer 27

The tortfeasor who is deemed less than 50% at fault can only be sued for her percentage of fault for non-economic damages (like pain and suffering). She will not be required to pay the entire judgment and seek contribution.

However, she will still be jointly and severally liable for economic damages (lost wages, medical expenses, etc.)

Question 28

What types of claims are exempted from Art. 16?

Answer 28

1. wrongful death claims,
2. property damage,
3. tortfeasors who acted with intent or reckless disregard for safety
4. tortfeasors who released hazardous substances into the environment
5. drivers and owners of motor vehicles (other than police cars, ambulances, and firetrucks)