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Brunner v. CUSA PCSTC, LLC

United States District Court, C.D. California

February 10, 2015

KURT BRUNNER, Plaintiff,


DEAN D. PREGERSON, District Judge.

Presently before the Court is Defendant CUSA PCSTC, LLC's Motion to Dismiss Plaintiff Kurt Brunner's Complaint. Having considered the submissions of the parties, the court denies the motion and adopts the following order.

I. Background

On October 14, 2010, Kurt Brunner ("Plaintiff") was a passenger in an airport shuttle when a bus owned by Defendant CUSA PCSTC, LLC ("Defendant") collided with the airport shuttle. (Compl. ¶¶ 4-6.) Plaintiff alleges he suffered serious emotional and bodily injuries due to the collision. (Id. ¶ 7.)

On July 20, 2011, Plaintiff's attorneys sent a letter of representation to Sedgwick Claims Management Services, Inc. ("Sedgwick"), the third party administrator of Defendant's automobile liability policy, placing Defendant and Sedgwick on notice of Plaintiff's injuries from the collision. (Id. ¶¶ 8-9.) On January 3, 2012, Defendant filed for Chapter 11 bankruptcy in the United States Bankruptcy Court, District of Delaware as Case No. 12-10062 ("Bankruptcy Case"). (Id. ¶ 10.) On March 29, 2012, Plaintiff filed a Proof of Claim in the Bankruptcy Case. (Id. ¶ 11.)

On January 3, 2013, Plaintiff's counsel received correspondence from Sedgwick that Plaintiff's claim had been reassigned to claims examiner, Darla Nehaz. (Id. ¶ 13.) Nehaz stated that Plaintiff's claims were currently stayed because of the bankruptcy filing, thus she could not advance the filing of Plaintiff's claim, but requested that Plaintiff submit a "demand package" as she was working on the documentation for the claim. (Id. ¶ 13.) On February 18, 2013, Plaintiff submitted the requested "demand package" and asked to be notified immediately upon direction from the bankruptcy court to proceed with claims administration and if/when the stay was lifted. (Id. ¶ 14.)

On May 31, 2013, the bankruptcy court issued an order (1) approving trust agreements, (2) authorizing the transfer of remaining assets to the lender trustee, (3) dismissing debtor's Chapter 11 cases and (4) granting related relief. (Mot., Ex. A.) On June 10, 2013, the Bankruptcy Case was closed. (Id.) Plaintiff alleges he never received notice that the bankruptcy case was dismissed from the bankruptcy court or Defendant. (Compl. ¶¶ 23, 26.)

On September 21, 2013, however, Plaintiff received a notice from the appointed trustee in the Bankruptcy Case that stated the United States Bankruptcy Court entered an order on May 31, 2013, establishing a "trust" to liquidate and distribute assets to beneficiaries, including Plaintiff. (Id. ¶ 15.) The notice also requested that Plaintiff fill out and return the enclosed W-9 form. (Id.) Plaintiff completed the W-9 form and submitted it to the trustee as requested. (Id.) Thereafter, Plaintiff attempted to contact Nehaz for an update on the status of his claims, but was unable to reach her. (Id. at ¶ 16.)

On December 3, 2013, Sedgwick reassigned Plaintiff's claim to a new claims adjuster, Douglas Johnson. (Id. ¶ 16.) On April 7, 2014, Johnson sent Plaintiff a correspondence stating that the statute of limitations had expired. (Id. ¶ 22.) Plaintiff received this correspondence on May 12, 2014. (Id.)

On June 25, 2014, Plaintiff filed the instant suit seeking damages for injuries sustained in the traffic collision. (Id.) Defendant now moves to dismiss the Complaint on the grounds that it is barred by the statute of limitations.

II. Legal Standard

A complaint will survive a motion to dismiss when it contains "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When considering a Rule 12(b)(6) motion, a court must "accept as true all allegations of material fact and must construe those facts in the light most favorable to the plaintiff." Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). When a 12(b)(6) motion is brought upon statute of limitations grounds, "a complaint cannot be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts that would establish the timeliness of the claim." Supermail Cargo, Inc. v. United States, 68 F.3d 1204, 1207 (9th Cir. 1995). Generally, courts can only consider allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice when ruling on a motion to dismiss. Outdoor Media Grp., Inc. v. City of Beaumont, 506 F.3d 895, 899 (9th Cir. 2007).

III. Discussion

Defendant argues that Plaintiff's claim is barred by the statute of limitations. In California, the statute of limitations for Plaintiff's claim is two years. Cal. Code Civ. Proc. § 335.1. At the time Defendant filed for bankruptcy on January 3, 2013, both parties agree that Plaintiff had 285 days remaining to file suit, or until October 14, 2013, to file the instant claim. (Mot. at 4; Opp. at 3.)

When a debtor files a petition for bankruptcy, an automatic stay comes into effect, preventing "the commencement or continuation... of a judicial, administrative, or other action or proceeding against the debtor... to recover a claim against the debtor that arose before the commencement of" the bankruptcy case. 11 U.S.C. § 362(a)(1). The automatic stay continues until the bankruptcy case is either closed or dismissed, or until a discharge is granted or denied, whichever comes first. 11 U.S.C. § 362(c). Section 362(a) does not, however, toll the running of statutes of limitations. See Husmann v. TWA, 169 F.3d 1151, 1154 (8th Cir. 1999)("The Bankruptcy Code does not provide that a statute of limitations is tolled during the period of bankruptcy.")

The bankruptcy court dismissed the case on May 31, 2014.[1] (Defendant's Request for Judicial Notice.) By that time, the two-year statute of limitations had expired. Plaintiff counters that the Complaint here is nevertheless timely because he is entitled to an extension of time pursuant to 11 U.S.C. § 108(c).[2]

Though Section 362 does not toll statutes of limitations, Section 108(c) extends the filing period for claims that otherwise might be subject to such time bars. Section 108(c) states that such period does not expire until the later of the statute of limitations period or "30 days after notice of the termination or expiration of the stay under section 362... with respect to such claim [against the debtor.]" 11 U.S.C. § 108(c). The purpose of section 108(c) is to extend "applicable time deadlines... for 30 days after notice of the termination of a bankruptcy stay, if such deadline would have fallen on an earlier date." Aslanidis v. U.S. Lines, Inc., 7 F.3d 1067, 1073 (2nd Cir. 1993). "There is no language in either in the Automatic Stay provision or the Extension of Time provision of the Bankruptcy Code that suspends a statute of limitations from running... The extension of time provision merely provides an extra 30 days to file a claim if the claims' limitation period expired before the automatic stay was lifted." Grotting v. Hudson Shipbuilders, Inc., 85 B.R. 568, 569 (W.D. Wash. 1988).

Plaintiff argues that under Section 108(c), the Complaint is timely because Plaintiff has yet to receive notice from either the bankruptcy court or Defendant that the automatic stay has been lifted. (Opp. at 2.) At least one California court has found a complaint timely filed under similar circumstances. In Shumacher v. Worcester 55 Cal.App.4th 376 (1997), the plaintiff filed suit to foreclose on a street improvement bond after the four year statute of limitations had expired. Finding the suit timely filed, the court noted that the plaintiff's claim was timely under Section 108(c) because the statute of limitations was extended until 30 days after plaintiff received notice of the termination of the bankruptcy stay. Shumacher, 55 Cal.App.4th at 380 ("Not having been given notice of the termination of the bankruptcy stay, the 30-day period for [plaintiff] to file his complaint did not expire and the complaint was timely filed.").[3]

In reply, Defendant asserts that Plaintiff has not alleged facts sufficient to establish that Section 108(c) applies. (Reply at 2.) The court disagrees. The allegation that Plaintiff has never received notice that the bankruptcy case has been dismissed, or the stay lifted, is sufficient. (Complaint ¶ 23.)

IV. Conclusion

For the reasons stated above, Defendant's Motion to Dismiss is DENIED.


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