The Court has considered the following submissions in connection with this matter: 1. Defendant McWane, Inc.’s Notice of Motion, Affirmation of Patrick J. Dwyer, Affidavit of Kim Ferguson, inclusive of Exhibit A; 2. Plaintiffs’ Affirmation In Opposition to McWane’s Motion to Stay by Seth A. Dymond with Exhibits A-D; and 3. Defendant’s Reply Affirmation with Exhibit A. Before the Court is a petition seeking the following relief: (1) A permanent stay of any proceedings pursuant to the Liquidation and Injunction Order by the Chancery for the State of Delaware (the “Bankruptcy Court”) under the Uniform Insurers Liquidation Act, Full Faith and Credit Clause of United States Constitution, and CPLR 2201, as against Arrowood Indemnity Company in Liquidation; (2) 180-day stay of this matter pursuant to the Liquidation and Injunction Order by the Chancery for the State of Delaware (the “Bankruptcy Court”) under the Uniform Insurers Liquidation Act, Full Faith and Credit Clause of the United States Constitution, and CPLR 2201 The Petition is opposed by Plaintiffs in all respects. The Petition is brought by a Defendant in the above captioned matter, (McWane, Inc. (“McWane”)), on behalf of an unincorporated division, Clow Valve Company sued herein as “Clow Valves, a wholly owned subsidiary of McWane, Inc.,” Arrowood Indemnity Company is an insurer of the Defendant named in this asbestos-related litigation. The Defendant, McWane, seeks to stay the proceedings pursuant to the Uniform Insurers Liquidation Act, the Full Faith and Credit Clause of the United States Constitution, and CPLR 2201. On one side of the equation the Court is confronted with concepts of comity, the Uniform Insurers Liquidation Act, as well as the Full Faith and Credit Clause of United States Constitution. On the other side of the equation, the Court sees the Estate of Frances Graziano seeking to prosecute its claims. Of course, a stay pursuant to the aforementioned statutes will delay the prosecution, and to the extent that the defendants are named the prosecution of those claims. Fortunately, a fair and equitable resolution manifests itself in the submissions. The same is found within the Reply Affirmation In Support Of [The] Motion For A Stay Of Proceedings at pages 4 and 5 to wit, At Point v. of Plaintiffs’ affirmation, and continuing thereafter at Paragraphs 36 and 37 of the Dymond Affirmation, Plaintiffs suggest, and movant agrees, that it is entirely appropriate to recognize the practical exigencies, wherein Plaintiffs write: 36. Assuming the stay is applicable to McWane, it is submitted that it should be severed from the main action. CPLR 407 provides that a court may order severance of a party at any time. CPLR 603 provides that a court may order separate trials ‘in furtherance of convenience or to avoid prejudice.’ The decision to grant severance ‘rests soundly in the discretion of the trial court.’ Rapini v. New Plan Excel Realty Trust, Inc., 8 A.D.3d 1013 (4th Dept., 2004). 37. Here, there is no dispute that McWane is not the sole defendant in this action. Severance strikes the appropriate balance between permitting the Plaintiffs to proceed to trial and abiding by the terms of the injunction as it purportedly applies to McWane. Indeed, severance is universally granted as to defendants that file for bankruptcy during the pendency of an action. See, e.g., Weber v. Baccarat, Inc., 70 A.D.3d 487 (1st Dept., 2010) (severance proper where the action was ready to proceed to trial at the time the defendant filed for bankruptcy); Kharmah v. Metropolitan Chiropractic Center, 288 A.D.2d 94 (1st Dept., 2001); Golden v. Moskowitz, 194 A.D.2d 385 (1st Dept., 1993); see also Rapini v. New Plan Excel Realty Trust, Inc., supra. As such, a stay as to one party should ‘not prevent a plaintiff from proceeding on causes of action against [] defendants [with non liquidated insurers].’ Centrust Servs., Inc. v. Guterman, 160 AD.2d 416 (1st Dept., 1990). The same rule should apply here. There are many other defendants named in this action, and there is no indication that other insurers or other defendants are similarly situated in liquidation and as such, Plaintiffs’ claim may go forward without McWane thereby causing no undue burden on Plaintiff’s estate or Plaintiff’s family. Therefore, the Petition, pursuant to CPLR 407 is GRANTED thereby severing Plaintiffs’ claims involving the insureds of Arrowood Indemnity Company, Clow Valve Company. The foregoing constitutes the decision and ORDER of this Court. Dated: February 23, 2024
