Judge: Laura A. Seigle, Case: BC645588, Date: 2022-11-01 Tentative Ruling

Case Number: BC645588    Hearing Date: November 1, 2022    Dept: 15

[TENTATIVE] ORDER RE SERVERANCE OF BANKRUPT DEFENDANTS FOR TRIAL

            Plaintiff Louis Wagner named Johnson & Johnson and Johnson & Johnson Consumer, Inc. as defendants.  At some point those defendants filed for bankruptcy, and a bankruptcy stay on Plaintiff’s claims against them went into effect.  This case is now ready for trial against the other remaining defendants, American Art Clay Co. Inc.; Ceramics and Crafts Warehouse, Inc.; Kemper Enterprises, Inc.; and Stewart’s of California, Inc.

            Pursuant to Code of Civil Procedure section 1048, subdivision (b), a court may order a separate trial of any cause of action or any number of causes of action or issues.  The bankruptcy stay does not extend to actions against non-debtor third parties.  (See, e.g., United States v. Dos Cabezas Corp. (9th Cir. 1993) 995 F.2d 1486, 1491; Related Asbestos Cases (N.D. Cal. 1983) 23 Bankr. 523, 530; Duval v. Gleason (N.D. Cal. 1990) 1990 WL 261364 at *4.)  Therefore, the claims against the bankrupt defendant can be severed for trial with the claims against the bankrupt defendant remaining stayed.  (Rim Forest Lumber Co. v. Woodside Construction Co. (1987) 190 Cal.App.3d 454, 466; Related Asbestos Cases, supra, 23 Bankr. at p. 530; Dos Cabezas, supra, 995 F.2d at p. 1492 [“The Bankruptcy Code contemplates that creditors will be able to proceed against [non-debtor parties] notwithstanding the automatic stay”].)

            This case is almost six years old.  The Court finds there is good cause to sever the stayed claims against Johnson & Johnson and Johnson & Johnson Consumer from the claims against the remaining four defendants, American Art Clay Co. Inc.; Ceramics and Crafts Warehouse, Inc.; Kemper Enterprises, Inc.; and Stewart’s of California, Inc. for purposes of trial.  Therefore, the trial against American Art Clay Co. Inc.; Ceramics and Crafts Warehouse, Inc.; Kemper Enterprises, Inc.; and Stewart’s of California, Inc. shall proceed separately from the action against Johnson & Johnson and Johnson & Johnson Consumer, which remains stayed.

            Plaintiff is to give notice.