The Civil Practice Law and Rules (“CPLR”) provides several formal devices that attorneys can use to encourage settlement and potentially shift costs when a claimant rejects a favorable offer. They are CPLR 3219, 3220, and 3221. Although these devices serve similar purposes, they differ significantly in their scope, mechanics, and consequences.

CPLR 3219: Tender

CPLR 3219 applies to claims based on express or implied contracts. No later than ten days before trial, a party against whom such a claim is asserted may deposit an amount with the court clerk and serve the claimant with a written tender of payment. 

The claimant then has ten days to withdraw the deposited funds in satisfaction of the claim. If the claimant accepts the tender, the clerk enters judgment dismissing the pleading asserting the claim, without costs. If the claimant rejects the tender and ultimately fails to obtain a more favorable judgment, the claimant may not recover interest or costs accruing after the tender and must pay the offering party’s costs of defending the claim from that point forward. The specific use of the word “costs” (as opposed to “expenses”) means that an offering party is generally not entitled to attorneys’ fees. The offer must also be unconditional for the tender to stop the accrual of interest. In Tanger v. Ferrer, 49 A.D.3d 286 (1st Dep’t 2008), a tender notice that included a “reservation of rights” was found to not comply with CPLR 3219 and did not halt the accrual of interest because it was conditional. The tender may not be disclosed to the jury.

CPLR 3219 may therefore be particularly useful when a defendant wishes to stop the accumulation of prejudgment interest while placing financial pressure on a claimant to realistically evaluate the value of a contract claim.

CPLR 3220: Offer to Liquidate Damages Conditionally

CPLR 3220 also applies only to express or implied contract claims, but it operates differently. Under this provision, the party defending the claim may serve a written offer stating the amount of damages to be awarded if the claimant succeeds at trial. The offer must be made no later than ten days before trial, and the claimant has ten days to accept it.

Acceptance does not immediately resolve the action. Instead, the claimant must still prevail at trial. If the claimant succeeds, damages are fixed at the amount stated in the offer, regardless of the amount the claimant might otherwise have proven.

If the offer is rejected and the claimant fails to obtain a more favorable judgment, the claimant must pay the expenses necessarily incurred by the offering party in trying the issue of damages after the offer was made. Those expenses may include attorneys’ fees attributable to the damages phase. In Kirchoff-Consigli Construction Management, LLC v. Dharmakaya, Inc., 129 N.Y.S. 3d 526 (2d Dep’t 2020), the Second Department held that the defendant was entitled to expenses, including attorneys’ fees, after the plaintiff rejected a $950,000 offer but recovered only $524,253.92.

The cost-shifting mechanism is limited to cases that go to trial. In Saul v. Cahan, 153 A.D.3d 951 (2d Dep’t 2017), the Second Department held that commencement of a trial is a condition precedent to recovering expenses under CPLR 3220. A party that obtains dismissal before trial is therefore not entitled to recover under the rule.

CPLR 3221: Offer to Compromise

CPLR 3221 has a broader application. Except in matrimonial actions, a party against whom a claim is asserted may serve a written offer allowing judgment to be entered for a specified sum, property, or other relief, together with accrued costs. Like the other devices, the offer must be served no later than ten days before trial and remain open for ten days.

If the claimant accepts, either party may file the relevant papers and the clerk enters judgment according to the offer. Unlike an accepted CPLR 3220 offer, an accepted CPLR 3221 offer results in the entry of judgment and resolves the affected claim.

If the claimant rejects the offer and fails to obtain a more favorable judgment, the claimant may not recover costs incurred after the offer and must pay the offering party’s costs from that time. The cost-shifting consequence is generally less substantial than under CPLR 3220 because statutory “costs” ordinarily do not include attorneys’ fees. The offer may not be disclosed to the jury.

Choosing the Appropriate Device

The appropriate provision depends on the nature of the claim and the offering party’s objective. CPLR 3219 may be useful in a contract action when the defendant is willing to deposit funds and wants to limit continuing interest and costs. CPLR 3220 provides the strongest potential fee-shifting consequence, but it applies only to contract claims and only when the case proceeds to trial. CPLR 3221 applies to a broader range of claims and can produce an immediate judgment upon acceptance, but its cost-shifting consequences are generally more limited.

These provisions are not interchangeable. Before making an offer, counsel should consider whether acceptance will end the claim, whether the case is likely to reach trial, and whether the potential recovery of statutory costs, litigation expenses, or attorneys’ fees provides meaningful leverage.

Ryan Lefkowitz is a senior associate with Adams Leclair LLP.  She can be reached at rlefkowitz@adamsleclair.law