Imagine being in the unfortunate position as a defendant/third-party plaintiff, or perhaps worse, its legal counsel, which has just had a substantial judgment entered against it. Wait, it gets worse. Your claim against the third-party defendant for indemnification was unsuccessful in the trial court. As counsel for the defendant/third-party plaintiff you have filed a timely notice of appeal from the judgment and have some strong and persuasive arguments to make, particularly on the issue of whether your client is entitled to indemnification from the third-party defendant. A decision on the as-yet unperfected appeal is at least a year away. Then your client asks, “Do we pay the judgment?”

What do you tell your client? This article discusses the perhaps somewhat counterintuitive advice that, yes, your client should pay the judgment sooner rather than later, especially if your client expects to have its claim for indemnity vindicated and even more so if your appeal is unsuccessful. The judgment should be paid because there is no right to indemnity unless and until there is something to be indemnified for. It is not enough that there is a judgment. The judgment has to be paid (see McCabe v. Queensboro Farm Products, 22 N.Y.2d 204, 292 N.Y.S.2d 400, 239 N.E.2d 340 [1968]; Bay Ridge Air Rights v. State, 44 N.Y.2d 49, 404 N.Y.S.2d 73, 375 N.E.2d 29 [1978] [there is no accrual of right to indemnity or contribution until a judgment is entered and paid]).

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