Summary
holding that "Defendants did not waive General Obligations Law § 15-108(c) because it was not included as an affirmative defense in their respective answers" and that "Plaintiffs failed to establish surprise and prejudice in this purely legal inquiry"
Summary of this case from Am. Zurich Ins. Co. v. Cal. Faucets, Inc.Opinion
2015-06-18
The DIVERSIFIED GROUP, INC., et al., Plaintiffs–Appellants, v. MARCUM & KLIEGMAN LLP, et al., Defendants–Respondents.
Wachtel Missry LLP, New York (Howard Kleinhendler of counsel), for appellants. L'Abbate, Balkan, Colavita & Contini L.L.P., Garden City (Anthony P. Colavita of counsel), for Marcum & Kliegman LLP and M&K Rosenfarb LLC, respondents.
Wachtel Missry LLP, New York (Howard Kleinhendler of counsel), for appellants. L'Abbate, Balkan, Colavita & Contini L.L.P., Garden City (Anthony P. Colavita of counsel), for Marcum & Kliegman LLP and M&K Rosenfarb LLC, respondents.
Wilson Elser Moskowitz Edelman & Dicker LLP, New York (Thomas W. Hyland of counsel), for Kostelanetz & Fink, LLP, respondent.
Ropers Majeski Kohn Bentley P.C., New York (Jung H. Park of counsel), for Weiss & Company, respondent.
Lawler Mahon & Rooney LLP, New York (James J. Mahon of counsel), for Gerald Cohen, respondent.
GONZALEZ, P.J., TOM, FRIEDMAN, KAPNICK, JJ.
Order, Supreme Court, New York County (Eileen Bransten, J.), entered on or about April 17, 2014, which denied plaintiffs' motions for summary judgment and granted defendants' motions for summary judgment dismissing the complaint, unanimously affirmed, with costs.
In this breach of contract action, plaintiffs may not seek contribution from defendants pursuant to General Obligations Law §§ 15–108(c) and 15–108(d) because they settled their dispute with the investors for monetary consideration prior to the court entering judgment against them ( see Gonzales v. Armac Indus., 81 N.Y.2d 1, 5–6, 595 N.Y.S.2d 360, 611 N.E.2d 261 [1993]; Carlin v. Patel, 99 A.D.3d 1220, 1221, 951 N.Y.S.2d 807 [4th Dept. 2012] ). To the extent the pre–2007 decisions cited by plaintiffs conflict with the plain language of General Obligations Law § 15–108(d), they are no longer good law.
Contrary to plaintiffs' contention, whether defendants settled pre-judgment or post-judgment, General Obligations Law § 15–108(c) provides that “[a] tortfeasor who has obtained his own release from liability shall not be entitled to contribution from any other person.” The settlement agreement also effectively ended the underlying litigation, thereby triggering the waiver of contribution set forth in General Obligations Law § 15–108(c), even though, pursuant to the settlement agreement, the parties had ongoing obligations to fulfill their duties under the agreement ( see Gonzalez v. Armac Industries, 81 N.Y.2d at 6–7, 595 N.Y.S.2d 360, 611 N.E.2d 261). Defendants did not waive General Obligations Law § 15–108(c) because it was not included as an affirmative defense in their respective answers. Plaintiffs failed to establish surprise and prejudice in this purely legal inquiry ( see Arteaga v. City of New York, 101 A.D.3d 454, 454, 956 N.Y.S.2d 9 [1st Dept.2012] ), and in any event, prejudice and surprise are “ameliorated when it is shown that the plaintiff has had a full and fair opportunity to respond and oppose the defense being asserted in connection with summary judgment” ( Kirilescu v. American Home Prods. Corp., 278 A.D.2d 457, 457–58, 719 N.Y.S.2d 93 [2d Dept.2000], lv. denied 96 N.Y.2d 933, 733 N.Y.S.2d 368, 759 N.E.2d 367 [2001] ).