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DALTON v. NEW COMMODORE CRUISE LINES LIMITED

United States District Court, S.D. New York


February 24, 2004.

DALTON, Plaintiff, -v- NEW COMMODORE CRUISE LINES LIMITED, Defendant

The opinion of the court was delivered by: DENISE COTE, District Judge

OPINION AND ORDER

Jackie Dalton, a Louisiana resident, filed this action against New Commodore Cruise Lines Limited ("New Commodore"), a Bermuda corporation, in the Eastern District of Louisiana ("the Louisiana Court") on May 25, 2001, to recover for an injury she sustained while on a cruise. The Louisiana Court granted New Commodore's motion to transfer venue to the Southern District of New York on October 2, 2002. Following discovery, New Commodore moved for summary judgment pursuant to Rule 56, Fed.R.Civ.P. Dalton opposed the motion, and on December 30, 2003, sought leave to file an amended complaint. For the reasons set forth below, New Commodore's motion for summary judgment is granted, and Dalton's motion to amend the complaint is denied. Page 2

 Background

  The following facts are undisputed or taken in the light most favorable to the plaintiff. On May 25, 2000, Dalton was injured aboard the vessel M/V Enchanted Isle ("the cruise ship") while on a cruise purchased from New Commodore. Dalton slipped and fell on a wet area of the cruise ship floor, and sustained injuries to her left knee and back. A cruise ship physician who examined her immediately following the accident diagnosed an "acute low back injury (strain)," and was "unable to rule out a herniated disc." Dalton was unable to work following the accident.

  Dalton's passage on the cruise ship was pursuant to a Passage Contract, which also served as her boarding pass and receipt. Dalton received the Passage Contract on May 19 and presented it upon boarding the cruise ship on May 20. The front cover of the Passage Contract, on which the passenger and cruise information was printed, informed the ticket holder in bold letters that she "should carefully examine all the conditions of this contract, particularly the conditions on pages 4-12." On those pages, the Passage Contract stated that any lawsuit against the cruise ship or its owners for injuries sustained on the cruise ship must be filed within one year from the day when the injury occurred. The Passage Contract also contained a forum selection clause, which provided that all disputes between a passenger and the cruise ship "shall be litigated, if at all, before a court of the State, City and County of New York to the Page 3 exclusion of the courts of any other country, state, city or county."

  At some point after Dalton's injury, the cruise ship ceased operating in Louisiana. On or about December 27, 2000, New Commodore filed an individual bankruptcy petition pursuant to 11 U.S.C. § 101, et seq., in the United States Bankruptcy Court for the Southern District of Florida (the "Bankruptcy Court"). Thereafter, an automatic stay pursuant to 11 U.S.C. § 362 (a) ("Section 362(a)") came into effect preventing, inter alia, lawsuits against New Commodore without leave from the Bankruptcy Court.

  On May 25, 2001, exactly one year after her accident, Dalton filed a personal injury action in the Louisiana Court against New Commodore and the insurance carriers Assurance Foreningen Skuld, Skuld, and Assurance Foreningen (collectively, "Skuld") in their capacity as co-owners of the cruise ship. New Commodore and Skuld failed to answer the complaint, and Dalton moved for a default. On March 13, 2002, the Louisiana Court granted Dalton's motion for a default judgment. On March 27, New Commodore moved to vacate the default judgment. New Commodore argued that it had not received notice of Dalton's lawsuit, and that Dalton's attorney had misrepresented to the Louisiana Court that he had properly served New Commodore and its co-defendants. In an Opinion dated April 22, the Louisiana Court granted New Commodore's motion, finding that Dalton had not served the defendants, and had moved for a default judgment despite knowing Page 4 that the defendants had not been properly served. The Louisiana Court found that Dalton's attorney had violated Rule 11, Fed.R. Civ. P., but declined to issue formal sanctions.

  On June 13, 2002, New Commodore answered the complaint. New Commodore cited its bankruptcy as an affirmative defense, noting that any claim against it would be subject to its Debtors' Second Amended Joint Plan of Reorganization dated October 4, 2001 (the "Plan"), and the Bankruptcy Court's Order Confirming Debtor's Second Amended Joint Plan of Reorganization dated March 15, 2002 ("Confirmation Order"). On June 20, New Commodore amended its answer to include copies of the Plan and Confirmation Order. The automatic stay had expired upon the issuance of the Confirmation Order.

  On August 1, the Louisiana Court dismissed Skuld "for lack of prosecution," leaving New Commodore as the only outstanding defendant. On September 17, New Commodore moved to dismiss the complaint, or, alternatively, to transfer venue to this district pursuant to the choice of forum provision in the Passage Contract. Dalton did not oppose the transfer motion, and it was granted on October 2.

  The parties completed discovery on July 30, 2003.*fn1 New Commodore then moved for summary judgment on the ground that Page 5 Dalton's action was filed in violation of the automatic stay, or, in the alternative, that it was time-barred. Dalton contended that she was unaware of New Commodore's bankruptcy proceedings, and, in any event, that New Commodore should be barred from using its bankruptcy as a defense because it affirmatively concealed the "bankruptcy issue" from Dalton.*fn2 On December 30, after the summary judgment motion was fully submitted, Dalton filed a motion to amend her complaint to add Steamship Mutual Underwriting Association ("SMUA"), New Commodore's insurance carrier, as a defendant. Dalton argues that the addition of SMUA would cure any defect in her complaint arising from New Commodore's bankruptcy.

 Discussion

  The United States Bankruptcy Code provides a comprehensive federal system of penalties and protections to govern the conduct of debtors' affairs and creditors' rights. See 11 U.S.C. § 101 et seq.; S.E.C. v. Brennan, 230 F.3d 65, 70 (2d Cir. 2000). "The filing of a Chapter 11 bankruptcy petition triggers an automatic stay of any judicial proceeding or other act against the property of the [Debtor] that was or could have been commenced before the filing of the petition." In re Dairy Mart Convenience Stores, Inc., 351 F.3d 86, 90 (2d Cir. 2003) (citing 11 U.S.C. § 362 (a)). The automatic stay "is effective immediately upon the filing of Page 6 the petition, and any proceedings or actions described in section 362(a)(1) are void and without vitality if they occur after the automatic stay takes effect." Rexnord Holdings, Inc. v. Bidermann, 21 F.3d 522, 527 (2d Cir. 1994) (citation omitted); In re Berkelhammer, 279 B.R. 660, 666 (S.D.N.Y. 2002). The action is void even where the acting party had no actual notice of the stay. In re Enron Corp., 300 B.R. 201, 212 (S.D.N.Y. 2003) (citation omitted). If the statute of limitations governing a plaintiff's claim against a debtor expires during the pendency of the stay, the plaintiff has 30 days to re-file the action from the time she receives notice that the Bankruptcy Court has ordered the stay lifted. See 11 U.S.C. § 108 (c); Aslanidis v. U.S. Lines, Inc., 7 F.3d 1067, 1073 (2d Cir. 1993).

  Dalton's lawsuit against New Commodore was filed inderogation of the automatic stay imposed by the Bankruptcy Court and was therefore void ab initio. Dalton's injury occurred on May 25, 2000. New Commodore filed for bankruptcy protection on December 27, 2000. Dalton had a pre-petition claim against New Commodore that could not have been filed without leave of the Bankruptcy Court. It is undisputed that Dalton never petitioned the Bankruptcy Court for leave to file her lawsuit. Dalton's lack of notice of New Commodore's bankruptcy is immaterial, since the stay is, as its name implies, automatic and therefore requires no action by the debtor to be enforced.

  Because the contractual one-year statute of limitations period expired during the pendency of the automatic stay, Dalton Page 7 had 30 days from the time she received notice that the stay had been lifted to re-file her lawsuit. Dalton was aware that the automatic stay had been lifted since at least June 20, 2002. On that date, New Commodore amended its answer to include the Bankruptcy Court's Confirmation Order, which had lifted the stay. Therefore, Dalton had at most until July 20 to re-file her action in the Southern District of New York pursuant to the choice of forum provision contained in the Passage Contract. Dalton failed to do so and chose instead to pursue the lawsuit, which was void, in the Louisiana Court. Dalton is now time-barred from re-filing the lawsuit in this district.

 The Amended Complaint

  Dalton seeks to amend her complaint to include SMUA, New Commodore's insurer, as a defendant. Dalton claims that she failed to name SMUA in her complaint because she did not know the identity of New Commodore's insurer until discovery. Dalton argues that the addition of SMUA as a defendant saves her action because SMUA is not in bankruptcy.

  Rule 15 of the Federal Rules of Civil Procedure provides that an amended pleading to add an additional party relates back to the date of the original timely pleading when: (1) both complaints arise out of the same conduct, transaction or occurrence; (2) the additional defendant was omitted from the original complaint by mistake; and (3) the additional defendant would not be prejudiced by the delay. VKK Corp. v. National Page 8 Football League, 244 F.3d 114, 128 (2d Cir. 2001). A "mistake" for purposes of Rule 15 may be a mistake of either fact or law. See Soto, 80 F.3d at 35-36. A mistake of fact occurs when a plaintiff misapprehends the identities of the individuals she wishes to sue. Id. A mistake of law occurs when she misunderstands the legal requirements of her cause of action. Soto, 80 F.3d at 36. Where a plaintiff shows neither type of mistake, the amended pleading will not relate back.

  Allowing Dalton to amend her pleading now would be both prejudicial and futile. There is no timely filed complaint to which this amendment may relate back. There is also no reasonable explanation as to why Dalton waited until this late stage in the litigation to file an amended complaint. She has not shown that her failure to name SMUA was due to either a mistake of law or fact. Dalton's assertion that the identity of New Commodore's insurer only became known to her after discovery shows, at a minimum, a lack of due diligence in prosecuting this case. The complaint filed in the Louisiana Court included Skuld, whom Dalton believed to be New Commodore's insurance carriers. Dalton does not show why, after the Skuld defendants were dismissed by the Louisiana Court for lack of prosecution, she did not immediately seek to ascertain the identity of New Commodore's present insurer. Furthermore, even if assuming, arguendo, that SMUA could only be identified at the conclusion of the discovery period, it is not clear why she waited until December 30 — some five months after the close of discovery, and also after the Page 9 summary judgment motion was fully submitted — to amend her complaint. The decision not to name an insurer must be assumed, under these circumstances, to be an intentional act, and not a mistake.*fn3

 Conclusion

  For the aforementioned reasons, the defendant's motion for summary judgment is granted. The plaintiff's motion to amend the complaint is denied. The Clerk of Court shall close the case.

  SO ORDERED.


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