United States District Court, N.D. Mississippi, Oxford Division
ORDER DENYING MOTION TO DISMISS
B. BIGGERS, JR., UNITED STATES DISTRICT JUDGE.
before the court is the defendant's motion to dismiss.
The court held a hearing on the motion and heard supporting
and opposing arguments from the parties on September 16,
2019. Upon due consideration of the motion, response, and
applicable authority, the court is ready to rule.
plaintiff, Hattie Young, alleges she was injured on May 12,
2013, while a guest of Harrah's Casino and Veranda Hotel
in Tunica County, Mississippi, a property owned by the
defendant, BL Development Corporation. Prior to the
plaintiff's filing suit, the defendant filed its Chapter
11 bankruptcy petition in the United States Bankruptcy Court
for the Northern District of Illinois, and an automatic stay
went into effect. The automatic stay was lifted on October 6,
2017, and replaced by an injunction order entered by the
bankruptcy court which, pursuant to its own terms, had the
same effect as the automatic stay, stating in pertinent part:
all Entities who have held, hold, or may hold Claims . . .
are permanently enjoined, from and after the Effective Date,
from taking any of the following actions against, as
applicable, any or all of the Debtors . . . (1) commencing or
continuing in any manner any action or other proceeding of
any kind on account of or in connection with or with the
respect to any such Claims or Interests. . . .
bankruptcy court entered an order modifying this injunction
on January 28, 2019, allowing the plaintiff to bring the
present action within thirty days of the date of the order.
Accordingly, the plaintiff filed her complaint for negligence
against the defendant on February 20, 2019.
parties agree that Mississippi's three-year statute of
limitations applies to the plaintiff's negligence claim.
See Miss. Code Ann. § 15-1-49. Had the
defendant not filed its bankruptcy petition, the limitations
period applicable to the plaintiff's claim would have
expired on May 12, 2016. The automatic stay triggered by the
bankruptcy filing, however, prevented the plaintiff from
initiating litigation. See 11 U.S.C. § 362. The
bankruptcy code provides, with respect to potential claims
against debtors, that
if . . . a period for commencing  a civil action [against
the debtor] has not expired before the date of the filing of
the petition, then such period does not expire until the
later of - (1) the end of such period, including any
suspension of such period . . . or (2) 30 days after notice
of the termination or expiration of the stay under section
362. . . .
11 U.S.C. § 108(c).
defendant argues that because the applicable limitations
period would have run during the pendency of the automatic
stay, the plaintiff was required to file the present action
within thirty days after the stay was lifted in accordance
with 11 U.S.C. § 108(c)(2). In response, the plaintiff
asserts that the statute of limitations was tolled not only
during the automatic stay, but also during the period in
which the bankruptcy court's subsequent injunction order
was in effect because that injunction order, like the
automatic stay, prohibited the plaintiff from filing a claim
against the defendant. In support, the plaintiff notes that
Section 108(c)(1) incorporates state tolling provisions.
See HSBC Bank USA, N.A. v. Crum, 907 F.3d
199 (5th Cir. 2018); Rogers v. Corrosion Products,
Inc., 42 F.3d 292 (5th Cir. 1995). The plaintiff
points to Mississippi's tolling statute which provides:
When any person shall be prohibited by law, or restrained or
enjoined by the order, decree, or process of any court . . .
from commencing or prosecuting any action or remedy, the time
during which such person shall be so prohibited, enjoined or
restrained, shall not be computed as any part of the period
of time…for the commencement of such action.
Miss. Code Ann. § 15-1-57.
plaintiff asserts that because both the automatic stay and
injunction order prohibited her from commencing her action,
the three-year statute of limitations was tolled during that
time pursuant to Mississippi's tolling statute,
incorporated via Section 108(c) of the bankruptcy code.
According to the plaintiff's argument, the period was
tolled from January 15, 2015, the date on which the defendant
filed its bankruptcy petition, until January 28, 2019, the
date the bankruptcy court entered its order modifying the
injunction order to allow the plaintiff to file suit against
the defendant. If this court adopts this rationale, the
plaintiff's complaint will be deemed timely filed.
defendant contends, however, that the tolling provision found
in Section 108, which incorporates state tolling law, does
not apply to the injunction order at issue here because the
injunction order was entered pursuant to 11 U.S.C. §
524, which is clearly excepted under Section 108.
See U.S.C. § 108 (stating “[e]xcept as
provided in section 524. . . .”); see also In re
WorldCom, Inc., 362 B.R. 96, 111 (S.D.N.Y. 2007)
(finding that a statute of limitations was not tolled during
the injunction period because Section 108 did not apply, as
the injunction order was entered under Section 524, and
because “[n]o state or federal statute relieved [the
creditor] from commencing” the action). The defendant
argues that even if the limitations period was tolled during
the pendency of the automatic stay, which the defendant
asserts is incorrect, once the automatic stay was lifted, the
period once again began to run, despite the injunction order.
According to the defendant's calculations, the
limitations period would have expired on February 2, 2019,
and because the plaintiff did not file the instant action
until February 20, 2019, her claim is untimely.
court finds that, while the tolling provision found in
Section 108 may not directly apply to the injunction order
entered pursuant to Section 524, that does not mean that the
limitations period was not tolled due to the injunction
order. It is well-settled that federal courts refer to state
law for tolling rules just as they do for statutes of
limitation. Wallace v. Keto, 549 U.S. 384 (2007). In
the present case, the parties agree that Mississippi's
three-year statute of limitations applies. It then logically
follows that Mississippi tolling provisions also apply. The
broad language of the tolling provision cited by the
plaintiff, Miss. Code Ann. § 15-1-57, undoubtedly
applies under the circumstances of this case. It cannot be
legitimately disputed that the automatic stay and injunction
order at issue here prohibited and enjoined the plaintiff
from commencing her action against the defendant. Though, as
the defendant argues, the plaintiff could have petitioned the
bankruptcy court for relief from the stay or order, the
applicable tolling provision requires no such action. See
Trustmark Nat'l Bank v. Pike County Nat'l Bank,
716 So.2d 618 (Miss. 1998). Moreover, the plaintiff asserts
she engaged in the ...