STATE OF NEW YORK
       ________________________________________________________________________
 
                                         3537
 
                              2001-2002 Regular Sessions
 
                    IN SENATE
 
                                    March 14, 2001
                                      ___________
 
       Introduced by Sen. VOLKER -- (at request of the Judiciary) -- read twice
         and ordered printed, and when printed to be committed to the Committee
         on Codes
 
       AN  ACT  to  amend  the civil practice law and rules and the surrogate's
         court procedure act, in relation to addressing delay in payment  of  a
         settlement where the settlement required court approval
 
         The  People of the State of New York, represented in Senate and Assem-
       bly, do enact as follows:
 
    1    Section 1. Section 1207 of  the  civil  practice  law  and  rules,  as
    2  amended  by  chapter  355  of  the  laws  of 1986, is amended to read as
    3  follows:
    4    § 1207. Settlement of action or claim by infant,  judicially  declared
    5  incompetent  or  conservatee,  by  whom motion made; special proceeding;
    6  notice; order of settlement. (a) Upon motion of a guardian of the  prop-
    7  erty or guardian ad litem of an infant or, if there is no such guardian,
    8  then  of  a  parent having legal custody of an infant, or if there is no
    9  such parent, by another person having legal custody, or if the infant is
   10  married, by an adult spouse residing with the infant, or of the  commit-
   11  tee  of  the property of a person judicially declared to be incompetent,
   12  or of the conservator of the property of a conservatee,  the  court  may
   13  order  settlement of any action commenced by or on behalf of the infant,
   14  incompetent or conservatee. If no action has been commenced,  a  special
   15  proceeding  may  be commenced upon petition of such a representative for
   16  settlement of any claim by the infant, incompetent or conservatee in any
   17  court where an action for the amount of the  proposed  settlement  could
   18  have  been  commenced.    Unless otherwise provided by rule of the chief
   19  administrator of the courts, if no motion term is being held  and  there
   20  is  no  justice  of  the  supreme  court available in a county where the
   21  action or an action on the claim is triable, such a motion may be  made,
   22  or special proceeding may be commenced, in a county court and the county
   23  judge  shall  act  with the same power as a justice of the supreme court
 
        EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD09648-02-1

       S. 3537                             2
 
    1  even though the amount of the settlement may exceed  the  jurisdictional
    2  limits  of  the  county court. Notice of the motion or petition shall be
    3  given as directed by the court. An order on such a motion shall have the
    4  effect  of a judgment. Such order, or the judgment in a special proceed-
    5  ing, shall be entered without costs and shall approve the  fee  for  the
    6  infant's, incompetent's or conservatee's attorney, if any.
    7    (b) Such order, or the judgment in a special proceeding, shall provide
    8  for the payment of interest on the settlement amount at four percent per
    9  annum or the statutory interest rate on judgments, whichever is less, to
   10  be  computed commencing the fifteenth day, or where the settling defend-
   11  ant is a municipal or state entity as set forth in  subdivision  (b)  or
   12  (c)  of  section  5003-a of this chapter then commencing from the sixty-
   13  first day following the day that the proposed settlement is entered into
   14  and continuing until the day that the order or judgment is signed. Where
   15  the proposed settlement includes an  annuity  to  provide  for  periodic
   16  payments,  interest  shall  not  be computed on the present value of the
   17  annuity, but interest shall accrue on any periodic  payment  made  later
   18  than the payment schedule set forth in the proposed settlement. The date
   19  and  terms  of the proposed settlement shall be set forth to all counsel
   20  or parties in writing, or in a court transcript, and a copy of the writ-
   21  ing or transcript shall be provide to the court in  order  to  calculate
   22  the days of interest.
   23    §  2.  Paragraphs 7 and 8 of subdivision (a) of rule 1208 of the civil
   24  practice law and rules, as amended by chapter 844 of the laws  of  1968,
   25  are amended to read as follows:
   26    7.  whether  reimbursement  for  medical  or  other  expenses has been
   27  received from any source; [and]
   28    8. whether the infant's or incompetent's representative or any  member
   29  of  the  infant's  or  incompetent's family has made a claim for damages
   30  alleged to have been suffered as a result of the same occurrence  giving
   31  rise  to the infant's or incompetent's claim and, if so, the amount paid
   32  or to be paid in settlement of such claim or if such claim has not  been
   33  settled the reasons therefor[.]; and
   34    §  3. Subdivision (a) of rule 1208 of the civil practice law and rules
   35  is amended by adding a new paragraph 9 to read as follows:
   36    9. the daily rate of interest on the settlement computed  pursuant  to
   37  subdivision  (b)  of section 1207 and  a copy of the court transcript or
   38  writing setting forth the date and terms of the proposed settlement.
   39    § 4. Rule 1208 of the civil practice  law  and  rules  is  amended  by
   40  adding a new subdivision (g) to read as follows:
   41    (g)  Upon  signing the order, or judgment in a special proceeding, the
   42  court will send a copy of the order or judgment to the attorney  repres-
   43  enting  the  infant  or  incompetent, or if there is no attorney, to the
   44  representative of the infant or incompetent.
   45    § 5. Subdivisions (a), (b) and (c) of  section  5003-a  of  the  civil
   46  practice  law  and rules, as amended by chapter 269 of the laws of 1992,
   47  are amended to read as follows:
   48    (a) When an action to recover damages has been settled,  any  settling
   49  defendant,  except  those defendants to whom subdivisions (b) and (c) of
   50  this section apply, shall pay all sums due  to  any  settling  plaintiff
   51  within  twenty-one  days,  or if it is an action which requires judicial
   52  approval of settlement, within fourteen days of tender, by the  settling
   53  plaintiff  to  the  settling defendant, of a duly executed release and a
   54  stipulation discontinuing action executed  on  behalf  of  the  settling
   55  plaintiff.

       S. 3537                             3
 
    1    (b)  When an action to recover damages has been settled and the settl-
    2  ing defendant is a municipality  or  any  subdivision  thereof,  or  any
    3  public  corporation  that  is not indemnified by the state, it shall pay
    4  all sums due to any settling plaintiff within ninety days, or if  it  is
    5  an  action  which requires judicial approval of settlement, within sixty
    6  days of tender, by the  settling  plaintiff  to  it,  of  duly  executed
    7  release and a stipulation discontinuing action executed on behalf of the
    8  settling plaintiff. The provisions of this [paragraph] subdivision shall
    9  not  inure to the benefit of any insurance carrier for a municipality or
   10  any subdivision thereof, or any public corporation that  is  not  indem-
   11  nified  by  the state. Any such insurance carrier shall pay all sums due
   12  to any settling plaintiff in accordance with the provisions of  subdivi-
   13  sion (a) of this section.
   14    (c)  When an action to recover damages has been settled and the settl-
   15  ing defendant is the state, an officer or employee of the state entitled
   16  to indemnification pursuant to section seventeen of the public  officers
   17  law,  or  a public benefit corporation indemnified by the state, payment
   18  of all sums due to any settling plaintiff shall be  made  within  ninety
   19  days,  or if it is an action which requires judicial approval of settle-
   20  ment, within sixty days of  the  comptroller's  determination  that  all
   21  papers  required  to effectuate the settlement have been received by him
   22  or her. The provisions of this [paragraph] subdivision shall  not  inure
   23  to  the  benefit  of  any insurance carrier for the state, an officer or
   24  employee of the state entitled to indemnification  pursuant  to  section
   25  seventeen  of  the  public officers law, or a public benefit corporation
   26  indemnified by the state. Any such insurance carrier shall pay all  sums
   27  due  to  any  settling  plaintiff  in  accordance with the provisions of
   28  subdivision (a) of this section.
   29    § 6. Section 2220 of the surrogate's court procedure act is amended by
   30  adding a new subdivision 6 to read as follows:
   31    6. The order or decree shall provide for the payment  of  interest  on
   32  the  settlement  amount  at  a  rate of four percent or of the statutory
   33  interest on judgment rate per annum whichever is less,  to  be  computed
   34  from  the  fifteenth day, or where the settling defendant is a municipal
   35  or state entity as set forth in subdivision (b) or (c) of  section  five
   36  thousand  three-a  of  the  civil  practice law and rules, then from the
   37  sixty-first day following  the  day  that  the  proposed  settlement  is
   38  entered  into and continuing until the day that the order or judgment is
   39  signed. Where the proposed settlement includes an annuity to provide for
   40  periodic payments, interest shall not be computed on the  present  value
   41  of the annuity provided that the defendant timely funds the annuity, but
   42  interest  shall  accrue  on  any  periodic  payment  made later than the
   43  payment schedule set forth in the  proposed  settlement.  The  date  and
   44  terms  of  the  proposed settlement shall be set forth to all counsel or
   45  parties in writing, or in a court transcript, and a copy of the  writing
   46  or  transcript  shall be provided to the court in order to calculate the
   47  days of interest.
   48    § 7. This act shall take effect on  the  first  day  of  January  next
   49  succeeding the date on which it shall have become a law, and shall apply
   50  to all actions settled on or after such date.

 
BILL NUMBER: S3537
 
SPONSOR: VOLKER

AN ACT to amend the civil practice law and rules, in relation to
addressing delay in payment of a settlement where the settlement
requires court approval
 
This is one of a series of measures being introduced at the request of
the Chief Administrative Judge on the recommendation of his Advisory
Committee on Civil Practice.
 
Section 5003-a of the CPLR sets forth times within which a settling
defendant must pay all sums due following the tender of a release and
stipulation of discontinuance in an action. Difficulties arise, however,
with cases involving an infant, an incompetent or the death of a plain-
tiff, where the release cannot be tendered without prior court approval.
Usually it takes at least several weeks (occasionally, several months or
longer) between the proposed settlement and court approval. Thus, the
anomaly exists that the only litigants who do not receive their settle-
ment monies "promptly" are those who are under the courts' protection.
 
Our Advisory Committees on Civil Practice and on Surrogate's Court Prac-
tice together recommend that the CPLR (§§ 1207, 1208, 5003—a) and the
Surrogate's Court Procedure Act (§ 2220) be amended to permit interest
to accrue where there is a delay in a proposed settlement of claims by
an infant, incompetent, or in a wrongful death action caused by the need
for court approval.
 
The interest rate set forth in the proposed amendments is 4% or the
statutory rate of interest on a judgment, whichever is less.  Interest
begins to run from the fifteenth day, or in the case of a state or
municipal entity from the sixty-first day, following the day that the
proposed settlement is entered into and continues to run until the day
that the order or judgment is signed.  Provision also is made for annui-
ty payments. Once the order or judgment Is signed, defendant then will
have 14 days or, in the case of a state or municipal entity, 61 days, to
make payment.
 
The date and terms of the proposed settlement shall be set forth in a
writing or court transcript, a copy of which shall be provided to the
court in order to calculate the days of interest.
 
This measure, which would have no fiscal impact on the State, would take
effect January 1st after its enactment and apply to actions settled on
or after that date.
 
 
1999-00 LEGISLATIVE HISTORY:  OCA 2000-159
 
Senate 6923 (Volker)  
Codes