On December 17, 2024, Justice Bannon of the New York County Commercial Division issued a decision in 63 Co., LLC v. 63rd & 3rd NYC LLC, 2024 NY Slip Op. 34393(U), severing third-party claims to avoid prejudice to the parties, explaining:
CPLR 603 provides that in furtherance of convenience or to avoid prejudice the court may order a severance of claims. Similarly, CPLR 1010 provides that the court may dismiss a third-party complaint without prejudice, order a separate trial of the third-party claim or of any separate issue thereof or make such other order as may be just. In exercising its discretion, the court shall consider whether the controversy between the third-party plaintiff and the third-party defendant will unduly delay the determination of the main action or prejudice the substantial rights of any party. Stated otherwise, CPLR 1010 provides a safety valve for cases in which the third-party claim will unduly delay the determination of the main action or prejudice the substantial rights of any party.. Third-party actions should not be dismissed if severance would result in multiplicity and circuitry of litigation. Whether to dismiss or sever an action is a matter within the discretion of the court.
The standards for CPLR 1010 mirror those for consolidation of actions. CPLR 602(a)
permits the court, in its discretion, to consolidate actions that involve common questions of law and fact so as to reduce the cost of litigation, make more economical use of the trial court’s time, and speed the disposition of cases. A party opposing the motion must show that consolidation will prejudice a substantial right. While mere delay is not a sufficient reason to deny the motion, consolidation may be denied where the actions are at markedly different procedural stages and consolidation would result in undue delay in the resolution of either matter.Here, the third-party action was commenced with discovery nearly complete in the main action and asserts the very same claims pending in other actions. To allow the third-party action to continue (1) would result in delay and prejudice to the plaintiff as, assuming RSC answers or appears in the third-party action, there would undoubtedly be necessary discovery as to RSC’s liability to the defendant as a result of the slab incident, and under the terms of their subcontract, in which the plaintiff would play no part, or (2) would prejudice RSC by requiring them to proceed to trial without the opportunity of such discovery. The defendant makes no excuse for its delay in commencing a third-party at the close of discovery, and in repeating in that action the same claims asserted in prior actions. In any event, any argument that it could not have brought the third-party action sooner because it was unaware of its own liability or possibly that of RSC is specious as the defendant previously asserted claims against RSC. As the other actions were commenced prior to this action, any additional claim the defendant may have against RSC should have been or should be brought in those actions. In that regard, CPLR 3211(a)(4) provides the court with broad discretion to dismiss an action on the ground that there is another action pending between the same parties on the same cause of action.
Moreover, contrary to the defendant’s contention, the two actions do not present identical questions of law and fact to warrant a joint trial. While both assert claims for contractual indemnification, they arise from two separate contracts. The main action concerns the License agreement between the plaintiff and defendant and RSC is not a party to that agreement. Likewise, the plaintiff is not a party to the contract between the defendant and RSC. The defendant’s indemnification and breach of contract claims against RSC need not and should not be tried together with the plaintiff’s breach of contract and indemnification claims against the defendant. Indeed, the defendant’s claims against RSC can and are being pursued, and possibly tried, in the prior actions. Dismissal of the third-party complaint will effectively reduce the multiplicity and circuitry of litigation. For these reasons, the plaintiff’s motion pursuant to CPLR 1010 is granted and the third-party action is dismissed without prejudice for the defendant to pursue the same claims asserted in prior pending actions.
(Internal quotations and citations omitted).