## Facts

- Cohen agreed to transfer to Perlman a specified portfolio of insurance business consisting of policies issued by Continental.
- Perlman executed promissory notes to Cohen as consideration for the portfolio.
- Perlman refused to pay the notes, asserting the portfolio was unsalable or valueless because the underlying policies allegedly violated New York insurance regulations.
- Cohen sued to recover on the dishonored notes (about $50,000–$52,000).
- Perlman asserted fraud-based defenses and counterclaimed against Cohen for compensatory and punitive damages far exceeding the amount sought on the notes.
- Perlman impleaded Continental and Pogoda under CPLR 1007, asserting related fraud allegations and seeking indemnity and/or contribution along with substantial damages.
- Continental moved to dismiss the third-party complaint; the trial court denied the motion, and the Appellate Division affirmed.

## Issues

1. Whether CPLR 1007 permits a third-party claim seeking damages exceeding the amount demanded against the third-party plaintiff in the main action.
2. Whether impleader is permitted when the third-party plaintiff denies any liability to the original plaintiff in the main action.
3. Whether potential effects on a third-party defendant’s ability to remove to federal court justify limiting impleader under CPLR 1007.

## Decision

- The Court of Appeals affirmed, allowing the third-party complaint to stand.
- CPLR 1007 does not cap third-party damages at the amount demanded in the main action.
- A defendant may implead a third party even while pleading that it is not liable to the plaintiff in the main action.
- Concerns about federal removal do not restrict the scope of impleader under CPLR 1007.

## Legal Principles

- CPLR 1007 is construed to serve the efficient, complete determination of related controversies arising from the same transaction or occurrence.
- A third-party plaintiff may seek damages in excess of the plaintiff’s demand in the main action when the claims are properly joined through impleader.
- Impleader is available even when the defendant pleads nonliability to the plaintiff; alternative pleading does not bar third-party practice.
- State impleader rules are not narrowed to protect speculative federal-jurisdiction or removal opportunities.

## Conclusion

The court upheld a broad view of CPLR 1007, permitting impleader to consolidate related disputes in one action, including third-party claims for damages beyond the main demand and claims pleaded alongside a complete denial of liability in the main action.


George Cohen Agency, Inc. v. Donald S. Perlman Agency, Inc., 51 N.Y.2d 358 (N.Y. 1980)