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PLAINTIFF IN THIS SLIP AND FALL CASE ENTITLED TO SEVERANCE OF THE ACTION AGAINST THE PROPERTY OWNER, WHICH FILED FOR BANKRUPTCY, AND THE SNOW REMOVAL CONTRACTOR (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff in this slip and fall case was entitled to severance of the action against the property owner, Pathmark (supermarket), which filed for bankruptcy, from the action against the snow removal contractor, Peterman:

The supermarket defendants filed for chapter 11 bankruptcy relief, resulting in an automatic stay pursuant to 11 USC § 362(a). However, the automatic stay provisions of 11 USC § 362(a) did not extend to the nonbankrupt Peterman … . “Generally, the balance of the equities lies with plaintiff[ ] when severance is sought because the case against one defendant is stayed pursuant to 11 USC § 362(a), and that is particularly so in this personal injury action where a delay would be prejudicial to the plaintiff[ ]” … .

The supermarket defendants are subject to a $750,000 self-insured retention, which would make a lifting of the bankruptcy stay less likely. As the prejudice to the plaintiff in being required to await the conclusion of the bankruptcy proceeding before obtaining any remedy outweighs any potential inconvenience to Peterman, the Supreme Court improvidently exercised its discretion in denying the plaintiff’s motion pursuant to CPLR 603 to sever the action insofar as asserted against the supermarket defendants from the action insofar as asserted against Peterman … . Vogric v Pathmark Stores, Inc., 2019 NY Slip Op 01447, Second Dept 2-27-19

 

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