Supreme Court, Bronx County, April 11, 2023

Law Office of Kent & McBride, Middletown, New Jersey (Christopher Donald Devanny of counsel), for ASA Beverages LLC and another, defendants.

Oresky & Associates, PLLC, Bronx (Jacob Oresky of counsel), for plaintiff.

In accordance with CPLR 2219 (a), the decision herein is made upon consideration of all papers filed by the parties in NYSCEF (New York State Courts Electronic Filing System) 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 setoff under General Obligations Law § 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 [*2]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{**79 Misc 3d at 364} 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 No. 12.)

Movants now seek to amend their answer (1) to plead a sixteenth affirmative defense citing General Obligations Law § 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,^[FN1] arguing that she would suffer undue prejudice, that General Obligations Law § 15-108 is not applicable to the circumstances of her voluntary discontinuance, and that the court cannot obtain jurisdiction over a deceased individual for the purpose of movants' newly asserted cross-claims.

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 AD3d 499, 499 [1st Dept 2010] [citations omitted].) CPLR 3025 (b) requires that a copy of the proposed amended pleading be submitted with the motion to amend. Leave to{**79 Misc 3d at 365} amend is committed to the trial court's sound discretion, which will not be lightly disturbed. (Mayers v D'Agostino, 58 NY2d 696 [1982]; Cortes v Jing Jeng Hang, 143 AD3d 854 [2d Dept 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 is unconvincing, as "[m]ere lateness is not a barrier to . . . amendment[;] [i]t must be lateness coupled with significant prejudice to the other side." (Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959 [1983]; Masterwear Corp. v Bernard, 3 AD3d 305, 306 [1st Dept 2004].) In the absence of prejudice, a trial court may grant leave to amend an answer to assert the affirmative defense of General Obligations Law § 15-108 (a) before, during, or even after trial. (See Whalen v Kawasaki Motors Corp., U.S.A., 92 NY2d 288, 293 [1998].) Here, no note of issue has yet been filed indicating that discovery is complete, and plaintiff has failed to show how she would be prejudiced, let alone [*3]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 New York, 23 AD3d 436 [2d Dept 2005].)^[FN2]

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 setoff under General Obligations Law § 15-108 (a). They assert that "the Defendants are not seeking to have the court exercise jurisdiction over the decedent," "[t]he decedent is not being added as a defendant," and "no recovery {**79 Misc 3d at 366}is being sought by the Defendants or the Plaintiff from the decedent in this matter." (NYSCEF Doc No. 27 at 2.) But these assertions directly contradict the proposed amended answer (NYSCEF Doc No. 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 General Obligations Law § 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 No. 27 at 3.) For this reason, some discussion of the purpose and applicability of the statute is warranted. General Obligations Law § 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 CPLR 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 General Obligations Law § 15-108 (a) is, in essence, [*4]intended to compensate for a contribution claim that is no longer available to the non-settling tortfeasor, because General Obligations Law § 15-108 (b) expressly relieves the tortfeasor who was "released" by a plaintiff from the claims of any other tortfeasor seeking contribution.

General Obligations Law § 15-108 is purposed to promote settlement and pretrial resolution by assuring the defendant{**79 Misc 3d at 367} 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), General Obligations Law § 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 AD2d 307, 310 [1st Dept 1992], affd 81 NY2d 437, 442 [1993].) Where the "released" tortfeasor has not actually been released under the scope of General Obligations Law § 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 General Obligations Law § 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 General Obligations Law § 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 AD2d 851, 853 [2d Dept 1979].)

A subsequent amendment to the statute has, however, put that interpretation to rest. Enacted in 2007, subdivision (d) of General Obligations Law § 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{**79 Misc 3d at 368} entry of judgment."

Thus, under the express language of General Obligations Law § 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 AD3d 1191, 1193 [4th Dept 2020]; McCarthy v Kerrigan, 178 AD3d 1342, 1343 [3d Dept 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 AD3d 1, 6 [1st Dept 2014]; Mountain View Coach Lines v Storms, 102 AD2d 663, 664-665 [2d Dept 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 [Sup Ct, St. Lawrence County 2018].) Though intended to [*5]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 New York, 21 Misc 3d 1146[A], 2008 NY Slip Op 52510[U], *5 [Sup Ct, NY County 2008] ["(W)here no consideration has been received, a released defendant cannot benefit from (General Obligations Law § 15-108) subdivision (b), but rather can be impleaded back into the case so that the non-released defendants can pursue a contribution claim"]; Calise v Heartland Med. Servs., P.C., 18 Misc 3d 332, 334 [Sup Ct, Richmond County 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{**79 Misc 3d at 369} 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 AD2d 969, 971 [3d Dept 1995]; De Sano v Tower, 129 AD2d 976 [4th Dept 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 v State of New York, 44 NY2d 49 [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 AD3d 98, 103 [2d Dept 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], 2019 NY Slip Op 51826[U], *5 [Civ Ct, Bronx County 2019], citing Kelly v Long Is. Light. Co., 31 NY2d 25, 30 [1972].)

Under these principles, General Obligations Law § 15-108 was never designed to "undercompensate the plaintiff" in its calculation of credit to a non-settling defendant. (Matter of New York City Asbestos Litig. [Brooklyn Nav. Shipyard Cases], 188 AD2d 214, 218 [1st Dept 1993].) Rather, it assumes that the plaintiff has already recovered some amount for their injury{**79 Misc 3d at 370} 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 [*6]damages attributable to the settling tortfeasors." (Id.) The addition of subdivision (d) to General Obligations Law § 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 General Obligations Law § 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 No. 12, the caption of this action shall henceforth read:{**79 Misc 3d at 371}

—————————————————————————————————-x

Laura Premusch,

Plaintiff,

-against-

ASA Beverages LLC and Angel Torres,

Defendants.

——————————————————————————————————x

; and it is further ordered plaintiff Laura Premusch shall file NYSCEF form EF22^[FN3] within 30 days from upload of this order to NYSCEF; and it is further ordered that the Clerk shall mark the motion (seq No. 2) decided in all court records.