Opinion
1622 TSN 01.
Decided January 26, 2005.
In this action plaintiff Francine Dembitzer alleges that on October 3, 1998 employees of the manager of her apartment house injured her by using an adhesive manufactured by third-party defendant Glidden Company ("Glidden") on one of her radiators. Glidden now moves for summary judgment dismissing the third-party action of the owner, manager, and employees ("defendants") against it. For the reasons set forth herein, the motion is granted.
Background
Plaintiff originally sued defendants for misusing the product and sued Glidden for manufacturing a defective product. Defendants and Glidden apparently cross-claimed against each other.
In a "Stipulation of Discontinuance" dated April 12, 2001, plaintiff's former counsel voluntarily discontinued the action as against Glidden "with prejudice" (Moving Exh. C) and, apparently without consideration (Plaintiff's Opp. Aff. ¶ 4). In a Stipulation of Discontinuance dated February 21, 2002, defendants and Glidden voluntarily discontinued their cross claims against each other without prejudice. On or about March 4, 2003, defendants commenced the instant third-party action for contribution and common-law indemnity against Glidden.
Discussion
The instant motion is granted because General Obligations Law ("GOL") § 15-108(b) bars defendants' contribution claim, and the facts bar defendants' indemnification claim.
Contribution
GOL § 15-108 provides, as here relevant, as follows:
(a) When a release or covenant not to sue . . . is given to one of two or more persons liable or claimed to be liable in tort for the same injury, . . . it reduces the claim of the releasor against the other tortfeasors 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 [New York's comparative negligence law].
(b) A release given in good faith by the injured person to one tortfeasor as provided in subdivision (a) relieves him from liability to any other person for contribution as provided in [New York's comparative negligence law].
The instant action would appear to be a textbook case for the application of the foregoing provisions. For whatever reasons, plaintiff discontinued with prejudice against Glidden. This discontinuance acted as a release, even if not signed by defendants, and even if the releasor received no consideration. Hanna v. Ford Motor Co., 252 AD2d 478, 479 (2nd Dept 1998) ("Notwithstanding the failure of the stipulation to conform to CPLR 3217, it was intended to release Ford from the action and constitutes a release within the meaning of General Obligations Law § 15-108. . . .") (citations omitted).
The release would be of cold comfort to Glidden if defendants could still sue it. The statute says they cannot. On the other hand, they, defendants, have reaped the enormous benefits of trying a case against "an empty chair" (Glidden) and of reducing their own liability by the percentage of the empty chair's fault. Thus, everyone has obtained either a distinct legal benefit ( i.e. defendants and Glidden) or the benefit of its bargain ( i.e., plaintiff).
Common-Law Indemnification
It is hornbook law that common law indemnity can only be had by a party without fault that is being held vicariously liable for the fault of another. "[W]here a party is held liable at least partially because of its own negligence, contribution against other culpable tort-feasors is the only available remedy." Glaser v. M. Fortunoff of Westbury Corp., 71 NY2d 643, 646 (1988); accord, Kagan v. Jacobs, 260 AD2d 442, 442-43 ("Since the third-party plaintiff actually participated to some degree in the alleged wrongdoing, he cannot claim indemnification."); Barrett v. United States, 651 F Supp 611, 613 (SDNY 1986) ("the role of the [subject] defendants in the alleged tortious conduct was active rather than passive"); Trustees of Columbia Univ. v. Mitchell/Giurgola Assoc., 109 AD2d 449, 453 (1st Dept 1985) ("a party who has itself actually participated to some degree in the wrongdoing cannot receive the benefit of [indemnity]"). Here, as Glidden argues, defendants "participated to some degree in the alleged wrongdoing," their "role in the alleged tortious conduct was active rather than passive" (they chose and applied the adhesive), and there is no basis to hold them vicariously liable for any culpable conduct by Glidden. In any event, if, at trial, defendants are found to be blameless, they will need neither contribution nor indemnity. If, on the other hand, they are found to be partially or wholly to blame, they will only be liable for their comparative share of the damages, rather than be jointly and severally liable for the entire amount of the damages, and they will not be entitled to indemnity (because of their fault) or contribution (because the damage award against them will be limited by operation of law).
Respondents' Arguments
Plaintiff and defendants (collectively, "respondents") argue vociferously against the motion. Their main arguments, in no rigid or rigorous order, and the reasons that this court finds those arguments to be unavailing, are as follows:
Law of the Case
A prior cross motion by Glidden to sever the third-party case from the first-party case was denied, and this denial is "law of the case." However, that a claim should not be severed from other claims does not mean that the claim is valid.
Affirmative Defense
Glidden did not assert release in its answer to defendants' third-party complaint. Defendants rightly note (Memorandum of Law at 6-7) that release is an affirmative defense that is waived if not asserted in a pre-pleading motion or in a pleading (CPLR 3211(e)), and they argue that they have been prejudiced by Glidden's delay. However, this Court deems Glidden's answer to be amended to assert a defense of "release," and, as this Court opines throughout this opinion, defendants have benefitted, not been prejudiced, by plaintiff's release of Glidden. Furthermore, defendants have not been prejudiced by Glidden's delay in asserting the "release," because, among other reasons, they presumably knew of the discontinuance against Glidden, as evidenced by the fact that they brought a third-party action, rather than reinstated their cross claims, against Glidden.
In any event, defendants did not "release" Glidden, and Glidden is not moving for dismissal on the ground that defendants released it. Rather, Glidden has moved for summary judgment on the ground that it is not subject to contribution or indemnification, the claims defendants have asserted against it. Dismissal of the contribution claim is mandated by the fact that, pursuant to GOL § 15-108, Glidden has been "relieve[d] . . . from liability . . . for contribution"; dismissal of the indemnification claim has nothing to do with any release.
Furthermore, as noted by Glidden (Reply Memorandum of Law at 9), a court may grant summary judgment on an unpleaded affirmative defense if (as here) the respondent is not prejudiced by surprise. Rogoff v. San Juan Racing Ass'n, Inc., 54 NY2d 883, 885 (1981); see generally, Ficorp, Ltd. v. Gourian, 263 AD2d 392, 392-93 (1st Dept 1999) (affirming grant of summary judgment on ground of unpleaded release).
Stipulation of Discontinuance With Prejudice
As defendants did not sign plaintiff's discontinuance with prejudice against Glidden, it did not conform with CPLR 3217(a)(2). Defendants argue that a stipulation of discontinuance not signed by all parties is ineffective for present purposes, citing Brown v. HCE, Inc., 8 AD3d 520 (2nd Dept 2004).
However, as this Court reads Brown, the holding there is very dependent upon the prejudice that would have befallen a non-signatory (Morse Diesel), which "had already invested substantial time and expense" in deposing the discontinuee (Surety Insurance Claim Specialists), if the latter had been let out of the case at that point. Id. at 522. "Furthermore, the court had already ordered, and all parties had agreed, that the deposition would be concluded within 30 days prior to trial." Id. Brown did not reject Hanna, which was from the same Department, the Second, and which, because it was not complicated by the disclosure issue, is more like the instant case. The idea that Hanna, decided less than seven years ago, might no longer be good law apparently would come as a surprise to Westlaw, which does not list any negative history, and to Judge Albert Rosenblatt, one of its authors and now an Associate Judge on the Court of Appeals. In Frost v. County of Rensselear, 220 AD2d 969, 971 (3rd Dept 1995), upon which respondents rely, the discontinuance at issue was without prejudice, which this Court would certainly agree is neither a release nor a covenant not to sue.
In the final analysis, aside from the fact that Hanna is the case most directly on point, today's decision boils down to a matter of philosophy. Plaintiff's philosophy (Memorandum of Law at 8) is that a discontinuance without consideration is not a "release" within the meaning of GOL § 15-108. This Court's philosophy is that a discontinuance with prejudice, with or without consideration, is a "release" within the meaning of GOL § 15-108. The spirit and intent of GOL § 15-108 are that a defendant who can no longer be sued by a plaintiff can no longer be sued by a co-defendant; but the co-defendant receives something even more valuable than the right to sue: a decrease in its exposure equal to the greater of the amount set forth in the document effecting the release, the amount actually paid for it, or the amount of the releasee's equitable share of damages. The only party at risk is the plaintiff, because the plaintiff may have received too little for the release, depending upon the eventual apportionment of liability between the released and the non-released tort-feasors.
Again, the touchstone is not whether the plaintiff has received consideration, the touchstone is whether the discontinuance is with prejudice. A discontinuance with prejudice acts as a release, plain and simple. Even more so, it is a "covenant not to sue," which the last clause of GOL § 15-108(a) seems to equate with a release. Furthermore, this Court is not aware of any reason why GOL § 15-108(b) should not be construed to cover one who has been "released" by a "covenant not to sue." Courts have enough to do without second-guessing why a plaintiff would discontinue an action with prejudice, and without consideration, against a plausible defendant. Here, plaintiff and/or her prior counsel may simply have felt that defendants, not Glidden, were the culpable parties. Perhaps plaintiff had some personal reason, unbeknownst to the rest of the world, for granting a discontinuance with prejudice. In any event, "[a] written instrument which purports to be . . . a total . . . release of any particular claim, . . . or obligation, . . . shall not be invalid because of the absence of consideration." GOL § 15-303.
In cases such as this, a court need only determine that a discontinuance was voluntary and signed by counsel, and that it will not prejudice anybody. Nobody has raised any issue as to the former, and this Court has satisfied itself as to the latter. Defendants' citation (Memorandum of Law at 5-6) to Klein v. Mt. Sinai Hosp., 61 NY2d 865 (1984), in which only one of two parties signed a purported "stipulation," is obviously unavailing.
As argued by Glidden (Reply Memorandum at 7), a stipulation with prejudice insures that the releasor will not revive the claim and subject the non-released parties to duplicative proceedings (and attendant unnecessary expense).
(As an alternative ground for today's decision, not advanced by Glidden, this Court would simply "order" the discontinuance with prejudice of plaintiff's action against Glidden, as 3217(b) does not, by its terms, expressly require that such an order be issued "upon motion," unlike numerous other CPLR provisions, such as, for example, CPLR 510: "The court, upon motion, may change the place of trial of an action. . . .")
Lack of a Formal Release
Defendants argue (Memorandum at 5) that a stipulation of discontinuance, here one with prejudice but without consideration, is not a release, which in common practice is a separate document that accompanies a discontinuance. In this Court's experience, lawyers are a cautious lot, and instances of "belt and suspenders" abound (indeed, often multiple times in the same document, speech, or transaction). Law in the modern era is concerned with the spirit, not the letter; with effects, not labels. The effect of the instant discontinuance was to release Glidden from any claim by plaintiff. That is quite enough for this Court. As eloquently stated by Judge Constance Baker Motley in Barrett v. United States, 651 F Supp 611, 613 (SDNY 1986):
In determining whether a written instrument constitutes a release, the language of the instrument is to be given its natural and ordinary meaning. The intent of the parties is the key to determining whether a writing is a release. To constitute a release, a writing need only contain an expression of a current intent to renounce a claim. While the writing must manifest such an intent, no set form nor any special words need be used.Disclosure
Defendants argue that Glidden's failure to raise release as a defense in its answer prejudiced defendants because of their extensive disclosure activity directed at Glidden. However, such disclosure will clearly be useful in defending against plaintiff's action and in attempting to shift blame to "the empty chair."
Massive Culpable Conduct and Indemnification
Finally, defendants spend some 20 pages (Memorandum of Law at 8-27) arguing that all fault for plaintiff's alleged injuries lies with Glidden. Even if so, this would simply result, pursuant to GOL § 15-108, in no finding of liability, and thus no judgment, against defendants; it would not result in common-law indemnity by Glidden, as defendants still would not be liable for Glidden's negligence, a prerequisite for indemnity.
Conclusion
Thus, for the reasons set forth herein, the motion for summary judgment by third-party defendant Glidden Company (originally s/h/a "Macco Adhesive Company") is granted, and the clerk is hereby directed to enter judgment accordingly.