Opinion
Index No.: 31049/2018E
04-11-2023
Laura PREMUSCH, Plaintiff, v. ASA BEVERAGES LLC and Angel Torres, Defendants.
For Plaintiff Laura Permusch: Jacob Oresky, Esq., Oresky & Associates, PLLC, 149 East 149th Street, Bronx, NY 10451, (718) 993-9999 For Defendants ASA Beverages LLC and Angel Torres : Christopher Donald Devanny, Esq., Law Office of Kent & McBride, 1715 Route 35, Ste 305, Middletown, NJ 07748, (732) 326-1711
For Plaintiff Laura Permusch: Jacob Oresky, Esq., Oresky & Associates, PLLC, 149 East 149th Street, Bronx, NY 10451, (718) 993-9999
For Defendants ASA Beverages LLC and Angel Torres : Christopher Donald Devanny, Esq., Law Office of Kent & McBride, 1715 Route 35, Ste 305, Middletown, NJ 07748, (732) 326-1711
Veronica G. Hummel, J. In accordance with CPLR 2219(a), the decision herein is made upon consideration of all papers filed by the parties in NYSCEF relevant to defendants ASA BEVERAGES LLC's ("ASA Beverages") and ANGEL TORRES's ("Torres"; and, together with ASA Beverages, "Movants") motion (Seq. No. 2) seeking an order, pursuant to CPLR § 3025(b), permitting them to serve an Amended Answer asserting the affirmative defense of set-off under General Obligations Law ("Gen. Oblig.") § 15-108 and various cross-claims against defendant ROBERT MORALES ("Morales").
This is an action for personal injuries resulting from a motor-vehicle accident that occurred on November 7, 2017, on 138th Street in Bronx County, New York. At approximately 8:15 a.m. on the date of the accident, a box truck owned by ASA Beverages and operated by Torres collided with plaintiff LAURA PREMUSCH ("Plaintiff"), a pedestrian who was in a motorized chair in the bike lane. Morales was then in control of the motorized chair, and he is alleged by Movants to have operated it unsafely and against traffic. Plaintiff commenced this action against Movants and Morales on September 26, 2018.
Movants filed a joint Answer on May 1, 2019. Morales never appeared in the action. It is undisputed that, in fact, Robert Morales died on or about March 22, 2020, following the lawsuit's commencement and unrelated to the accident. Counsel for Movants represent that Morales was uninsured and without assets. Rather than attempt to proceed with an action against the "uninsured and impoverished" decedent's estate, Plaintiff filed a notice of voluntary discontinuance dated November 16, 2020, stating that the action as against Morales only was discontinued "without prejudice." [NYSCEF Doc. 12]
Movants now seek to amend their answer (1) to plead a sixteenth affirmative defense citing Gen. Oblig. § 15-108, reducing Plaintiff's claim against them in the amount of Morales's equitable share of the damages, or the amount of any settlement or consideration paid to Plaintiff, whichever is greater, and (2) to assert cross-claims for contribution and common-law indemnification against Morales.
Plaintiff opposes both amendments, arguing that she would suffer undue prejudice, that Gen. Oblig. § 15-108 is not applicable to the circumstances of their voluntary discontinuance, and that the Court cannot obtain jurisdiction over a deceased individual for the purpose of Movants’ newly asserted cross-claims.
Plaintiff's attorney affirmation in opposition was filed four days after the submission deadline of December 26, 2022, as noted in reply by Movants. The Court will nevertheless deem the opposition papers timely pursuant to CPLR § 2004, though the issues raised by Morales's death would be apparent to the Court even without consideration of the opposition papers.
A party may amend its pleadings at any time by permission of the court, and leave to amend pleadings "should be freely granted, absent prejudice or surprise resulting therefrom, unless the proposed amendment is palpably insufficient or patently devoid of merit." MBIA Ins. Corp. v. Greystone & Co., Inc., 74 A.D.3d 499, 901 N.Y.S.2d 522 (1st Dep't 2010). CPLR § 3025(b) requires that a copy of the proposed amended pleading be submitted with the motion to amend. Leave to amend is committed to the trial court's sound discretion, which will not be lightly disturbed. Mayers v. D'Agostino, 58 N.Y.2d 696, 458 N.Y.S.2d 904, 444 N.E.2d 1323 (1982) ; Cortes v. Jing Jeng Hang , 143 A.D.3d 854, 40 N.Y.S.3d 434 (2d Dep't 2016). Thus, a party opposing leave to amend must overcome a heavy presumption in favor of permitting amendment.
Initially, Plaintiff's bare assertion that the proposed amendments would be prejudicial are unconvincing, as "mere lateness is not a barrier to amendment; it must be lateness coupled with significant prejudice to the other side." Edenwald Contracting Co. v. City of NY , 60 N.Y.2d 957, 959, 471 N.Y.S.2d 55, 459 N.E.2d 164 (1983) ; Masterwear Corp. v. Bernard, 3 A.D.3d 305, 306, 771 N.Y.S.2d 72 (1st Dep't 2004). In the absence of prejudice, a trial court may grant leave to amend an Answer to assert the affirmative defense of Gen. Oblig.§ 15-108(a) before, during, or even after trial. See Whalen v. Kawasaki Motors Corp. , 92 N.Y.2d 288, 293, 680 N.Y.S.2d 435, 703 N.E.2d 246 (1998). Here, no Note of Issue has yet been filed indicating that discovery is complete, and Plaintiff has failed to show how they would be prejudiced, let alone significantly, by the proposed amendments.
That said, the obvious and unavoidable defect in the motion arises from the fact that Morales died three years ago and that this action was discontinued against him on or about November 16, 2020. Movants sought to amend their Answer by filing this motion on October 19, 2022. It is, therefore, a legal impossibility for Movants to assert new cross-claims against Morales, as the Court is without jurisdiction over a deceased person. Jordan v. City of NY, 23 A.D.3d 436, 807 N.Y.S.2d 595 (2d Dep't 2005).
CPLR § 1403 allows claims for contribution to be asserted in a separate action, cross-claim, counterclaim, or third-party claim. Thus, Movants’ "cross-claims" for contribution and indemnification may still be asserted against Morales's estate, once an appropriate representative has been appointed, either in the present action by impleading the estate as a third-party defendant or within six years of payment of the judgment, pursuant to CPLR § 213(2). See EPTL §§ 11-3.1, 11-3.2 ; McDermott v. City of New York, 50 N.Y.2d 211, 428 N.Y.S.2d 643, 406 N.E.2d 460 (1980) ; Bay Ridge Air Rights, Inc. v. State , 44 N.Y.2d 49, 404 N.Y.S.2d 73, 375 N.E.2d 29 (1978) ; Walker v. Trustees of Univ. of Pa., 275 A.D.2d 266 , 712 N.Y.S.2d 117 (1st Dep't 2000) ; Allen v. Town of Hempstead , 145 A.D.2d 588, 536 N.Y.S.2d 129 (2d Dep't 1988).
In their reply affirmation, Movants argue that Plaintiff misstates the relief sought by the motion. Movants argue that their sole reason for seeking to amend is to plead the affirmative defense of set-off under Gen. Oblig. § 15-108(a). They assert that "the Defendants are not seeking to have the court exercise jurisdiction over the decedent," "the decedent is not being added as a defendant," and "no recovery is being sought by the Defendants or the Plaintiff from the decedent in this matter." [NYSCEF Doc. 27, at 2] But these assertions directly contradict the proposed Amended Answer [NYSCEF Doc. 24, at 6], which pleads the affirmative defense and adds cross-claims against Morales for contribution and indemnification. These cross-claims, asserted after Morales's death and before any administrator of his estate has been duly appointed or identified, are palpably insufficient and devoid of merit as a matter of law.
The other proposed amendment to the Answer pleads an affirmative defense of Gen. Oblig. § 15-108 to reduce Plaintiff's claim against Movants in the amount of Morales's equitable share of the damages. Movants suggest in their reply affirmation that seeking this type of "credit/offset for the decedent's negligence," without bringing the decedent or his estate back into the action directly, is the primary goal of amending their Answer. [NYSCEF Doc. 27, at 3] For this reason, some discussion of the purpose and applicability of the statute is warranted. Gen. Oblig. § 15-108(a) provides, in relevant part, that when a release or covenant not to sue is given to one person, others who are liable in tort for the same injury are not discharged from liability, but the plaintiff's claim is reduced
to the extent of any amount stipulated by the release or the covenant, or in the amount of the consideration paid for it, or in the amount of the released tortfeasor's equitable share of the damages under article fourteen of the civil practice law and rules, whichever is the greatest.
The reference to Article 14 is significant. Under the CPLR's contribution provisions, when two or more people are liable for the same personal injury, but one ends up paying a greater share to the injured party than his proportionate fault, the overpaying tortfeasor may claim contribution against the other liable party for "the excess paid by him over and above his equitable share of the judgment." CPLR § 1402. The related portion of Gen. Oblig. § 15-108(a) is, in essence, intended to compensate for a contribution claim that is no longer available to the non-settling tortfeasor, because Gen. Oblig. § 15-108(b) expressly relieves the tortfeasor who was "released" by a plaintiff from the claims of any other tortfeasor seeking contribution.
Gen. Oblig. § 15-108 is purposed to promote settlement and pre-trial resolution by assuring the defendant who chose to settle that he would be definitively released for a certain sum and not subject to further contribution claims from other tortfeasors. As a balance against the settling defendant's relief from liability in subdivision (b), Gen. Oblig. § 15-108(a) assures non-settling defendants that they will not pay more than their equitable share of the final judgment despite their "loss of the right of contribution." See Williams v. Niske, 181 A.D.2d 307, 310, 586 N.Y.S.2d 942 (1st Dep't 1992), aff'd , 81 N.Y.2d 437, 442, 599 N.Y.S.2d 519, 615 N.E.2d 1003 (1993). Where the "released" tortfeasor has not actually been released under the scope of Gen. Oblig. § 15-108, however, the right of contribution still exists, and the reduction of damages contained in subdivision (a) does not apply. While it is not uncommon to plead Gen. Oblig. § 15-108 as an affirmative defense at the outset of a case against multiple potential tortfeasors, the provision does not truly come into effect until a tortfeasor is released in such a way that inhibits other tortfeasors from seeking contribution.
Movants contend that Plaintiff's notice of discontinuance against Morales constitutes a release or covenant not to sue within the scope of Gen. Oblig. § 15-108. As they point out, some courts have previously held that a discontinuance without monetary consideration may be deemed such a release and allow the remaining defendants’ share of any damages owed reduced pursuant to an equitable apportionment of fault. See, e.g., Killeen v. Reinhardt , 71 A.D.2d 851, 853, 419 N.Y.S.2d 175 (2d Dep't 1979).
A subsequent amendment to the statute has, however, put that interpretation to rest. Enacted in 2007, subdivision (d) of Gen. Oblig. § 15-108 provides:
(d) Releases and covenants within the scope of this section. A release or a covenant not to sue between a plaintiff or claimant and a person who is liable or claimed to be liable in tort shall be deemed a release or covenant for the purposes of this section only if:
(1) the plaintiff or claimant receives, as part of the agreement, monetary consideration greater than one dollar;
(2) the release or covenant completely or substantially terminates the dispute between the plaintiff or claimant and the person who was claimed to be liable; and
(3) such release or covenant is provided prior to
entry of judgment.
Thus, under the express language of Gen. Oblig. § 15-108(d)(1), the statute applies only where a plaintiff received some amount of monetary consideration for the agreement. Since subdivision (d) was enacted, multiple New York appellate courts have affirmed that a stipulation of discontinuance unsupported by monetary consideration does not fall under the statute's purview. Nicotra v. CNY Family Care, LLP , 184 A.D.3d 1191, 1193, 125 N.Y.S.3d 213 (4th Dep't 2020) ; McCarthy v. Kerrigan , 178 A.D.3d 1342, 1343, 116 N.Y.S.3d 412 (3d Dep't 2019). In the absence of direct First Department precedent, this Court is bound by those decisions. McKinney's Cons. Laws of NY, Statutes § 72(b) ; D'Alessandro v. Carro , 123 A.D.3d 1, 6, 992 N.Y.S.2d 520 (1st Dep't 2014) ; Mountain View Coach Lines, Inc. v. Storms , 102 A.D.2d 663, 664-65, 476 N.Y.S.2d 918 (2d Dep't 1984).
Subdivision (d) was enacted with support from the New York State Advisory Committee on Civil Practice to promote discontinuance with "ostensibly blameless" defendants without triggering a potential reduction of a plaintiff's claim or affecting the right of contribution. See McCarthy v. Kerrigan, 59 Misc.3d 872, 881, 74 N.Y.S.3d 694 (N.Y. Sup. Ct. N.Y. Cty. 2018). Though intended to clarify that the statute does not apply where a plaintiff "released" one or more defendants on the belief they were free from liability, it is apparent that the new subdivision has a broad effect on any voluntary discontinuance without monetary consideration, e.g., a plaintiff who discontinued against a defendant who appeared insolvent, a plaintiff who chose to discontinue after a defendant's death rather than substitute an estate representative, and even a plaintiff whose discontinuance was based on an unresolved binding arbitration agreement with the defendant, the subject of McCarthy . In all these situations, the remaining defendants still have the remedy of contribution under Article 14 of the CPLR. See Fleck v. City of NY , 21 Misc.3d 1146(A), at *5, 2008 WL 5235423 (N.Y. Sup. Ct. N.Y. Cty. 2008) ("[W]here no consideration has been received, a released defendant cannot benefit from [Gen. Oblig. § 15-108 ] subdivision (b), but rather can be impleaded back into the cased so that the non-released defendants can pursue a contribution claim."); Calise v. Heartland Med. Servs., P.C. , 18 Misc.3d 332, 334, 852 N.Y.S.2d 643 (N.Y. Sup. Ct. Richmond Cty. 2007) ("Where a defendant is released, without prejudice by the codefendants, and thereafter is found to actually be at fault, the remaining defendants can implead the released codefendant back into the case and pursue their contribution/indemnification claims.").
It should also be noted that Plaintiff's notice of discontinuance against Morales was expressly "without prejudice," unlike the releases in any other case cited by Movants. This language did not completely or substantially terminate the dispute in a way that precluded Movants from their right of contribution. See Frost v. County of Rensselaer , 220 A.D.2d 969, 971, 632 N.Y.S.2d 702 (3d Dep't 1995) ; De Sano v. Tower , 129 A.D.2d 976, 514 N.Y.S.2d 153 (4th Dep't 1987). While it is true that the statute of limitations would now hinder Plaintiff from reviving any claim against Morales's estate, Movants’ potential contribution or indemnification claims have a six-year statute of limitations, which does not begin to run until payment of judgment. See CPLR § 213(2) ; Bay Ridge Air Rights, Inc. v. State , 44 N.Y.2d 49, 404 N.Y.S.2d 73, 375 N.E.2d 29 (1978).
There is no evidence in the record indicating that Plaintiff received any monetary compensation to discontinue her claims against Morales. Instead, the record indicates that Plaintiff filed her notice of voluntary discontinuance "without prejudice" after learning that Morales had died, seemingly to avoid the staying of the case pending the appointment of an appropriate representative of Morales's estate or because she believed such efforts would be futile.
It is well-established that, under the doctrine of joint-and-several liability, where there is more than one proximate cause of a motor-vehicle accident, any liable tortfeasor is obligated to pay the full amount of the plaintiff's damages, regardless of their proportionate culpability. CPLR § 1602(6) ; see also Shaw v. Carolina Coach , 82 A.D.3d 98, 103, 918 N.Y.S.2d 120 (2d Dep't 2011). "[T]he fact that a defendant is entitled to contribution from another defendant for sums paid over the former's proportionate share of the fault in no way limits a plaintiff's ability to recover all sums permitted by law from a defendant jointly and severally liable." Acosta v. Xinna Lu , 65 Misc.3d 1224(A), at *5, 2019 WL 6109633 (N.Y. Civ. Ct. Bronx Cty. 2019) (citing Kelly v. Long Is. Light. Co. , 31 N.Y.2d 25, 30, 334 N.Y.S.2d 851, 286 N.E.2d 241 (1972) ).
Under these principles, Gen. Oblig. § 15-108 was never designed to "undercompensate the plaintiff" in its calculation of credit to a non-settling defendant. In re N.Y.C. Asbestos Litig. , 188 A.D.2d 214, 218, 593 N.Y.S.2d 43 (1st Dep't 1993). Rather, it assumes that the plaintiff has already recovered some amount for their injury and prevents a double recovery. If the plaintiff's verdict is ultimately reduced by an "equitable share" greater than the monetary consideration they received, it is only due to the risk that they "agreed to accept less in settlement than the share of damages attributable to the setting tortfeasors." Id. The addition of subdivision (d) to Gen. Oblig. § 15-108 put a fine point on this policy by expressly allowing only offsets where the plaintiff settled for monetary consideration. A voluntary discontinuance for any other reason, without prejudice and without consideration, does not carry the same assumption that a plaintiff's reward against the remaining defendant will be reduced.
Again, the remedy for a liable defendant paying more than their fair share of a monetary award is to seek contribution under Article 14 of the CPLR—or indemnification where applicable. Only in cases where contribution is disallowed, because the plaintiff has already accepted some monetary consideration to release or not sue the other tortfeasor, may the remaining defendant adjust the injured party's award by invoking Gen. Oblig. § 15-108. This remedy may be imperfect, as the present case demonstrates. When a party or nonparty determined to be more at fault is insolvent and without assets, it can fall on the better-insured, more-financially-capable vehicle owner or driver to foot the bill, unless they are entirely free from liability for the plaintiff's injury. The law is clear, however, that it is a defendant's burden and recourse—not the injured plaintiff's—to demand that another responsible party pay their equitable share, by asserting a contribution or indemnification claim, including, as in this case, against the now-deceased defendant's estate, if necessary.
Based on the record now before the Court and foregoing legal principles, Movants’ proposed Amended Answer is devoid of merit and the cross-claims asserted against Morales are a nullity due to his death.
Accordingly, it is:
ORDERED that defendants ASA BEVERAGES LLC's and ANGEL TORRES's motion (Seq. No. 2) seeking an order, pursuant to CPLR § 3025(b), permitting them to serve an Amended Answer is DENIED ; and it is further
ORDERED that, pursuant to the notice of discontinuance, dated November 16, 2020, and entered at NYSCEF Doc. 12, the caption of this action shall henceforth read:
| -------------------------------------------------------------------------x | |
| LAURA PREMUSCH, | |
| Plaintiff, | |
| against- | |
| ASA BEVERAGES LLC and ANGEL TORRES, | |
| Defendants. | |
| -------------------------------------------------------------------------x |
ORDERED plaintiff LAURA PREMUSCH shall file NYSCEF form EF22 within thirty (30) days from upload of this Order to NYSCEF; and it is further
NYSCEF Form EF22 can be found at: https://iappscontent.courts.state.ny.us/NYSCEF/live/forms/notice.to.county.clerk.pdf
ORDERED that the Clerk shall mark the motion (Seq. No. 2) decided in all court records. This constitutes the decision and order of the Court.