The New York State legislature recently passed the Avoiding Vexatious Overuse of Impleading to Delay (AVOID) Act in an effort to impose a time limit on impleading civil actions.1 The bill is currently with the New York State Senate for review.
Section (b)(1) of the act provides that a defendant seeking to assert a third-party claim based on a contract must file and serve a third-party summons and complaint within 60 days of serving an answer.2 If enacted, this legislation will force defendants to make decisions on filing third-party claims well before most discovery has been conducted.
Under current law, there is no procedural time limit on when a defendant may implead a third party as long as the third-party claim is timely under the applicable statute of limitations. This allows defendants time to fully vet a plaintiff’s claim prior to bringing a third-party action. Should the AVOID Act become law, defendants will no longer have the benefit of discovery before bringing a third-party claim based on a contract. The 60-day time constraint does not apply to common law contribution and indemnification claims.
The AVOID Act has limited exceptions. For instance, the time periods do not apply to a third-party action against the plaintiff’s employer for contribution or indemnification due to a grave injury or when the employer’s identity was unknown until after those time limits expired, provided the third-party complaint is filed within 120 days of the defendant’s discovery of the employer’s identity or the existence of the grave injury. Otherwise, the third-party action may not proceed without written consent from both the plaintiff and the court.
While the purpose of the AVOID Act seeks to prevent defendants from using third-party actions as a delay tactic, its potential impacts are detrimental to defendants with legitimate third-party claims that are discovered too late. For example, if it is not discovered until a deposition that a certain subcontractor was on-site on the day of the alleged injury, the primary defendant may be precluded from executing their contractual rights to indemnification. This likely will have two effects: 1) defendants will bring third-party actions that will eventually be dismissed after discovery or 2) defendants will be forced to bear the burden of claims that should have been the responsibility of a third party. The AVOID Act also puts time limits on the filing of subsequent third-party complaints, which will have similar effects.
If you have any questions regarding the content of this alert, please contact C. J. Englert, associate, at cenglert@barclaydamon.com; Taylia Hinds, summer associate, at thinds@barclaydamon.com; Matthew Larkin, Torts & Products Liability Defense Practice Area chair, at mlarkin@barclaydamon.com; or another member of the firm’s Torts & Products Liability Defense Practice Area.
1New York State Senate Bill S8071A.
22025 Bill Text NY S8071A.