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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: August 8, 2020

Impleader Claim Not Limited to Indemnification for the First-Party Claims

On June 24, 2020, Joseph Risi of the Queens County Commercial Division issued a decision in Chinun LLC v. UNO A Brokerage Inc., 2020 NY Slip Op. 32476(U), holding that an impleader claim was not limited to a claim for indemnification related to the first-party claims, explaining:

The plaintiff argues that impleader is available only to bring in a potential indemnitor of the defendant. While the language of CPLR § 1007 limits impleader to cases where a third party is or may be liable to the original defendant for part of the original claim, case law has allowed a more expansive use of the procedure. The Court of Appeals has recognized that the language of CPLR § 1007 serves only to identify the persons against whom a third-party claim may be brought. It does not place a limit upon the amount which may be recovered or the theory of liability. One of the main purposes of third-party practice is the avoidance of multiplicity of actions and the determination of primary liability as well as ultimate liability in one proceeding whenever convenient. In such instances, it may be used to resolve interrelated lawsuits.

Thus, CPLR 1007 should not be read as allowing recovery soley for claims sounding in strict indemnity. The statute places no limit upon the legal theories which may be asserted as a basis for the claim and the third-party complaint may be based on a theory of liability different from and independent of the cause of action pleaded against the primary defendant. Here, the claims that defendant asserts in the third-party complaint arise from the same agreement as the main action. In order to avoid potentially conflicting results, it is necessary and proper to allow them to be tried together. In fact, if the defendant had commenced a separate action it would be proper to join that action for a joint trial as they arise from the same transaction. Therefore, dismissal or severance of the third-party complaint is not warranted.

(Internal citations omitted).

The New York court are (usually) very practical, hence this decision’s liberal reading of the law regarding impleader claims. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding procedure in the New York state courts, particularly in the courts’ Commercial Divisions.

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Posted in Commercial, Impleader
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