by John Darer® CLU ChFC MSSC RSP CLTC
The structured settlement broker for the Defendant on a recent case got their nose out of joint after I instructed the plaintiff lawyer to send directly to defense lawyer, one original of the settlement agreement and release, qualified assignment agreement and Stipulation of Discontinuance by Certified Mail, with the remaining originals to be routed through me and then on via my counterpart. But why?
New York's CPLR 5003-a was enacted in 1992 to encourage prompt payment of settlements (see Cunha v Shapiro, 42 AD3d 95, 101; Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C5003-a: 121). The statute requires any settling defendant, subject to certain exceptions (set forth in CPLR 5003-a[b], [c], [d]), to pay all sums due to any settling plaintiff "within twenty-one days of tender, by the settling plaintiff to the settling defendant[s], of a duly executed release and a stipulation discontinuing [the] action executed on behalf of the settling plaintiff"(CPLR 5003-a[a]) When the release and stipulation of discontinuance are tendered by mail, the 21-day period is measured from receipt of the documents (see Leipold v Arnot Ogden Med. Ctr., 46 AD3d 1299, 1300; Cunha v Shapiro, 42 AD3d at 101). If the settling defendant fails to pay the sum due under the settlement agreement within 21 days of tender of the required documents, the statute authorizes the plaintiff to enter, without further notice, a judgment in the amount of the settlement, which is to include interest, costs, and disbursements (see CPLR 5003-a[e]). Source: David M. Gottlieb, Esquire.
I'm certainly willing to be corrected if I'm wrong, but the statute does not appear to have any provision for the "21 day clock" starting to run when the documents are received at the office of the structured settlement broker. Some structured settlement brokers conducting business that involves cases with New York jurisdiction have their paperwork handled by remote independent contractors to the structured settlement broker, who are not even based in the same office; in some cases not even from the same state.
Is the structured settlement broker the agent of the Defendant for purposes of "tender" or is it an agent of the insurance company? How about the independent contractor who is handling the administration for the broker?
Typically structured settlement brokers when working for defendants are retained by an adjuster for the insurer. In some cases the defense attorney retains them with the knowledge and approval of the insurer or market leader.
It is clear that the defense attorney is an agent of the Defendant and thus, in my personal opinion, one original set of documents should be delivered there. Looking for a parallel, with the disclosures that must be made under the New York Structured Settlement Protection Act, the obligation is on "the Defendant or the Defendant's legal representative", NOT the structured settlement broker or the defendant's insurer.
Delays which result in failure to comply with the statute can prove costly for the defendant or insurer and thus, in my personal opinion, noses ought to stay in place.
For more information here is a good article about New York's statute concerning prompt payment following settlement. In a 2nd department case decided in 2010 and discussed in the aforementioned article, the Appellate Division overturned a lower court ruling that supported the defendant's contention that the completion of a IRS Form W-9 was a condition precedent for payment of the sum due in a settlement of a personal injury claim.