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CPLR 5015 Power to Vacate a Final Judgment after Reversal of a Companion Case Is Discretionary

The Court of Appeals, in a full-fledged opinion by Judge Pigott (with a dissent), determined that Supreme Court had the discretion to vacate a final $4.4 million judgment against Port Authority based upon the subsequent Court of Appeals reversal of a companion case (Ruiz) holding Port Authority immune from lawsuits stemming from the 1993 bombing of the World Trade Center.  Supreme Court had vacated the judgment, but appeared to do so under the assumption the vacation was mandated by statute (CPLR 5015).  The Court of Appeals sent the matter back to Supreme Court, explaining that the court had the power to exercise its discretion:

Although a court determination from which an appeal has not been taken should “remain inviolate,” that rule applies “[a]bsent the sort of circumstances mentioned in CPLR 5015” ….  Moreover, as Professor Siegel has observed, “[i]f a judgment for which preclusive effect is sought is itself based on an earlier judgment . . ., and the earlier one has been vacated or reversed or otherwise undone, it is of course divested of its finality and the remedy to cancel the second judgment is a motion to vacate it on the ground of the undoing of the first” (Siegel, NY Prac § 444 at 776 [5th ed 2011] [emphasis supplied], citing CPLR 5015 [a] [5]).  Subdivision 5 of section 5015 (a) is applicable where the reversed, modified or vacated judgment or order is the basis for a later judgment – not where it merely compelled the result as a matter of collateral estoppel or stare decisis, but where it was actually entered in the same lawsuit as, and led directly to, the later judgment.  Thus, section 5015 (a) (5) applies in a case like this one where a joint trial on liability results in a single order entered in two cases, and where, after a separate trial on damages in one of the cases, that order is reversed on appeal.  * * *

Here, Supreme Court’s only finding was that this Court’s decision in Ruiz “eviscerate[d] any judgment, holding or finding of tortious liability on behalf of the Port Authority,” and therefore “require[d]” Supreme Court to find the Port Authority insulated from tortious liability pursuant to CPLR 5015 (a) (5).  It also appeared to believe that once the Port Authority had demonstrated that the Ruiz holding reversed the earlier liability determination to which Nash was a party, Supreme Court had no choice but to grant the Port Authority’s vacatur motion.  That was error. Nash v Port Authority, 238, CtApp 11-26-13

 

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