Alam v Amf Bowling Ctrs., Inc.
Annotate this CaseDecided on September 14, 2004
Supreme Court, Nassau County
DEBRA ALAM, Plaintiff,
against
AMF BOWLING CENTERS, INC. d/b/a GARDEN CITY BOWLING ALLEY and AMF BOWLING CENTERS, INC., Defendants.
10231/03
Kenneth A. Davis, J.
Upon the foregoing papers, the defendant's motion to dismiss on the grounds that this action may not be maintained due to the discharge in bankruptcy is denied.
The instant motion stems from an action for personal injuries allegedly sustained by plaintiff, Debra Alam, when she slipped and fell on January 23, 2002 at AMF Bowling Centers d/b/a Garden City Bowl. Plaintiff alleges that the bowling alley lane at the aforesaid location was in an unsafe and dangerous condition due to the negligence of the defendants and/or their employees in that they allowed oil to remain on the bowling alley lane for an unreasonable length of time when defendants knew or should have known of the dangers existing. Defendants permitted plaintiff to use the bowling lane without notice of the dangerous condition and as a result, plaintiff slipped and fell on the oil, sustaining injuries.
Plaintiff served a verified summons and complaint on or about June 11, 2003. The defendant interposed an answer on August 11, 2003. At a conference held on April 14, 2004, the defendant mentioned that defendants had filed for bankruptcy in July of 2001, with their Second Modified Joint Plan of Reorganization under Chapter 11 of the Bankruptcy being confirmed on [*2]February 1, 2002. No mention of the bankruptcy or the reorganization plan was made prior to this conference.
Defendants now contend that plaintiff's suit is barred due to the fact that the injuries she allegedly sustained as a result of the negligence of the defendants occurred within the dates set forth by the Bankruptcy Court to be classified as an administrative expense. As such, defendants claim that plaintiff's only remedy was to submit a request for payment of administrative expense and failure to timely file such a request leaves her without a remedy.
Since no mention was made of the bankruptcy or reorganization plan prior to the April 14th conference and that the plaintiff had no reason to know that the defendants had filed for bankruptcy, the Court finds that the plaintiff lacked notice and therefore her failure to file for an administrative expense was an excusable error. To bar plaintiff's action for this error alone would be fundamentally unfair and violative of the plaintiff's right to due process.
The United States Bankruptcy Court for the Southern District of Ohio has ruled that to permit discharge of a personal injury claim, where the claimant had no notice of the bankruptcy proceeding or confirmation hearing, would violate the claimant's right to due process. In the Matter of Federated Department Stores Corporation, 158 B.R. 103 (1993), the plaintiff was struck on the head and neck and knocked unconscious by a banner and wooden dowel that fell from the ceiling of a Bullock's Department Store. Federated was aware of this injury and plaintiff's claim. Nevertheless, Federated never scheduled the plaintiff as a creditor and never gave her notice of the bar date or any of the other bankruptcy proceedings. In its decision, the Court stated:
where a claimant had not received notice of the bankruptcy proceeding or the confirmation hearing, discharge of the claim without reasonable notice is violative of the Fifth Amendment and a creditor could not be bound by the terms of the plan. Id. at 105 quoting Reliable Electric Co., Inc. v. Olson Constr. Co., 726 F.2d 620 (10th Cir. 1984).
In Re: Federated Department Stores, Inc., 226 B.R. 191 (1998), the plaintiff filed a complaint against reorganized debtors in New York asserting a personal injury claim. Reorganized debtors filed an answer and later a motion for summary judgment based upon the assertion that plaintiff's claim was barred by the discharge set forth in the Confirmation Plan as she failed to file a proof of claim in the consolidated bankruptcy cases. Plaintiff maintained that Federated was well aware of its contingent liability for plaintiff's injuries and should have served plaintiff with formal notice. Both the State Court and the Bankruptcy Court agreed. The Bankruptcy Court has held that without receipt of formal notice, which is "an elementary and fundamental requirement of due process in any proceeding which is to be afforded finality ", the discharge in the confirmation order has no application to the plaintiff and she is therefore entitled to proceed with the state court action with all rights to levy execution on any favorable judgment just as if there had never been a bankruptcy. Id. at 194, quoting Mullins v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S. Ct. 652, 657, 94 L. Ed. 865 (1950).
[*3]
Accordingly, the Court holds that the plaintiff's action is not barred and may proceed in this Court. Defendant's motion to dismiss is denied.
This decision constitutes the order of the court.
Dated: __________________ _______________________________
J.S.C.
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