Source: https://www.newyorkbusinesslawyerblog.com/what-happens-when-a-plaintiff-sues-many-defendants-in-new-york-but-settles-with-only-one/
Timestamp: 2019-04-22 11:00:29+00:00

Document:
(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.
In tort actions involving multiple defendants where a plaintiff settles with one or more defendants before trial, and proceeds to trial against the remaining defendants, General Obligations Law § 15-108(a) permits nonsettling defendants a monetary offset against the amount of a verdict. The permitted reduction is the greatest of three items: (a) the amount stipulated as consideration for the release; (b) the amount actually paid for the release; or (c) the settling tortfeasor’s equitable share of plaintiff’s damages (General Obligations Law § 15-108[a] ). 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 (see, Williams v. Niske, supra, 81 N.Y.2d, at 442-444, 599 N.Y.S.2d 519, 615 N.E.2d 1003; accord, Dudick v. Keene Corp., 82 N.Y.2d 821, 605 N.Y.S.2d 3, 625 N.E.2d 588, affg. for reasons stated at 188 A.D.2d 214, 218, 593 N.Y.S.2d 43; Didner v. Keene Corp., 82 N.Y.2d 342, 351, 604 N.Y.S.2d 884, 624 N.E.2d 979; Pollicina v. Misericordia Hosp. Med. Ctr., 82 N.Y.2d 332, 604 N.Y.S.2d 879, 624 N.E.2d 974).
If a defendant settles with the plaintiff, that defendant is done with the case; none of the other defendants can ask it to contribute any additional money to compensate for the plaintiff’s damages.
The non-settling defendants still can try to prove at trial that it was all the fault of the settling defendant, and they have every incentive to do so.
The non-settling defendants get a credit either for what the settling defendant actually paid, or what it should have paid, as determined at trial, to the plaintiff for its role in causing plaintiff’s injuries.
The plaintiff takes the risk that it accepts less money from the settling defendant than the settling defendant was actually liable for. The non-settling defendants are not penalized for any miscalculation plaintiff might make.
The plaintiff cannot recover twice for the same injuries.
It’s strange how little things can mean a lot, even in the most unexpected places. The next time you or your business are part of a lawsuit involving multiple parties in New York, it might be a good idea to keep these rules in mind. No matter whether you are a plaintiff or a defendant, a little knowledge can go a long way.
Of course, there’s more to this story than we’ve gone through here, but that can wait for another day.

References: § 15
 § 15
 v. 
 v. 
 v. 
 v.