OPINION AND ORDER
Bеfore the Court is Defendants’ motion, pursuant to Rule 56(b) of the Federal Rules of Civil Procedure, for an order granting summary judgment in this legal malpractice action. For the reasons set forth below, Defendants’ motion is denied.
Background
This legal malpractice action centers around this Court’s dismissal, and the Second Circuit’s affirmance, of Plaintiffs personal injury action on the grounds that it was time-barred. Plaintiff has invoked this Court’s diversity jurisdiction.
In 1986, Plaintiff was employed by United States Lines and alleges that on August 14 he was seriously injured when struck in thе head by a piece of equipment. He was serving at that time on the S.S. American Georgia, a vessel owned by United States Lines, Inc.
On November 24, 1986 United States Lines, Inc. and United States Lines (S.A.) Inc. filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. These petitions were filed in the United States Bankruptcy Court for the Southern District of New York. On the same day, the Bankruptcy Court entered a restraining order prohibiting commencement or continuation of suit on all pre-petition causes of action against Debtors. An automatic stay of actions also commenced by operation of law. By this time Plaintiff had not filed any action based on the August 14, 1986 incident, and the stay and restraining order prevented him from doing so. However, the Plaintiff filed a proof of claim in the bankruptcy proceeding on May 14,1987.
The bankruptcy proceeding resulted in a reorganization. On August 6, 1992, the Bankruptcy Court entered an order terminating the automatic stay and restraining order. Plaintiffs attorneys received notice of the termination on August 17, 1992. The effect was to allow Plaintiff to commence a lawsuit based upon his personal injury claim. Plaintiffs attorneys filed a complaint in this Court on November 12, 1992, stating a claim of negligence under the Jones Act and a claim of unseaworthiness under the General Maritime Law.
Defendants United States Lines, Inc., and United States Lines (S.A.) Inc. Reorganization Trust moved for summary judgment dismissing the complaint on the ground that it was barred by the statute of limitations. Chief Judge Thomas P. Griesa granted the motion.
Skywark v. United States Lines, Inc.,
... [I]f applicable nonbankruptcy law ... fixes a period for commencing or continuing a civil action in a court other than a *559 bankruptcy court on a claim against the debtor ... and such period 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 occurring on or after the commencement of the case; or
(2) 30 days after notice of the termination or expiration of the stay ... with respect to such claim.
Id.
(quoting 11 U.S.C. § 108(c)). Judge Griesa concluded that “a plаintiff may bring a civil action against a debtor within the regular limitation period or up to 30 days after notice of the termination of the bankruptcy stay, whichever is later.”
Id. As
the regular limitation period had expired before the termination of the bankruptcy stay, Plaintiff Skywark had until 30 days after notice of the termination to commence a civil action. Judge Griesa found that Plaintiff thus had until 30 days after August 17, 1992, or until September 16, 1992 in which to file suit. Because Plaintiff did not file until November 12, 1992, Judge Griesa held that the plain language of 11 U.S.C. § 108(с) time-barred Plaintiff’s suit.
Id.
at *2 (citing
Aslanidis v. United States Lines, Inc.,
Plaintiff appealed Judge Griesa’s ruling to the Second Circuit. Plaintiff argued that his claims were not time-barred because maritime law provides for tolling of the limitations period where an automatic stay prevents plaintiff from bringing suit, and this non-bankruptcy tolling rule is incorporated by reference into the extension of time provision of the bankruptcy code. The Circuit rejected Plaintiff’s argument, applying its reasoning in
Aslanidis v. United States Lines, Inc.,
Plaintiff subsequently filed the instаnt legal malpractice action against Defendants, Henry Isaacson, Esq. and Isaacson, Schiow-itz, Korson & Solny, who represented Plaintiff in his personal injury action. Plaintiff alleges that Defendants breached their duty to exercise reasonable care in providing Plaintiff with competent legal representation by not seeking to lift the automatic stay so that Plaintiff’s claims could be prosecuted, and by failing to timely file Plaintiffs complaint.
Defendants now move for summary judgment, claiming that their conduct was reasonable, that attorneys may not be liable for “honest mistakes of judgment,” and that at the time the personal injury action was commenced, all of the relevant case law indicated that the statute of limitations had not expired. On October 31,1996, this Court heard oral argument on the instant motion.
Discussion
A. Legal Standards
A motion for summary judgment may be granted under Fed.R.Civ.Pro. 56 if the entire record demonstrates that “there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.”
Anderson v. Liberty Lobby,
In this diversity case, the substantive law of New York governs as to attorney liability. An attorney is liable for malpractice if it can be proved that his conduct fell below the ordinary and reasonable skill and knowledge commonly possessed by a mem
*560
ber of the profession.
Grago v. Robertson,
B. The “Reasonableness” of Defendants’ Course of Conduct
In support of their summary judgment motion, Defendants argue that they cannot be found liable because, at worst, they made an “honеst mistake of judgment” and they took a reasonable course of conduct under the circumstances. At the time the bankruptcy stay was lifted, Defendants allege that “all appellate authority held that the statute of limitations was tolled during the pendency of a bankruptcy stay.” Def. Mem. in Supp., at 5, 7-9 (citing
Garbe Iron Works, Inc. v. Priester,
Defendants contend that where courts used the word “toll” with regard to statutes of limitations, they reasonably viewed “toll” to mean that the statute of limitations stopped when the stay was imposed and began running again upon termination of the stay. Defs. Reply Mem. in Supp., at 7. Further, Defendants argue that the First Circuit Court of Appeals, the only appellate court to have spoken on the issue in the context of a Jones Act proceeding, ruled as Defendants wish the Second Circuit had in
Aslanidis.
Defendants point to
McKinney v. Waterman Steamship Corp.,
Here, however, the running of the statute of limitations was suspended on December 1, 1983, when Waterman [Stеamship Corporation] filed for reorganization. See 11 U.S.C. § 362 (automatically staying commencement of actions against bankruptcy debtors).
Thus, nearly two years had passed before the clock was suspended — leaving twelve and a half months in which McKinney might commence his action after the clock began running again.
Defendants assert that the Second Circuit’s Aslanidis decision, upon which Judge Griesa and the Circuit relied in finding Plaintiffs claim time-barred, came down more than ten months after the Defendants commenced Plaintiffs personal injury action, whereas McKinney preceded the filing in this case. Aslanidis affirmed an October 16, 1992 dismissal order by this Court, which *561 was thus not available for inspection by the Defendants until 41 days after the 30-day period of § 108(e)(2) had expired. Defendants further contend that Aslanidis was the first appellate decision holding that a toll does not automatically arise during the рen-dency of a bankruptcy stay. Defendants thus argue their conduct was reasonable, given the state of the law at the time, and they cannot be held liable for failing to foresee a split in authority on the issue.
Plaintiff opposes Defendants’ summary judgment motion on the grounds that Defendants undertook an unreasonable course of action. Plaintiff cited cases to demonstrate that at the time the bankruptcy stay was lifted, contrary to Defendants’ assertions, the state of the law was unsettled аs to the tolling effect of § 108(c). Because of this unsettled state of the law, Plaintiff contends that Defendants acted unreasonably in choosing a course of conduct, i.e. not filing the complaint within 30 days after receiving notice that the stay was lifted, that “so manifestly risked the loss of his client’s claims.” Pls.Mem. in Opp., at 18.
Plaintiff has offered sufficient evidence to demonstrate to the Court that the case law was unsettled at the time the stay was lifted. Upon an examination of the eases cited by Plaintiff and Defendants, and through the Court’s own research into the law as it existed in 1992, it is clear that there was a divergence of authority as to the “tolling” effect of § 108(c). In fact, courts disagreed even as to the definition of “toll” with regard to § 108(e).
At the time Defendants filed Plaintiffs action, courts viewed § 108(e) in three ways. Some courts held that § 108(c) “tolls” or “suspends” statutes of limitations so that the clock stopped running upon imposition of the bankruptcy stay, to pick up where it left off when the stay terminated.
See e.g., McKinney v. Waterman Steamship Corp.,
Other сourts held that § 108(c) “tolls” or “suspends” the expiration of the statute of limitations until 30 days after notice of termination of the stay.
See e.g., In re Richardson Builders, Inc.,
Yet, other courts held that section 108(c) did not “toll” or “suspend” statutes of limitation, but merely “extended” the right to bring an action for 30 days following notice of termination of the stay.
See e.g., In re Coan,
Defendants counterargue, however, that even if the law was unsettled throughout the country as to the tolling effect of § 108(c), in the case of
In re Morton,
Viewing the legal landscape as it existed in August of 1992, this Court does not draw the same conclusions from
Morton
as do the Defendants. The
Morton
court held “that § 108(c) ... tolls New York’s ten-year period until the automatic stay is terminated.”
The question presented in Morton was whether a judgment lien, normally valid under New York law for ten years, remains enforceable after expiration of the ten-year period when during that period the property subject to the lien becomes part of a bankrupt estate protected by the automatic stay pursuant to bankruptcy law. A bank held a judgment lien on the debtor’s property, which was docketеd on December 10, 1975. The debtor filed for bankruptcy on October 26, 1982. In late 1985, about the time the hen was due to expire under state law, the bank filed for extension of its judgment hen. The New York Supreme Court issued an order extending the hen “for as long as plaintiff is stayed by defendant Joan Morton’s filing of a petition in Bankruptcy, plus three months after the lifting of such stay.” Flushing National Bank v. Trident Construction Corp., No. 24949, Motion No. 15,076 (N.Y.Sup.Ct. February 25, 1986). On June 6, 1986, Morton moved in bankruptcy court for an order avoiding the bank’s judgment hen on the ground that the bank failed to properly extеnd its hen pursuant to N.Y.Civ.Prac. L. & R. § 5203(b) (McKinney 1978). The bankruptcy court denied Morton’s motion, and Morton appealed to the district court, and then to the Circuit. *563 Among other grounds, the bank argued before the Circuit that under § 108(c),
the running of the ten-year expiration period governing the bank’s judgment lien was suspended on October 26, 1982 while the lien was still less than seven years old, so that, under § 108(c)(2) of § 108(c) the bank will have 30 days after the automatic stay is terminated to enforce its claims under the protection of the lien or to take steps to further extend the lien. 3
Morton,
The Circuit surmised that no other circuit court had addressed the question “whether § 108(c) tolls the expiration of periods governing the life of statutory liens” and that bankruptcy courts are split on the issue. Id. at 566 (emphasis added). The Circuit concluded that if a limitation period was allowed to run and subsequently expire during a bankruptcy stay, it “would give the debtor the power to eliminate certain secured claims simply by filing for bankruptcy at the appropriate time and then allowing the limitation period to run while it rеmained under the protection of the automatic stay.” Id. at 567. The Court found that where the limitation period governing the lien had not expired at the time Morton commenced her bankruptcy proceeding, “the running of the period is tolled pursuant to § 108(c)(1), (2).” Id. at 566.
The difficulty in interpreting
Morton
is that the Circuit never stated exactly what interpretation of “toll” it was adopting when used in the context of § 108(c). In holding that under § 108(c) the limitation period was “tolled” the Circuit cited three cases that agreed on one principle regarding § 108(с)— the statute of limitations will not be allowed to expire during a stay such that once the stay is lifted, the debtor is free of all claims which were valid prior to the stay.
Id.
at 566 (citing
In re Victoria Grain Co.,
Consequently, a close analysis of
Morton
reveals only one limited holding: § 108(c) tolls the expiration of a statute of limitations
during
a bankruptcy stay, or until that automatic stay is terminated. Once the stay is terminated,
Morton
does not indicate what the effect of the “toll” will be.
Morton
reaches no explicit conclusion as to whether a plaintiff, such as Mr. Skywark, will have 30 days to file his action after receiving notice of the termination, or whether he will have whatever time was left on the statute of limitations when the stay was imposed.
Morton
holds only that § 108(c) prevents the expiration of the statute of limitations on a claim, such as Mr. Skywark’s, that was valid when the debtor filed for bankruptcy. The Circuit never reached how much time a claimant had to file his claim upon termination of the stay.
See e.g., In re Hunters Run Ltd. Partnership,
Morton could not have definitively told the Defendants that the limitations period for filing Plaintiffs claim stopped running when the debtor filed for bankruptcy, and began running again upon notice of termination of the stay. In light of the very unsettled caselaw in 1992 as to § 108(c)’s “tolling” effect, the fact that Morton cited cases which took different views as to the “tolling” effect, that the bank believed it had no more than 30 days to file under § 108(c) and the Circuit did not disagree, and that Morton only explicitly addressed what happened during the stay, this Court cannot make a finding, as a matter of law, that the Defendants took a reasonable course of conduct under the circumstances.
Defendants knew with certainty that Plaintiffs claim would still be valid upon termination of the stay; they could not know whether they had any longer than 30 days to file his claim upon receiving notice of termination of the stay. The Second Circuit had not definitively ruled on the issue, and the caselaw throughout the country was unsettled. Where a client allegedly suffered serious injury, his claim accrued almost six years eаrlier, and the law was unclear as to whether the lawyer would have any more than 30 days to file the claim upon termination of a bankruptcy stay, this Court cannot find that a lawyer pursued a reasonable course of conduct by waiting several months after the stay to file, where that decision so manifestly risked the loss of his client’s claims and deprived the client of his day in court.
Plaintiff also put forward evidence that Defendants may not have made an “honest mistake of judgment,” and therefore, summary judgment must be precluded. Under New York law, an attorney may not be liable for “honest mistakes of judgment,”
Bernstein v. Oppenheim & Co.,
Plaintiffs have submitted an affidavit which raises a genuine issue of material fact as to Defendants’ assertion that they reasonably interpreted Morton to mean that § 108(e) tolled the statute of limitations such that the clock stopped during the life of the stay, and then began running again upon termination of the stay. The affidavit of Plaintiffs wife, Esterlene N. Skywark, states that “Mr. Isaacson knew that he had only 30 days to file the ease.” E. Skywark Aff. ¶ 3. Mrs. Skywark alleges that when her husband received a letter stating that the stay had been lifted, she called “Mr. Isaacson to make sure he got the papers and [to] ask what was going to happen. He said to me, ‘don’t worry, we have 30 days to file and I’m on top of things.’ ” Id. When the Skywarks learned that the case was time-barred, Mrs. Skywark stated:
... Mr. Isaacson admitted that he filed it too late. One time, he said sort of apologetically, that he was getting old and “sometimes things slide by.” Another time I talked to him, the reason he gave me for filing Peter’s case too late was that his secretary’s typewriter was broken and that she didn’t get the papers ready! I asked him how in a big office with lots of lawyers and secretaries around he couldn’t get the papers typed up somehow, and then he said something about his secretary being out sick.
Id. ¶4. In their reply papers, Defendants include an affidavit by Mr. Isaacson denying ever having made these statements. Mr. Isaacson asserts Mrs. Skywark “invented” this account. Isaacson Aff. ¶ 1. However, Mrs. Skywark’s affidavit bears directly on the issue of whether Defendants made an “honest mistake of judgment,” because if they did not, they face potential liability.
Further, if Mr. Isaacson was aware that he may have had only 30 days to file Plaintiffs claim, this also brings into question whether his conduct was reasonable under the cirсumstances. Where the law is unsettled, and an attorney believes that he may only have 30 days to file a client’s claim or *565 the claim will be lost forever, and then the attorney does not file it within that time period, this Court cannot find that he acted reasonably under the circumstances. Moreover, Mrs. Skywark’s affidavit calls into question the Defendants’ assertions as what they truly believed state of the law to be. Plaintiff is entitled to have these issues brought before a jury.
After carefully reviewing the arguments and examining the cases cited by both parties, this Court declines to find as a matter of law that Defendants chose a “reasonable” course of conduct under the circumstances. Under New York law, absent a finding that Defendants pursued a reasonable course of conduct as a matter of law, a determination that a course of conduct constitutes malpractice requires findings of fact.
See Bernstein,
Conclusion
For the reasons set forth above, Defendants’ motion for summary judgment is denied. There will be a pretrial conference on December 5,1996 at 9:45 a.m.
SO ORDERED.
Notes
. Curiously, in their moving papers Defendants cite
In re Coan,
This serves to highlight the fact that courts, and even litigants, used the term "toll" interchangeably to mean stopping and then starting the clock again, or merely suspending expiration of the limitations period until 30 days after termination of the stay.
. In 1989 the Wyoming Supreme Court noted the split on the issue of § 108(c) and "tolling”:
A survey of the cases addressing the question reveals a division in authority as to whether § 108(c) operates to suspend the running of any applicable limitation period, thereby еxtending the creditor's time to act for a period equal to the time the action was stayed by the Bankruptcy Code, or whether it merely provides an additional thirty days to commence or continue an action once the stay is lifted.
Diamond Hill Investment Co. v. Shelden,
. Interestingly, the bank in Morton assumed it only had 30 days to enforce its claim upon termination of the claim. The bank never hinted that it should have the three years left in the ten-year limitation period when Morton filed for bankruptcy. Further, the Circuit never disagreed with the bank’s view of § 108(c).