McCarthy v Kerrigan

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[*1] McCarthy v Kerrigan 2018 NY Slip Op 28093 Decided on March 27, 2018 Supreme Court, St. Lawrence County Farley, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the printed Official Reports.

Decided on March 27, 2018
Supreme Court, St. Lawrence County

Jessica McCarthy, as Administrator of The Estate of Jay F. McCarthy, Plaintiff,

against

Brian R. Kerrigan, M.D., TOWN OF MASSENA NEW YORK (MASSENA MEMORIAL HOSPITAL), JAN CLOSE, M.D., CANTON-POTSDAM HOSPITAL, and ST. LAWRENCE HEALTH ALLIANCE, INC., Defendant, BRIAN R. KERRIGAN, M.D., Third-Party Plaintiff, NATHAN WITTKOP, D.C., Third-Party Defendant.



146307



Law Office of Mark H. Cantor, LLC (David J. Wolff, Jr., Esq., of counsel), attorneys for Plaintiff; Phelan, Phelan, & Denak, LLP (Timothy S. Brennan, Esq., of counsel), attorneys for Defendant and Third-Party Plaintiff Brian R. Kerrigan, M.D.; Thuillez, Ford, Gold, Butler, & Monroe, LLP (Kelly M. Monroe, Esq., of counsel), attorneys for Defendant Town of Massena; Carter, Conboy, Case, Blackmore, Maloney & Laird, P.C. (Stanley J. Tartaglia, Jr., Esq., of counsel), attorneys for Defendants Canton-Potsdam Hospital and St. Lawrence Health Alliance; Maynard, O'Connor, Smith & Catalinotto, LLP (Bridget M. Schultz, Esq., of counsel), attorneys for Defendant Jan Close, M.D.; Marks, O'Neill, O'Brien, Doherty, Kelly, P.C. (Robert E. Fein, Esq., of counsel), attorneys for Third-Party Defendant.
Mary M. Farley, J.

Two motions are before the Court in this medical malpractice action. First, Third-Party [*2]Defendant Nathan Witkop, D.C. ("Witkop")[FN1] moves for summary judgment, arguing the third-party action brought against him by Defendant/Third-Party Plaintiff Brian R. Kerrigan, M.D. ("Kerrigan") is barred by NY General Obligations Law § 15-108. To this end, Witkop asserts Plaintiff's stipulation of discontinuance "with prejudice" of his claims against Witkop, as ordered pursuant to New York C.P.L.R. § 3217 (b) by the Court on June 27, 2016, comprises a "release" under General Obligations Law § 15-108, thereby barring Kerrigan's third-party claim. Defendant Jan Close, M.D. ("Close") cross-moves seeking to stay the trial in this action pending conclusion of an arbitration agreed to by Plaintiff and Witkop, and which formed the basis of Plaintiff's stipulation of discontinuance as against Witkop. For the reasons which follow, the Court: (1) denies Witkop's motion for summary judgment, without prejudice to renewal pending conclusion or settlement of the arbitration and Plaintiff's claims against Witkop; and, (2) grants Close's cross-motion for stay of trial.

STATEMENT OF FACTS

Jay F. McCarthy ("Jay") commenced this medical malpractice action August 17, 2015, alleging numerous defendants, including Kerrigan, Close and Witkop, committed medical malpractice by negligently failing to recognize and treat symptoms of a stroke during the course of Jay's treatment from April 7, 2015, through April 22, 2015. See Affirmation of Robert E. Fein, Esq., dated November 7, 2017 ("Fein aff."), at ¶ 5 & Ex. A (Complaint dated August 12, 2015); Affirmation of David J. Wolff, Jr., Esq. ("Wolff"), dated December 29, 2017 ("Wolff aff."), at ¶¶ 5-9 & Ex. E (Plaintiff's Bill of Particulars); Affirmation of Timothy S. Brennan, Esq., in Opposition to Summary Judgment dated December 6, 2017 ("Brennan Opposition aff."), at ¶ 3. No Defendant has asserted cross-claims. See Fein aff. at ¶¶ 7-8, 20-23 & Exs. B-D, F, N-Q (Answers).

Jay died September 28, 2016, and Letters of Administration were issued to Jay's daughter, Jessica McCarthy ("Jessica"), on February 22, 2017. See Fein aff. at ¶¶ 15-16 & Ex. J. By Order dated July 7, 2017, Jessica, as Administrator of the Estate of Jay McCarthy, was substituted as Plaintiff. The parties have stipulated a wrongful death cause of action be added through Amended Complaint. See Fein aff. at ¶ 18 & Ex. L (Supplemental Summons and Amended Complaint).

After commencing this action, but before his death, Jay entered into an Arbitration Agreement dated January 29, 2016 ("Arbitration Agreement") with Witkop.[FN2] Affirmation of Bridget M. Schultz, Esq., dated December 5, 2017 ("Schultz aff."), at ¶ 5 & Ex. A (Arbitration Agreement); Fein aff. at ¶ 9 & Ex. E (same); see Brennan Opposition aff. at ¶ 4. In pertinent part, the Arbitration Agreement states:



Article 1: Agreement to Arbitrate: It is understood that any dispute as to[*3]medical malpractice, that is as to whether any medical services rendered under this contract were unnecessary or unauthorized or were improperly, negligently, or incompletely rendered, will be determined by submission to arbitration as provided by state and federal law, and not by a lawsuit or resort to court process, except as state and federal law provides for judicial review of arbitration proceedings. Both parties to this contract, by entering into it, are giving up their constitutional right to have any such dispute decided in a court of law before a jury, and instead are accepting the use of arbitration... An arbitration can only decide a dispute between the parties [ ].

Article 3: Procedures and Applicable Law: A demand for arbitration must be communicated in writing to all parties. Each party shall select an arbitrator (party arbitrator) within thirty days, and a third arbitrator (neutral arbitrator) shall be selected by the arbitrators appointed by the parties within thirty days thereafter. The neutral arbitrator shall then be the sole arbitrator and shall decide the arbitration...

Arbitration Agreement at Arts. 1 & 3 (boldface in original; emphases added).



Plaintiff and Witkop do not dispute the Arbitration Agreement was valid when made, and remains so, despite the substitution of Jessica as Plaintiff. "[T]he action against Witkop has to proceed through Arbitration." Wolff aff. at ¶ 18; see Fein aff. at ¶ 9. Plaintiff has invoked the Arbitration Agreement and served an Amended Arbitration Complaint on Witkop, which Witkop answered June 8, 2017. See Fein aff. at ¶¶ 17, 19 & Exs. K & M; Brennan Opposition aff. at ¶ 4. No arbitration date has yet been scheduled. Wolff aff. at ¶ 4. Plaintiff's and Witkop's submissions do not indicate whether either has selected an arbitrator, or whether the neutral arbitrator has been selected.

On March 23, 2016, counsel for Plaintiff executed the stipulation of discontinuance, wherein Plaintiff agreed to "discontinue [the action] against [Witkop] only, with prejudice." Fein aff. at ¶ 11 & Ex. G. Witkop acknowledges Plaintiff "entered into [the] Arbitration Agreement with [Witkop] voluntarily discontinuing his State court action against [Witkop] in consideration for binding arbitration with [Witkop]." Id. at ¶ 9 (emphasis added). "This [Arbitration] Agreement inevitably led the plaintiff to discontinue the plaintiff's trial court claims against defendant Wittkop [sic], in consideration for binding arbitration." Schultz aff. at ¶ 5. Witkop, with the consent of Plaintiff's counsel, had not then responded to the Complaint. See Affidavit of Victor L. Prial, Esq. ("Prial"), sworn to May 5, 2015 ("Prial aff."), at ¶ 10 [FN3] ; see Fein aff. at ¶ 9.

When the remaining Defendants did not sign this stipulation of discontinuance, Witkop moved on May 12, 2016, for an order of discontinuance pursuant to NY C.P.L.R. § 3217 (b). Fein aff. at ¶ 12 & Ex. H (Notice of Motion). In support of this motion, counsel for Witkop stated:

Dr. Witkop has not joined issue in this action because Plaintiff and Defendant Dr. Witkop are parties to an agreement whereby Plaintiff agreed to arbitrate any dispute as to [*4]malpractice against Dr. Witkop. Accordingly, Plaintiff has agreed to discontinue his claims as against Dr. Witkop asserted in this litigation. Plaintiff's claims against Dr. Witkop will be arbitrated.

Prial aff. at ¶ 5.



By Order dated June 27, 2016 [Ex. I to Fein aff.], the Court granted Witkop's unopposed motion for an order of discontinuance and deleting Witkop from the caption, and ordered the proceeding be discontinued as against Witkop, with prejudice.

On September 12, 2017, Kerrigan commenced a third-party action for contribution and indemnification against Witkop, "seeking to preserve his rights for common law indemnity and/or contribution against Witkop." Brennan Opposition aff. at ¶ 6; see Fein aff. at ¶ 24 & Ex. R (Third-Party Summons and Complaint). "Dr. Kerrigan commenced the Third-Party Action [against Witkop] to prevent the possibility of divergent results or a double recovery." Affirmation of Timothy S. Brennan in Response to Close Cross-Motion dated December 29, 2017 ("Brennan Response aff."), at ¶ 5. In his Answer to Kerrigan's Third-Party Complaint ("Witkop Answer") [Ex. S to Fein aff.], Witkop asserted several affirmative defenses, including: (1) "in the event of any award made to the plaintiff, [Witkop] is entitled to a Set-Off with respect to the amounts of any and all payments made to the plaintiff in settlement of any claims arising out of the claims of damages or injuries alleged in this action pursuant to NY General Obligations Law § 15-108"; and, (2) Witkop "is already a party to a binding Arbitration pursuant to a duly executed Arbitration Agreement." Witkop Answer [Ex. S to Fein aff.] at ¶¶ 14-15.

Plaintiff is actively pursuing arbitration against Witkop, although an arbitration date has not yet been scheduled. Wolff aff. at ¶ 4; see Brennan Opposition aff. at ¶ 9. Plaintiff "has not executed any release/settlement, received payment or obtained any judgment to date against Witkop." Wolff aff. at ¶ 4; see Brennan Opposition aff. at ¶ 9. "Joint discovery in [this] State Court action and plaintiff's binding Arbitration against [Witkop] [has] proceeded in the ordinary course." Fein aff. at ¶ 14; Schultz aff. at ¶ 15 ("discovery [in the State Court action] can continue in the ordinary course"). By letter to counsel dated October 13, 2017, and at the request of Plaintiff's counsel, the Court administratively set aside two weeks (October 1, 2018, through October 4, 2018; and October 9, 2018, through October 12, 2018) for trial, pending receipt of a filed note of issue. No note of issue has yet been filed.



DISCUSSION

Before the Court are two requests for relief: (1) Witkop's motion seeking summary judgment on the ground General Obligations Law § 15-108 bars Kerrigan's third-party action; and, (2) Close's cross-motion to stay the trial in this action pending resolution of the arbitration between Plaintiff and Witkop.



A. Witkop's Motion for Summary Judgment

"Where, as here, the relief is sought via summary judgment, the proponent of such relief has the initial burden to 'make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact.'" NY Professional Drywall of OC, Inc. v. Rivergate Dev., LLC, 137 AD3d 1509, 1511 (3d Dep't 2016) (citation omitted). If the movant makes a prima facie showing on motion, "the burden shifts to the opposing party 'to produce [*5]evidentiary proof in admissible form sufficient to establish the existence of material issues of fact.'" E.g., Maines Paper & Food Serv., Inc. v. Keystone Assoc., Architects, Engrs., & Surveyors, LLC, 134 AD3d 1340, 1341 (3d Dep't 2015). "Only when the movant bears this burden [on motion] and the nonmoving party fails to demonstrate the existence of any material issue of fact will the motion [for summary judgment] be properly granted." Staunton v. Brooks, 129 AD3d 1371, 1372 (3d Dep't 2015).

Witkop's summary judgment motion relies upon subdivisions (a) and (b) of General Obligations Law § 15-108, which state, in pertinent part:

(a) Effect of release of or covenant not to sue tortfeasors. When a release or a covenant not to sue or not to enforce a judgment is given to one of two or more persons liable or claimed to be liable in tort for the same injury, or the same wrongful death, it does not discharge any of the other tortfeasors from liability for the injury or wrongful death unless its terms expressly so provide, but it reduces the claim of the releasor against the other tortfeasors to the extent of any amount stipulated by the release or the covenant, or in the amount of the consideration paid for it, or in the amount of the released tortfeasor's equitable share of the damages under article fourteen of the civil practice law and rules, whichever is the greatest.(b) Release of tortfeasor. A release given in good faith by the injured person to one tortfeasor as provided in subdivision (a) relieves him from liability to any other person for contribution as provided in article fourteen of the civil practice law and rules.

Id. (emphases added).

Witkop asserts Plaintiff's stipulation of discontinuance with prejudice against him constitutes a "release" under General Obligations Law § 15-108, and therefore bars Kerrigan's third-party claim for contribution against him. See Fein aff. at ¶¶ 30-31. Witkop further argues that although Kerrigan's Third-Party Complaint [Ex. R to Fein aff.] alleges an indemnification claim against him, the facts of this case preclude this claim, with the result that Kerrigan's current claim against Witkop is limited to contribution. Kerrigan does not dispute this.

Kerrigan opposes Witkop's motion on several grounds. First, he argues that because Witkop provided no payment to Plaintiff in exchange for the stipulation of discontinuance, neither the stipulation nor the Court's June 27, 2016 Order comprise a "release" under General Obligations Law § 15-108. See Brennan Opposition aff. at ¶ 8; Kerrigan's Memorandum of Law dated December 6, 2017 ("Memorandum of Law"), at pg. 4. Kerrigan argues that the continuing pendency of Plaintiff's claim against Witkop — albeit in arbitration, rather than in this action — further demonstrates that Plaintiff never gave a release to Witkop and, thus, Kerrigan's third-party action is not barred. Id. at pp. 4-5; Brennan Opposition aff. at ¶¶ 9-10. According to Kerrigan, "the arbitration agreement and discontinuance are not, in any way, a release since plaintiff is even now actively prosecuting her claims against Witkop." Memorandum of Law at pg. 3; see Brennan Opposition aff. at ¶ 9. Kerrigan acknowledges that "should Witkop make a [*6]payment to plaintiff to resolve the arbitration proceeding in advance of trial, then General Obligations Law § 15-108 would apply." Memorandum of Law at pg. 7 (emphasis added); see Brennan Opposition aff. at ¶ 11. Plaintiff agrees General Obligations Law § 15-108 applies to Plaintiff if a settlement with Witkop occurs. Wolff aff. at ¶ 14. In the event the Court does not deny Witkop's motion, Kerrigan argues the Court should find that motion premature "because [Witkop] has yet to make a payment to resolve [Plaintiff'] claims." Memorandum of Law at pg. 4. Plaintiff, Close, and the other Defendants take no position on Witkop's motion. See Wolff aff. at ¶ 4; Schultz aff. at ¶ 3.

General Obligations Law § 15-108 applies to contribution claims [FN4] when a "release" is provided to less than all defendants in a multi-defendant lawsuit. Subdivision (a) provides that where such a release is given, it does not discharge any of the other defendants, but it reduces the claim of the releasor against the remaining defendants by the greater of: (1) the amount stipulated in the release, (2) the amount of consideration paid for the release, or (3) the amount of the released defendant's equitable share of the damages. Id., see Gonzales v. Armac Indus., 81 NY2d 1, 5 (1993). Subdivision (b) provides that a defendant who has been given such a release is "relieve[d]... from liability to any other person for contribution..." Id. The Legislature enacted General Obligations Law § 15-108 to further settlements, safeguard equity, and avoid double recoveries. As stated by the Court of Appeals:

The purpose of the statute is to encourage settlement, although the statute is also concerned with ensuring equity. Plaintiffs should be fairly compensated, but nonsettling defendants should not bear more than their fair share of a plaintiff's loss. Moreover, the possibility of double recovery should be avoided.

Whalen v. Kawasaki Motors Corp., U.S.A., 92 NY2d 288, 292 (1998) (emphases added).

"The overall scheme and purpose of [General Obligations Law § 15-108] is to promote settlements in multiple-party tort cases by clearly defining the effect the settlement will have on collateral rights and liabilities in future litigation." Rock v. Reed-Prentice Div. of Package Mach. Co., 39 NY2d 34, 41 (1976) (emphasis added).

In 2007, the Legislature amended General Obligations Law § 15-108 by adding subdivision (d), which defines a release or covenant not to sue thereunder. Effective July 4, 2007, § 15-108 (d) provides:

Releases and covenants within the scope of this section. A release or a covenant not to sue between a plaintiff or claimant and a person who is liable or claimed to be liable in tort shall be deemed a release or covenant for the purposes of this section only if:(1)the plaintiff or claimant receives, as part of the agreement, monetary consideration greater than one dollar;(2)the release or covenant completely or substantially terminates thedispute between the plaintiff or claimant and the person who was claimed to be liable; and,(3)such release or covenant is provided prior to entry of judgment.

Id. (emphases added).



Subdivision (d) was introduced at the Request of the Chief Administrative Judge on the recommendation of his Advisory Committee on Civil Practice. Introducer's Mem in Support, Bill Jacket, 2007 S.B. 3739, Ch. 70 ("Introducer's Mem") at 1. It was proposed by the New York State Advisory Committee on Civil Practice to encourage plaintiffs to voluntarily release "ostensibly blameless defendants" without the fear of having their awards reduced pursuant to subdivision (a). Report of the Advisory Committee on Civil Practice, January 2006 ("Advisory Committee Report") at 43, available at https://www.nycourts.gov/ip/judiciaryslegislative/pdfs/CivilPractice_06.pdf; see 187 Siegel's Practice Review, Amendment of Settlement Statute, Gen. Oblig. Law § 15-108, Alters Impact of Settlement with Fewer than all Tortfeasors at 3 [July 2007].

As now pertinent, subdivision (d) eliminates two kinds of releases of contribution claims from the ambit of the General Obligations Law § 15-108. First, General Obligations Law § 15-108 (d) (1) specifies that a discontinuance given without monetary consideration is not a "release" under the statute. In that instance, a plaintiff's jury award will not be reduced pursuant to subdivision (a), and the discontinued defendant may be impleaded back into the case so the remaining defendants may pursue a contribution claim. E.g., Calise v. Heartland Med. Servs., P.C., 18 Misc 3d 332, 334 (Sup Ct Rockland County 2007) (discussed in 193 Siegel's Practice Review, Discontinuance by P as Against D-1 in Tort Case, Also Canceling D-2's Cross-Claim, Now Doesn't Stop D-2 from Impleading D-1 at 4 [Jan. 2008]); Palmer v. Cervone, 2017 Westlaw 6002869 (Sup. Ct. Suffolk County, Oct. 10, 2017); see Fleck v. City of New York, 21 Misc 3d 1146 (A), 875 N.Y.S.2d 820 (Sup Ct NY County 2008). Second, General Obligations Law § 15-108 (d) (2) eliminates releases which do not "completely or substantially terminate [ ] the dispute" between a plaintiff and the allegedly liable party. This subdivision was introduced to "effectively exclude 'high-low' agreements by which the parties agree to confine the damages to an agreed range [and] agreements in which the parties merely narrow the issues (perhaps, by conceding liability, or jurisdiction) without fully resolving the action." Introducer's Mem at 3; Advisory Committee Report at 45.

The particular facts here — a stipulation of discontinuance "with prejudice" has been given by plaintiff to one of several defendants "in consideration for" [Fein aff. at ¶ 9] plaintiff entering into a binding arbitration agreement with the settling defendant, after the effective date of subdivision (d); none of the defendants has asserted cross-claims against the others; an Order has been entered pursuant to C.P.L.R. § 2317 (b) dismissing with prejudice "all cause of action" against the settling defendant and discontinuing the action, with prejudice, as against the settling defendant; a non-settling [*7]defendant has later brought a third-party action against the settling defendant; and, the arbitration "in consideration for" which the settling defendant was given the stipulation of discontinuance has not been conducted or the dispute between plaintiff and the settling defendant otherwise resolved — present a case of first impression. The Third Department has not addressed the meaning and effect of General Obligations Law



§ 15-108 (d).

The cases cited by Kerrigan and Witkop are not on point. Schreiber v. K-Sea Transp. Corp., 30 AD3d 101 (1st Dep't 2006), aff'd, 9 NY3d 331 (2007), heavily relied upon by Kerrigan, states an agreement to arbitrate, when no defendant was released from liability, "[p]lainly [ ] is not a release." 30 AD3d at 105. Schrieber, however, was decided prior to 2007 enactment of General Obligations Law §15-108 (d), and its holding concerns the interplay of the Jones Act (46 U.S.C.A. § 688) and the Federal Arbitration Act (9 U.S.C. § 1 et seq.). None of the cases relied upon by Witkop [see Fein aff. at ¶¶ 30-35] concerns agreements to arbitrate; most were decided prior to 2007 enactment of General Obligations Law § 15-108 (d); and, none mentions or construes subdivision (d).

Both the language of General Obligations Law § 15-108 (d) and the overall statutory purposes of § 15-108 make plain the stipulation of discontinuance here does not comprise a "release or covenant not to sue", as specifically defined under subdivision (d). First, Plaintiff received no "monetary consideration greater than one dollar" in exchange for the stipulation. Wolff aff. at ¶ 4; see Brennan Opposition aff. at ¶ 9. Even if the arbitration agreement has a value to Plaintiff greater than one dollar, the statute requires "monetary consideration." General Obligations Law §15-108 (d) (1). Second, the arbitration remains pending and undecided, thus making clear Plaintiff has not "completely or substantially terminate[d] [his] dispute" with Witkop. General Obligations Law § 15-108 (d) (2). The Court of Appeals has made plain the purposes of General Obligations Law § 15-108 include "encourag[ing] settlement"; "ensuring equity"; avoiding the possibility of double recovery; and, "clearly defining the effect [of] settlement" in multi-party tort cases. Whalen, 92 NY2d at 292; Rock, 39 NY2d at 41.

The Court finds Plaintiff's stipulation of discontinuance with prejudice against Witkop was not a "release" within the scope of General Obligations Law



§ 15-108. That the Court's June 26, 2016 Order [Ex. I to Fein aff.] "discontin[ued] all causes of action against [Witkop] with prejudice" does not alter this result. At that time, no cross-claims had been interposed against Witkop; Plaintiff's was the only pending claim against Witkop. The Order gives no greater weight to the stipulation of discontinuation than it would otherwise have, and does not concern the clear language and statutory purpose of General Obligations Law § 15-108. As a result, Kerrigan "can implead [Witkop] back into the case and pursue [contribution] claims." Calise, 18 Misc 3d at 334 (citation omitted). Accordingly, the Court denies Witkop's motion for summary judgment, without prejudice to renewal pending the dispute between Plaintiff and Witkop being "completely or substantially terminate[d]" by arbitration award, settlement, or some other means, in a manner satisfying the definition of a release or covenant not to sue set forth in General Obligations Law § 15-108 (d).

B. Close's Cross-Motion for Stay of Trial

The Court next addresses Close's cross-motion to stay the trial of this action (administratively scheduled for October 2018) pending completion of the Plaintiff/Witkop arbitration (or other complete and substantial termination of their dispute). Close argues he and the other Defendants are entitled to receive the benefit of the set-off available under General Obligations Law § 15-108 to non-settling defendants. According to Close, a stay pending arbitration is necessary "for the purposes of ascertaining the set-off value, if any, which is statutorily afforded to the defendants by virtue of General Obligations Law § 15-108." Schultz aff. at ¶ 10. Close states — and neither Plaintiff nor Kerrigan disputes — "[a]ny recovery the plaintiff procures against the defendants [in this action] must be reduced by the portion attributable to Witkop [ ] in arbitration, if any." Id. at ¶ 14; see Wolff aff. at ¶ 12; Memorandum of Law at pg. 6. Both Close and Plaintiff cite to the Third Department's decision in County of Broome v. Dickinson, 91 AD2d 780 (3d Dep't 1982), and acknowledge it stands for the proposition that any recovery Plaintiff procures here against Defendants must be reduced by the proportion found attributable to Witkop in arbitration. Schultz aff. at ¶ 14; see Wolff aff. at ¶ 12. Close also argues joint discovery has taken place "in the ordinary course", and thus a stay of trial will not prejudice the parties. Schultz aff. at ¶ 15; see also Fein aff. at ¶ 14 ("[j]oint discovery in the pending State Court action and plaintiff's binding Arbitration action against [Witkop] proceeded in the ordinary course").

Kerrigan generally supports stay of trial pending arbitration, arguing the trial of this action before the arbitration is concluded (or Plaintiff's claims against Witkop otherwise substantially terminated) may allow Plaintiff the very result — a double recovery — which General Obligations Law § 15-108 seeks to prevent. Brennan Response aff. at ¶ 5. According to Kerrigan, a stay pending a determination of the arbitration proceeding also "will bring the issues more into focus"; "[s]hould an award be made against Witkop in the arbitration proceeding, it [the arbitration award] will clear up the issue of the General Obligations Law § 15-108 set-off as, at that time, it will be clear what was paid by Witkop to resolve the claim." Brennan Response aff. at ¶¶ 6, 7.

Plaintiff opposes Close's cross-motion, arguing a stay of trial will be prejudicial "in that resolution for this matter would take longer." Wolff aff. at ¶ 15. Plaintiff further argues a stay of trial will not further judicial economy, asserting an arbitration which determined Witkop's liability would not eliminate the need for trial. According to Plaintiff, "[a] trial will simply always be present in this action no matter what the result of the arbitration is." Id. at ¶ 16. Plaintiff further argues a stay of trial would "disincentivize a settlement of this action", contrary to the interests of judicial economy. Id. at ¶ 19.

"The issuance of a stay pursuant to CPLR 2201 is discretionary in the trial court." Research Corp. v. Singer-Gen. Precision, 36 AD2d 987, 988 (3d Dep't 1971). "[A] court has broad discretion to grant a stay in order to avoid the risk of inconsistent adjudications, application of proof and potential waste of judicial resources." In re Tenenbaum, 81 AD3d 738, 739 (2d Dep't 2011) (internal quotation marks and citation omitted). Grounds for stay include preserving judicial resources and furthering the interests of justice by preventing inequitable results. Concord Assoc., v. EPT Concord, LLC, 101 AD3d 1574, 1575 (3d Dep't 2012); accord: National Mgt. Corp. v. Adolfi, 277 AD2d 553, 555 (3d Dep't 2000) (affirming stay issued by Supreme Court because [*8]"goals of preserving judicial resources and preventing an inequitable result are properly served"); Finger Lakes Racing Ass'n v. New York Racing Ass'n, 28 AD3d 1208, 1209 (4th Dep't 2006) (same; quoting Adolfi); Burgdorf v. Kasper, 83 AD3d 1553, 1556 (4th Dep't 2011) (same).

Where there exist two actions or proceedings involving an overlap of issues and similarity of parties, "the imposition of a stay [ ] avoids the risk of inconsistent adjudications, duplication of proof, and the potential waste of judicial resources." El Greco v. Cohn, 139 AD2d 615, 616-17 (2d Dep't 1998) (citation omitted). Where determination of a related, pending proceeding "may dispose of or limit issues involved in [a pending] action", a stay is proper. SSA Holdings, LLC v. Kaplan, 120 AD3d 1111, 1111 (1st Dep't 2014). "[C]omplete identity of the parties and claims" is not required for a stay if the failure to grant a stay may cause "duplication of effort, waste of judicial resources, and possibility of inconsistent rulings." Uptown Healthcare Mgt., Inc. v. Rivkin Radler LLP, 116 AD3d 631, 631 (1st Dep't 2014) (citation omitted).

The First Department's decision in Oxbow Calcining USA Inc. v. American Indus. Partners, 96 AD3d 646 (1st Dep't 2012), is instructive. In that case, an arbitration agreement had been signed by some (but not all) parties to the pending Supreme Court action, and defendants moved to stay that action pending resolution of arbitration. The arbitration involved "substantially the same improper conduct" as was alleged against defendants in the Supreme Court action. 96 AD3d at 652. As noted by the First Department, "the arbitration statement of claims and the [state court] complaint contain overlapping factual allegations, and both seek the same damages



[ ]." Id. Accordingly, Oxbow Calcining USA affirmed the stay because "determination of the pending arbitration proceeding may well dispose of or limit the issues to be determined in this action." Id.; see also, Palcon Indus. v. Travelers Indem. Co., 114 AD2d 667, 667 (3d Dep't 1985) (action for damages "properly stayed [ ] pending the arbitrator's decision").

In addressing Close's motion for stay pending resolution of arbitration, the Court is mindful of New York's "'long and strong public policy favoring arbitration.'" Adams v. Kent Sec. of NY, Inc., 156 AD3d 588, 589 (1st Dep't 2017) (citation omitted). "It is '[t]he policy of this state... to favor and encourage arbitration as a means of expediting resolution of disputes and conserving judicial resources.'" Brandle Meadows, LLC v. Bette, 84 AD3d 1579, 1580 (3d Dep't 2011) (citation omitted). "Clearly, the public policy of this State favors and encourages arbitration and ADR resolutions." Ferguson Elec. Co. v. Kendal at Ithaca, 274 AD2d 890, 891 (3d Dep't 2000).

Here, although the parties to this action and the arbitration are not identical, Plaintiff and Witkop are parties to both, and many of the issues in the two matters — including injuries sustained, damages, and proximate cause — are substantially similar. El Greco Inc., 139 AD2d at 616-17. Resolution of the Plaintiff/Witkop arbitration (or complete settlement of Plaintiff's claims against Witkop resulting in a release satisfying General Obligations Law § 15-108 [d]) will likely determine the set-off value statutorily afforded to Defendants here under General Obligations Law § 15-108 (a). In that event, Kerrigan's third-party action will likely then be appropriate for a new or renewed summary judgment motion by Witkop. If the third-party action is dismissed or becomes unnecessary, this will likely dispose of or limit the issues to be determined in this action, avoid a possible inequitable result, and conserve judicial resources. [*9]E.g. Concord Associates, L.P., 101 AD3d at 1575; In re Tenenbaum, 81 AD3d at 739; Oxbow Calcining USA, 96 AD3d at 652. To stay this action pending arbitration furthers New York's public policy favoring arbitration. E.g., Brandle Meadows, LLC, 84 AD3d at 1580; Adams, 156 AD3d at 589.

The Court rejects Jessica's argument that a stay of arbitration results in unfair prejudice to Plaintiff. Before his death, Jay freely signed the binding Arbitration Agreement; he commenced, and Jessica has continued, the arbitration proceeding; and, Plaintiff's counsel executed the stipulation of discontinuance in consideration for arbitration. Jay agreed in writing to arbitrate any dispute with Witkop as to medical malpractice; the requested stay does nothing more than give that agreement effect. Likewise unavailing is Plaintiff's assertion a stay of trial would "disincentivize a settlement of this action." See Wolff aff. at ¶ 19. Nothing about a stay of this action pending arbitration precludes Plaintiff and Witkop from reaching a settlement in advance of arbitration which "completely or substantially terminates the[ir] dispute", and otherwise satisfies the requirements of a release under General Obligations Law



§15-108 (d). Of course, the parties to this action remain free to negotiate a global settlement of their disputes, which would bring to a close both this action and any arbitration. Accordingly, the Court, in its discretion, grants Close's cross-motion for stay of trial.

CONCLUSION

The Court denies Witkop's motion for summary judgment, without prejudice to renewal. The Court further grants Close's cross-motion for stay of trial.

SO ORDERED.



DATED: March 27, 2018, at Chambers, Canton, New York.

MARY M. FARLEY, J.S.C. Footnotes

Footnote 1:The Summons and Complaint, caption, and other submissions in this case misspell Witkop's name as "Wittkop."

Footnote 2:Plaintiff's counsel asserts "the arbitration agreement [ ] was signed by Plaintiff before any treatment was rendered." Wolff aff. at ¶ 18 (emphasis added). This appears to be incorrect. Suit was commenced August 15, 2015. The Arbitration Agreement is dated January 29, 2016. However, even assuming the Arbitration Agreement is misdated and was in fact executed before Jay began treating with Witkop and commencement of suit, this would be immaterial to the Court's analysis and conclusion.

Footnote 3:Witkop submitted Prial's affidavit in support of his May 5, 2016, notice of motion [Ex. G to Fein aff.] for discontinuance, and it is on file with the St. Lawrence County Clerk. Witkop's pending notice of motion expressly relies "upon all prior pleadings and proceedings heretofore had herein."

Footnote 4:General Obligations Law § 15-108 does not apply to claims for indemnification. E.g., Riviello v. Waldron, 47 NY2d 297, 307 (1979); Wolfe v. Irving Tissue, Inc., 95 AD3d 1628, 1629 n 2 (3d Dep't 2012).



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