Court Opinion

ID: 5767398
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:25:39.134822+00
Date Added: 2024-06-11T08:41:41.455935
License: Public Domain

*221Order, Supreme Court, New York County (Eileen Bransten, J.), entered April 1, 2008, which granted the motion by defendants Musallam, Klener and ThruPoint to amend their answer and by ThruPoint for summary judgment, and denied plaintiffs cross motion to amend his complaint, modified, on the law, to the extent of vacating the credit allocated to the nonsettling defendants under General Obligations Law § 15-108, and otherwise affirmed, without costs.
Plaintiff asserts that he was induced to transfer shares of ThruPoint stock to defendants Musallam, Zimmerman, Nachtigal and Klener and nonparty Rich as a result of their breach of fiduciary duty and fraud. The complaint further alleges that plaintiffs employment with ThruPoint was wrongfully terminated. Rich settled with plaintiff by returning the shares that he had received, and Zimmerman and Nachtigal settled with plaintiff for $25,000 each. Musallam, Klener and ThruPoint were permitted to amend their answer to include an affirmative defense under General Obligations Law § 15-108, which “reduces a nonsettling tortfeasor’s liability to the injured party by the greater of the amount of consideration the settling tortfeasor paid for its release or, alternatively, the amount of the settling tortfeasor’s equitable share of the damages under CPLR article 14” (Chase Manhattan Bank v Akin, Gump, Strauss, Hauer & Feld, 309 AD2d 173, 174 [2003]).
Supreme Court held that the nonsettling defendants are entitled to a credit equal to 61.5% of any damages that plaintiff might be awarded at trial, representing the percentage of the shares of ThruPoint stock that plaintiff transferred to the settling transferees. Because their culpability cannot be assessed in the absence of a verdict, and because additional findings are needed before the credit to be assigned to the nonsettling defendants under General Obligations Law § 15-108 can be calculated, the award of a credit equal to 61.5% of the transferred shares was erroneous.
The equitable share of damages attributable to released tortfeasors under General Obligations Law § 15-108 is “determined in accordance with the relative culpability of each person liable for contribution” (CPLR 1402) and is calculated using one of two methods. Where appropriate evidence is presented at trial, it is preferable to assess the fault of both settling and nonsettling defendants (see Williams v Niske, 81 NY2d 437, 440 n 1 [1993]). This approach simplifies the allocation of liability in that “the question of what constitutes the ‘equitable share’ attributable to a defendant does not arise. In this instance, the equitable share is simply the percentage fault allocated to each *222defendant” (Matter of New York City Asbestos Litig. [Brooklyn Nav. Shipyard Cases], 188 AD2d 214, 221 [1993], affd for reasons stated below 82 NY2d 821 [1993]). Essentially, the nonsettling defendants receive a credit equal to the greater of the amount of the consideration paid by the settling tortfeasors, in the aggregate, or, if greater, that portion of the verdict determined by the percentage fault allocated to the settlers. Likewise, if the culpability of all settling tortfeasors cannot be assessed, “the aggregate method of computing offsets under General Obligations Law § 15-108 (a) should be used” (Matter of New York City Asbestos Litig. [Brooklyn Nav. Shipyard Cases], 82 NY2d 342, 353 [1993]). In this instance, a nonsettling defendant’s equitable share of damages is calculated by reducing the verdict by the total consideration received by way of settlement and applying the percentage share of the defendant’s fault to the result (see Vazquez v City of New York, 211 AD2d 475, 476 [1995]).
Without an allocation of fault as to those transferees of plaintiffs shares who settled his claims against them, the credit to be assigned to the nonsettling defendants cannot be calculated as a percentage of the verdict. Significantly, plaintiff places most of the responsibility for inducing the transfer of his shares on one defendant, Musallam. Furthermore, the complaint seeks additional damages (for financial benefits accruing from plaintiffs ownership of the transferred stock and lost wages resulting from the improper termination of his employment with ThruPoint), and the extent to which each of the settling transferees bears responsibility for inducing the transfer of his stock or his termination, if any, is unclear. In any event, any damages consequent to plaintiffs lost employment are not amenable to apportionment according to the distribution of his shares of stock among the various transferees.
Our decision merely holds that no determination of the credit to which the nonsettling defendants are entitled can be made at this juncture. To sustain the motion court’s summary allocation of fault, each transferee of plaintiffs ThruPoint shares would have to be held culpable for damages, including loss of earned income, in proportion to that tortfeasor’s ownership of transferred stock, which further presumes that the equitable share of each settling tortfeasor can be determined. At this early stage of the proceedings, such assumptions are speculative, prematurely resolving issues within the exclusive province of the trier of fact. In sum, we make no findings with respect to the computation or allocation of damages, which must be made at trial on the basis of the guidance afforded by the cited authority.
*223Plaintiff failed to raise a triable issue of fact to defeat ThruPoint’s motion for summary judgment. Indeed, plaintiff did not allege that ThruPoint committed fraud or breached any duty owed to him, nor does the record support such claims. Furthermore, plaintiff did not contend that the shareholder defendants’ alleged fraudulent scheme was carried out in furtherance of ThruPoint’s interests (see Solow v New N. Brokerage Facilities, 255 AD2d 198 [1998]). Finally, none of plaintiffs stock was transferred to ThruPoint.
The court properly exercised its discretion in denying plaintiffs motion to amend the complaint to add a new theory of recovery, since such an amendment may not be “based on facts that would contradict [the] original theory” (Peso v American Leisure Facilities Mgt. Corp., 277 AD2d 48, 49 [2000]). Notably, while plaintiffs original theory was that defendant Musallam acted on his own behalf and in concert with the other shareholders to defraud plaintiff, the proposed amended complaint completely contradicts that theory, alleging that Musallam’s statements and actions were made in his capacity as ThruPoint’s president and on behalf of the company.
With regard to the new damage claims sought to be added, plaintiff failed to show that the proposed amendments had merit (see Citarelli v American Ins. Co., 282 AD2d 494 [2001]), and he provided no valid reason for waiting until the eve of trial to propose the amendments (see Oil Heat Inst, of Long Is. Ins. Trust v RMTS Assoc., 4 AD3d 290 [2004]).
We have considered plaintiffs remaining contentions and find them unavailing. Concur—Lippman, EJ., Tom and Freedman, JJ.