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In Matter of State of New York State v. DeFranco Ford, Inc., 202 AD2d 593, 609 N.Y.S.2d 266, 2nd Dept., 1994., (at 594) the Appellate Division stated "The clear language of 11 USC § 362 indicates that the provisions of the statute will only serve to stay proceedings against the debtor (see, Carley Capital Group v. Fireman's Fund Ins. Co., 889 F.2d 1126).
Summary of this case from Fountainview at Coll. Rd. v. Pearl Riv. Plumbing, HeatingOpinion
March 21, 1994
Appeal from the Supreme Court, Dutchess County (Beisner, J.).
Ordered that the judgment is affirmed insofar as appealed from, with costs.
In November 1991, the State of New York commenced this proceeding pursuant to Executive Law § 63 (12), against the DeFranco Ford, Inc., a car dealership, and its principal, seeking, inter alia, injunctive relief and restitution for repeated fraudulent acts. DeFranco Ford, Inc., had filed a petition for bankruptcy in April 1991. The appellant Ford Motor Credit Company, a sales finance company which had taken assignments of retail installment contracts from DeFranco Ford, Inc., and others were also made parties to the proceeding.
We reject the appellant's contentions that it was improperly joined in the action. The appellant's liability to consumers arises from its status as assignee of the retail installment contracts. Pursuant to Personal Property Law § 302 (9), the appellant, as an assignee, is subject to "all claims and defenses of the buyer against the seller arising from the sale." As such, the appellant was properly made a party to afford complete relief (see, CPLR 1001 [a]).
We reject the appellant's further contention that the judgment is void absent an order granting relief from the automatic stay provisions of the Federal bankruptcy laws. The clear language of 11 U.S.C. § 362 indicates that the provisions of the statute will only serve to stay proceedings against the debtor (see, Carley Capital Group v. Fireman's Fund Ins. Co., 889 F.2d 1126). An automatic stay of proceedings accorded by 11 U.S.C. § 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the debtor (see, Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194; see also, Rosenbaum v. Dane Murphy, 189 A.D.2d 760). Thompson, J.P., Santucci, Friedmann and Florio, JJ., concur.