New York’s Civil Practice Law and Rules (CPLR) provides for three ways in which a defendant can try to settle before trial, which may have extreme benefits for the defendant, even if (or especially if) the offer is rejected. These three provisions are affectionately called “The Three Musketeers.” Although very similar, the three sections are nuanced.
Section 3219: Tender
CPLR § 3219 provides that, at any time no later than ten days before trial, a defendant in a contract cause of action may deposit with the clerk of the county an amount deemed by him or her to be sufficient to satisfy the claim and serve the plaintiff a written tender. If the tender is accepted by the plaintiff by withdrawing the sum posted with the clerk and filing satisfaction paperwork concluding the litigation, the clerk then enters a judgment dismissing the claim without costs. Acceptance must occur within ten days of the deposit with the clerk. If the tender is refused or not withdrawn from the clerk, the trial can be conducted in the normal course. If the verdict is for the plaintiff in excess of the tender, plaintiff can enter judgment in the amount of the verdict plus CPLR interest. If the verdict is less than the tender, the plaintiff loses CPLR interest from the date of the tender, and the right to recover statutory costs is forfeited. Additionally, the plaintiff is then responsible to pay the defendant’s costs of defending the action from the date of tender forward.
Section 3220: Offer to Liquidate Damages Conditionally
CPLR § 3220 provides that, at any time no later than ten days before trial, the defendant in a contract cause of action may serve upon the plaintiff an offer to allow judgment to be taken against him or her for a sum specified, with costs then accrued, if the defendant fails in his or her defense. If the plaintiff accepts the offer to liquidate damages conditionally, in writing, pursuant to this section, within ten days thereafter, and wins at trial, the plaintiff will be entitled only to the liquidated damages. If the offer is not accepted and the plaintiff’s verdict at trial is less favorable than the offer to liquidate, the plaintiff must pay the expenses incurred by the defendant in defending the action from the time of the offer.
Section 3221: Offer to Compromise
Finally, CPLR § 3221 provides that in any action other than matrimonial, at any time no later than ten days before trial, a defendant may serve the plaintiff a written offer to allow judgment to be taken against him or her for a sum of money or property, with costs then accrued. If the plaintiff accepts in writing within ten days thereafter, either party may enter judgment accordingly with the clerk. If the offer is not accepted and the plaintiff fails to obtain a more favorable judgment at trial, the plaintiff is prohibited from recovering costs from the time of the offer and instead shall pay the defendant’s costs from that time.
