Martz v City of New York

[*1] Martz v City of New York 2005 NY Slip Op 51728(U) [9 Misc 3d 1122(A)] Decided on October 26, 2005 Supreme Court, New York County Ling-Cohan, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on October 26, 2005
Supreme Court, New York County

Claude Martz, Plaintiff,

against

THE City of New York, NEW YORK CITY DEPARTMENT OF TRANSPORTATION, NEW YORK, INC. and FELIX INDUSTRIES, INC., Defendants.



10268902

Doris Ling-Cohan, J.

Upon the foregoing papers, it is ordered that this motion is denied, for the reasons set forth below.

Background

Plaintiff brought this action to recover damages for personal injuries he allegedly sustained on February 28, 2001, when he fell from a bicycle while riding on Broadway, in front of the building located at 726 Broadway, in New York, New York. In or about February 2002, plaintiff commenced this action against defendants City of New York (City), the New York City Department of Transportation (DOT), Consolidated Edison Company of New York, Inc. (Con Edison) and Felix Industries, Inc. (Felix). On or about July 9, 2002, Felix filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (11 USC § 1101, et seq.) (Affirmation of Debra S. Reiser, Esq. in Support of Motion [Reiser Aff.], Ex. J). On or about September 9, 2002, Felix brought a third-party action against Nico Asphalt Paving, Inc. (Nico), asserting claims for indemnification and contribution (Reiser Aff., Ex. G). By order dated April 4, 2005, the Bankruptcy Court granted plaintiff's motion to modify the automatic stay of this action, to the extent of allowing plaintiff to proceed against Felix to collect solely from the [*2]proceeds of the insurance policy issued to Felix (Reiser Aff., Ex. K).

Plaintiff brings the instant motion for an order, pursuant to CPLR 3025(b), for leave to serve a supplemental summons and amended complaint joining Nico, Empire City Subway Company, Ltd. (Empire) and Verizon New York, Inc. (Verizon) as defendants in this action.

Discussion

1. Whether Statute of Limitations for Commencing Action Against Proposed Defendants is Tolled by Bankruptcy Stay in Favor of Felix

Plaintiff's action to recover damages for personal injuries is governed by a three-year statute of limitations (see CPLR 214 [5]). Accordingly, any attempt to join additional parties as defendants to this action is time-barred after February 28, 2004. Plaintiff asserts, however, that the bankruptcy stay in favor of Felix, effective from on or about July 9, 2002 until on or about April 5, 2004, operated to toll the running of the statute of limitations to commence an action against the proposed additional defendants, pursuant to CPLR 204 (a). That statute provides, "Where the commencement of an action has been stayed by a court or by statutory prohibition, the duration of the stay is not part of the time within which the action must be commenced."

Plaintiff's position lacks merit. The courts have repeatedly concluded that the automatic stay triggered when a Federal bankruptcy proceeding is commenced applies only to claims or actions against the bankrupt party, known as the debtor, or against the debtor's property or estate [FN1], [*3]and does not preclude a plaintiff from pursuing claims against parties other than the debtor (see Merrill Lynch, Pierce, Fenner & Smith, Inc. v Oxford Venture Partners, LLC, 13 AD3d 89 [1st Dept 2004]; United Airlines, Inc. v Ogden New York Servs., Inc., 305 AD2d 239, 240-241 [1st Dept 2003]; Velez v Seymour Moslin Assocs., Inc., 278 AD2d 164, 165 [1st Dept 2000]; Maynard v George A. Fuller Co., 236 AD2d 300 [1st Dept 1997]; Golden v Moscowitz, 194 AD2d 385, 385-386 [1st Dept 1993]; Centrust Servs., Inc. v Guterman, 160 AD2d 416, 418 [1st Dept 1990]). The decisions cited by plaintiff involve mortgage foreclosure actions stayed by bankruptcy proceedings commenced by the mortgagor and, thus, do not deal with claims against non-bankrupt parties (see, e.g., Carr v McGriff, 8 AD3d 420 [2d Dept 2004]; Mercury Capital Corp. v Shepherds Beach, Inc., 281 AD2d 604 [2d Dept 2001]; Zuckerman v 234-6 W. 22 St. Corp., 167 Misc 2d 198 [Sup Ct, NY County 1996]). Accordingly, the statute of limitations applicable to plaintiff's claims against the proposed new defendants was not tolled by the bankruptcy petition filed by Felix.

2. Applicability of "Relation Back" and United in Interest" Doctrines to Proposed New Defendant Nico

Plaintiff has asserted, for the first time in its reply to Nico's opposition papers, that Nico is not prejudiced by being joined as a defendant, as it had previously been served with a third-party complaint by Felix and, thus, knew or should have known that it would be sued by plaintiff directly. Plaintiff attempts to apply the "relation back" doctrine, to establish the timeliness of its action against Nico.

First, plaintiff may not raise a new theory for the first time in its reply papers (see Migdol v City of New York, 291 AD2d 201 [1st Dept 2002]; Schiulaz v Arnell Constr. Corp., 261 AD2d 247 , 247 [1st Dept 1999]). Even assuming, for the sake of argument, that this Court considers this new theory, plaintiff has failed to satisfy the applicable criteria. Plaintiff must establish that all of the following three conditions are satisfied in order for claims against one defendant to relate back to claims asserted against another defendant, for the purpose of the statute of limitations: "(1) both claims arose out of the same conduct, transaction or occurrence; (2) the new party is united in interest with the original defendant, and by reason of that relationship can be charged with such notice of the institution of the action that the new party will not be prejudiced in maintaining its defense on the merits by the delayed, otherwise stale, commencement; and (3) the new party knew or should have known that, but for an excusable mistake by the plaintiff in originally failing to identify all the proper parties, the action would have been brought against the additional party united in interest as well ..."

(Mondello v New York Blood Ctr. — Greater New York Blood Program, 80 NY2d 219, 226 [1992], see also Buran v Coupal, 87 NY2d 173, 178 [1995]).

Although plaintiff's claims against Nico arose out of the same conduct, transactions and occurrences as the claims against the other defendants, Felix, the City and DOT, Nico is not "united in interest" with these other defendants (see CPLR 204 [b]). In order to establish "unity of interest' between two parties, there must be a relationship between them giving rise to [*4]vicarious liability of one for the conduct of the other, such that they stand or fall together and that judgment against one will similarly affect the other (see Mondello v New York Blood Ctr., 80 NY2d at 226; Matter of 27th Street Block Assn. v Dormitory Auth. of State of New York, 302 AD2d 155, 164 [1st Dept 2002]; Mercer v 203 East 72nd Street Corp., 300 AD2d 105, 106 [1st Dept 2002]). This is plainly not the case with respect to Nico and Felix, as well as the other defendants. Significantly, Nico cannot be united in interest with Felix, as the defenses applicable to each defendant are different and each defendant will try to establish that the other is liable for plaintiff's injuries (see Valmon v 4 M & M Corp., 291 AD2d 343, 344 [1st Dept 2002], lv denied 98 NY2d 611 [2002]; Vanderburg v Brodman, 231 AD2d 146, 148 [1st Dept 1997]). In fact, Felix has brought a third-party action seeking indemnification and contribution from Nico (Reiser Aff., Ex. H).

Lastly, plaintiff makes an equitable argument for bringing a third-party action against proposed defendants Verizon and Empire. He asserts that, because discovery in this action did not proceed during the pendency of the bankruptcy stay affecting Felix, he did not learn of the potential liability of these proposed defendants until after the limitations period had expired. Plaintiff, however, does not explain when and how he learned about the street opening permit issued to Empire for an area of Broadway near the accident site (see Reiser Aff., Ex. M). Nor does plaintiff cite any cases to support a tolling of the limitations period for commencing an action against Verizon and Empire on this basis.

Accordingly, it is

ORDERED that plaintiff's motion to amend the complaint by adding new defendants is denied; and it is further

ORDERED that, within thirty days of entry, defendant Felix Industries, Inc. shall serve upon all parties to this action, a copy of this decision and order, with notice of entry.

This constitutes the Decision and Order of the Court.

Dated: October 26, 2005

Doris Ling-Cohan, JSC Footnotes

Footnote 1: The notice of the bankruptcy proceeding pending on behalf of Felix served on the parties to this action refers to provisions of the Federal Bankruptcy Code concerning the automatic stay triggered by the filing of a bankruptcy petition, including the following: "[A] petition filed under section 301, 302, or 303 of this title [11] ... operates as a stay, applicable to all entities, of ___ (1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other proceeding against the debtor, that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title; (2) the enforcement, against the debtor or against property of the estate, of a judgment obtained before the commencement of the case under this title; (3) any act to obtain possession of the property of the estate or property from the estate or to exercise control over property of the estate; . . . (6) any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title ...." (Reiser Aff., Ex. J.)