Based on Bankruptcy Court Stay of the Matter, Appellate Court Overturns Administrative Dismissal of Case by Trial Court

In the case of Tyson v. City of Philadelphia, No. 519 C.D. 2022 (Pa. Cmwlth. Jan. 16, 2024 McCullough, J., Wojcik, J. and Hannah Leavitt, S.J.) (Op. by McCullough, J.), the Pennsylvania Commonwealth Court vacated a Philadelphia County trial court’s denial of a Petition to Open an Administratively Dismissed Action.

This case involved a trip and fall along a sidewalk in Philadelphia. The Plaintiff sued the City of Philadelphia, Sears Holdings Corp. d/b/a Kmart and other Defendants.

The one (1) Defendant, Sears Holdings Corp. and its affiliates had provided the trial court with a notice that a voluntary bankruptcy proceeding was pending which necessitated a stay of this action.

However, this personal injury litigation was administratively terminated by the trial court due to a lack of docket activity. The injured party Plaintiff’s Petition to Open was denied. That party asserted that he was not aware of the administrative dismissal paperwork.

In part, the Plaintiff asserted that the administrative dismissal was improper as no action should have been taken in the matter due to the pending bankruptcy of Sears Holding and the automatic stay issued by the bankruptcy court.

On appeal, the Commonwealth Court found that the trial court had erred in administratively dismissing the action for failure to prosecute given that one of the Defendants in the case had filed a voluntary bankruptcy proceeding and given that a bankruptcy stay had to be construed to apply to the dismissals.

The lower court’s decision was vacated and the case was remanded for further proceedings.

Anyone wishing to review a copy of this decision may click this LINK.


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Jan. 30, 2024).

Liability Case Allowed To Proceed Against Defendant Who Filed Chapter 7 Bankruptcy - PART II

Tort Talkers may recall a recent post on the Bankruptcy Court case of In re Betty L. Morris addressing the ability of a Plaintiff to move a personal injury case forward against a tortfeasor who is in bankruptcy where the Plaintiff agrees to limit the recovery to the amount of the liability limits available.  That Tort Talk post can be viewed via this LINK.

Anyone wishing to review the companion state court decision in that case along the same lines may click HERE.

I send thanks to Attorney Scott E. Diamond of the Philadelphia, Pennsylvania law firm of Sacks Weston Diamond, LLC for bringing this case to my attention. 

Bankruptcy Court Addresses Impact of Bankruptcy Stay on Ability of Plaintiff To Proceed on Personal Injury Action

A recurring issue in civil litigation matters is the effect of a Bankruptcy Stay on the ability of a plaintiff to proceed on a personal injury action against a person in bankruptcy.

In the United States Bankruptcy Court for the Middle  District case of In Re: Betty L. Morris, No. 1-14-bk-03161 RNO (April 28, 2017), the court addressed a Claimant’s desire to move forward in a state court personal injury action to pursue only the extent of the available liability insurance coverage despite a bankruptcy stay.  

According to the Opinion, the Chapter 7 debtor received a bankruptcy in October of 2014.   The case was reopened in February of 2017 to consider a motion filed by a personal injury Claimant who commenced a pre-bankruptcy state court action against the debtor.   The state court action arose out of a motor vehicle accident against the debtor. 

The Claimant moved for a declaration from the bankruptcy court that her state court action, in which she wished to only pursue the extent of the available liability insurance coverage, is not stayed by the discharge injunction imposed by §524 of the bankruptcy code.

After a review of the matter before it, the court concluded that the state court personal injury action was not stayed and could proceed.  

Anyone wishing to review this case may click this LINK.

I send thanks to Attorney Scott E. Diamond of the Philadelphia, Pennsylvania law firm of Sacks Weston Diamond, LLC for bringing this case to my attention.