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.
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
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
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
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
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
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
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
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.
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
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
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.