Opinion
197 CA 20-00322
06-11-2021
LG 2 DOE, Plaintiff-Appellant, v. Gerald JASINSKI, Defendant-Respondent, The Diocese of Buffalo, N.Y., and Blessed Mother Teresa of Calcutta Parish, Formerly Known as St. James Roman Catholic Church, Defendants.
LIPSITZ GREEN SCIME CAMBRIA LLP, BUFFALO (JOHN A. COLLINS OF COUNSEL), FOR PLAINTIFF-APPELLANT.
LIPSITZ GREEN SCIME CAMBRIA LLP, BUFFALO (JOHN A. COLLINS OF COUNSEL), FOR PLAINTIFF-APPELLANT.
PRESENT: WHALEN, P.J., CENTRA, PERADOTTO, LINDLEY, AND TROUTMAN, JJ.
MEMORANDUM AND ORDER It is hereby ORDERED that the order insofar as appealed from is unanimously reversed in the exercise of discretion without costs, the second ordering paragraph is vacated, the motion is granted in its entirety and the matter is remitted to Supreme Court, Erie County, for further proceedings in accordance with the following memorandum: Plaintiff commenced this action pursuant to the Child Victims Act seeking damages for personal injuries he sustained as a result of sexual abuse allegedly perpetrated in the late 1970s by Gerald Jasinski (defendant), who was purportedly then serving as a priest at defendant Blessed Mother Teresa of Calcutta Parish, formerly known as St. James Roman Catholic Church (Church), operated by defendant Diocese of Buffalo, N.Y. (Diocese). Plaintiff asserted a cause of action against defendant for his alleged intentional conduct that constituted sexual offenses under Penal Law article 130. Plaintiff also asserted causes of action against the Church and the Diocese (collectively, Church defendants) alleging that they knew or should have known of defendant's propensity to commit sexual abuse and that they were negligent and reckless in appointing, training, retaining, and supervising defendant. The Church defendants answered, but defendant, despite being personally served, failed to answer. Plaintiff thereafter moved pursuant to CPLR 3215 for a judgment determining that defendant was in default and directing a determination of damages against defendant. There was no opposition to plaintiff's motion. Supreme Court determined that plaintiff had established his entitlement to a default judgment against defendant. The court further determined, however, that plaintiff's claims against defendant implicated the potential liability and damages against the Church defendants, which were still litigating those issues, and that an award of damages against defendant prior to resolution of those issues would be prejudicial to the Church defendants. The court thus granted plaintiff's motion insofar as it sought a determination that defendant was in default. The court, however, effectively denied that part of the motion seeking a determination of damages by staying entry of a default judgment, pursuant to CPLR 3215 (d), until the conclusion of a trial or disposition of the matter with respect to the non-defaulting Church defendants, at which time damages would be determined. Plaintiff now appeals from the ensuing order to that extent.
As a preliminary matter, we take judicial notice of the fact that, following entry of the order on appeal, the Diocese commenced a chapter 11 bankruptcy proceeding (see MJD Constr. v. Woodstock Lawn & Home Maintenance , 293 A.D.2d 516, 517, 740 N.Y.S.2d 402 [2d Dept. 2002], lv denied 100 N.Y.2d 502, 760 N.Y.S.2d 765, 790 N.E.2d 1194 [2003], rearg denied 100 N.Y.2d 616, 767 N.Y.S.2d 398, 799 N.E.2d 621 [2003] ; Marcinak v. General Motors Corp. , 285 A.D.2d 387, 387, 727 N.Y.S.2d 309 [1st Dept. 2001] ; see generally Matter of Khatibi v. Weill , 8 A.D.3d 485, 485, 778 N.Y.S.2d 511 [2d Dept. 2004] ). We agree with plaintiff, however, that the bankruptcy proceeding does not stay this appeal, which involves only plaintiff and defendant. In general, "the automatic stay provisions of section 362 (a) (1) of the Bankruptcy Code ( 11 USC § 362 [a] [1]) do not apply to non[-]debtor defendants" ( Central Buffalo Project Corp. v. Edison Bros. Stores , 205 A.D.2d 295, 297, 619 N.Y.S.2d 890 [4th Dept. 1994], citing, inter alia, Teachers Ins. & Annuity Assn. of Am. v. Butler , 803 F.2d 61, 65 [2d Cir. 1986] ; see e.g. Deutsche Bank Natl. Trust Co. v. Karlis , 138 A.D.3d 915, 917, 30 N.Y.S.3d 228 [2d Dept. 2016] ; Katz v. Mount Vernon Dialysis, LLC , 121 A.D.3d 856, 857, 994 N.Y.S.2d 661 [2d Dept. 2014] ). Under certain limited circumstances, "[t]he automatic stay can apply to non-debtors, but normally does so only when a claim against the non-debtor will have an immediate adverse economic consequence for the debtor's estate" ( Queenie, Ltd. v. Nygard Intl. , 321 F.3d 282, 287 [2d Cir. 2003] ), such as "when the bankrupt [defendant] is obligated to indemnify a non-debtor defendant" ( Murnane Assoc. v. Harrison Garage Parking Corp. , 217 A.D.2d 1003, 1003, 630 N.Y.S.2d 187 [4th Dept. 1995], citing A.H. Robins Co. v. Piccinin , 788 F.2d 994, 999-1001 [4th Cir. 1986], cert denied 479 U.S. 876, 107 S.Ct. 251, 93 L.Ed.2d 177 [1986]; see Central Buffalo Project Corp. , 205 A.D.2d at 297, 619 N.Y.S.2d 890 ). Here, the automatic stay provisions of 11 USC § 362 do not apply to defendant, a non-debtor, and the record lacks evidence of any circumstances that would warrant extension of the stay to defendant (see Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Oxford Venture Partners, LLC , 13 A.D.3d 89, 89, 786 N.Y.S.2d 161 [1st Dept. 2004] ; Murnane Assoc. , 217 A.D.2d at 1003, 630 N.Y.S.2d 187 ).
With respect to the merits, plaintiff first contends that the court erred in denying his motion in part because, pursuant to CPLR 3215 (d), deferring the entry of judgment and the determination of damages is authorized only upon application of the party seeking a default judgment, and here plaintiff made no such application. We reject that contention. Upon our review of the text of CPLR 3215 (d), as well as "the spirit and purpose of the legislation, which requires examination of the statutory context of the provision as well as its legislative history" ( Nostrom v. A.W. Chesterton Co. , 15 N.Y.3d 502, 507, 914 N.Y.S.2d 725, 940 N.E.2d 551 [2010] [internal quotation marks omitted]; see Altman v. 285 W. Fourth LLC , 31 N.Y.3d 178, 185, 75 N.Y.S.3d 465, 99 N.E.3d 858 [2018], rearg denied 31 N.Y.3d 1136, 81 N.Y.S.3d 360, 106 N.E.3d 743 [2018] ), we conclude that where, as here, a court has before it a motion for a judgment against one defaulting defendant and other non-defaulting defendants, the court is afforded discretion to decide whether the determination of damages against the defaulting defendant should await the disposition of the matter against the non-defaulting defendants (see Sponsor's Mem, Bill Jacket, L 1992, ch 255 at 5; Mem in Support, Bill Jacket, L 1992, ch 255 at 6; Assembly Introducer's Mem in Support, Bill Jacket, L 1992, ch 255 at 8; cf. NY St Bar Assn, Comm on Civ Practice & Rules, Bill Jacket, L 1992, ch 255 at 19-20; see also 7 Weinstein-Korn-Miller, NY Civ Prac: CPLR ¶ 3215.18 [2020]; see generally Caronia v. Peluso , 2016 N.Y. Slip Op. 30311[U], *2, 2016 WL 799364 [Sup. Ct., Suffolk County 2016], affd 170 A.D.3d 649, 96 N.Y.S.3d 75 [2d Dept. 2019] ; Revankar v. Tzabar , 16 Misc. 3d 1127[A], 2007 N.Y. Slip Op. 51590[U], *6-7, 2007 WL 2385091 [Sup. Ct., Kings County 2007] ).
We nevertheless agree with plaintiff that the court's decision to stay entry of judgment and defer the determination of damages against defendant until resolution of the matter with respect to the Church defendants constitutes an improvident exercise of its discretion, and we therefore substitute our own discretion "even in the absence of abuse [of discretion]" ( Brady v. Ottaway Newspapers, Inc. , 63 N.Y.2d 1031, 1032, 484 N.Y.S.2d 798, 473 N.E.2d 1172 [1984] ; see generally Alliance Prop. Mgt. & Dev., Inc. v. Andrews Ave. Equities, Inc. , 70 N.Y.2d 831, 833, 523 N.Y.S.2d 441, 517 N.E.2d 1327 [1987] ). To the extent that prejudice to non-defaulting defendants is an appropriate consideration under CPLR 3215 (d) (see Revankar , 2007 N.Y. Slip Op. 51590[U], *6-7 ), we conclude that any prejudice to the Church defendants is relatively insignificant. While plaintiff's damages arising from the intentional sexual abuse by defendant are certainly closely related to the claims of negligence and recklessness against the Church defendants, a determination of damages against defendant will not be given preclusive effect against the Church defendants inasmuch as they will not have had a full and fair opportunity to litigate that issue in the separate damages proceeding involving only defendant (see Taylor v. Pescatore , 102 A.D.2d 867, 867, 477 N.Y.S.2d 41 [2d Dept. 1984] ; Gallivan v. Pucello , 38 A.D.2d 876, 876, 329 N.Y.S.2d 211 [4th Dept. 1972] ). Instead, the Church defendants will be afforded a full and fair opportunity to contest both liability and damages for their own alleged negligence and recklessness, which, although related, is distinct from the intentional conduct for which defendant is liable in default. Conversely, plaintiff may suffer significant prejudice by further delay of a determination of damages against defendant. As with stays generally, a postponement of a damages determination "can easily be a drastic remedy, on the simple basis that justice delayed is justice denied" (Patrick M. Connors, Practice Commentaries, McKinney's Cons Laws of NY, CPLR C2201:7). In that regard, we agree with plaintiff that further delay undermines the purpose of the Child Victims Act, which is to "finally allow justice for past and future survivors of child sexual abuse, help the public identify hidden child predators through civil litigation discovery, and shift the significant and lasting costs of child sexual abuse to the responsible parties" (NY Comm Report, 2019 NY Senate Bill 2440). Given the uncertainty as to when plaintiff's claims may be resolved against the Church defendants, additional delay may hinder his efforts to prove damages against defendant and secure a final judgment, particularly considering defendant's age and the prospect that defendant's assets may be dissipated in the interim. Although judicial economy, which is an important consideration under CPLR 3215 (d) (see Sponsor's Mem, Bill Jacket, L 1992, ch 255 at 5; Assembly Introducer's Mem in Support, Bill Jacket, L 1992, ch 255 at 8), may favor a single damages proceeding involving both the defaulting and non-defaulting defendants, we conclude that such consideration does not outweigh the significant prejudice that may inure to plaintiff, who has expressed his desire to move forward against defendant regardless of the additional economic and emotional costs in doing so.
We therefore reverse the order insofar as appealed from in the exercise of discretion, vacate the second ordering paragraph, and grant the motion in its entirety, and we remit the matter to Supreme Court for a determination of damages pursuant to CPLR 3215 (b). Finally, to the extent that plaintiff is enjoined from prosecuting this action against defendant as a result of a preliminary injunction recently issued by the bankruptcy court, we note that he may pursue whatever relief therefrom is available to him including, as stated by the bankruptcy court, a motion seeking relief from that court.