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Reyes v. McCarley12/30/2004
ORDER REVERSED AND CASE REMANDED WITH DIRECTIONS
Graham and Criswell, JJ., concur
In this personal injury action, plaintiff, Rose Reyes, appeals the order dismissing her claims against defendant, Keven M. McCarley, for failure to prosecute. We reverse and remand for further proceedings.
Plaintiff filed her complaint in January 2002, alleging that she was injured in a car accident negligently caused by defendant. Defendant was served with the complaint and thereafter filed his answer. In May 2002, defendant filed a notice that he had filed for Chapter 7 bankruptcy , which triggered the automatic stay of all proceedings, including this action.
In September 2002, defendant was granted a bankruptcy discharge under 11 U.S.C. § 727 of the United States Bankruptcy Code. Defendant moved to dismiss this action based on his bankruptcy discharge. The trial court granted the motion and dismissed the case with prejudice.
In October 2002, plaintiff filed an objection to the motion to dismiss, asserting that defendant's discharge would not preclude her from pursuing a judgment solely to the extent of any insurance proceeds. Specifically, she argued:
In this case, Plaintiff does not seek to impose personal liability against the Debtor for purposes of seeking satisfaction of any judgment entered from the Debtor/Defendant or any of his assets, or from any other property of his former bankruptcy estate or otherwise. Instead, Plaintiff seeks to satisfy any judgment entered herein solely from the hidden, but altogether real party in interest herein, State Farm Mutual Automobile Insurance Company.
Plaintiff attached to her motion a letter from defendant's automobile liability insurer to defendant indicating that plaintiff had offered to settle the claim against defendant for an amount within policy limits. The letter further stated that the insurer would pay the cost of defending the lawsuit and would "protect [defendant] from any monetary award."
The trial court withdrew its order of dismissal and granted defendant leave to file a reply addressing the issue of whether the bankruptcy discharge "precluded a proceeding against the debtor's insurance carrier." In his reply, defendant contended that only the bankruptcy court could resolve the issue of whether plaintiff could continue prosecution of her claim against defendant. The trial court agreed and in November 2002 entered an order staying this action pending a ruling from the bankruptcy court as to whether it would grant relief from the automatic permanent injunction provided for under 11 U.S.C. § 524(a).
Plaintiff filed three motions to reconsider the court's ruling. The first two were struck by the court based on its finding that the language was scandalous. The third motion to reconsider was denied in February 2003.
In April 2003, plaintiff filed a case status report, in which she stated that she was "ready, willing and able" to pursue her claims with respect to defendant's liability insurance proceeds, but would not seek to satisfy her claims from any of defendant's individual assets. Plaintiff asserted in the report that the claims were not stayed by virtue of the permanent injunction issued by the bankruptcy court and indicated that her counsel did not intend to file a motion for relief from the permanent injunction in bankruptcy court. Plaintiff requested a case management conference.
Defendant moved to dismiss for failure to prosecute. The court granted the motion.
Plaintiff argues that the trial court erred in granting the motion to dismiss because it was based upon the faulty premise that this action could not
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