STATE FARM MUTUAL AUTOMOBILE INS CO v. LOPEZ (2020)

I. Papers

The following papers assigned to this Court on September 29, 2020 were read on Plaintiff's motion seeking to vacate the stay, discontinue against defendant Lopez, and restore the action to the immediate calendar:

 Papers/Numbered

Plaintiff's Notice of Motion seeking to vacate the stay, discontinue against defendant Lopez and restore the action to the immediate calendar, as well as Affirmation in Support dated January 24, 2020 (“Motion”) and filed with the court on January 29, 2020, together with all supporting exhibits 1

Defendants' Affirmation in Partial Opposition (“Opposition”) dated March 18, 2020 and electronically filed with the court to Plaintiff's Motion 2

II. Background

In a complaint filed on October 18, 2018, Plaintiff insurance company alleged that on December 25, 2017, a vehicle owned, operated or controlled by Defendants Lopez and South collided with a vehicle owned by Plaintiff's subrogor James resulting in Plaintiff's payment of $16,573.01. The action was automatically stayed after defendant Lopez filed for Chapter 13 Bankruptcy on January 23, 2018 in the United States Bankruptcy Court, Southern District of New York (See 11 U.S.C. § 362[a] ).

On January 24, 2020, Plaintiff moved to vacate the stay in order to discontinue the action as against defendant Lopez and restore the action to the immediate calendar as against defendant South. Defendants opposed only to the extent of objecting to the action being placed on calendar immediately as opposed to at a later date.

III. Discussion

“Federal bankruptcy law automatically stays the commencement or continuation of any judicial proceedings against a debtor upon the filing of bankruptcy petition” (Lubonty v. U.S. Bank N.A., 34 NY3d 250, 252 [2019]). The automatic stay is “effective immediately upon filing without further action” (Carr v. McGriff, 8 AD3d 420, 422 [2d Dept 2004]), including an absence of notice of the bankruptcy proceeding's commencement (Yen-Ching Chen v. Dickerson, 17 Misc 3d 61, 63 [App. Term 2d Dept 2007]). Non-ministerial actions taken against the debtor after the automatic stay takes effect are void from their inception (W. Rogowski Farm, LLC v. County of Orange, 171 AD3d 79, 84 [2d Dept 2019]; Emigrant Sav. Bank v. Rappaport, 43 AD3d 502, 503 [2d Dept 2005]; Homeside Lending, Inc. v. Watts, 16 AD3d 551, 552 [2d Dept 2005]). Only bankruptcy court has the jurisdiction to terminate, annul, or modify the automatic stay (Emigrant Sav. Bank v. Rappaport, 43 AD3d at 503; Homeside Lending, Inc. v. Watts, 16 AD3d at 553; Carr v. McGriff, 8 AD3d at 422). Thus, in the instant matter, Plaintiff must seek to vacate the automatic stay in bankruptcy court, where Plaintiff may alternatively seek permission to discontinue the action against Lopez (see Mingo v. Nobandegani, 174 AD3d 888, 889 [2d Dept 2019]) or modify the stay as against Plaintiff (see Manufacturers & Traders Trust Co. v. Foy, 43 AD3d 1005, 1007 [2d Dept 2007]).

It is noted that Plaintiff commenced its action by filing a summons and complaint on October 18, 2018, almost nine months after defendant Lopez filed for bankruptcy on January 23, 2018. Therefore, the action is voidable from its inception (W. Rogowski Farm, LLC v. County of Orange, 171 AD3d 79, 84 [2d Dept 2019]; Emigrant Sav. Bank v. Rappaport, 43 AD3d 502, 503 [2d Dept 2005]; Homeside Lending, Inc. v. Watts, 16 AD3d 551, 552 [2d Dept 2005]).

IV. Order

Accordingly, it is

ORDERED that Plaintiff's Motion is denied.

This constitutes the DECISION and ORDER of the Court.

Wendy Changyong Li, J.