I have a pending auto accident case in which the issue of when a claim accrues against a Chapter 7 debtor has come up. In my case, the debtor was involved in an automobile accident approximately one year prior to her filing a Chapter 7 bankruptcy petition. Attorneys for the plaintiff placed the debtor's insurance company on notice of the plaintiff's claim, but did not place the debtor on notice. The plaintiff's attorneys filed suit two months after the debtor filed her Chapter 7 petition. About thirty days after plaintiff filed her complaint, the bankruptcy court entered an order of discharge and closed the the debtor's case.
A motion to dismiss the plaintiff's lawsuit is now pending. The argument in favor of dismissal is that the automatic stay renders the complaint filed by the plaintiff void. Thus, the argument follows that since the complaint is void because it was filed in violation of the automatic stay, the suit must be dismissed.
This is certainly a frustration for the plaintiff. Had she known about the bankruptcy, she could have filed a motion for relief from the automatic stay and agreed not to pursue any recovery from the debtor beyond available insurance coverage.
One lesson learned from this case is that plaintiff's counsel should do a quick search on PACER (the federal case reporting system) to determine if defendants have filed for bankruptcy protection. A lesson for debtors is that they should be sure to include any potential claims against them in their bankruptcy filing.
Stay tuned to learn the outcome of this interesting legal question.
(502) 245-9100
No comments:
Post a Comment