Skywark v. Isaacson

202 B.R. 557, 1996 U.S. Dist. LEXIS 17103, 1996 WL 668861
CourtDistrict Court, S.D. New York
DecidedNovember 19, 1996
Docket96 Civ. 2815 (JFK)
StatusPublished
Cited by7 cases

This text of 202 B.R. 557 (Skywark v. Isaacson) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Skywark v. Isaacson, 202 B.R. 557, 1996 U.S. Dist. LEXIS 17103, 1996 WL 668861 (S.D.N.Y. 1996).

Opinion

OPINION AND ORDER

KEENAN, District Judge.

Before the Court is Defendants’ motion, pursuant to Rule 56(b) of the Federal Rules of Civil Procedure, for an order granting summary judgment in this legal malpractice action. For the reasons set forth below, Defendants’ motion is denied.

Background

This legal malpractice action centers around this Court’s dismissal, and the Second Circuit’s affirmance, of Plaintiffs personal injury action on the grounds that it was time-barred. Plaintiff has invoked this Court’s diversity jurisdiction.

In 1986, Plaintiff was employed by United States Lines and alleges that on August 14 he was seriously injured when struck in the head by a piece of equipment. He was serving at that time on the S.S. American Georgia, a vessel owned by United States Lines, Inc.

On November 24, 1986 United States Lines, Inc. and United States Lines (S.A.) Inc. filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. These petitions were filed in the United States Bankruptcy Court for the Southern District of New York. On the same day, the Bankruptcy Court entered a restraining order prohibiting commencement or continuation of suit on all pre-petition causes of action against Debtors. An automatic stay of actions also commenced by operation of law. By this time Plaintiff had not filed any action based on the August 14, 1986 incident, and the stay and restraining order prevented him from doing so. However, the Plaintiff filed a proof of claim in the bankruptcy proceeding on May 14,1987.

The bankruptcy proceeding resulted in a reorganization. On August 6, 1992, the Bankruptcy Court entered an order terminating the automatic stay and restraining order. Plaintiffs attorneys received notice of the termination on August 17, 1992. The effect was to allow Plaintiff to commence a lawsuit based upon his personal injury claim. Plaintiffs attorneys filed a complaint in this Court on November 12, 1992, stating a claim of negligence under the Jones Act and a claim of unseaworthiness under the General Maritime Law.

Defendants United States Lines, Inc., and United States Lines (S.A.) Inc. Reorganization Trust moved for summary judgment dismissing the complaint on the ground that it was barred by the statute of limitations. Chief Judge Thomas P. Griesa granted the motion. Skywark v. United States Lines, Inc., 1994 WL 494864 (S.D.N.Y. Sept. 9, 1994). The normal limitation period for Plaintiffs negligence and unseaworthiness claims was three years. The three-year period expired on August 13, 1989. However, Judge Griesa found that “the automatic stay and restraining order in the bankruptcy proceeding intervened and prevented any suit by Plaintiff from November 24, 1986 until August 6, 1992.” Id. at *1. Judge Griesa then quoted § 108(c) of the Bankruptcy Code entitled “Extension of Time,” which provides:

... [I]f applicable nonbankruptcy law ... fixes a period for commencing or continuing a civil action in a court other than a *559 bankruptcy court on a claim against the debtor ... and such period has not expired before the date of the filing of the petition, then such period does not expire until the later of—
(1) the end of such period, including any suspension of such period occurring on or after the commencement of the case; or
(2) 30 days after notice of the termination or expiration of the stay ... with respect to such claim.

Id. (quoting 11 U.S.C. § 108(c)). Judge Griesa concluded that “a plaintiff may bring a civil action against a debtor within the regular limitation period or up to 30 days after notice of the termination of the bankruptcy stay, whichever is later.” Id. As the regular limitation period had expired before the termination of the bankruptcy stay, Plaintiff Skywark had until 30 days after notice of the termination to commence a civil action. Judge Griesa found that Plaintiff thus had until 30 days after August 17, 1992, or until September 16, 1992 in which to file suit. Because Plaintiff did not file until November 12, 1992, Judge Griesa held that the plain language of 11 U.S.C. § 108(c) time-barred Plaintiff’s suit. Id. at *2 (citing Aslanidis v. United States Lines, Inc., 7 F.3d 1067 (2d Cir.1993)).

Plaintiff appealed Judge Griesa’s ruling to the Second Circuit. Plaintiff argued that his claims were not time-barred because maritime law provides for tolling of the limitations period where an automatic stay prevents plaintiff from bringing suit, and this non-bankruptcy tolling rule is incorporated by reference into the extension of time provision of the bankruptcy code. The Circuit rejected Plaintiff’s argument, applying its reasoning in Aslanidis v. United States Lines, Inc., 7 F.3d 1067, 1074-75 (2d Cir.1993), that maritime law “does not provide for tolling during pendency of bankruptcy, because ‘in the bankruptcy arena ... plaintiffs have advance knowledge of when claims are to expire and may act to protect themselves,’ ” Skywark v. United States Lines, Inc., No. 94-9027, op. at 3, 57 F.3d 1064 (2d Cir. May 22, 1995 (quoting Aslanidis, 7 F.3d at 1074)), cert. denied, — U.S. -, 116 S.Ct. 337, 133 L.Ed.2d 236 (1995). The Circuit found that before the stay is lifted plaintiff is aware he has a cause of action against the defendant, because he would previously have filed a proof of service of claim in the Bankruptcy Court, and he has at least 30 days in which to file after receiving notice that the stay has been lifted.

Plaintiff subsequently filed the instant legal malpractice action against Defendants, Henry Isaacson, Esq. and Isaacson, Schiow-itz, Korson & Solny, who represented Plaintiff in his personal injury action. Plaintiff alleges that Defendants breached their duty to exercise reasonable care in providing Plaintiff with competent legal representation by not seeking to lift the automatic stay so that Plaintiff’s claims could be prosecuted, and by failing to timely file Plaintiffs complaint.

Defendants now move for summary judgment, claiming that their conduct was reasonable, that attorneys may not be liable for “honest mistakes of judgment,” and that at the time the personal injury action was commenced, all of the relevant case law indicated that the statute of limitations had not expired. On October 31,1996, this Court heard oral argument on the instant motion.

Discussion

A. Legal Standards

A motion for summary judgment may be granted under Fed.R.Civ.Pro. 56 if the entire record demonstrates that “there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.” Anderson v. Liberty Lobby, 477 U.S. 242, 250, 106 S.Ct.

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Cite This Page — Counsel Stack

Bluebook (online)
202 B.R. 557, 1996 U.S. Dist. LEXIS 17103, 1996 WL 668861, Counsel Stack Legal Research, https://law.counselstack.com/opinion/skywark-v-isaacson-nysd-1996.