ALLEYNE v. PENSKE TRUCK LEASING CORPORATION

Reset A A Font size: Print

Supreme Court, Appellate Division, First Department, New York.

Magdeline Young ALLEYNE, et al., Plaintiffs-Respondents, v. PENSKE TRUCK LEASING CORPORATION, et al., Defendants-Appellants.

Decided: January 30, 1997

Before MILONAS, J.P., and ELLERIN, RUBIN and MAZZARELLI, JJ. Jeffrey S. Stillman, for Plaintiffs-Respondents. Joseph A. Oliva, for Defendants-Appellants.

Order, Supreme Court, Bronx County (Anne Targum, J.), entered December 1, 1995, which, in an action to recover for personal injuries sustained in an automobile accident, denied defendants' motion to vacate plaintiffs' note of issue and certificate of readiness, unanimously affirmed, with costs.

The IAS Court properly rejected defendants' argument that the instant action against the lessor and driver of the offending vehicle should be stayed under Bankruptcy Code (11 USC) § 362, based on the bankruptcy proceeding against the lessee of the vehicle and a lease agreement requiring the lessee to indemnify the lessor for the first $250,000 of any liability arising out of an accident involving the vehicle.   Unlike In re North Star Contracting Corp. v. McSpedon, 125 Bankr. 368, which stayed an action against the president of a bankrupt corporation for having misrepresented its financial viability on the grounds that the president had a right of indemnification against the corporation and that plaintiff did not have a “bona fide separate cause of action against [the president]” (id., at 371), here, defendant lessor's potential liability to plaintiffs, which stems from its ownership of the vehicle (Vehicle and Traffic Law § 388), is independent of any contractual obligation nonparty lessee may have to indemnify the lessor, and should not be affected by the bankruptcy.