The Tennessee Court of Appeals recently issued an excellent opinion that sets out how a defendant's bankruptcy affect the timeliness of a tort action filed against the defendant in McCollough v. Vaughn,
No. M2016-01458-COA-R3-CV (Tenn. Ct. App. Apr. 27, 2017). Here is the syllabus from the slip opinion:
This action arises out of a two-car accident. Prior to the commencement of this action, the
driver of the vehicle who is the defendant in this action filed a petition in bankruptcy
court. Shortly thereafter, and being unaware of the bankruptcy proceeding, Plaintiffs
commenced this action naming the driver of the other vehicle as the only named
defendant. Summons was issued for the defendant driver as well as Plaintiffs’ uninsured
motorist insurance carrier. Summons was served on the carrier; however, summons for
Defendant was returned unserved, and more than a year passed before Plaintiffs
requested issuance of an alias summons. Upon motions of the defendant and the
uninsured motorist carrier, the trial court dismissed all claims as time barred upon the
finding that Plaintiffs failed to comply with Tenn. R. Civ. P. 3 by obtaining the issuance
of a new summons for service of process on the defendant within one year of the issuance
of the previous summons that was not served. Plaintiffs appeal contending their claims
are not time barred because the defendant filed her bankruptcy petition prior to the
commencement of this action and Tenn. Code Ann. § 28-1-109 expressly states, “When
the commencement of an action is stayed by injunction, the time of the continuance of the
injunction is not to be counted.” We agree. The bankruptcy court’s automatic stay not
only enjoined the commencement of this action but the issuance of process, and Tenn.
Code Ann. § 28-1-109 expressly states that the time of the continuance of an injunction is
not to be counted in calculating the statute of limitations. The bankruptcy injunction
remained in effect for 202 days; therefore, that period is not to be counted. With the
addition of 202 days to the period within which Plaintiffs could obtain the issuance of an
alias summons under Tenn. R. Civ. P. 3, the issuance of the alias summons was timely.
As a consequence, the trial court’s order dismissing this case is vacated, and this matter is
remanded with instructions to reinstate the complaint as to the defendant driver and the
uninsured motorist carrier for further proceedings consistent with this opinion.
Here is a link to the slip opinion:
http://www.tncourts.gov/sites/default/files/mccullough.robert.opn_.pdf
NOTE: This is a must-read opinion for any Tennessee practitioner who handles tort cases.