Carol Artibee et al., Appellants,v.Home Place Corporation, Respondent.

Brief

N.Y.January 5, 2017

APL-2016-00018 App. Div. Third Dep't No. 520426; Warren County Clerk's Index No. 56768 01. First, the principle of expressio unius - "the specific mention of one person or thing implies the exclusion of other persons or thing[s]," N.Y. Statutes § 240 at 411 (McKinney 1971) - counsels against creating a new exception to joint and several liability here. Because apportionment for the benefit of the State is expressed in the statute while apportionment against the State in Supreme Court is not, the latter should not be implied. See Morales v. County of Nassau, 94 N.Y.2d 218, 224 (1999) (applying expressio unius to C.P.L.R. Article .16); see also Matter of Chemical Specialties Mfrs. Ass'n v. Jorling, 85 N.Y.2d 38.2, 394 (1995) (when construing statute, an "'inference must be drawn that what is omitted or not included was intended to be omitted and excluded"') (citation omitted). Second, the principle that "statutes in derogation of the common law receive a strict construction" calls for a similar result. See 13 N.Y. Statutes § 301 at 459 (McKinney 1971). Because Article 16 restricts the common-law principle of joint and several liability, it should be extended only so far as expressly stated by the Legislature. See Chianese v. Meier, 285 A.D.2d 315, 322 (1st Dep't 2001) ("since Article 16 is in derogation of the common law, it must be strictly construed"), aff'd as modified and remanded, 98 N.Y.2d 270 (2002). Third, courts must consider the "legislative purpose of effecting a compromise in a statute which would fairly balance the conflicting interests." Ellington Constr. Corp. v. Zoning Bd. of Appeals of Incorporated Village of New Hempstead, 77 N.Y.2d 114, 124 (1990). Article · 16 of the C.P.L.R. did not do away with joint and several liability, but instead established specific and narrowly-defined exceptions to it. The statute and its exceptions were "the product of a painstaking balance of interests." Morales, 94 N.Y.2d at 224; accord Chianese v. Meier, 98 N.Y.2d at 275. As the Governor's Approval Memorandum explained, an Advisory Commission had recommended modifying the rule to make defendants severally liable for non-economic loss under certain circumstances, but the Legislature ultimately modified that proposal to limit the changes 14 to the common-law rule in var10us respects.· Governor's Approval Memorandum for S.9391-A (July 30, 1986) at 1-2, included in Bill Jacket at 20-21, reprinted in N.Y. St. Legis. Ann. (1986) at 288-89. Governor Mario Cuomo observed: "The crafting of these exceptions and savings prov1s10ns reflects careful deliberations over the appropriate situations for a modified joint and several liability rule and demonstrates the benefits of addressing this important reform through the legislative process." Id. at 2, included in Bill Jacket at 21, reprinted in N.Y. St. Legis. Ann. (1986) at 289. Accord Siegel, N.Y. Practice § 168C (qualifications and exceptions in Article 16 were "the result of intense legislative trading that required a lot of small steps back after the agreement had been made in the back rooms to take the main pro- defendant step forward"). Under those conditions, courts should · not assume that the Legislature acted inadvertently when it omitted a particular clause that would have extended the statute's reach. "If a change should be made, it is for the Legislature, and not the courts, to make." Liff v. Schildkrout, 49 N.Y.2d 622, 634, rearg. denied, 49 N.Y.2d 1048 (1980); see Morales, 94 N.Y.2d at 221 (where Legislature "explicitly provided a list of 15 exemptions in article 16," the "policy decision" to provide an additional exemption "rests with the Legislature"). C. The Third Department's Reasons for Allowing Private Parties to Apportion Fault to the State Are Not Sufficient The Third Department cited several reasons for extending section 1601 to enable apportionment of the State's fault in Supreme Court. None withstands analysis. 1. The Requirement that Claims against the State be Brought in the Court of Claims is a Jurisdictional Limitation The Third Department began its legal discussion by asserting that plaintiffs did not face any "jurisdictional limitation" in impleading the State as a co-defendant, but rather could not do so because of the doctrine of sovereign immunity. (R. 39.) That premise was incorrect: regardless of its basis in sovereign immunity, the limitation is jurisdictional. New York's Constitution provides that the Court of Claims shall have "jurisdiction to hear and determine claims against the state." N.Y. Const. Art. VI, § 9 (emphasis added). The Court of Claims' jurisdiction is exclusive: New York's waiver of sovereign immunity 16 applies only "provided the claimant complies with the limitations of' the Court of Claims Act. See Ct. Cl. Act § 8. The State's submission to suit is thus "conditioned on submission to the exclu~ive jurisdiction of the Court of Claims." Haywood v. Drown, 9 N.Y.3d 481 , 499 n.8 (2007) , rev'd on other grounds, 556 U.S. 729 (2009). By vesting exclusive jurisdiction in the Court of Claims, the Constitution and the Legislature necessarily denied other courts the jurisdiction to hear claims against the State. The Third Department also cited commentaries by Professors Siegel and Alexander in support of allowing Supreme Court to apportion fault to the State. (See R. 40.) Although the court did not discuss the question, both commentators reasoned that the term "jurisdiction" in C.P.L.R. § 1601 refers to "[p]ersonal, not subject matter, jurisdiction." Siegel, N.Y. Practice § 168C; accord Vincent C. Alexander, Practice Commentaries to C.P.L.R. § 1601, Cl601:2, reprinted in McKinney's Consol. Laws of N.Y. , vol. 7B (C.P.L.R. 1401-2200) at 176 (2012) (opining that proviso in C.P.L.R. § 1601 applies where "no basis of personal jurisdiction exists, i.e. , where a forum-based territorial connection is lacking"). The restriction of claims 17 against the State to the Court of Claims, in contrast, is one of subject- matter jurisdiction. Although the statute refers to the claimant's inability "to obtain jurisdiction over such person," it now here spec~ies that such inability must have a particular cause, such as Professor Alexander's suggested lack of a "forum-based territorial connection." In some situations- including this one-the claimant cannot obtain jurisdiction over a person because the court lacks subject-matter jurisdiction over any claims against that person. Subject-matter jurisdiction "'. lS a question of judicial power: whether the court has the power, conferred by the Constitution or statute, to entertain the case before it."' Matter of Ballard v. HSBC Bank USA, 6 N.Y.3d 658, 663 (2006) (citation omitted); accord Matter of Fry v. Village of Tarrytown, 89 N.Y.2d 714, 718 (1997). If the court has no power to "entertain the case before it," then it cannot obtain jurisdiction over the parties for that purpose. Here, because jurisdiction over claims against the State is vested exclusively in the Court of Claims, Supreme Court lacks jurisdiction over the State. Because the claimant cannot obtain jurisdiction over the State in Supreme Court, 18 apportionment is .not available against the State under the terms of C.P.L.R. § 1601. 2. The Rule in Analogous Contexts Does Not Support Apportionment Against the State The Appellate Division observed that apportionment has been permitted in "analogous context[s]." (R. 39.) Yet neither of the two contexts cited by the Third Department is truly analogous - in neither case have the courts authorized apportionment against a person who is protected by a jurisdictional bar from suit in the main action. First, some courts have permitted apportionment against a debtor that has filed for bankruptcy and thus is protected by the automatic stay.1 (See R. 39.) But a debtor in bankruptcy, unlike the State, is subject to apportionment under the general rule of C.P.L.R. § 1601. To preclude apportionment under that statute, a barrier to suit must be jurisdictional. The requirement that claims against the State be litigated in the Court of Claims is jurisdictional. (See Point C(l).) The 1 This Court has not yet decided whether apportionment may be obtained against a bankrupt non-party. The Second Circuit has ruled that trial courts cannot apportion fault to a bankrupt debtor that is not participating in the proceedings due to the automatic stay. In re Brooklyn Navy Yard Asbestos Litig., 971 F.2d 831, 846 (2d Cir. 1992). 19 bar of bankruptcy is not. It results instead from the application of 11 U.S.C. § 362(a), the bankruptcy code's automatic stay provision. The automatic stay does not affect Supreme Court:s personal or subject- matter jurisdiction to decide an action; it merely "operates as a stay" of such actions, and the bankruptcy court may lift or modify the stay. See 11 U.S.C. §§ 362(a), (d); Matter of New York City Asbestos Litig., 6 A.D.3d 352, 352 (1st Dep't 2004) ("A New York State court does not lack jurisdiction over a tortfeasor in bankruptcy."), leave dismissed, 5 N.Y.3d 849 (2005). The fact that some courts have allowed apportionment against a debtor subject to the bankruptcy stay thus does not support apportionment against the State here. Second, courts allow nonsettling tortfeasors to offset their liability by deducting from the verdict the settling tortfeasor's share of the settlement amount or equitable share of the damages. (See R. 39-40.) Such offsets, however, are expressly authorized by General Obligations Law § 15-108(a) and preserved in C.P.L.R. § 1601(2). This case is not analogous, because there is no such express statutory authorization for apportionment against the State in Supreme Court. 20 3. The "Prevailing View" Does· Not Justify Apportionment Against the State According to the Appellate Division, "the prevailing view is that apportionment against the State is an appropriate consideration in determining the fault of a joint tortfeasor in Supreme Court." (R. 40.) But the evidence for such a "prevailing view" is scant. This Court has not addressed the issue, and before the decision below no other Appellate Division decision had held that Supreme Court could apportion fault to the State under C.P.L.R. § 1601.2 The Appellate Division cited only two trial court rulings for the · proposition that apportionment against the State in Supreme Court represented the "prevailing view," and only one of those cases involved apportionment against the State. In Rezucha v. Garlock Mech. Packing Co., 159 Misc.2d 855, 858-59 (Sup. Ct. Broome Cty. 1993) (Rose, J.), the trial court so held, characterizing the question as "a matter of first 2 Although the Fourth Department cited approvingly to commentaries and a trial-level decision on this point in Duffy v. County of Chautauqua, 225 A.D.2d 261, 266-67 (4th Dep't 1995), leave dismissed, 89 N.Y.2d 980 (1997), that case did not involve any claim against the State. The Fourth Department therefore had no occasio~ to rule on whether the State, as opposed to other parties, could be the subject of apportionment in Supreme Court. 21 impression" rather than a point on which there was a well-settled prevailing view. In the other case cited by the Appellate Division, Allstate Ins. Co. v. State of New York, 152 Misc.2d 869 (Ct. CL 1991), Allstate settled and sought indemnification post-settlement. Discussing the options that might have been open to Allstate had it not settled, the Court of Claims judge wrote that the "comparative negligence of the State ... could have been at issue" before the jury in Supreme Court. Id. at 872-73. The Allstate court did not say a Supreme Court jury could take the next step and apportion negligence to the State. Moreover, even if the court had said so, its views on the subject would be a dictum entitled to little weight. See Moore v. Hegaman, 92 N.Y. 521, 528 (1883) (a dictum "cannot be regarded as a controlling authority"). The Third Department's remaining citations for the "prevailing view," to commentaries by Professors Siegel and· Alexander (R. 40), are unpersuasive for the reasons discussed above in Point C(l). 22 4. The Legislative History of C.P.L.R. § 1601 Does Not Support Apportionment Against the State As evidence that article 16's legislative history "supports [its] view,'' the Appellate Division cited the Attorney General's Memorandum for the statute's policy of "prevent[ing] a Jury from imposing full liability on a defendant in the absence of the option to apportion culpability between the two entities." (R. 40.) As discussed above in Points A and B, however, both the Attorney General's memorandum and the Governor's Approval Memorandum show that the Legislature enacted limited exceptions to the common law rule of joint and several liability, including a limited exception for actions against the State in the Court of Claims. (See Points A, B.) The Legislature did not adopt a new policy of proportional liability for courts to apply across the board. 5. Public Policy Considerations Weigh Against Apportionment of Fault to the State in Supreme Court Finally, the Appellate Division stated that, "as a policy matter, prohibiting a jury from apportioning fault would seem to penalize a defendant for failing to implead a party that, as a matter of law, it cannot implead." (R. 40.) In the words of Justice Rose in Rezucha, 23 allowing proof of the State's culpable conduct furthers the "underlying rationale[]" of Article 16 "to permit as comprehensive a determination of relative fault as possible." 159 Misc.2d at 861 , 862. That argument proves too much. If the policy goal were to permit as comprehensive a determination of relative fault as possible, the Legislature would have abolished joint liability altogether. It did not do so. As the Third Department recognized, article 16 "was promulgated as a modification of the common-law theory of joint and several liability" (R. 38), but did not eliminate it entirely. Rather, joint and several liability remains as the background rule against which the limited exceptions in C.P.L.R. § 1601 operate. Moreover, Home Place would not be "penalized" if apportionment against the State were barred. As Supreme Court pointed out, Home Place would remain free to argue at trial that the accident was not its fault. (R. 8.) If Home Place were found liable in Supreme Court due to the State's alleged conduct, it could still sue the State for contribution or indemnification in the Court of Claims. Bay Ridge Air Rights, Inc. v. State, 44 N.Y.2d 49, 54 (1978); see, e.g. , LeFevre v. State, 176 Misc.2d 666 (Ct. Cl. 1998) (claim for contribution); Frontier Ins. Co. v. State, 24 239 A.D.2d 92 (3d Dep't 1997) (claim for indemnification), leave denied, 92 N.Y.2d 807 (1998). Neither collateral estoppel nor res judicata would bar such a claim for contribution or indemnification in the Court of Claims, because the Supreme Court action would not have considered.the issue of the State's liability. See O'Connor v. State, 70 N.Y.2d 914, 915 (1987). Any remaining risk of inconsistent verdicts-or other logistical problems arising from the maintenance of two simultaneous actions-must be considered an "unavoidable concomitant[] of the present statutory scheme," in which claims against the State are tried in a separate court. See Baisley v. Town of Kent, 111 A.D.2d 299, 300 (2d Dep't 1985). On the other hand, allowing apportionment against the State in Supreme Court would be bad policy. Litigation of the State's comparative fault in Supreme Court would almost certainly yield an inflated estimate of the State's fault. That is because the other defendant has an incentive to cast blame upon the State, but the State cannot be present to defend itself. The plaintiff will not defend the State in Supreme Court, because saying that the State is not liable would 25 conflict with the plaintiffs separate action against the State in the Court of Claims. This problem recently recurred in Cabrera v. A-to-Z Signs, Index No. 64988/13, 2016 WL 1061338 (Sup. Ct. Westchester Cty. Mar. 15, 2016). The plaintiff in Cabrera was injured on the SUNY Purchase campus when a sign fell on him. The ~ign had been installed by a contractor, A-to-Z Signs. The plaintiff sued A-to-Z in Supreme Court and simultaneously sued the State in the Court of Claims. Before trial, Westchester County Supreme Court granted A-to-Z's motion to (1) allow · apportionment between A-to-Z and the State on the verdict sheet; (2) utilize the "empty chair defense" by casting fault on the State; and (3) offer evidence that the plaintiff had a separate action against the State pending in the Court of Claims (the last point having been resolved by a stipulation to that effect). See id., 2016 WL 1061338 at *l, 3. At trial, A-to-Z argued that its actions had-been controlled by the State. The plaintiff did not seriously contest that point (for doing so would have compromised his pending claim against the State). Although State witnesses testified at the trial under subpoena, the 26 State was not permitted to examine those witnesses, and thus was unable to elicit favorable testimony from them. Indeed, the State- w hich had relied on A-to-Z for sign installation and did not, in fact, control the contractor's actions-was unable to appear at trial or offer any defense whatsoever of its actions. Nobody explained to the jury why the State was absent. From the jury's point of view, it appeared that the State could have participated in the trial, but simply did not care enough to do so. Predictably, the jury found that A-to-Z was not negligent. The State, as the only defendant in the Court of Claims action, has now become the plaintiffs sole possible source of recovery for his injury. Cabrera perfectly illustrates Justice Egan's warning in dissent below: "if we permit the requested charge and ask a jury (in the context of the Supreme Court action) to apportion fault (if any) between defendant, which will be present in the courtroom and which no doubt will present a vigorous defense, and the State, which, as the 'constitutionally mandated empty chair' in the courtroom, can neither appear nor offer any defense, an unfair - or, at the very least, skewed - 27 result will occur." (R. 41.) This unfair result is at odds with law and public policy. This Court should accordingly reverse. CONCLUSION The order appealed from should be reversed. Dated: Albany, New York April 13, 2016 BARBARAD. UNDERWOOD Solicitor General ANDREW D. BING Deputy Solicitor General FREDERICK A. BRODIE Assistant Solicitor General of Counsel By: Respectfully submitted, ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney for Amicus Curiae ?~~~~ FREDERICK A. BRODIE Assistant Solicitor General Office of the Attorney General The Capitol Albany, New York 12224 Telephone: (518) 776-2317 Facsimile: (518) 915-7724 Reproduced on Recycled Paper 28