Third Party Practice, Contribution, and Indemnification Flashcards
What is impleader?
How is it accomplished? Are there any special procedures?
1) Impleader is when a D wants to join another party alleged to be liable in whole or in part to D for damages D may pay to P.
(Generally used when there is indemnity or contribution. This gets it all done in 1 action instead of making D start another suit later).
2) It is accomplished by D (known as third-party plaintiff) serving summons and third-party complaint on the new D (third-party defendant, TPD). All the rules for service of complaint/answer are the same as with a regular lawsuit. (and obviously serve everything on the true plaintiff too).
What does a P do if it wants to bring a claim against a newly impleaded third party defendant?
P may amend complaint without judicial permission if it does it within 20 days after the P was served with the third-party answer.
Otherwise, P must get court’s permission to amend pleading.
How is a P’s amended claim against a third-party defendant (impleader) treated for statue of limitations purposes?
The general rule regarding S/L and amended complaints is that the date of the ameendment must occur within the statute of limitations period.
BUT, there is an exception for IMPLEADER that allows P’s claim against the TPD to relate back to the date the TPD was impleaded if:
(1) P’s claim against TPD is based on the same transaction or occurence as the impleaded claim; AND
(2) P’s claim as against TPD would have been timely as of date of impleader.
(pretty easy - generally, P’s claim against an impleaded party will thus relate back to the date impleader papers were sent)
What is indemnity?
When does indemnity occur?
1) Indemnity allows one party to shift 100% of the blame to another party.
2) Indemnity can occur:
a) By contract clause
b) Implied-in-law indemnity: (1) Products liability: a retailer held liable for selling a defective product is entitled to indemnity from the manufacturer; (2) Vicarious liability situations: ex. in NY an owner of a car is liable for negligence of driver, and owner is entitled to indemnity from that driver.
What is contribution?
Who can seek contribution?
1) Contribution is a way that the harshness of joint and several liability is mitigated and D’s share a loss.
Note: Joint and several liability is the rule in NY and the MS majority rule.
2) Contribution allows a D that beared more than his fair share of the judgment to seek partial reimbursement from the other D’s.
3) Note: An intentional tortfeasor CANNOT seek contribution on MSE, but CAN in NY.
Can an intentional tortfeasor seek contribution?
NO on MSE, YES in NY.
How is a claim for contribution asserted?
a) If P originally joined the tortfeasors as co-defendant’s, they can assert cross-claims against each other.
2) If P omitted a tortfeasor, a D can implead the outsider as a TPD.
3) Tortfeasor may sue TPD in a separate action, BUT res judicata and collateral estoppel will not apply against that TPD [the finding of liability and percentages of fault will not apply against that new TPD in the new action].
(above methods also apply to indemnity)
What is the equal shares formula of contribution?
Give example.
A minority view.
It says the contribution shares are always equal in amount, regardless of the percentages of fault assigned by the jury.
This is crazy. Example: Vinny is 45% negligent, Pauly 35%, and Snooki 20%. Judgment is 100k, and Vinny pays it all. How much can Vinny seek in contribution from the other 2?
$33,000 each, because this is 1/3 of the total. The assigned percentages of fault are irrelevant.
How much may a party generally seek in contribution?
Majority view on NY and MSE both is that a party can seek the excess he paid over his comparative percentage of fault,
I.E. that each is liable for their percentage, and the party seeking contribution can seek up to another party’s percentage amt.
Example: Vinny is 45% negligent, Pauly 35%, and Snooki 20%. Judgment is 100k, and Vinny pays it all. How much can Vinny seek in contribution under the majority rule?
Answer: Vinny can seek 35k from Pauly and 20k from Snookie [their respective percentage amounts].
[Note: If one of the D’s is insolvent or can’t pay, the party seeking contribution can’t ask another D to pay to make up for the insolvent party.]
When can a party seek contribution?
General rule is that a party can seek contribution whenever the TPD breached a duty in tort that contributed to or aggravated the damages for which D may be liable to P.
Example: Building owner, alarm system manufacturer, and alarm system monitoring company. If alarm failed, and monitoring co. also reported it late, manufacturer could seek contribution from reporting company if manufacturer is sued.
Example 2: P is victim of tort. Goes to hospital, is negligently treated by doctor and injuries are worsened. D may seek contribution from doctor.
How does NY define a grave injury for purposes of contribution from an employer for a workplace injury?
Grave injury is strictly defined as
- death
- total loss of an arm, leg, hand, foot, nose, ear, index finger, or total loss of multiple fingers or toes [not tips]
- paraplegia or quadriplegia
- severe facial disfigurement
- total defaness or blindness
- brain damage causing total disability.
How does contribution work in a workplace injury?
Worker’s Comp: An employee cannot sue employer, but may sue a third party like an equipment manufacturer. May that manufacturer seek contribution from the employer?
MS RULE: A third-person has no right of contribution from P’s employer.
NY RULE: A third person has no right of contribution against P’s employer UNLESS employee sustained a grave injury.
How is contribution treated in cases involving settlements and multiple tortfeasors?
The liability of settling tortfeasors is discharged (they also cannot sue for contribution).
The law prohibits P receiving excess recovery, so P’s judgment is reduced by the larger of:
1) the amount of the settlement; or
2) the settling tortfeasor’s equitable share of the fault, whichever is larger.
Can a party that settles sue for indemnity? Be sued for indemnity?
Yes to both. Note that settlement cuts off claims for contribution.
Can a party who settles seek contribution? Have contribution sought against it?
No to both. Settlement cuts off contribution.
