Bay Ridge Air Rights, Inc. v. State, 44 N.Y.2d 49 (1978)
A claim for apportionment of damages (contribution) against the State generally accrues when the party seeking apportionment makes payment to the injured party, not when the underlying injury occurs or when the action is brought against the party seeking contribution.
Summary
Bay Ridge Air Rights, Inc. (Bay Ridge) was sued in federal court for negligently hiring a custodian who killed a tenant. Bay Ridge sought to bring a claim against the State of New York, alleging the State was responsible for the custodian’s premature release from psychiatric care. The New York Court of Appeals addressed when such a claim for apportionment of damages accrues for the purpose of filing a claim against the State. The Court held that the claim accrues when the party seeking apportionment (Bay Ridge) makes payment to the injured party (the tenant’s estate), aligning the accrual rule with that for indemnification claims. This means Bay Ridge’s claim was premature because no judgment had been entered or paid. The court acknowledged the potential prejudice to the State due to delayed notice but stated that legislative action is required to change the accrual rule.
Facts
A custodian employed by Bay Ridge killed a tenant on July 2, 1972.
The tenant’s estate sued Bay Ridge in federal court on April 1, 1974, alleging negligent hiring, because the custodian had been under psychiatric care in state hospitals.
Bay Ridge notified the Attorney General in December 1974 of its intent to seek apportionment of damages from the State if there was a recovery in the federal action.
Bay Ridge’s third-party complaint against the State was dismissed by the federal court for lack of jurisdiction.</n
Procedural History
Bay Ridge served a notice of intention to file a claim and a proposed claim on the State on June 3, 1975.
The State moved to dismiss the claim for untimeliness under Section 10 of the Court of Claims Act.
The Court of Claims granted the State’s motion, holding that the cause of action accrued on the date of the killing.
The Appellate Division modified the dismissal, holding that the claim accrues when there is a recovery against the party seeking apportionment, dismissing the claim without prejudice to refiling if a claim accrues.
Issue(s)
Whether a claim for apportionment of damages under Dole v. Dow Chemical Co. and CPLR Article 14 accrues on the date of the underlying injury, the date action is brought against the party seeking contribution, or the date judgment or settlement is recovered.
Holding
No, because a claim for apportionment of damages, like a claim for indemnification, generally accrues when payment is made by the party seeking apportionment. Therefore, until Bay Ridge makes payment to the tenant’s estate, it need not serve notice of claim upon the State.
Court’s Reasoning
The Court reasoned that there’s insufficient support for the Court of Claims’ view that a claim for contribution accrues at the time of the underlying injury, because a defendant might lose their claim against the State if they are unaware of any right they have against the State before the applicable 90-day or 6-month time period expires.
While the State argues that the onset of the main action should trigger the statutory time limitations, the court notes that there is nothing in Dole v. Dow Chem. Co. or CPLR article 14 that justifies distinguishing claims for apportionment from those for indemnity. The court stated, “It is not the role of the court, however, without benefit of legislative authority, to cut off abruptly a cause of action good until then under conventional law.”
The court acknowledged the potential disadvantage to the State due to the delayed accrual date, but stated that the remedy lies with the Legislature, which could explore alternatives such as establishing an earlier accrual date, at least for notice of claim purposes. The court suggests allowing the State to be impleaded as a third party in the main action when the action is brought in the State courts, so that all claims could be tried in a single action.
Under conventional principles, no judgment in the Federal action against Bay Ridge having been entered, let alone paid, its claim for indemnity and contribution has not yet accrued.