Third Party Practice (Impleader), Contribution & Indemnification

Question 1

Def: Impleader

Answer 1

• is a procedural device used by Δ to join another party alleged to be liable in whole or in part to Δ for damages that Δ may have to pay π.
• usually indemnity or contribution
• enables Δ to join the other party as a third-party Δ (TPD). In relation to TPD, Δ is referred to as a third-party π.

Question 2

Mechanics of Impleader

Answer 2

• D does not need a court order
• D may implead TPD at any time after D answers Ps complaint by filing a summons & third-party complaint and serving a copy on TPD w/in 120 days of the filing
• P also gets a copy of all papers served on TPD
• TPD must serve a third-party answer on D and all other parties in either 20 or 30 days

Question 3

• Can P amend her complaint to asset a claim against a TPD?
• How?
• SoL?

Answer 3

• after TPD is joined, π may amend her complaint to assert a claim directly against TPD w/in 20 days after P is served w/ the third party answer (after that she needs permission to amend)
• Usually an amendment must occur w/in SoL, BUT Ps claim against TPD will be relate back to the date TPD was impleaded (when D filed the impleader papers) IF: (i) based on same T/O as the impleader claim; AND (ii) Ps claim against TPD would have been timely @ date of imp leader

Question 4

Indemnity

• what is it
• types
• SoL

Answer 4

Allows one party to shift 100% of the responsibility to the other party

Can be agreed to by contract.

Can be implied-in-law:

• Prod Liab- retailer held liable for selling defective product is entitled to indemnity from manufacturer
• Vicarious Liability Situations- `vicariously liable party entitled to indemnity from tortfeasor)
• 6 year SoL from payment

Question 5

Contribution

• what is it
• SoL
• is an intentional tortfeasor entitled to seek contribution (MBE & NY)

Answer 5

• sharing of the loss–-apportionment–among multiple tortfeasors who are all actual participants in the tort. The purpose of contribution is to mitigate the harshness of the law of joint and several tort liability.
• six-year statute of limitations that runs from the date of payment of the judgment for which contribution is sought
• MBE- contribution not available when liability based on intentional
• NY- allows contribution in all tort cases, including intentional torts

Question 6

Ways to Assert Claims for Contribution and/or Indemnity

Answer 6

• If π originally joined the tortfeasors as co-Δs, they can assert cross-claims against each other
• If π omits a tortfeasor, a Δ can implead the outsider as TPD
• Tortfeasor may sue TPD in a separate action BUT res judicata and collateral estoppel will not apply agains the TPD so better to do in one action

Question 7

How is contribution calculated in the majority & NY?

Answer 7

• comparative degrees of fault
• the amount of contribution to which a tortfeasor is entitled is the excess actually paid by him over and above his percentage of the judgment

Question 8

Limitation on Contribution & Indemnity in Workers’ Comp Cases:

If an employee is injured on the job, she cannot sue her employer, regardless of fault on the part of the employer, because of the Workers’ Comp. Law. (The trade-off is that employees are entitled to recover fixed compensation amounts from the employer’s insurer on a no-fault basis.) However, the employee can sue a third person who is partially at fault for the accident, e.g., the manufacturer of a product that the employee was using at the workplace when she was injured. In these circumstances may the third person seek contribution or indemnity from π ’s employer?

Answer 8

• MBE RULE– 3rd party has NO right of contribution or indemnity from the Ps employer
• NY rule– generally no right of contrib/indem from Ps employer UNLESS the injured employee sustained a GRAVE INJURY
• “Grave injury” is strictly construed and statutorily defined as: death; total loss of an arm, leg, hand, foot, nose, ear or index finger; total loss of multiple fingers or toes; paraplegia or quadriplegia; severe facial disfigurement; total deafness or blindness; or brain damage causing total disability

Question 9

Settlements in Cases Involving Multiple Tortfeasors (NY RULES)

Answer 9

• partial satisfaction of the claim does not discharge Ps claim against the other tortfeasors
• any judgment for P against a non-settling tortfeasor will have to be reduced to take account of the settlement (P cant recover excess)

REDUCTION FORUMLA
Ps judgment against a non-settlor must be reduced by the LARGER of:
1- the amount of the settlement; OR
2- the settling tortfeasor’s equitable share of the fault

Question 10

Effect of Settlement on CONTRIBUTION Claims

Answer 10

Settling party CANNOT SUE or BE SUED for contribution

Question 11

Effect of Settlement on INDEMNITY Claims

Answer 11

Settling party CAN SUE and BE SUED for indemnity.

Question 12

CPLR ARTICLE 16 Modification of Joint & Several Tort Liability

• ROL
• Exclusions from Article 16

Answer 12

ROL- in a PERSONAL INJURY claim, when a joint tortfeasor is 50% or less at fault AND P has sustained non-economic damages THEN the JT can only be required to pay her own share of the Ps NON-ECONOMIC damages. Any D found liable for 51% or more of the total liability for a PI claim is J&S for the entire judgment.

EXCLUSIONS (there tortfeasors are subject to full J&S liability for all damages)

• acted w/ intent or reckless disregard for the safety of others
• released a hazardous substance into the environment
• DRIVERS & OWNERS of MOTOR VEHICLES other than police and fire vehicles