Robert Whalen v. Kawasaki Motors Corp. & Robinson Cycle Sales, Inc., 98 N.Y. Int. 0112 (Oct. 15, 1998).

WAIVER - SETTLEMENT SET-OFF

ISSUE & DISPOSITION

Issues

1. Whether the nonsettling Defendant, Robinson, waived its General Obligations Law (GOL) § 15-108(a) benefits by waiting until after the verdict to assert the setoff provisions.

2. Whether Plaintiff's recovery by verdict against a nonsettling Defendant should be first reduced following the comparative fault provisions of CPLR § 1411 or by the settlement setoff rule codified in GOL §15-108(a).

Disposition

1. No. Defendant did not waive its GOL benefits and the Appellate Division did not abuse its discretion by permitting Defendant Robinson to file a motion to amend its answer to assert the GOL §15-108(a) setoff because the motion did not prejudice plaintiff.

2. Plaintiff's recovery should be reduced first by the settlement setoff rule. This method was held to achieve the statutory objectives of equity and encouragement of settlement.

SUMMARY

Plaintiff was injured in a collision with a tree that occurred while driving a three-wheel all-terrain vehicle, designed and manufactured by Defendant Kawasaki and sold by Defendant Robinson. Plaintiff and Defendant Kawasaki settled before trial for $1,600,000, and plaintiff agreed to withdraw all claims of liability against Kawasaki. During trial, Defendant Robinson did not seek any apportionment of liability against Kawasaki. The jury found the Plaintiff 92% comparatively negligent and Defendant Robinson 8% at fault. The trial court denied Robinson's post-judgment motion to amend its answer to apply GOL § 15-108(a)'s setoff provision. The court did discount the jury verdict by plaintiff's comparative fault, holding Defendant Robinson liable for $193,000. The Appellate Division reversed the Supreme Court on two issues. First, the court held that Robinson's motion should not have been denied by the Supreme Court. Second, the court applied the "fault first" calculation by subtracting the Kawasaki settlement of $1,600,000 from plaintiff's comparative fault verdict of $193,000. This approach relieved Robinson of all monetary responsibility. The Court of Appeals affirmed the Appellate Division's grant of Defendant Robinson's motion, but applied the "settlement first" rather than the "fault first" approach.

Prepared by the liibulletin-ny Editorial Board.