Opinion
June 5, 1997
Appeal from the Supreme Court (Rose, J.).
This case involves a breach of contract claim for the sale of real property owned by plaintiff in the Town of Chenango, Broome County. The contract was entered into as a result of a public auction. Defendants, the contract vendees, answered and counterclaimed seeking rescission of the contract on the ground that plaintiff was incapable of conveying marketable title because the property lacked a legal right of access.
During the pendency of the instant appeal, on February 10, 1997, plaintiff filed a chapter 13 (11 USC) petition in bankruptcy pursuant to the Federal Bankruptcy Code. While there is a question as to the ability of an estate to file such a petition, that issue must be resolved by Bankruptcy Court. The immediate issue for our determination is whether the filing operates as a stay of the instant appeal.
The automatic stay imposed by 11 U.S.C. § 362 is applicable only to a "proceeding against the debtor" ( 11 U.S.C. § 362 [a] [1]; see, Koolik o Markowitz, 40 F.3d 567, 568). The stay is mandatory and operates even at the appellate level ( see, e.g, Parker v Bain, 68 F.3d 1131, 1135; Cathey v. Johns-Manville Sales Corp., 711 F.2d 60, 62; see generally, Maritime Elec. Co. v. United Jersey Bank, 959 F.2d 1194, 1206). Significantly, an answer that asserts a counterclaim against a plaintiff who subsequently files a petition in bankruptcy "is an `action or proceeding against the debtor' within the meaning of [the statute], notwithstanding the fact that the plaintiff initiated the lawsuit" ( Koolik v Markowitz, supra, at 568, quoting 11 U.S.C. § 362 [a] [1]).
Because plaintiff appeals from a judgment which, inter alia, awarded defendants rescission of the contract and the return of their down payment as requested in their counterclaim ( compare, Carley Capital Group v. Fireman's Fund Ins. Co., 889 F.2d 1126, 1127), we conclude that this appeal is stayed by plaintiffs bankruptcy petition until Bankruptcy Court grants relief from the automatic stay or it lapses ( see, Parker v. Bain, supra, at 1137; Koolik v. Markowitz, supra; cf., Beltrone v. General Schuyler Co., 229 A.D.2d 857).
Cardona, P.J., Mercure, Crew III and White, JJ., concur.
Ordered that the decision is withheld, and appeal stayed until further order of Bankruptcy Court.