Grotting v. Hudson Shipbuilders, Inc.

• Decision Date: 14 April 1988
• Docket Number: C86 1392M.
• Parties: Charles GROTTING and George McMurrick, Plaintiffs, v. HUDSON SHIPBUILDERS, INC., Defendant.
• Court: U.S. District Court — Western District of Washington

85 B.R. 568 (1988)

Charles GROTTING and George McMurrick, Plaintiffs, v. HUDSON SHIPBUILDERS, INC., Defendant.

C86 1392M.

United States District Court, W.D. Washington.

April 14, 1988.

John N. Connell, Anderson & Connell, Bellingham, Wash., for plaintiffs.

David Danielson, Danielson Harrigan Smith & Tollefson, Seattle, Wash., Jerard S. Weigler, Thomas E. McDermott, Lindsay, Hart, Neil & Weigler, Portland, Or., for defendant.

ORDER GRANTING MOTION FOR PARTIAL SUMMARY JUDGMENT RE STATUTE OF LIMITATIONS

McGOVERN, District Judge.

Defendant Hudson Shipbuilders, Inc. (Hudson) seeks partial summary judgment against Plaintiffs' first, second, and fifth claims to the extent they seek recovery of damages associated with Plaintiff McMurrick's alleged personal injuries. Hudson's Motion for Partial Summary Judgment is based on a contention that the above claims are barred by the applicable statute of limitations, 46 U.S.C.App. § 763a, and by a Bankruptcy Code provision allowing, inter alia, a 30-day extension of a statute of limitations in certain circumstances. 11 U.S.C. § 108(c).

The loss of the fishing vessel MIDNIGHT EXPRESS, and Plaintiff McMurrick's alleged injuries, occurred on November 21, 1981. Defendant Hudson filed a Chapter 11 bankruptcy petition February 9, 1983. Plaintiffs' motion to lift the automatic stay in bankruptcy to prosecute this action was granted June 30, 1986. Plaintiffs filed their original complaint in this action September 4, 1986.

The appropriate statute of limitations, 46 U.S.C.App. § 763a, requires a party to file a complaint for damages for personal injury from a maritime tort within three years from the date the cause of action accrues. Under this statute, Plaintiffs should have filed their cause of action as to McMurrick's injuries by November 29, 1984, unless the statute of limitations was tolled or extended.

Hudson went into bankruptcy, however, before Plaintiffs filed their claims, but the statute of limitations had not yet run on their claims. The Automatic Stay of 11 U.S.C. § 362, nevertheless, precluded commencement of Plaintiffs' cause of action against Hudson.

Another provision of the Bankruptcy Code, entitled "Extension of Time," addresses Plaintiffs' situation. Title 11 U.S.C. § 108(c) provides:

Except as provided in section 524 of this title, if applicable nonbankruptcy law, an order entered in a nonbankruptcy proceeding, or an agreement fixes a period for commencing or continuing a civil action in a court other than a bankruptcy court on a claim against the debtor, or against an individual with respect to which such individual is protected under section 1301 of this title, and such period has not expired before the date of the filing of the petition, then such period does not expire until the later of —

(1) the end of such period, including any suspension of such period occurring on or after the commencement of the case; or

(2) 30 days after notice of the termination or expiration of the stay under section 362, 722, or 1301 of this title, as the case may be, with respect to such claim.

(Emphasis added.) The proper interpretation of this provision is at issue in Hudson's motion. There is no dispute of the underlying facts.

The issue is whether the applicable statute of limitations is tolled during the period of the Automatic Stay in bankruptcy.

Hudson argues that Plaintiffs failed to file their claims for personal injuries arising from maritime torts either within the three-year statute of limitations (46 U.S.C. App. § 763a) or within the alternative 30-day period following the lifting of the stay in bankruptcy as permitted under 11 U.S.C. § 108(c).

Plaintiffs argue that the applicable statute of limitations is tolled or suspended during the period of the automatic stay, and that there was an unexpired portion of the limitation period amounting to 1 year and 294 days when the bankruptcy stay went into effect. Thus, while Plaintiffs did not file their claims within the 30-day period after the stay was lifted, they did so within the remaining year and 294 days of the limitation period.

The following chart may be helpful to visualize the pertinent dates:

                     11/29/81     2/9/83   11/29/84   6/30/86     7/30/86         9/4/86
                     Injury       Hudson   S  of  L   Bkcy Sty    End of 30-day   Ps    file
                                  Ch. 11   expires    lifted at   extension       complaint
                                           if   not   Ps' reqst   of
                                           tolled                 § 108
                

There is no language 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 Automatic Stay provision merely prohibits a cause of action from being...