Judge: Steven A. Ellis, Case: 20STCV26702, Date: 2023-12-14 Tentative Ruling

DEPARTMENT 29 - LAW AND MOTION RULINGS IMPORTANT  (PLEASE SEND YOUR E-MAIL TO DEPT. 29 NOT DEPT. 2)

Communicating with the Court Staff re the Tentative Ruling 1. Please notify the courtroom staff by email not later than 9:30 a.m. on the day of the hearing if you wish to submit on the tentative ruling rather than argue the motion. The email address is SSCDEPT29@lacourt.org. Please do not use any other email address. 2. You must include the other parties on the email by "cc." 3. Include the word "SUBMISSION" in all caps in the Subject line and include your name, contact information, the case number, and the party you represent in the body of the email. If you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the motions. THE COURT WILL HEAR ARGUMENT UNLESS BOTH SIDES SUBMIT ON THE TENTATIVE.  4. Include the words "SUBMISSION BUT WILL APPEAR" if you submit, but one or both parties will nevertheless appear. 5. For other communications with Court Staff a. OFF-CALENDAR should appear in all caps in the Subject line where all parties have agreed to have a matter placed off-calendar. All counsel should be cc'ed (and where appropriate parties not represented by counsel) and the body of the email should state: (a) name and case number; (b) date of proceeding. b. CASE SETTLED should appear in all caps in the Subject line where all parties have agreed that the case has settled for all purposes. All counsel should be cc'ed (and where appropriate parties not represented by counsel) and the body of the email should state: (a) name and case number; (b) whether notice of settlement/dismissal documents have been filed; (c) if (b) has not been done, a date one year from the date of your email which will be a date set by the court for an OSC for dismissal of the case. c. STIPULATION should appear in all caps in the Subject line where all parties have stipulated that a matter before the court can be postponed. All counsel should be cc'ed (and where appropriate parties not represented by counsel) and the body of the email should state: (a) name and case number; (b) what proceeding is agreed to be postponed e.g. Trial, FSC; (c) the agreed-upon future date; (d) whether all parties waive notice if the Court informs all counsel/parties that the agreed-upon date is satisfactory. This communication should be used only for matters that are agreed to be postponed and not for orders shortening time. 6. PLEASE MAKE SURE THAT ALL COMMUNICATIONS WITH COURT STAFF DEAL ONLY WITH SCHEDULING AND ADMINISTRATIVE MATTERS AND DO NOT DISCUSS THE MERITS OF ANY CASE. (UPDATED 6/17/2020) 
IMPORTANT:  In light of the COVID-19 emergency, the Court encourages all parties to appear remotely.  The capacity in the courtroom is extremely limited.  The Court appreciates the cooperation of counsel and the litigants. 
ALSO NOTE:  If the moving party does not contact the court to submit on the tentative and does not appear (either remotely or in person), the motion will be taken off calendar.  THE TENTATIVE RULING WILL NOT BE THE ORDER OF THE COURT.

Case Number: 20STCV26702    Hearing Date: January 30, 2024    Dept: 29

Motion for Relief from Automatic Stay to Proceed Against Defendants Not Subject to the Stay filed by Plaintiff Jonathan Weir.

Tentative

Plaintiff’s motion is DENIED on the ground that it seeks an affirmative order that is unnecessary. 

By operation of law, the automatic stay of the U.S. Bankruptcy Code applies only to Defendant Thrifty Payless, Inc. only.  This action is not stayed as to Defendants Iovate Health Sciences U.S.A. Inc., Steuben Foods, Inc., and SIG Combibloc, Inc.

Background

Plaintiff Jonathan Weir (“Plaintiff”) alleges that on October 16, 2019, he suffered severe injuries after he swallowed a foreign object in a protein shake. 

Plaintiff filed the Complaint in this action on July 15, 2020, asserting causes of action for negligence and products liability against Iovate Health Sciences U.S.A. Inc. (“Iovate”), Rite Aid Corporation (“Rite Aid”), and Does 1 through 25.

On August 20 and 28, 2020, Iovate and Rite Aid filed their Answers to the Complaint.

On April 7, 2021, Plaintiff amended his Complaint to name Defendant Thrifty Payless, Inc. (“Thrifty”) as Doe 1.

On May 4, 2021, the Court, at the request of Plaintiff, dismissed all claims in the Complaint against Rite Aid without prejudice.

On May 10, 2021, Thrifty filed its Answer to the Complaint.

On September 23, 2021, Plaintiff amended his Complaint to name Defendant Steuben Foods, Inc. (“Steuben”) as Doe 2.  Steuben filed its Answer to the Complaint on January 21, 2022.

On April 28, 2022, Steuben filed a Cross-Complaint against SIG Combibloc, Inc. (“SIG”) and Roes 1 through 25.  SIG filed its Answer to the Cross-Complaint, as well as its own Cross-Complaint against Moes 1 through 25, on June 2, 2022.

On May 18, 2022, Plaintiff amended his Complaint to name SIG as Doe 3.  SIG filed its Answer to the Complaint on June 16, 2022.

On October 20, 2023, Thrifty filed a notice that it had filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code (title 11 of the United States Code). The notice advised that “as a result of the bankruptcy filing, any further action against ‘the Debtors’ is stayed under Bankruptcy Doe section 362(a).” Thrifty’s notice defined the term “the Debtors” as Thrifty and “certain of its affiliates.”

On October 25, 2023, Plaintiff filed the instant motion.  Plaintiff’s motion is entitled as “Notice of Motion and Motion for Relief from Automatic Stay to Proceed Against Defendants Not Subject to the Stay.”  In the text of the motion, Plaintiff states that he is seeking “an order directing that this action is only stayed as to defendants Thrifty Payless, Inc. and Rite Aid Corporation, but not as to the remaining three defendants.”

On December 1, 2023, Iovate filed a response to the motion.  Some rhetoric aside, Iovate agrees that the automatic stay set forth in the Bankruptcy Code does not apply to the non-debtor co-defendants in this litigation (Iovate, Steuben, and SIG).

Legal Standard

As soon as a bankruptcy case is filed, an automatic stay immediately goes into effect and generally prevents creditors, and other parties, from taking most actions against property of the bankruptcy estate, the debtor, and the debtor's property. This injunction continues until a bankruptcy court order lifting the stay has been entered or the stay has expired. (11 USC § 362.) The stay arises automatically by operation of law upon filing of the bankruptcy petition. No court order is required to activate the stay. (11 USC § 362(a).)

Judicial proceedings in violation of the automatic stay are void. (Sindler v. Brennan (2003) 105 Cal.App.4th 1350, 1353 [trial court’s dismissal of case violated automatic stay and was void on its face]; see also, e.g., Hillis Motors, Inc. v. Hawaii Auto. Dealers' Ass'n (9th Cir.1993) 997 F.2d 581, 585-86 [“actions taken in violation of the automatic stay are void”].)

Discussion

Thrifty filed a petition under chapter 11 of the Bankruptcy Code on October 15, 2023.  Under the automatic stay of federal bankruptcy law, the action against Thrifty is stayed.

Any request for relief from the automatic stay must be addressed to the bankruptcy court, not to this Court.  This Court has no power to grant relief from the automatic stay.

The automatic stay as to Thrifty has no effect, however, on unaffiliated co-defendants in civil litigation, including, in this case, Iovate, Steuben, and SIG. (Plaintiff’s claims against Rite Aid were dismissed almost three years ago.) As the Court of Appeal has explained, “the automatic stay of judicial proceedings against a debtor in bankruptcy does not apply to nondebtor codefendants.” (Higgins v. Super. Ct. (2017) 15 Cal.App.5th 973, 979 [quoting Cross v. Cooper (2011) 197 Cal.App.4th 357, 365].) Accordingly, this case may proceed against Iovate, Steuben, and SIG, and no court order granting “relief” from the automatic stay, or “directing” the parties regarding the scope of the automatic stay, is needed.

Plaintiff states that some courts have made an exception to this rule when the debtor is an indispensable party.  (Motion, at pp. 4-5.)  Here, however, no party contends that Thrifty is an indispensable party as to the claims against the other defendants or that the claims against the other defendants should be (or are) stayed.  (Ibid.; see also Response, at p. 3.)

Conclusion

Plaintiff’s motion is DENIED on the ground that it seeks an affirmative order that is unnecessary on a matter that is undisputed. 

By operation of law, this action is stayed as to Thrifty Payless, Inc. only.  This action is not stayed as to Defendants Iovate Health Sciences U.S.A. Inc., Steuben Foods, Inc., and SIG Combibloc, Inc.

Moving party is ORDERED to give notice.