Mitchell v. New York Hospital

OPINION OF THE COURT

On this appeal, we are asked to decide whether subdivision (c) of section 15-108 of the General Obligations Law, which prohibits a settling tort-feasor from obtaining contribution from another person, can be waived by agreement of all parties to the litigation.

Michael Mitchell, one of the plaintiffs in the underlying action, was employed by third-party defendant, Wolf & Munier, Inc. (W & M), as a steamfitter. On August 20,

Whenever the enforceability of a stipulation among parties in a civil case is put in issue, we must begin our analysis with the recognition that courts have long favored and encouraged the fashioning of stipulations as a means of expediting and simplifying the resolution of disputes. (Salesian Soc. v Village of Ellenville, 41 NY2d 521 , 525-526.) We have repeatedly held that, unless public policy is affronted, parties to a civil dispute are free to chart their own litigation course. (T. W. Oil v Consolidated Edison Co., 57 NY2d 574 , 579-580; Rector, Church Wardens & Vestrymen of St. Bartholomew’s Church v Committee to Preserve St. Bartholomew’s Church, 56 NY2d 71 , 76; Martin v City of Cohoes, 37 NY2d 162 , 165.) They “may fashion the basis upon which a particular controversy will be resolved” (Cullen v Naples, 31 NY2d 818 , 820) and in doing so “[t]hey may stipulate away statutory, and even constitutional rights.” (Matter of New York, Lackawanna & Western R.R. Co., 98 NY 447 , 453.)

There can be no serious claim that the subject stipulation offends public policy. Far from offending our sense of justice or threatening the public welfare (Intercontinental Hotels Corp. v Golden, 15 NY2d 9 , 13; Loucks v Standard Oil Co., 224 NY 99 ,110), the stipulation here is designed to insure the fair and prompt compensation of an injured party while reserving the right of one tort-feasor to seek contribution from the remaining wrongdoers in an effort to accomplish an equitable sharing of liability. We believe stipulations such as this effectuate, rather than affront, the public policy of this State.

The principal argument proffered by third-party defendants is that subdivision (c) of section 15-108 of the General Obligations Law, which states that “[a] tortfeasor who has obtained his own release from liability shall not be

A review of the historical underpinnings of the statute is necessary to demonstrate how enforcement of the agreement at issue here not only presents no affront to the Legislature’s purpose in enacting section 15-108 but will be of assistance in achieving the lawmakers’ goals of encouraging out-of-court settlements and insuring that liability will be fairly apportioned among all tort-feasors.

Prior to this court’s decision in Dole v Dow Chem. Co. ( 30 NY2d 143 ), New York law encouraged parties to settle lawsuits by insulating a settling tort-feasor from contribution claims by the remaining tort-feasors who were subsequently found liable to the plaintiff. (Occhialino, Contribution, Nineteenth Ann Report of NY Judicial Conference, 1974, pp 217-218.) Pre-Dole law, however, made little provision for equitable loss sharing among all tort-feasors. While our decision in Dole remedied the problem of disparate apportionment of liability, its suggestion that a settling tort-feasor could be held liable for contribution to nonsettling wrongdoers who would otherwise be responsible for paying more than their equitable shares of liability had the effect of discouraging out-of-court settlements. (Dole v Dow Chem. Co., supra, at pp 148-149,153; see, also, Williams v Town of Niskayuna, 72 Misc 2d 441 ; McLaughlin, Practice Commentary, McKinney’s Cons Laws of NY, Book 23A, General Obligations Law, § 15-108, p 717.)

Thus, in an effort to strike a better balance between the often competing policies of encouraging settlement and providing for equitable sharing of liability among tortfeasors, the Legislature enacted section 15-108. (Memorandum of Judicial Conference in support of Assembly Bill A-9192, Jan. 24,1974.) Subdivision (a) of the statute permits a plaintiff to settle with a defendant without risking the discharge of other potentially liable tort-feasors while insuring that those defendants who choose not to settle will pay no more than their equitable share of liability. Subdi

In addition to these two subdivisions which were intended to encourage settlement and apportion responsibility in an equitable manner, the Legislature enacted subdivision (c) which prohibits a tort-feasor who has obtained his own release from liability from receiving any contribution from any other person. As best as can be ascertained from the available legislative history, this subdivision was adopted to preserve judicial resources by forestalling future litigation between a settling tort-feasor, who voluntarily bought his release from the case at a price he considered fair, and nonsettling tort-feasors who contested their liability at trial and prevailed in having the ultimate damage award determined to be less than the settling tortfeasor believed it would be at the time he settled. (See Rock v Reed-Prentice, supra, at p 41 .) Our view of the Legislature’s purpose in enacting this subdivision is supported by the Judicial Conference’s statement that a tort-feasor who settles with a claimant by paying more than his equitable share “is a volunteer as to the excess paid by him. ‘The rule is familiar that money voluntarily paid by one person may not be recovered back.’” (Judicial Conference Report on CPLR, McKinney’s Session Laws of NY, 1974, p 1820, quoting Codling v Paglia, 38 AD2d 154 , 161, 162, mod on other grounds 32 NY2d 330 .)

Recognizing what the Legislature hoped to accomplish generally in enacting section 15-108, we turn to the claim of the third-party defendants who argue that the Legislature did not intend that the protection offered by subdivision (c) of the statute could be waived. We reject this view. There is nothing in the history or purpose of the legislation to indicate that the statute was intended to be nonwaivable. Indeed, in view of the Legislature’s clear pronouncement that section 15-108 was designed to encourage settlement and provide for a more equitable sharing of liability (Judicial Conference Report on CPLR, McKinney’s Session Laws of NY, 1974, pp 1816-1817), we believe that enforce

The subject stipulation was freely, knowingly and openly agreed to by all of the named parties. It provides for fair and prompt compensation of the plaintiff, yet allows all of the tort-feasors to litigate, or decide among themselves, who is responsible for plaintiff’s injuries and to what degree, while armed beforehand with the knowledge of the exact amount of the monetary damages involved. Thus, by preserving the Hospital’s claims for contribution against third-party defendants, the stipulation has removed a barrier to settlement which would otherwise exist by virtue of subdivision (c) of section 15-108. It can hardly be disputed that the Hospital, a lone defendant third-party plaintiff, would rarely, if ever, settle with an injured party if it knew that by doing so it could not seek contribution by way of a third-party action against other potentially liable third-party defendants whom the plaintiff, for whatever reason, chose not to sue directly. Additionally, by providing a postsettlement vehicle whereby each tort-feasor, including the Hospital, can contest its liability vis-a-vis the others in a single proceeding, equitable sharing of liability will be more fully realized. We hold, therefore, that the stipulation should be enforced.

The cases cited by third-party defendants do not require a contrary, result as each is readily distinguishable. Lettiere v Martin Elevator Co. ( 62 AD2d 810 , affd 48 NY2d 662 ) involved a stipulation, unlike the one before us, to which the nonsettling tort-feasor was not a party. Thus, even if that stipulation was intended to waive the protection afforded by subdivision (c) of section 15-108, the tort-feasor whose protection was purportedly being waived did not consent thereto and obviously could not be bound thereby. In Rock v Reed-Prentice ( 39 NY2d 34 , supra), we were asked to enforce a settlement agreement between plaintiff and one defendant reached after judgment had been entered against the remaining defendant. It was held that subdivision (c) of section 15-108 did not even apply to that fact situation because the statute was not intended to nullify pre-existing judgments. Third-party defendants’ re

Finally, with respect to W & M’s claim that the Hospital cannot seek recovery against third-party defendants under the inconsistent theories of contribution and contractual indemnity, we note the well-settled rule that “a plaintiff is entitled to advance inconsistent theories in alleging a right to recovery.” (Cohn v Lionel Corp., 21 NY2d 559 , 563; Siegel, Practice Commentary, McKinney’s Cons Laws of NY, Book 7B, CPLR 3014, p 8.)

Accordingly, the order of the Appellate Division should be modified by denying third-party defendant W & M’s and Utilex’s motions for summary judgment on the issue of contribution, and, as so modified, affirmed. The certified question should be answered in the negative.

Chief Judge Cooke and Judges Jones, Wachtler, Meyer and Kaye concur; Judge Simons taking no part.

Order modified, with costs to appellant against respondents Wolf & Munier and Utilex, in accordance with the opinion herein and, as so modified, affirmed, with costs to respondent Syska & Hennessy against appellant. Question certified answered in the negative.